Why CMOs Must Side With The Revenue Camp
Studies show that marketing departments are often seen as cost centres rather than revenue drivers. It’s time to change the perception—CMOs should be chief growth officers.
Influential business leaders are associated with revenue, yet too often marketers are not. They’re missing the point. It’s time for CMOs to get into the revenue camp.
Profitable growth (the sustainable kind) is high on every CEO’s agenda. In fact, it’s not just high. Next to strategy and organisation, sustainable growth is the number one item on the agenda for every company leader. That’s great news for marketers. In the end, innovating and finding customers is what marketers do, isn’t it?
A new study by the search firm Russell Reynolds raises questions about marketers’ role in driving growth. The consultancy highlighted that more and more companies are now hiring chief growth officers (CGOs). Some of these CGOs are simply super CMOs with a broader remit, including innovation or R&D. But in some cases, CGOs are hired in addition to the firm’s top marketers. The reason behind this is that marketers in these companies are seen as too tied up with digital and other issues. In other words: CEOs in these firms don’t believe their marketers can drive enough growth. That’s a chilling finding.
The Russell Reynolds study isn’t the first to cast doubt on marketers’ ability to drive growth. The Economist Intelligence Unit (EIU) recently found that over 68% of CMOs believe their department is seen as a cost centre and about one third of CMOs said their business owners don’t see marketing as a revenue driver. When another EIU study asked: “Who is the voice of your customer?” just 13% of C-suite leaders mentioned their CMO. There’s work ahead for the CMO brand.
Marketers must reclaim the revenue camp. It’s obvious why: being a cost centre isn’t a good place to be. What do clever CEOs do with the cost camp? Reduce it. Management thinker Peter Drucker once said the job of marketing is to make sales obsolete. While this may be a push too far for some, getting closer to Drucker’s idea must be every CMO’s aspiration. Only when marketing is in the revenue camp, will CMOs have a seat at the table.
In working with over 100 CMOs and CEOs for our upcoming book (The 12 Powers of a Marketing Leader , Fall 2016, McGraw Hill), we have identified a number of levers marketers can pull to get into the revenue camp. Among other things, they must:
- Tackle only big issues. CMOs must ensure what marketing works on is a priority for both customers and the CEO. Only when both conditions are met can marketing get into the revenue camp.
- Deliver returns, no matter what. Some things in marketing can’t be measured—but most can. Even if marketers know the evidence for their (revenue) success, others may not see it. It’s important to share widely how marketing drives revenue.
- Make marketing transparent. Many successful CMOs use a simple marketing model that clarifies the link between awareness or consideration and sales . These models tend to oversimplify things, true. But they are extremely powerful for internal communication—especially if developed with finance.
- Keep the language close to the revenue line. Perception is reality. If leaders talk revenue (instead of brand likes or gross rating points ), they’ll more likely be associated with revenue too. It’s called brand building.
Whatever companies put on marketers’ name badge, being the chief growth officer is the right aspiration for every CMO.