Category: Marketing Management

The Multi-Dimensional Responsibilities of a CMO

The position of Chief Marketing Officer (CMO) in a business shares similarities with the head coach of a professional sports team. First, both positions represent the go-to leader for the people charged with delivering results. Second, pressures to perform can be great and immediate. Third, when performance falls short of expectations an organization can either get rid of all employees or the leader- we know which route is normally taken. The stakes to perform and perform now are high for CMOs. The average tenure of a CMO in 2012 was about 45 months according to research from Spencer Stuart. Although 45 months seems like a precarious tenure, it is nearly double the average CMO tenure in 2006 (23 months). Still, there is little disagreement that CMOs are subject to a great deal of scrutiny when it comes to the marketing performance of their organizations.

Why CMO is a Tenuous Position
CMOs bear great responsibility for the success of their firms’ marketing efforts. Much is expected of them… perhaps too much. A recent global study of business executives by the Economist Intelligence Unit   revealed a disjointed situation concerning the marketing function. It is disjointed in that the CMO is looked to by many executives as a comprehensive marketing solution. One area in which the CMO is expected to take the lead is in customer centricity. In the EIU study, the current state of customer focus is not very impressive:

  • 60% said their firms were customer-centric
  • 56% said their companies have a clear understanding of customers’ tastes and needs
These findings are sobering; we expect marketing organizations to be on top of understanding customers, but four in ten executives see their organizations as not doing a good job of being customer focused.

Another chief responsibility that CMOs are charged with is being most in tune with the Voice of the Customer (VOC):

  • 28% said CMO should be Voice of the Customer, but only 18% said the CMO fulfills that role now. Currently, that role is more likely to be taken on by the head of Sales (31% said Sales has VOC responsibility).
  • 25% of marketing executives surveyed believe a Chief Customer Officer (CCO) is needed to be the VOC, but that sentiment is not shared by executives outside the marketing suite as overall only 13% said a CCO should take the lead for VOC.
The customer-leading role that CMOs are expected to take on adds a layer of complexity to the position. The reason is that the relationship and brand equity building functions of a CMO are superseded by other marketing priorities. When asked what the function of marketing should be, executives connected marketing to financial outcomes:
  • 30% said revenue growth should be top priority
  • 17% said finding new customers should be marketing’s top function
  • 16% said improving organization reputation should be top function

Thus, CMOs are expected to have significant dual roles in managing customer relationships and driving business growth. Either role can be a monumental challenge on its own. It is little wonder CMOs are on average out of an organization in just under four years- they struggle to meet expectations that may be unrealistic or unclear.

The Case for a CCO
Findings from the EIU study suggest that the CMO position as conceptualized by executives is two roles in one: Chief Customer Officer and Chief Marketing Officer. It seems that the findings calling on the marketing function to focus on growth create a clear need for an executive whose job is to drive growth. That person should be the CMO. At the same time, nurturing customer relationships has bearing on growth as well as creating brand equity. Given that four in ten executives believe their firms are deficient in understanding their customers, a need exists to bridge the gap between seller and buyers. The CCO position can narrow such a gap. Just as the marketing function became more specialized over time and led to splitting of sales and marketing roles in many organizations, the time has come for businesses to back up talk about being customer centric by creating a leadership position such as CCO.

Center for Media Research – “Who Knows the Customer Best”

Wanted: Head Coach and Chief Marketing Officer

As a college football fan, I look forward to certain  happenings throughout the year that add to the enjoyment of the game. National signing day, spring games, preseason media days, opening weekend, rivalry week, and bowl games are among the traditions that contribute to the pageantry of college football. Unfortunately, there is one other event that has become tradition: coaching staff terminations. The conclusion of the regular season also marks the beginning of a period in which schools that are dissatisfied with the direction of their football program often fire their head coach and his assistants. As of now, thirteen NCAA football bowl subdivision (FBS) teams will have new head coaches in 2013 out of 124 FBS schools.

People have different opinions about whether we should feel sorry for football coaches who lose their jobs because of under-performance. The main argument for expecting results from head coaches is their compensation. A recent USA Today story reported that the average pay of a head coach at an FBS school is more than $1.6 million per year, easily making the head football coach the highest paid employee at many institutions. So, even if a coach gets fired he likely made a great deal of money while he was employed and should be set for the future, right?

The turnover in college football coaches parallels another employment phenomenon: the tenure of chief marketing officers (CMOs). Executive search firm Spencer Stuart tracks CMO tenure, and its research shows that average tenure of a CMO bears some similarity to the time frame given college football coaches to produce results. In 2011, CMO tenure averaged 43 months, which is comparable to the three to five-year window given to many college football coaches. Tenure length for CMOs has actually increased in recent years after bottoming at 23 months in 2006. CMO tenure varies by industry, with more turbulent industries like automobiles (25 month average tenure) and communications and media (33 months) being more unkind to CMOs.

If there are similarities between the tenure lengths of college football coaches and CMOs, maybe it is because the jobs entail similar responsibilities. Here are three characteristics the two positions have in common:

  1. Accountable for results – The number one reason coaches and CMOs lose their jobs is not meeting desired performance outcomes. For coaches, the primary metric is wins. CMOs are evaluated based on success indicators such as stock price and market share. If the results are not there, change is inevitable. The question is how long should a coach/CMO be given to instill the culture, recruit and develop personnel, and implement strategies.
  2. Face of the brand – The coach/CMO are the marketing leaders in their organizations. The transient nature of players, whose careers are four years or less, means that coaches are the constant personality around which marketing efforts can be created. Similarly, CMOs have the highest profile of any employee in a firm’s marketing organization and is expected to represent the brand’s interests not only internally but with external stakeholders including media and financial analysts.
  3. Build a culture within a culture – Coaches and CMOs share the challenge of shaping a brand culture within their organization that is subservient to the brand culture of a larger organization. Coaches must build a brand that is congruent with the values of the institution brand. Likewise, CMOs are tasked with building great product brands that mesh with the corporate brand.

A results-now mentality held by many fans, alumni, administrators, shareholders – whoever the relevant stakeholders are – applies pressure to coaches/CMOs to deliver results quickly. We must not lose sight of the human side of this phenomenon. Coaches/CMOs invest themselves heavily in their jobs, as do their families. When a coach/CMO is fired it is not usually because they are bad people, it is a consequence of brand performance not meeting expectations. They did not rise to the level of head coach or CMO without knowledge and skills… they are not dummies!

Given the similarities in the two positions, college football coaches and CMOs can look to each other for inspiration in how to lead their organizations and how to cope with the stark reality of job termination.