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"
Labels: CMO, Marketing Management