One of the things I’m finding disheartening is what appears to be a rush to lay-off the CMO as companies struggle to respond to the impact 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.
But that was then, and 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.
Studies have shown that the average tenure of a CMO in a position is 3 to 4 years, much less 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. In our current uncertain environment where no one knows what the world and economy will look like 12 months from now, added pressure has been applied to the expectation dynamic between the CEO and CMO as leads and sales drop-off. If a CEO is judging the value of a CMO only on demand generation metrics, it becomes an easy decision to eliminate that position as those metrics plummet and with no end in sight to the current crisis. But is this 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.
Positioning and Messaging
For most of us, company and product positioning need to be rethought and refined as a result of the pandemic. Many things have changed over the last three months. Business as usual doesn’t exist anymore. It’s important to look at company and product positioning in this new and evolving world. 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? Have your market landscape and competitive environment changed? Have your sales cycle and customer persona changed? Chances are the answers to some of these questions is yes and as a consequence you’ll need to refine your positioning and messaging both at the company and product level.
Crafting and delivering the right messaging have become complicated. Over the last three months 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.
In the B2C world, some of the most effective messaging has been 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. They are being ignored and, in some instances, negatively impacting brand opinion as prospects start to feel 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 and time goes on, messaging requirements will become more complicated. The Black Lives Matter movement and associated social unrest has already added a new complexity to company messaging. Should a company respond publicly and if so, how? The answer will be different for each company but any public statement should be a reflection of company values and actions. One of the Boston entrepreneurs I admire, Bobbie Carlton, wrote a compelling message that was authentic to her, her team, and their mission.
Positioning and messaging are complex and need to be constantly evolved to reflect the current marketplace and environment. To advance the brand and support growth, positioning and messaging must reflect the core values and operations of the company, the true functionality of the product, and be communicated consistently internally and externally within the context of the relevant market environment. Without a CMO driving this activity you run the risk of poor positioning, tactical not strategic messaging, lack of consistency, and badly executed delivery.
Marketing strategy
I often think of the CMO as a composer, they understand how everything works together to produce something that is 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 uncertainty are requiring 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, it’s likely that significant course corrections will be ongoing for the foreseeable future. It is the CMO that 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 the series of disconnected initiatives.
User experience and satisfaction
The pandemic has disrupted supply chains and access to goods. And while most everyone has been patient and understanding to date, that goodwill will quickly disappear as things begin to open up and consumers start to believe that things should be getting better. CMOs are on the front lines of assessing user satisfaction and helping shape the user experience. If close attention is not paid to this you run the risk of losing new customers and repeat business. A couple of examples: I decided this weekend to see if I could purchase a small metal cabinet from IKEA to store my BBQ tools outside. Stores are starting to open up in Massachusetts and I’d be happy to order online and either pay for shipping or do curbside pickup. The good news – I can actually order online. The bad news, no delivery, my only option was curbside pickup in Texas! Somebody is not paying attention. Another example, weeks ago I ordered something from The Container Store, they’ve been very good about sending emails letting me know that things are delayed which I appreciate and in our current environment doesn’t bother me at all. Last week I received a package from them that was badly damaged. My only option is to ship it back to them to Texas at my cost which will cost me almost as much as the item did. They won’t accept the product back at one of their locations and will not take a phone call. I filled out the email form and three-days later no response. At this point, all roads seem to lead to Texas – I could take my damaged item back to The Container Store and pick up my cabinet from IKEA! Eventually I’ll return to shop at these stores but not for the foreseeable future – I’m not sure that is the desired behavior these companies want.
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 as you navigate through unchartered waters. 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 see you through and out of 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. Fundamental to the role of the CMO 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. For B2B companies finding phone contacts for prospects working at home and figuring out the best time to reach outare new challenges. 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. It’s most likely that the customer journey has and will 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.
Please think twice about eliminating the CMO role
For some companies that are struggling to survive it may be necessary to let go of the CMO along with other executives, I don’t want to pass judgement. But if you are simply trying to reduce expenses and thinking that marketing is an easy place to make a cut, I’d like to suggest that 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 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 growing as the road ahead becomes clearer.