The CMO is Dead

This is a guest post by Professor Dominique Turpin.

I have some sad news: The Chief Marketing Officer is dead.

Fortunately, I’m talk­ing about the CMO pos­i­tion rather than a par­tic­u­lar per­son. But the decline of the CMOs influ­ence is an alarm­ing trend in com­pan­ies that claim to put the cus­tom­er first but in real­ity con­tin­ue to be product-driv­en. CMOs are increas­ingly power­less and peri­pher­al. The CEO sets the over­all strategy, the R&D and innov­a­tion teams design the product, and the CFO determ­ines pri­cing and depart­ment­al budgets. The CMO, mean­while, reports to a chief exec­ut­ive who often has only par­tial know­ledge of the cus­tom­er. No won­der some CMOs are con­sid­er­ing a career change.

The CMO pos­i­tion is dead for sev­er­al reasons:

Most CMOs are not really immersed in mar­ket­ing activ­it­ies. By this I mean under­stand­ing, cre­at­ing and deliv­er­ing value to the cus­tom­er. Too many CMOs are con­strained, focus­ing on PR and com­mu­nic­a­tions and not on products or pri­cing, so as not to invade the space of the Chief Innovation Officer or the CFO.

CFOs have become more power­ful. This is partly the res­ult of tough trad­ing con­di­tions and short-term pres­sure from fin­an­cial mar­kets. The CFO has taken con­trol of pri­cing decisions and is win­ning the race to the very top. The evid­ence today is that most chief exec­ut­ives have a fin­ance or engin­eer­ing back­ground, and few come from the ranks of sales and marketing.

Marketing impact is often hard to meas­ure. Marketing is more art than sci­ence. It’s dif­fi­cult to quanti­fy the res­ults of a mar­ket­ing cam­paign, and to know wheth­er all those mil­lions of dol­lars spent have led to an increase in real sales. And when a down­turn comes, the mar­ket­ing budget is often the first to be cut.

Nobody has a clear idea of what mar­ket­ing is. It’s fuzzy. Ask 20 seni­or man­agers in any com­pany what mar­ket­ing is, and they will give 20 dif­fer­ent answers. By con­trast, most people would agree on a defin­i­tion of fin­ance or production.

In some cases, mar­ket­ing is still power­ful and cent­ral to the cor­por­ate DNA. There are com­pan­ies with a vis­ion­ary founder who has a great under­stand­ing of the cus­tom­er, like Steve Jobs at Apple or Ingvar Kamprad at IKEA. And there are fam­ily busi­nesses, which are bet­ter than pub­lic com­pan­ies at tak­ing the long-term view needed in marketing.

But these cases tend to be the excep­tions. At most com­pan­ies the power of the CMO is being eroded almost by the day. Instead of griev­ing over this, CMOs can take the fol­low­ing prac­tic­al steps to reclaim some of their lost power:

Get rid of the CMO title, because nobody under­stands it. Create the new title of CCO – Chief Customer Officer. This per­son must be the voice of the cus­tom­er in the organ­iz­a­tion, tak­ing views and mes­sages from the mar­ket and spread­ing them intern­ally. Changing a job title is clearly not enough, but there are oth­er con­crete steps that can be taken.

Get the CEO to be the CMO. CEOs can drive the cus­tom­er-cent­ri­city agenda bet­ter than any­one else. They have the power to lead a company’s cul­ture, increase cus­tom­er focus and drive the recruit­ment of cus­tom­er-ori­ented people. The CEO as CMO also sends a strong mes­sage through­out the organ­iz­a­tion that the cus­tom­er is at the cen­ter of the company’s key pre­oc­cu­pa­tions and that mar­ket­ing is everybody’s job.

Get the CFO on board too. Doing this requires tak­ing some of the fuzzi­ness out of mar­ket­ing. CCOs should try to pro­duce hard num­bers that show a return on invest­ment and a clear impact on the company’s fin­an­cials. They could also take a refresh­er course in fin­ance to get a bet­ter under­stand­ing of where CFOs are com­ing from. Even some­thing as simple as lunch with the CFO can help CCOs become more flu­ent financially.

Use cus­tom­er know­ledge to build influ­ence. With back­ing from the big two in the C‑suite, CCOs can use their teams’ cus­tom­er know­ledge to influ­ence dis­cus­sions of product design and pri­cing, and make a company’s offer­ings more sens­it­ive to the mar­ket. Very few busi­ness lead­ers ask them­selves ‘What are my cus­tom­er head­aches?’ But this is such a good ques­tion. Companies that can provide a product or ser­vice that make people’s lives faster, easi­er, bet­ter or cheap­er will always be on the right track.

Back in the 1950s, the man­age­ment guru Peter Drucker wrote that a com­pany has two and only two key func­tions – mar­ket­ing and innov­a­tion – and that all oth­er func­tions should sup­port these. Back to basics: Objective num­ber one for the CCO is cus­tom­er-cent­ri­city. This focus must come from the very top and fil­ter down through the whole organ­iz­a­tion so every­one has the incent­ive to add value to the cus­tom­er. Although pay­ing atten­tion to the cus­tom­er is com­mon sense, unfor­tu­nately com­mon sense is less and less com­mon. The CCO must be the first step in the right direction.

So – good­bye to the CMO, hello to the CCO.

About the writer: Dominique Turpin is the Nestlé Professor and President of IMD. He co-dir­ects IMD’s Orchestrating Winning Performance program.

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