As has the experience of customers, marketing’s role has evolved. The signing of the contract is only the beginning. Businesses that understand that customers of tomorrow care more about their journey will be successful.
Chief marketing officers (CMOs), as a result, are required to have a new set of skills, namely the ability to wear multiple hats simultaneously.
It is about being a CFO who makes strategic decisions about where and when to invest in marketing dollars to maximize ROI. It’s also about being a product designer who matches the customer’s evolving technical needs and integrates sales expertise to drive leads through the funnel.
Let’s take a look at this evolution…
CMOs in companies of all sizes have more responsibility than ever before, not only for revenue but also for profitability.
The CFO/CEO must justify every dollar that the CMO requests for the Marketing budget at the start of the planning period. Each dollar spent also needs to be accounted for. Once the budget has been approved, Marketing and the CMO will be evaluated on their performance based on the ROI metrics at the end of the specified period, which is usually 3, 6, or 12 months.
This assessment used to be based on volume metrics such as the number of attendees at an event or website visitors and cost metrics such as cost per acquisition (CPA) and cost-per-lead (CPL). With the increasing adoption of data visualization and deep analytics technologies, most businesses now assess their marketing performance based on a revenue-based metric: customer lifetime value (LTV) divided by customer acquisition costs (CAC), also known as LTV: CAC.
For the CAC, all expenses must be taken into account, including digital and content marketing, SEO, event management, media relations, and influencer marketing. Also included are creative services, website development and maintenance costs, personnel, and other vendor fees.
If the LTV to CAC ratio is greater than 2-3X, it is considered healthy. If the rate is sustained, the CMO should be able to breathe easily. CMOs must now understand where to spend their precious marketing dollars to get the best return on investment.
1. Know your customer
How do they buy? What do they buy and how? Why would they buy from us? Answers to these questions will define the foundations for the most effective CMOs—a deep understanding of the ideal journey by type of customer.
This information will help the CMO and marketing team make better decisions. They can decide who to target, what type of content to create, and how often to publish it.
The customer journey can be simple, linear, complex, and multi-layered. The entire process can become complicated when you version by segment and type of customer.
2. Select the right technology
There are literally thousands of technology providers that cater to every aspect of marketing. There are many different systems, including paid search, content management, media relations, and marketing automation platforms.
The CMO must choose the right technology combination to ensure success. It is also important to deliver ROI to the C-suite. It is important to have a thorough understanding of the many technologies and their often slight differences. A wrong decision could be very costly. Many technology vendors have minimum-term contracts or multi-year contracts. Unwanted costs can quickly reduce ROI.
3. Form a team of sportspersons
The decathlon in business is marketing as a function. No other part of a company offers such a wide range of skills, from the analytical (left brain) to the creative (right brain). CMOs need to have an in-depth understanding of a wide range of disciplines, or they must be educated enough to guide and assist those on the marketing team.
It is important to hire the best people for each role. The most important asset of a CMO is its people. The wrong hire can cripple marketing effectiveness and be very expensive. Only hire if you are certain that the candidate has the required level of expertise for the role.
The degree of expertise needed can vary depending on your go-to-market (GTM). If PR is an important part of your overall strategy, then hiring a skilled media relations specialist is essential. A business that relies heavily on its website to generate demand will benefit from a team with a strong technical and creative background.
Hire only the most talented people you can find.
4. Create your GTM Playbook
To determine how to reach the market, you will need to make critical decisions regarding target markets, ideal customer profiles and personas, partnerships, branding and campaigns, advertising online and offline, messaging, timing and sequencing, and your marketing strategy.
These decisions are not solely the responsibility of the CMO. All those responsible for the success of the company’s commercial activities, including the CEO, the sales and support leaders, and product development and engineering leaders, as well as the heads of business and partnership, have a role to play in the GTM plan.
To achieve revenue targets and beat the competition, all employees must be aligned with common GTM objectives and goals. These goals and objectives should be documented and reviewed periodically as part of a formal review process. This will help to ensure that the business is moving in the right direction and can change its course if necessary.
5. Integrate with other departments
CMOs are responsible for a wide range of internal functions, including generating revenue.
- Sales for product training, event management, and campaign development
- Customer success for marketing
- Support for the creation of an online help center
- Human Resources for talent branding and recruitment
The CMO must integrate with other functions and be transparent to ensure that there is a successful relationship from beginning to end.