What McDonald's, HP, Virgin America, and Walmart Have in Commonby
By Pete Krainik Founder of The CMO Club
People ask me all the time about the success of McDonalds, HP, Virgin America, and Walmart with new products and services, and their ongoing buzz. For me one key factor is the strength of their marketing leadership and the fact that their CMOs have an active seat at the C-Level table.
No surprise then that gaining this seat is always a big topic of chatter at The CMO Club website and events. What can you do to make sure you obtain and keep your seat at the table? Based on our recent research, the secret to earning a seat at the table is to go beyond branding and lead generation and help the business make decisions that create customer value.
I enlisted the help of Mark Bonchek, a long time friend and Founder of Truman Company, to speak with CMOs in the club these past few months on this topic of earning a seat at the table. In all of these conversations with leading CMOs, three key practices emerged over and over again:
(1) Think like a CFO (2) Speak business, not marketing (3) Be the voice of your customer
Think Like a CFO CMOs with a seat at the table have developed an ability to think like their CFO. Mike Hogan of GameStop says, “Too many marketers try to defend the historical advertising or marketing budget. What we really represent are great investment opportunities for the organization. Every time I sit down in front of the CEO or CFO, I should act like I’m pitching an idea to venture capitalists. I’m excited about what the investment can do.”
You can tell if you have an investment mindset by whether you think about your function as a revenue center or a cost center. How much do you focus on driving the growth of the business, versus allocating your budget across different spending categories?
“I’m hired to make sure that marketing supports the growth of the firm in the best way possible,” says Phil Clement of Aon Corporation. “The degree to which marketers can understand that a dollar invested in their area is a dollar not invested somewhere else, they end up being an important part of the corporate leadership team and helping to grow revenue for the company.”
The truth is that it doesn’t matter if your marketing investments are good investments. They have to be better investments than those proposed by your colleagues. Put yourself in the CEO and CFO’s shoes and think about why your marketing ideas are a better use of funds than sales, product development, or acquisitions.
To help make your case, create what leading CMOs call “a clear line of sight.” The ability to trace “every marketing dollar spent through to the results” builds credibility according to Jean Foster of Neustar. Mitch Bishop of iRise adds that the movement towards a more “data-driven model for marketing” gives a real boost to his ability to create “direct line of sight.” Making a concrete connection between marketing investment and sales revenue gives him a seat at the table.
Speak Business, not Marketing CMOs are always complaining that no one else truly understands and appreciates marketing. To earn a seat at the table, CMOs need to stop complaining. It does as much good as complaining that your customers don’t understand the benefits of your product. Marketing has a marketing challenge inside the company. Take it on.
To most people, campaigns are what get politicians elected and marketing mix is a snack with nuts and pretzels you might serve at a party. Drop the marketing jargon and start using the language of your business.
CMOs should “spend 50% of your time educating your internal stakeholders on the value of marketing,” says Ram Menon of Tibco. Ram says it is imperative to “speak in their language.” After all, “the CMO is articulating the company story to its prospective customers in the language they understand. Why don’t we use that simple principle when we articulate our story to our own stakeholders?”
Part of speaking the language of business is using the metrics of business. Chuck Martz of Dow Water Solutions tracks the traditional marketing measures of campaign response, lead conversion, etc. But when he talks to the business, he talks about broader business measures. “Revenue growth, market share, EBIT margin, or gross margin — are those business measures, or are they marketing measures?” says Chuck. “I would argue that they’re both.”
Be The Voice of Your Customer So now you are thinking like a CFO and speaking in the language of business. One more thing and you’ll have your seat at the table: be the voice of your customer.
“The number one way to earn and retain a seat at the table is to have a comprehensive understanding of the customer base,” according to Margaret Molloy of Gerson Lehrman Group. “The more insight that you have on the customer in aggregate and through specific anecdotes ─ the more value you bring to the table.”
There are many ways of capturing the voice of the customer and channeling it into the business. Heidi Melin of Polycom has a dedicated team whose job it is “to listen to our customers through a series of user groups and advisory groups and, more importantly, to funnel that information back into the company.” In addition, the team has a responsibility to “leverage customers to tell our story, including a customer reference program, and a customer showcase program.”
John Moser of Denihan Hospitality Group agrees. “My role is to bring the voice of the customer to the table. CMOs with a seat at the table work on both sides of the equation: capturing the voice of the customer and channeling it through the business into the market.”
It’s time for CMOs to stop scrambling for their seat at the table, afraid of when the music will stop. Follow these three practices — thinking like a CFO, speaking business, and being the voice of the customer – to go beyond branding and lead generation, help the business create customer value, and earn your seat at the table.