Good CMO. Bad CMO.

13 09 2013

In CMO.com in August there was an interview with Wharton’s Dr. David Reibstein.  The question addressed was:

Why are some CMOs losing ground when it comes to playing a significant role in setting firm strategy? At a more basic level, why are CMOs even excluded from the strategic discussions to begin with?

The ARTICLE HIGHLIGHTS the following three points.

  • “Marketers may be able to talk about awareness, trial, or loyalty, but they are generally unable to connect these metrics to financial statements.”
  • “Conceptually, marketers should be included in the firm’s strategic discussions.”
  • “Marketing…can step forward and lead the effort to create measures for key firm assets, such as brand value and customer value.”

After reading the interview and thinking about it, I took the liberty to post a comment which I want to share with my readership. I know many of my marketing friends will agree with me yet other colleagues will probably disagree as well. I welcome that debate.  Here are my comments.

I agree, in part, with the interview.   Many CMOs – especially from the CPG industries or those heavily dependent on advertising, don’t think as strategically as they could.   I have seen many of these purported CMOs focus on advertising and awareness vs. the real drivers of the business.  And, as the article points out, CMOs have the ability to understand the customer and make that translation to the internal departments.  I don’t know why that doesn’t happen although I believe it could be fear or complacency or perhaps even more simplistically, these CMOs are not quant or metric driven. 

On the other hand, I have seen many of the tech CMOs think about customers and become good strategic advisers to the CEO. I have been that way as a tech CMO in my career.   From my vantage point, I see the CMOs being involved in setting the strategic agenda by leveraging customer information by determining what is important and how well the company performs on these attributes.   I have seen CMOs in the tech world talk about average revenue per customer, cost of acquisition, lifetime value, margin, % revenue from new products, incremental increase in order size by customer, and other similarly situated metrics.  

I have seen CMOs manage the new product, commercialization, and innovation processes.  Unfortunately, I have seen other CMOs manage and be accountable for strictly tactical areas such as managing social media or PR or communications or other “softer” elements of the marketing process. 

 

It is unfortunate as well, that when companies today recruit for CMOs they don’t understand what they really want. I have seen job specs for a CMO that, to me, meant that they wanted a tactician to implement Google Adwords, or Facebook pages.  It is a shame that this puts the incumbent in a no win situation as they are not “full blooded” CMOs but just have a title as the “senior” marketing person in the company.  The article describes this predicament too.

What is needed from the CMOS?  They have to actively determine how their efforts affect sales, margins, cash flow and explain and show it to the other execs.  They need to be more proactive in sharing information on customers and being the linking pin between the outside world of the customer and the inside world of manufacturing, production and technology.   They need to think more technical and work hand in hand with the CIO and CTO because good marketing and business success today will depend on technology. Frankly, they need to think and act as a CEO or at least his or her alter-ego.  

What can a company do?  Companies need to be realistic in hiring CMOs vs. marketing executives who are much narrower in their focus.   They need to hold the CMOs accountable to produce results in line with the business plan. 

A good CMO adds tremendous value to a company.  A poor one gives the CMO category a bad name and reputation.

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One response

29 12 2013
Tom Stamatis

I fully agree with that assesment of what value a good strategic-thinking CMO can bring to the company,as all the the other “C” level execs. need to do likewise, and not fall into the “silo” mentality as often happens in their own fiefdoms. Escpecially true of CFO’s and CIO’s who are usually very territorial, often paraochial and unfortunately block dissemination and lack understanding of what the key business drivers are for the organization.

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