The marketing function is under the gun to demonstrate its impact on a firm’s top line. An explosion of new channels and metrics over the past decade and a demand to tie everything back to revenue come on top of some fundamental shifts that effect marketing. The result is a lot of pressure on a role that isn’t used to this level of accountability. CEOs and Managing Partners want financially literate CMOs that understand the impact of marketing initiatives on the balance sheet and income statement.
This is a big challenge for large firms, so what’s a smaller firm—or even one without a dedicated marketing department—to do?
Financial accountability is only one challenge for CMOs. A recent survey by IBM of 1,734 CMOs underscores three permanent shifts in marketing:
Empowered customers now control the business relationship. The traditional sales funnel no longer accurately describes the buying process, and yet greater accountability is demanded. Firms cling to the sales funnel, however, because it is easy to measure.
Delivering customer value is paramount — and value creation recognizes no boundaries between product, services and behavior. Marketing's impact is expanding in scope, but budgets aren't.
Hard times may have ushered in greater accountability, but the requirement for new skills, tools, and approaches is permanent. Collaboration between CMOs, CIOs and CFOs is becoming critical, especially with regards to pricing and technology.
According to Peter Drucker in The Practice of Management, only two things matter in business: marketing and innovation. A Strategic Marketing Plan creates benefits far beyond marketing, creating a stronger and more accountable marketing organization positioned to support innovation across the firm.
Forward-looking CMOs are committing to initiatives reflecting the above shifts in four ways:
Increasing focus on retention. Although less sexy, retention is becoming as important as acquisition because for many businesses the ROI is simply too large to ignore. Forrester foresees a customer life-cycle approach replacing the still widely used sales funnel. I couldn't agree more. For these efforts to be successful, CMOs must take leadership for not only nurturing leads into prospects, but for converting mere purchasers into fans and advocates.
Aligning with sales and service. Nearly two-thirds of CMOs see greater alignment with sales as a top priority. Greater focus on retention means service alignment is equally critical. Both initiatives constructively blur the lines between sales, marketing and service, making a strategic framework with common goals essential.
Beefing up technical capabilities. Marketing is increasingly driven by technology. The shift towards technology, however, risks hollowing out marketing by creating a functional island with specialists knowing more and more about less and less. While growing capabilities, the CMO must ensure that technology remains subservient to business leadership and strategic objectives. Effective marketing is not just good programs, but the right programs. A Strategic Marketing Plan defines criteria essential for managing marketing technology effectively--and efficiently.
Partnering with other members of the C-suite. CMOs can't do it all alone. They need to be a leader among leaders, supplying strategic guidance and tactical tools to other functional areas to effectively increase the footprint of sales, marketing and services by engaging--and equipping--the entire organization to tell a master story demonstrating why your offer is better than the alternatives. In the spirit of Peter Drucker, this is the story of how your firm innovates to create greater value for your customers. The Strategic Marketing 3.0 framework directly addresses this opportunity.
The outcomes create—but extend beyond—better results to include a new generation of CMOs earning greater respect in the C-suite because they speak “CEO” while balancing other marketing capabilities. The verdict seems to be in as the new breed of CMOs are holding their jobs longer in a role notorious for its short tenure.
How specifically is your firm responding to fundamental shifts in the expectations for marketing?