As the Industry Evolves, It’s Time for CMOs to Act Like CEOs

They're not delivering ROI that their CEOs want and need to adapt their strategies

CMOs need to adapt to a changing environment and take new stances and positions, similar to a CEO's.
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Gartner’s prediction that CMOs will outspend CIOs on technology is now a fact: CMOs will use 12 percent of their company’s revenue on marketing technologies in 2018.

It makes sense. Just as a consumer would look to Yelp before going to a restaurant, prospects today do research before talking to sales, meaning the marketing department owns more of the sales funnel than ever. Silicon Valley has jumped on this opportunity, with over 5,000 companies clamoring to help marketers meet this growing responsibility.

Armed with growing budgets and new technologies, you’d think CMOs would have lasting influence in the boardroom. But research suggests otherwise: CMO tenures now average only 42 months, and that number declines every year. Another study revealed that 2016 was a year of record turnover rates for marketing executives. It’s time for CMOs to either figure out why they’re not delivering the ROI that CEOs want or not bother to set up their offices.

As the CEO of a mar tech company for the past 15 years, I’ve seen the role of marketing teams completely transform. I remember when I thought about our marketing spend much like I did about playing roulette, like throwing money on the table hoping it would pay off. I assumed that, like gambling, our marketing budget was simply the cost of playing the game.

Digital technologies changed that, and it changed the role of CMOs. But CMOs haven’t adapted quite yet. CMOs now need to act like the CEO of their own business: the marketing team. And that ultimately means CMOs must redefine success in the same way a CEO does, with an unrelenting focus on revenue. This revenue-or-die mindset isn’t easy to adapt, but here are three ways for CMOs to start thinking like a CEO and keep their eyes on the bottom line.

Say no

One of the toughest choices we have to make every day is the decision to not do something. It’s easier to latch onto a fad than to stand against it. But the rationale for a campaign or new technology can’t be for the sake of trying something out. Numbers speak louder than words, and CMOs who have hard data to back up their strategy, approach and results give themselves leverage in the C-suite and make any campaign, whether it fails or succeeds, defensible.

Digital technologies have empowered us to analyze the entire performance of our marketing channels and use that intelligence to determine our future investments.

Social campaigns are great for awareness, for example, but for business, they don’t drive revenue. This realization led us to scale back our investments in Facebook and Twitter. We used those resources to double down on our own website, webinars and in-person events because our data showed these channels yielded the best results. We certainly feel some fear of missing out, but once you know what drives revenue, other channels become moot.

Prioritize relationships

Even in the digital age, I still believe a one-on-one, in-person conversation is the best way to close a deal and build a relationship with a customer. As far as technology has come, no automation software, algorithm or predictive analytics has the power of empathy. Consider H&R Block’s partnership announcement with IBM Watson. H&R Block could have heralded Watson as the end to human tax professionals, letting the computers do all the work faster. But who wants to just deal with a computer?

To their credit, IBM positioned Watson as a tool to further elevate services H&R reps already provide to customers. It was not about replacement but letting computers and humans do what they do best together. Marketers need to take a similar mindset where you’re not having data dominate your approach but are using it in a manner that supplements your human understanding of your customer and their pain points.

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