Chief Marketing Officers (CMO’s) have some interesting challenges at the moment. Companies are giving marketers greater responsibility to manage customer interactions which is largely orientated towards figuring out how to engage with customers rather than to market to them.
This growth in responsibility has led to more Marketing teams being accountable for more of the traditional sales KPI’s. eg for a B2B business increasingly selling via the online channel – marketing should be running the complete process from awareness to engagement, trial and then sale using an analytically orientated, data driven process. In this scenario the Marketing team will increasingly own the KPI’s at each stage of that sales funnel.
However, the CMO has another function as part of the leadership team – to drive strategic value.
We all know that the value of a business in simple terms is determined by a multiple of revenue/profit. Typically amongst the operational team the CEO has individuals aligned with the important aspects of both the revenue and profit KPI’s. In most of the conversations I have had with CEO’s, they recognise there is a typical range of multiples related to their sector – however there is little understanding or accountability around the table to ensure you attract a valuation at the high end vs the low end of that range. Yet clearly in any valuation the difference between these two will be material.
I would argue it is the role of the CMO to be responsible to the CEO for this strategic planning if for no other reason than many of the “off balance sheet” assets a company can build lie within the Marketing arsenal; Brands, New revenue streams, markets, geographies, products. Whether the Marketing team have accountability for all/some of these is not the issue what is important is that the CEO has someone around the leadership team table actively thinking and planning on how to optimise the multiple for the day of exit.