The passage to the CEO’s office – veer “left”

Chief marketing officers must tap into their “left brain” thinking if they want to move into a chief executive role, writes PAUL NELSON.

As appeared in... www.financialstandard.com.au

Marketers have traditionally been very “right brained”, using their creative capabilities to great effect in communi-cation strategies with external market-places. But now times have changed. For those interested in the CEO’s job, they will need to compliment this tra-ditional ‘right brain” understanding of creativity and communications, with a much deeper “left brain” understand-ing of metrics, analytics and measure-ment of performance.

So what might we do differently? Here are my four key suggestions for those looking to transition beyond marketing and down the corridor to the CEO’s office.

1. Obtain a defined and measured return on your marketing investment

Finding ways to accurately measure re-turn on investment remains a challeng-ing issue for many CMOs, but one that must be mastered if we are to retain and grow appropriate levels of invest-ment in our products and brands.

Today, marketers must be able to cor-relate a direct impact on marketing expenditure and then forecast and pre-dict leads, pipeline, and revenue with confidence.

With the revenue forecast in place, se-nior marketers must also make a hard business case for the resources they need to deliver on those forecasts. In business-to-business markets, this re-quires knowing what it takes – in mon-ey, time, and effort – to acquire quali-fied leads and nurture those leads until they are ready to talk with sales.

In consumer markets, today’s market-ers that also use this type of rigorous methodology to determine marketing spending so they are able to make, justify and defend their budgets. If the CEO wants to cut marketing spending by 10 per cent, the CMO needs to be able to specify exactly what impact that will have on next quarter’s revenue.

The reverse is also true. By understand-ing the marginal return of incremental spending, the CMO can justify a larger budget and know exactly where to put the extra funds and with what predict-

ed effect. Specialist tools exist today that enable marketers to do just that.

That is not to say that soft metrics like brand awareness, impressions, organ-ic search rankings, satisfaction, and the like are not important – they clearly are. But only to the extent that they eventually connect in a quantifiable way to hard metrics like incremental sales revenue and profit.

By speaking the same quantitative lan-guage as the CEO and CFO, CMOs will better communicate marketing’s true value and overall impact.

2. Be the subject matter expert as it relates to yesterday’s, today’s and tomorrow’s customer.

Marketing has been described as a “customer contact sport” and astute CMOs are pushing their organisations on every front to gain sustained expo-sure to what their customers are think-ing and doing.

Strengthening their knowledge of cus-tomer-driven design techniques and customer community development will empower today’s CMO. Methods such as ethnography (including live in’s with consumers), competitive context and online customer communities en-able marketers to create products mo-tivated by first-hand, substantiated — and not assumed — customer needs.

CMOs who harness these tools will advance their customer-centric com-petencies and improve their personal

knowledge of the customer providing a reliable voice of that customer to the organisation.

The CMO is in a unique position to champion (top down) the shift of con-sumer trust throughout the organisa-tion to drive a customer-focused busi-ness strategy.

3. Understand, embrace and leverage new media

Ambitious CMOs will also leverage a range of resources, including social com-puting and Web 2.0 tools, that enable a two-way dialogue with customers to in-crease their customer understanding.

While today’s CMO’s currently rank da-ta-collecting tactics such as research, measurement, and analytics as the tools for marketing success, tomor-row’s CMO’s will also leverage social computing/Web 2.0, applications such as blogs, social networking sites, wikis, etc. that allow customers to influence others about a brand or product.

Marketing is now about conversations. And media, specifically digital media, make those conversations possible. Demonstrating business benefit and leveraging this understanding is es-sential for today’s CMO.

4. Move beyond your traditional marketing expertise and think like a business owner

When hiring CMOs, CEOs frequently look for a business partner: someone who has a track record of successfully growing businesses and someone who has a keen customer driven insight into opportunities the business can exploit.

CEOs are looking for people who un-derstand how to differentiate in the marketplace in such a way that com-petitors are hard pressed to keep up or make up the gap. As a small busi-ness leader myself who has come from large corporate environments, I don’t underestimate the change of thinking required here, but it will pay dividends.

In summary, tomorrow’s CMOs will proactively engage and endorse some of the actions and suggestions out-lined above. Leveraging the best from marketing community suppliers will

also be critical as will the appropriate resourcing across the marketing team itself. CMOs must also expect a new level of partnership from their advertis-ing agencies and marketing supplier communities. Pushing them to balance opposing forces of creativity and account-ability is a challenge they must learn to relish if relationships are to be sustained. Best practice measurement tools to manage these relationships (and keep the parties “married”) can assist here.

The final point relates to embracing this change and accepting this as the new “normal”. Irrespective of how business conditions change, market-ing should see this as an opportunity to create a new marketing paradigm beyond merely functional to overall business leadership.

“By understanding the marginal return of incremental spending, the CMO can justify a larger budget and know exactly where to put the extra funds and with what predicted effect.”

PAUL NELSON established BrandMatters seven years ago after a successful and senior career in marketing with organisations including AMP, Tip Top Bakeries and McDonald’s Family Restaurants.