Some studies say CMO tenure is getting longer in the booming economy, but the average duration on the job is still shorter for CMOs than it is for C-suite peers. And for digital services providers, the average CMO tenure is just 24 months. One potential explanation is that it’s more challenging for marketing to show revenue impact, and these days, that’s what CEOs demand.
As Greg Welch, senior partner at the Spencer Stuart leadership consulting firm, noted last year in Forbes, “Companies are incredibly focused on…[knowing] what we’re going to spend, what the likely results will be, and here’s what actually happened. The very best marketers are performance-led, metrics-focused…”
It’s also important to keep in mind that, outside of marketing operations, strategic rather than tactical marketing metrics are what matter. Sometimes that point gets lost when marketing teams are disrupted by turnover.
The departure of a CMO often results in a massive disruption. If you’ve been in the marketing business long enough, you’ve probably seen this happen more than once — a leader exits, which prompts turnover across the department. Then a new leader comes in and builds a team from the ground up.
Sometimes turnover can be the best move for a marketing department. Fresh leadership, accompanied by a bold vision, can take the company in a better direction. But a change in personnel can also mean the loss of institutional knowledge regarding the revenue engine that’s in place — including process, team responsibilities, the martech stack and data flow through integrations. When that happens, the incoming leadership and/or operations team may pull the plug on martech solutions precipitously.
All Martech Is Not Created Equally
It makes sense to regularly review the martech stack, especially the measurement layer. Conducting a quarterly martech stack audit to confirm that each solution is contributing to revenue can be a best practice that provides crucial information to the marketing team.
If the performance measurement tools are tactical rather than strategic, it’s a good idea for incoming leadership to think about upping their measurement game. For example, if reporting consists of email performance metrics like opens and clicks, it’s not yielding information that’s of broad and strategic value to the company.
Marketing is a strategic asset not only when its activities generate revenue but also when its leadership can demonstrate specifically how marketing adds value. That means marketing needs to be able to show strategic impact in terms of pipeline and revenue contribution, and the marketing team must also be able to demonstrate this using deal data provided by the sales and customer success teams.
The analysis of data generated by the typical martech solution may be meaningful to the marketing team from an operations perspective. But the underlying data must also be captured and rendered in terms that resonate beyond marketing — in other words, marketing metrics must be able to attribute revenue to marketing activities, not just show tactical metrics, such as increased impressions or clicks.
Is It Time to “Marie Kondo” Your Martech Stack?
Organization guru Marie Kondo is famous for prompting people to part with unneeded possessions by asking them to consider whether an item “sparks joy.” The point isn’t to make people feel guilty for accumulating too many things or to reach a set limit of items but rather to consider each possession’s usefulness in the here and now.
When a marketing leader considers culling the martech stack, a similar exercise can be helpful. The point is to understand the value of the tool, not just make changes for the sake of change. The best approach is to conduct a SWOT analysis to identify strengths, weaknesses, opportunities and threats or a gap analysis to assess actual vs. potential performance for each technology.
In a modern marketing organization, this means evaluating solutions in terms of their contribution to creating and demonstrating value. Does the performance management solution help you allocate spending more effectively by identifying which marketing programs, channels and campaigns work? Can it prove how marketing contributes to revenue — beyond the marketing department?
A martech solution that accomplishes that should pass the “sparks joy” test. So, if you find yourself evaluating your company’s martech stack, keep metrics that demonstrate strategic impact in mind. If you’re unsure about what role a technology solution plays, evaluate it carefully before you pull the plug. In marketing, a failure to measure what matters can lead to even more turnover.