CMO: The Most Blamed Role in Business
In a March 2014 article for the Wall Street Journal, Suzanne Vranica shared the results of a study that suggested the average tenure of a CMO was on the rise — improving from just 23 months in 2006 to more than 45 months in 2013. And less than a year later, Forrester predicted an even rosier picture for senior marketers: By the end of 2015, the global research firm suggested CMO tenure would reach 60 months.
What’s driving this shift?
One big reason for the longer tenure is the growing population of data-driven CMOs who are more technologically sophisticated. These CMOs rely on cold, hard, quantitative evidence to make decisions and investments, which generally helps them deliver better ROI, drive more predictable growth, and erase the stigma famously summed up by this John Wanamaker quote: “I know that half of my advertising dollars are wasted, I just don’t know which half.” In other words, by eliminating some of the unpredictability of marketing, CMOs are making themselves more valuable to their organizations.
This trend is, of course, great news for CMOs who have long been viewed as one of the more expendable members of the c-suite. But in my experience, CMOs shouldn’t get too comfortable. This is because, in many companies, they’re still viewed as black sheep — the lone executive in the c-suite operating with amorphous goals, responsibilities, and parameters of success.
The Birth and Evolution of a Black Sheep
Most roles in a growing SaaS business are created as the result of a very logical, needs-based process. For instance:
- When a SaaS startup sets out to build a product, most founders find it easy to decide which roles and responsibilities are necessary to establish product development, operations, and delivery groups. So, they hire for those roles and give employees very specific responsibilities.
- When it’s time to take that product to market, the next logical step is to create a sales team whose explicit goal is to sell it. And there are very well-defined metrics for measuring sales success.
- When money starts coming in, it’s obvious that someone needs to manage it. So, SaaS startups build out a finance team. And there are very obvious ways to measure finance.
- When customers start calling with questions or product issues, there’s a very clear and compelling argument to build out customer service. And there are clear ways to track the impact of customer service.
Marketing, on the other hand, is often created with far less definition and purpose.
Sure, you could say marketing is created when a business needs to grow pipeline, assess market opportunities, create brand awareness, and facilitate other top-of-funnel activities. But what exactly do each of those responsibilities entail? When’s the right time to create roles for them? What activities and channels are necessary to support them? What tools and technology are needed to make them effective? And, most importantly, how do all of those responsibilities directly tie back to the company’s ultimate goal: growing revenue? Too often, companies don’t fully answer those questions before building out marketing.
And then there’s the issue of scaling marketing. As fellow venture capitalist Tomasz Tunguz points out in this excellent post, most SaaS companies must deploy at least nine marketing disciplines in order to be effective at scale, and they each require different skills, talent, and strategy. Throw in marketing’s increasingly large role in managing internal technology (a domain once reserved for CIOs), and it appears marketing’s role is becoming more amorphous and vague, not less. In fact, a 2012 Gartner study predicted that CMOs will outspend CIOs on IT by 2017 and current trends seem to confirm that idea.
For CMOs, these added responsibilities translate to bigger budgets, to be sure. But they also translate to less clarity on what exactly marketing is designed to achieve.
The Two Roles that Matter for SaaS CMOs
Before SaaS CEOs decide to heap more on their CMO’s plate, I’d highly recommend first stepping back to ask a simple, but important, question: Why? More specifically, what will adding specific marketing responsibilities and roles accomplish? And how will new activities, campaigns, channels, and tools empower a CMO to achieve key company goals?
With that in mind, I think there are two key roles CEOs should push CMOs to focus on before they do anything else:
- Setting the customer market strategy for the company. Before diving into a new technology or tactic, SaaS CMOs must be given ample time and resources to focus on the position they’re trying to carve out in a particular market, and the actions that need to be taken to make that happen. If they’re inundated with ancillary activities and goals that aren’t tied to that responsibility, then they’ll fail to create and execute an effective strategy. And when that happens, the CMO will look like a failure — even if much of the blame could be laid on the CEO for failing to set clear expectations and goals.
- Executing against three key operational objectives. Ultimately, I believe CMOs at growing companies should be tasked with — and measured against — three relatively simple objectives:
- Moving buyers through their journey more efficiently
- Enabling the sales team with the tools and training that helps them convert sales-ready leads into revenue as quickly as possible
- Executing strategies and tactics that create value for customers and maximizes upsell/cross-sell opportunities
Now, it’s important to note that the strategy used to address those three objectives can vary significantly by company type, industry, market segment, overall strategy, and several other factors. As such, it’s critical for every company to create their own unique approach for accomplishing those objectives, rather than try to copycat other businesses or chase supposedly hot trends. And as your business scales and organizational goals change, you should revisit your marketing approach to ensure it aligns with those adjustments. If it doesn’t but you push forward with the old approach anyway, it’s a recipe for disaster.
A Simple Way to Set CMOs Up for Success
Given advancements in marketing analytics and Big Data, there’s no doubt that the CMO role will continue to evolve and rise in significance — particularly in SaaS organizations dependent on improving the efficiency of customer acquisition and retention.
But for that rise in significance to correlate to improved business results, it’s critical that CEOs and CMOs work even more closely to define parameters of success. Doing that will ensure CMOs know what they’re being measured against, and it will push their teams toward the opportunities, activities, and tactics that deliver meaningful results.
That’s not just good for a CMO’s tenure with a company, it’s also very good for a business’s bottom line.
Photo by: TaxRebate.org.uk
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