CMO or Chief Business Builder?
The CMO role has evolved substantially, and yet, not many CMOs are prepared to move from being the “head of marketing” to what could be best described as the chief business builder.
In my observation working with growth stage and established technology companies, too many CMOs are executing the classic business school playbook, which starts with brand building and ends with driving vanity metrics like the number of leads created.
Which begs the question, what is the real job of the CMO today?
Marketers are expected to be growth leaders. Yet far too many are trapped in a functional rut, focused on campaigns, branding, and Marcom activities as if that is the key to growth.
Many CMOs spend time in budget planning and agency review meetings designed to reshape the customer experience and create brand differentiation.
Fewer than 25% of CMOs and marketing leaders believe that their role is to be a champion of the buying experience or customer journey for the entire organization.
This is a massive miss based on my work with CEOs and founders who are desperate to find marketing leaders who can take a proactive role in building the company.
More MQLs and SQLs are not what the business needs, which is why marketing’s impact on growth is an enigma.
Deloitte found that 95 percent of marketing leaders and CMOs say revenue is a high priority in their company, yet, only 32% feel ready to impact market share. Just 20% are prepared to drive gross margin improvements.
I have come to define the CMO role as Chief Business Builder.
The CMO is not the new CRO. These are separate and distinct functions. But, the CMO is in the best position to work across the market to drive the business forward, hand in hand with sales.
This is why it’s sad that many CMOs are busy executing marketing initiatives that do not return business value to the enterprise.
If your new CMO has in the 90-180 day plan a website makeover, branding initiative, and logo redesign, you are in for dashed expectations.
As CMOs re-position themselves as enterprisewide strategic leaders, they are often tasked with legacy tasks, such as campaign management, marketing team management, and coaching.
This is why the situation with highly educated and qualified CMOs failing spectacularly makes sense, as one survey found that just 6% of CMOs are actively working on growing revenue across the business.
If you are a CEO, this should be a wake up call. Your CMO may be only focused 6% of the time on activities that are revenue generating.
65% of Chief Marketing Officers aspire to lead the businesses corporate strategy, and yet just 8% are actually operating in that capacity.
How CMOs can be a business builder.
- Most CMOs are chasing things that don’t have a business impact. If your CMO is spending a high percentage of time pursuing partnerships, corporate strategy that isn’t 100% anchored in the objectives of the business, or public relations, the odds are that the efforts will not return a dividend. With command of the ecosystem, marketing messages and initiatives will be better aligned and have a greater impact. CMOs must get close to the customer.
- CMOs who own innovation road maps, the company vision, customer relationships, buying journey, and sales processes are in a much better position to drive revenue and be seen as critical to the company’s success. Note that NPS, magic quadrant scores, and other vanity branding metrics rarely map to meaningful business impact.
- Where CMOs choose to focus in the marketing funnel is critical. Too many marketing leaders are ok accepting an MQL or meetings booked KPI. This is completely wrong. You cannot make payroll based on how many leads you generated. Only when those leads convert to money in the bank, do they return business value. Forward-thinking CMOs will always ask to be measured against revenue. You may be in trouble if your CMO suggests an MQL metric as the primary KPI.
CMOs who are influential bring critical ecosystem and market insights to the entire organization. By bringing their unique expertise to the strategic table, modern CMOs can open new doors for collaborating across the C-suite and, by so doing, transform every facet of the enterprise.
That means confidently leveraging their expertise in four key roles: Growth Driver, Ecosystem Catalyst, Problem/Solution Storyteller, and Enterprise Capability Builder.
Be a Growth Driver.
Today’s crucial area of focus for the CMO is the creation and management of profitable growth. For too many marketing leaders and their chief executives, growth at all costs has meant that the word profitable is nowhere to be found.
Amazingly, many marketing teams are still running programs with wildly negative ROI to “show user growth,” with no regard to the actual economic value of the customer. This must stop.
