What do boards and C-level execs need to know about marketing?
Businesses that want to win in their market (or at least avoid disruption) need to look outwards. And the right people to help boards and executives really understand the competitive landscape are senior people with ‘market’ in their title.
I’m not trying to be cute here: a marketer’s job is to know the market well and help businesses win.
We know people buy from (and into) brands that best meet their needs and interests.
So a crucial part of a marketing leader’s role is to analyse the market and design strategies to win more attention, loyalty and sales with marketing tactics that are attractive to more people.
While your target market is mostly made up of customers, it’s also worth focusing on the needs and interests of your employees, business partners, investors and pundits. Therefore, it’s equally important for senior marketers to help people inside the business understand the market better.
What can a CMO bring to your leadership team?
Businesses win in the market by growing the profit margin and shortening the sales cycles. You can achieve both when your strategy is very customer-focused. That means spending time at the executive and board level understanding what people really want from the brand.
Many businesses have people with sales, financial or legal backgrounds at the top of their C-level hierarchy. Unremarkably, most boards have similar make ups, with much of their oversight focused on profit and risk.
Chief Marketing Officers like me also understand profit and risk: we help businesses win by addressing both so we can drive growth. We’re also very focused on building the brand so it meets people’s needs and interests, because people are the source of value for a business:
What value are our customers seeking? (How can the business create more value?)
What problems or needs can we address?
What do people think of our brand? (Do we have a good reputation? What about loyalty? How much does that matter?)
Do people understand what our brand represents?
How are people’s needs and interests are evolving?
What are our competitors doing better? (Are we at risk of being disrupted?)
What can our business do better to improve people’s experiences of the brand and win more of the market? (How do we deliver better on the brand promise?)
When I joined Telstra the company had a lot of different offerings in the market, with a huge number of combinations of features and products for many different market segments. This increased choice just led to increased confusion .
So over time the team stripped all those plans and products in the consumer market back to a few simple offers and focused on helping the company deliver them really well.
When we got it right, the company experienced operational efficiencies, alongside improvements in marketing and innovation, which helped us grow the top and bottom line. I’m not saying these achievements were all led by marketing, though they were certainly led by a greater focus on customer needs.
What can a CMO bring to the board?
It’s highly likely a decent number of the MBA students I teach at UNSW Business School will want to get onto boards later in their careers and some might even get there earlier as C-level execs of fast growth companies.
They know an important part of a board director’s responsibility is to oversee a company’s business strategy: staking out a market position, attracting and pleasing customers, competing successfully and driving productivity. Interestingly, this generation of MBA students seems very in-tune to how a business can attract and please more customers, and some of them have commented that some boards need to get better at ‘walking the customer-first talk’.
I agree.
Boards with a Chief Marketing Officer at the table (or at least regularly reporting to the board) understand more clearly how the marketing strategy aligns with and influences the business strategy, so they actively encourage a genuine ‘customer-first’ mindset across the organisation.
The CMO is the board’s go-to person for insights on:
Customers’ needs, wants and CSR interests – CMOs can update boards on how customers’ needs and interests are changing, and suggest ways the company can respond, including advice on how employees at all levels can serve customers well (from sales/acquisition to relationship building and after sales customer service)
Market position and the brand/company reputation – CMOs can share their always-on analysis of how the company measures up against its competitors, as well as how the brand is perceived.
Innovation and creativity – CMOs can report on new and/or creative approaches to addressing risks and opportunities in the market that will help the business attract and please more customers.
CMOs can also influence company culture
Some companies have had chief marketing officers since the 1990s. While the CMO role has always been dedicated to building brand value and strengthening customer relationships, its recently also taken leadership of customer experience (CX) strategy, which covers extends from top of funnel awareness of a brand to conversion, customer service, loyalty and lifetime value.
A recent Gartner think piece on how the CMO role has evolved identified three big priorities for CMOs:
Re-embracing an intelligent approach to strategy based on deeper market insight (and designing strategies to be adaptable)
Optimising lifetime value to meet near-term business objectives and long-term needs
Brand has become more important than ever: “the power of a healthy, vibrant brand has sustained many organisations through challenging times, and as buyers are overwhelmed with options in virtually every category, its impact has become clear.”
When companies have a customer-first mindset it influences culture across the organisation. It creates a sense of purpose and commitment to making an impact.
In turn, people working with a sense of purpose tend to be more loyal and more interested in innovation.
Great innovations are often the result of a culture that encourages collaboration and shared success (rather than self-aggrandising success). I think the lone genius inventor is more myth than reality, and there’s a lot of risk attached to relying on one ‘genius’ if they go off the rails.
So, one way to encourage people to work together on new ideas is to give them permission to experiment – allow them to make mistakes. People need to feel safe to test/fail/learn along the way.
When people feel empowered to experiment their thinking is freed up to explore new ways of solving customer challenges (not just adjusting the old ways).
Some marketing-leading innovations like the iPhone reimagined people’s ‘jobs to be done’ before most customers had even thought about what they wanted.
Though even if you’re not reinventing the wheel, you can win markets by creating better ways for customers’ to have their needs and wants met.
More company boards need senior marketers like me at the table
Almost a decade ago I was disappointed to discover just 2.6% of board members for S&P 1500 companies had ‘active marketing experience’. (That figure was from a 2015 study by the Marketing Institute, which is now offline but often still cited.)
A few years later, a Deloitte paper on board practices revealed that a little more than a quarter of Chief Marketing Officers regularly report to their companies’ boards of directors. And yet, Chief Marketing Officers are the second most likely executives to step into the CEO role after CFOs according to research by US executive search firm Spencer Stuart.
That last insight describes my own career.
In 2017, after two decades as a senior marketer at large corporations such as IBM and Telstra, I took on my first CEO role and began my board career.
I was interviewed about my experience alongside my friend and mentor Andrew Baxter by Company Director magazine, and yes, given the audience was company directors, we talked about why more boards need marketers.
We also talked about why companies need to get better at customer-first business and marketing strategies. Now we’re both working on delivering those capabilities to many more organisations: Andrew launched the 24 Hour Business Plan, which I joined as a senior advisor and CMO, and I founded my strategy agency Jarther+.