Advertising Age has an article that every CMO should read: “Are Your Customers Holding You Back?” (http://adage.com/cmostrategy/article?article_id=148145). The three authors—Rajesh Chandy, D. Eric Boyd and Marcus Cunha—conducted a study on the impact CMOs have on the financial value of the firms where they work.
They really got it right on three important points:
- CMOs can have a tough time justifying their existence, which leads to ever shortening tenures with a firm (anywhere from 18 months according to CMO.com to 34.7 months from Brandweek).
- CMOs report to multiple constituencies inside and outside the company: investors, executives, customers, etc. You can’t please everyone all of the time—and often you can only make one group happy at the expense of another.
- CMOs have the least direct influence on shareholder value of nearly any corporate department. It’s easy to quantify the effects of trimming expenses, but much harder to show the benefit of longer term branding actions.
I also agree with the authors that large customers and stakeholders can lead the agenda for both B2B and B2C companies. If you’re a supplier to Ford or GM, they’ll tell you what kind of product to offer and at what price. We all know the power Wal-Mart and Costco wield with brand marketers.
A clear definiton of the marketers’ customer. In my opinion, this is Mrs. Smith who shops for her family and has been buying your product consistently for a while.
This is the person a large number of CMOs routinely forget. They are so focused on acquiring new consumers that they don’t pay enough attention to the customers they already have.
Check out the metrics traditionally used to assess CMO performance. New acquisitions. Traffic. Customer counts. Number of prospects converted into customers. Of course these are important to monitor. But why do CMOs so often forget that it’s almost 17-times more efficient to retain existing customers than it is to acquire new ones? That it takes $10 of new business to replace $1 of lost business. That the average spend of a repeat customer is 67% higher than a new one.
So if you’re a CMO, having a customer-centric view of marketing is the best way to positively affect a company’s current and future performance—and lengthen your stay there.