The need to be a growth driver for the business is not an excuse for unprofitable or low-value customer expansion.
The CMO that exhibits high business impact will be mindful of CAC, payback periods for paid advertising, and other metrics that directly impact profitability. This CMO will be an important partner to the CEO, who, faced with investor pressure to “show growth,” may be tempted to implement highly unprofitable marketing programs.
As the buyer’s journey has become more fragmented with an increasing number of stakeholders, marketers can create breakthroughs for the company by acting as an ecosystem catalyst.
The CMO, recognized by the market (ecosystem), is in a preferred position to catalyze the ecosystem and market the company’s point of view. CEOs need to be comfortable with the high public image their CMO will gain and recognize that the business value outweighs their star being a recruiting target.
As the primary storyteller, the CMO is best positioned to craft messaging and ensure its optimal fit to the market. CMOs must disseminate information about the problem and solution the company addresses and invite customers to participate in the narrative.
While many CMOs spend time on brand and campaign execution activities, few connect these activities to revenue. Reach and frequency metrics amplified by paid advertising wrapped in pre-planned campaigns do not work as they did in years past when the vendor was in control. The CMO is the primary problem and solution storyteller, with the buyer in control.
Enterprise Capability Builder.
CMOs who operate as capability builders are in the best position to demonstrate the function’s reach and value across the business.
As marketing leaders possess greater customer insights and ecosystem reach, they are in the perfect position to provide critical intelligence to product, sales, corporate development, and other key stakeholders in the company.
The surest way for the CMO to impact the company is to connect their insights and market-facing technology (marketing teams have tremendous tools available for listening to and engaging the market, customers, and users) to guide decision-making and high-value initiatives.
How the CMO can make a bigger impact on the C-Suite.
- Leverage your position of organizational strength. CMOs are closest to the customer and thus deliver unique insights to the executive team and valuable perspectives about the market, ecosystem threats, technology adoption trends, and other critical factors to the business.
- Utilize customer expertise as an inroad to owning other activities. CMOs are well-positioned to chart a customer-driven innovation roadmap that combines customer needs and drives bottom-line value. This toehold into the company’s strategic thinking widens the aperture for the CMO to play a more influential role in activities outside marketing’s remit.
- Collaborate with sales to influence go-to-market strategy and processes. Being closely tied to revenue helps CMOs demonstrate their impact on the business. This can help marketing move from the cost to the revenue side of the P&L in the mind of the C-suite. CMOs collaborating with CROs to define customer-orientated processes and territory designs that lead to improved revenue performance will always be highly regarded.
- Their title shouldn’t constrain CMOs. CMOs should focus on the scope, the impact, and the business results of their function regardless of title. I know of one tenured CMO with a track record who joined a scale-up company and is now operating as the head of corporate and business development. He still carries the CMO title and is engaged with leading the marketing team and setting strategy. But, his daily activities around business development outweigh the marketing ones. Far from a demotion, this move recognized his amazing scope and ability to reach the largest accounts that are most valuable to the company during this critical market and revenue development stage.
The CMO that is a business builder has shifted from being brand-focused and a experience-orchestrator to a executive who drives long-term, sustainable growth by introducing new points of distribution and business opportunities. Many CMOs have made the transition from mastering the art of the brand to securing sales success, but this can’t be the end of the growth evolution.
Positive business results rest on Chief Marketing Officers who are prepared to assume multiple roles to help drive their organizations to success. The CMO who has embraced their role as a growth driver and orchestrator of the customer experience will set a new course for lasting profitability and opportunity, leading to a more rewarding and sustainable professional development path.
So, what is the primary job of the CMO in today’s B2B company?
Though the title may never be assumed, I believe it is to act as the Chief Business Builder. The next time you interview CMO candidates, let this framework guide your questions, and you’ll likely discover an entirely new and different crop of candidates. Those who are revenue first and completely aligned with the goals of the business and increasing shareholder/investor value.