It used to be the hot new executive title. CMOs had their own magazine, and still have myriad Web sites and a slew of conferences that appeal to the agenda that this boardroom marketing hero is heralding. But most of what is written about chief marketing officers these days concerns an alarming lack of shelf life.
An oft-quoted survey from executive search firm Spencer Stuarton called "Slowing Down the Revolving Door" put the average CMO tenure at 23.6 months during 2006. That's a slight up-tick from 23.2 months in 2005. The reasons for the short CMO lifespan, according to the survey, include pressure to perform, being hindered by the CEO, short-term demands of Wall Street, and executive "poaching."
But the survey's findings do not reflect what some experts have called a significant disconnect between CMOs and customer strategy. According to the November 2006 CMO Council report called "Select & Connect," based on a survey of 568 executives, most marketers are not maintaining significant, regular contact with customers-and when they do, they fail to systematically evaluate and track customers throughout the pipeline. The report reads: "While marketers are making customer development a priority, they have a significant disconnect with the realities that drive effective customer targeting, acquisition, and retention."
CMO Council CEO Donovan Neale-May says CMOs wouldn't find tenure, or any other measure of success, an issue if they were to focus more on generating positive customer value. The CMO Council report found that CMOs are still too focused on revenue growth. Most marketers cite the value and profitability of an account or customer as the most important customer data to consider when planning marketing programs. But other key metrics, such as cost of acquisition, churn and retention rates, and procurement cycles get short shrift, suggesting that the complete value picture is still not a marketing priority. Only 33 percent of all respondents felt they were "on the right track" in growing customer value. Only 44 percent of the respondents answered in the affirmative when asked if their marketing department monitored customer churn and retention.
But many CMOs are changing the way they approach actual responsibilities and priorities as this C-level executive position continues to take shape. CMOs are starting to define their roles more as the steward of customer value rather than the keeper of the marketing keys. Before it was shuttered early this year CMO Magazine surveyed more than 7,000 CMOs and found that one of the top goals (46 percent) is to acquire, satisfy, and retain customers.
"If you don't focus on customer equity, customer experience, and customer value in this job, you can't stay in it very long," says Jocelyne Attal, CMO of IP solutions provider Avaya. "It used to be all about communicating and branding. But when it comes to focusing on our customers and increasing our value proposition to them, I believe there is no higher task."
Attal and Avaya have had to balance such brand-building events as global World Cup sponsorships with educational seminars and technology upgrades to keep current customers and attract new ones. She says most of her peers who have CMO titles are just now understanding that the CMO cannot be a marketing maven at the expense of avoiding operations and IT. The CMO, she says, has to be just as customer-focused and obsessed with customer value as any other employee.
That awareness of customer value in all
activities is shared by Susan Schwartz McDonald, CMO of National Analysts Worldwide. The company doesn't have the high profile of competitors such as Gallup, Harris, or Simmons. But it does have the distinction of being one of the world's oldest market research firms. McDonald and her team decided that the 80-employee firm needed a brand overhaul earlier this year and, to do it, she aligned her job and the company's mission with customer value.
"We thought about the current value of our customers and the potential future value of those customers," she says. "Then we thought about the customers that we don't have. How could we increase the value of our company to attract potential customers who don't even know what we do?"
McDonald started by surveying current clients and found out that National Analysts Worldwide had an excellent reputation among its most long-standing and valuable clients. Most of those were in the pharmaceutical and consumer packaged goods areas. These "connoisseurs" told National it needed to do more global market research if it wanted to increase business. McDonald pushed the firm's operations into developing markets such as Asia-Pacific and established territories such as the EU gradually as 2006 played out. She rebranded the firm as National Analysts Worldwide (formerly National Analysts), but the real marketing effort came from applying customer feedback to operations.
"As CMOs we could all do a better job of applying data to vision," McDonald says. "We're in the business of generating data but sometimes even we fail to appreciate who the customer is and what it will take to make the firm more valuable to them."
Value, both from the customer and enterprise viewpoint, is the new proposition and it may be the new measurement for a somewhat troubled executive spot.