Is the CMO The Problem? No, it’s the CEO

Adam Needles recently wrote an interesting blog Is The CMO The Problem? that explores the question of why CMOs are not ceo measure marketingfocused on revenue driving programs and their demand centers.  Here are three points of interest from the blog but you should also read it in it’s entirety.

CMOs Want ROI But We Don’t Do it
Adam cites an IBM study that said 63% of CMOs believe marketing ROI should be the leading measure of marketing accountability. He also cites that only 39% of B2B marketing organizations calculate true marketing ROI according to the 2012 Lenskold Group / Pedowitz Group Lead Gen Marketing Effectiveness study. This certainly shows a trend of wanting something but not getting to it.  This is a okay with us at Full Circle CRM because we actually have a different point of view.  CMOs should use Campaign Influence to measure impact. Campaign Influence is the better way to show marketing’s impact on business vs. Campaign ROI.

CMOs Still Aspire to Mapping Content to the Customer Journey
Adam cites a Forrester report that only 14% of B2B marketers align content with the buyer’s journey.  Honestly, I’m not surprised — because doing this is hard!  (It’s also crucial for efficient marketing.)  I like Dave Lewis’s book Manufacturing Demand which has some great tips how to build the right content for effective demand generation.  Also Christine Crandell’s Seller’s Compass is very insightful.

CMOs Don’t Think Demand Generation is a Critical Trait for Success
What!???  Yes, here’s the clincher, Adam also cites that only 30% CMOs think demand generation expertise is an important trait of a successful CMO.  Oh dear.  What are these folks thinking?  The fundamental job of a CMO is to lead the effort to make their offerings easier to buy and easier to sell. Demand generation is central to that mission.

Where are the CEOs?
When I read this article, I thought to myself, what happened to the CEOs?  A wise man once told me, “You know Bonnie, a lot of people at companies don’t really understand marketing.  It’s a very complex discipline.” Ok, so maybe most CEOs don’t understand marketing.  Most are not marketers I suppose.

Here’s my working theory of what’s happening here: most CEOs don’t understanding marketing and so they don’t put the right comp plans in place to encourage the right behavior.  And they are not hiring CMOs who understand how to measure marketing’s impact on a business.

My Recommendation for CMO Compensation Plans:
Most people in executive roles are competitive and respond to changes in compensation to maximize their take home pay. To get the right behavior, here’s what I recommend:

Divide total comp, making 25% bonus pay and 75% base salary. For the 25% bonus include the following for current quarter:

  1. Create a map for the customer journey for each group of products
  2. Measure your baseline marketing programs using funnel metrics – volume, velocity, and conversion rates.
  3. Identify average sales cycles for each product group to predict when changes in marketing can affect sales.
  4. Set goals for volume, velocity, and conversion rates.

Next quarter’s MBOs for the 25% bonus:

  1. Create new compelling content that maps to the customer journey.
  2. Start measuring change in effectiveness of marketing programs using funnel metrics and campaign influence.
  3. Change marketing mix based on metrics to optimize marketing budget.

Measure your marketing!  And I think CEOs must also insist on it.

As a starter, check out our Top 5 Reports Your CEO Wants from Marketing to show how marketing is contribution to revenue.

Bonnie Crater

About Bonnie Crater

Bonnie is a 5-time VP of Marketing at Genesys, Netscape, Oracle (Network Computer Inc.), Stratify, and VoiceObjects. While valuing the creative side of marketing, Bonnie's real love is marketing operations -- measuring marketing investments and determining investment optimization. Now as CEO of Full Circle Insights, Bonnie is working to help fellow marketers get the data needed to succeed. In 2000, Bonnie was named one of the “Top 20 Female Executives in Silicon Valley” by San Jose Magazine. Bonnie holds a B.A. in biology from Princeton University.