Written by Phil Fernandez, Marketo CEO. He is a Silicon Valley veteran, with more than 30 years of experience building and leading breakout technology companies. Phil is a well-known writer and speaker on topics related to digital marketing, marketing automation, big data, and entrepreneurialism, and is the author of Revenue Disruption (Wiley, 2012), which delivers bold new strategies for any company to transform its sales and marketing to accelerate revenue.
Who is the most important exec after the CEO of a company?
In answering the above question you probably would have said the CFO, COO or the Chairman. For a hi-tech company you might have mentioned the CTO. And for B2B enterprises there likely would have been some votes for the head of sales being the next most important executive after the CEO.
I’m guessing you would not have chosen the head of marketing. But that would be exactly the right answer today. Over the past five years, the Chief Marketing Officer has quietly emerged as having a major impact on revenue, growth, customer satisfaction, and overall company strategy. Reflecting the growing clout of marketing leaders, some major corporations (McDonald’s, Campbell’s Soup and Audi USA) recently installed CMOs as their new CEOs. This relatively new reality has big implications for CMOs and the marketing function itself.
What has been the catalyst driving this rise of the CMO in the past couple years? Technology. The new digital-centric business landscape has not only empowered today’s buyer to be in control of the buying process, but it has dramatically increased the number of ways that a brand can “touch” the customer during and after her buying journey. With a myriad channels and touch-points between a company and the buyer—the need for an integrated, holistic approach to managing the entire customer lifecycle is critical. The person responsible for coordinating all this into an “engagement marketing”strategy? The CMO.
The new, strategic approach to marketing engagement is very bottom-line business oriented. It’s really focused on nurturing rich, mutually beneficial relationships with customers throughout their entire journey—including after the purchase when the real loyalty building has to happen. This new emphasis on end-to-end customer engagement means that the CMO is now assuming responsibilities that not long ago were owned by sales, service and even operations.
Earlier this year my company, Marketo, contracted with the Economist Intelligence Unit to survey 500 marketers about a wide range of topics, including how they view engagement in marketing and the role of CMOs in driving this new marketing paradigm. The survey findings illustrated the new thinking that is transforming both the marketing profession and industry:
- 63% of marketers view engagement as customer renewals, repeat purchases and retention.
- 78% of respondents think engagement occurs in the middle or end stages of the marketing funnel.
- Only 20% of marketers defined engagement as a top of the funnel awareness or emotional brand building tool.
- 75% of CMOs and senior marketing executives expect to own, or at least play a major role in managing, the end-to-end customer engagement for their companies in the next 3-5 years.
As CMOs gain more stature in the corporation by shouldering even more responsibility for driving and activating the entire customer lifecycle, they are also getting more credit for being revenue drivers. Of course, the department or executive who owns revenue growth (and can deliver it consistently with an upward trajectory), pretty much rules the game in business.
To handle this new level of responsibility—CMOs today need to adapt. What it took to be a CMO 10 years go and what it takes to be a CMO today are two different things.
Marketing has always been a blend of art and science, and it still is to a great degree. There is no question, though, that the science part has gained primacy in the new world of tech-powered, omni-channel marketing. From mastering the digital and social channels that customers use to educate themselves on your products, to understanding how advanced analytics can drive truly personalized communications and engagement, marketers must now possess a whole new set of tech oriented skills and capabilities. “Test, learn, repeat and scale” have long been part of the marketing model, but in this new tech-centered environment these concepts are the daily lexicon of the CMO and her marketing team.
All of this means that today’s CMO needs to combine the technical abilities of a project manager and data geek with the big picture strategic business capabilities that go beyond brand building and driving awareness and preference. This is not to say that CMOs must be tech engineers any more than CEOs or CFOs need to be. But, in addition to finding and leading the marketing talent that has the requisite technology skills required to thrive in the modern marketing world, the CMO needs to be comfortable with these new capabilities and tools as well. CMOs can’t just sit in the corner office and delegate. They need to be in the center of the action, driving the strategy and operations. And that includes getting their hands “dirty” with the technology, analytics and digital media that power customer engagement in the 21st Century.
That’s probably going to be a challenge for some marketers. But, no one ever said stepping up to become the second most important person in the corporation was going to be easy! But those that can make the shift now find themselves joined at the hip with the CEO. The corporation’s growth and success really do depend on the close collaboration and productive relationship of its two most important executives.