Editorial
There appears to be a rush to lay off CMOs as companies respond to the continued repercussions of the pandemic.
For as long as I can remember, marketing was always the first department hit by budget cuts. Though I hated it, I understood. Twenty years ago, marketing’s job was brand development and filling the top of the funnel. In most cases, it ended there. Back then tools didn’t exist to measure the success of individual programs or the part they played in driving the overall customer journey. Metrics were simply cost per lead (tradeshows delivered the highest CPL), response rates (anything over 1% was good for a direct mail piece), and media mentions (mentions, not quality).
We didn’t talk about Cost of Customer Acquisition or Customer Lifetime Value. In B2B companies, marketing was frequently perceived as “fluff” and was the last function staffed in a startup. In B2C environments, everyone thought they were a marketer because they knew what ads they liked and didn’t like.
That was then, this is now.
The role of marketing has greatly expanded and is now a measurable, critical function. Done well and assuming a good product and functioning sales organization, revenue grows, CLTV grows, churn is reduced and market share increases. Done badly, the company stagnates and loses market share.
A Narrow View of the CMO Role
Studies have shown that the average tenure of a CMO is three to four years, much shorter than other C-Suite positions. A Harvard Business Review article from 2017 suggests that mismatched expectations between the CEO and CMO are a primary contributor to a shortened CMO tenure. Our current environment, where no one knows what the world and economy will look like 12 months from now, only adds more pressure to the expectations CEOs have of CMOs as leads and sales drop-off. If a CEO is judging the value of a CMO only on demand generation metrics, the decision to eliminate the position becomes easy as those metrics plummet, with no end in sight to the current crisis. But is it the right decision?
The CMO job encompasses much more than demand generation. The CMO is also responsible for company and product positioning, marketing and communications strategy (which encompasses the entire customer lifecycle), user experience and satisfaction, and customer loyalty and engagement. Our world has been turned upside down by the pandemic and current social unrest. It is no longer business as usual, and a focus only on demand generation is short sighted. Each of these responsibilities needs to be managed as part of a survival and long-term growth strategy.
Related Article: 3 Myths of the Modern CMO
Who Will Lead Positioning and Messaging?
The last three months changed many things. Companies have had to change the way they work and sell products and some have been forced into hibernation. Defining a communications strategy to keep employees and customers connected and engaged, while navigating the impact of the pandemic and economic unknowns has been challenging for most.
Yet most of us need to rethink and refine our company and product positioning. Are you a pain killer (essential) or a vitamin (nice to have) and where on the spectrum between those two ends do you live? Has your primary value changed? Has your market landscape and competitive environment changed? Has your sales cycle and customer persona changed? Chances are the answers to some of these questions is yes, which means you’ll need to refine your positioning and messaging both at the company and product level.
In the B2C world, some of the most effective messaging has centered around the theme of “we are all in this together” which created a backdrop to allow companies to talk publicly about their internal operations and ask their customers to be understanding of the impact of our collective changed environment.
In a B2B world where customers are dealing with budget cuts, layoffs and the challenges of working from home, promotional emails are falling on deaf ears. People are ignoring them and, in some instances, getting annoyed by the feeling of being under siege. Many companies have moved to providing educational information or free access to their platform until there is evidence that the buying cycle has been reactivated.
As the world begins to reopen, messaging requirements will get even more complicated. The Black Lives Matter movement and the associated protests have already added a new complexity to company messaging. Should a company respond publicly? If so, how? The answer will be different for each company but any public statement should be grounded in authenticity. One of the Boston entrepreneurs I admire, Bobbie Carleton, wrote a compelling message that was authentic to her, her team and their mission.
Related Article: Today's CMO: Job Hoppers or Growth Drivers?
CMOs Orchestrate the Marketing Strategy
I often think of CMOs as composers: they understand how everything works together to produce something greater than the sum of its parts. They compose an overall plan that encompasses campaigns and programs, technology, people and channels. Once composed they measure, monitor and course correct in order to meet business objectives.
The pandemic and resulting economic upheaval demand significant course corrections. Shrinking budgets and workforce are forcing teams to do more with less. Customers are shopping at different times, in different locations and for different things: customer priorities have changed. Channels have been disrupted both temporarily and, in some cases, permanently. None of us knows what lies ahead, but it’s likely that significant course corrections will be ongoing for the foreseeable future.
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The CMO is the person who maintains the big picture and manages the balance between people, programs, technology and channels. Without strategic oversight and coordination, marketing strategy is non-existent and the marketing plan devolves into a series of disconnected initiatives.
Related Article: Marketing in a Crisis, One Month Later
User Experience and Satisfaction
The pandemic has disrupted supply chains and access to goods. And while most people have been patient and understanding to date, that goodwill will quickly disappear as things begin to reopen and consumers start to expect things to improve. CMOs are on the front lines of assessing user satisfaction and helping shape the user experience. If your business ignores this, it runs the risk of losing new customers and repeat business.
Customer Loyalty and Engagement
Staying connected to existing customers, bringing them inside your business, acknowledging their challenges and changed circumstances, and offering rewards and incentives in the right context is going to enhance brand loyalty moving forward. Communicating appropriately, in a personalized fashion, and being consistent with overall messaging and positioning is essential for long-term success.
Done well, your existing customers are going to stick with you through your short-term challenges. The CMO is best positioned to direct this strategy as part of an overall communications and marketing plan and to ensure that customers are not receiving mixed messages from various departments within the organization — remember the old days when we talked about a unified customer experience? Hard to accomplish that without centralized oversight.
Demand Generation and Customer Journey
Last but not least, demand generation and customer journey. A fundamental part of the CMO role is producing qualified leads and then working alongside the sales team to nurture those leads until they result in a purchase. In our newly upside-down world, spending priorities have shifted along with our ability to reach new customer prospects. B2B companies face new challenges like finding phone contacts for prospects working at home and figuring out the best time to reach out. For B2C, shifting shopping habits due to business closures and the changed shape of day-to-day lives require rethinking both demand generation and sales strategies.
The customer journey will most likely continue to change. Without addressing these fundamentals, current problems generating leads are likely to continue. Now is not the time to be short-sighted and to measure marketing performance just on current demand generation. We all need to be focused on reshaping and redesigning our processes in anticipation of what lies ahead.
Related Article: How Has the Customer Journey Shifted?
Please, Think Twice About Eliminating the CMO Role
Companies are struggling to survive. For them, it might be necessary to let go of the CMO along with other executives, I understand. But if you are simply trying to reduce expenses and thinking that marketing is an easy place to make a cut, I’d suggest you look at the entirety of the marketing and CMO function. Eliminating the CMO and much of the marketing budget may provide some short-term relief, but it may also make the road to recovery incredibly bumpy or even impassable. I contend that the CMO and the marketing team are mission critical to surviving these crazy times and to growing as the road ahead becomes clearer.
Author's note: On a related note, check out my colleague, Dom Nicastro’s article on the skills that CMOs need to have. We have an uncanny and unplanned way of writing about similar topics at the same time.
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