Over the past few years, research has been showing a decline in the average tenure of a U.S. chief marketing officer.
In fact, at 3.5 years—cites a new report from consulting firm Korn Ferry—the CMO’s tenure actually ranks as the shortest of all titles in the C-suite (CEO, CFO, CHRO, CMO and CIO/CTO). In comparison, the average for the CMO was 4.1 years in 2016.
The report, which analyzes the top 1,000 U.S. companies (by revenue), notes in particular that CMOs in the technology industry are ranking the lowest on average, with a 3.0-year tenure. At the top were CMOs in the industrial sector, coming in at 4.0 years.
Caren Fleit, leader in Korn Ferry’s global marketing officers practice, suggests the overall tenure problem could be tied to an organization’s deficiency in proving the true value of the CMO—i.e., “a lack of understanding of how powerful this role can really be in terms of driving business outcomes.”
“This often leads to lack of clarity around tangible deliverables,” Fleit explained in a recent press release, “and also to hiring a CMO whose skills and experiences may not be aligned with business needs.”
A CMO’s ability to demonstrate ROI and prove the value of marketing is more important than ever. Not only do they need to balance the demands of the ever-changing (and inevitably uncertain) marketing environment, but they also must keep an eye toward sustaining viability in the long term.
Demonstrating ROI: Focus on What Really Matters
When it comes to proving marketing’s value to an organization, CMOs should make sure they’re presenting the data that matters the most and leaving the rest behind (or for another day).
According to new Forrester analysis, top-level marketing dashboards—i.e., CMO dashboards—typically include a total of eight metrics for “consistent review.”
Ross Graber, Forrester’s VP and principal analyst for marketing operations, explains that although marketing leaders might feel they have “limitless” potential to make an impact on an organization, they still need to rein in the data to a certain extent, seeing as there is, however, a limit to the “attention of executive audiences.”
When CMOs use this “crisp set” of metrics, Graber says, they can adequately “summarize marketing’s value,” rather than “investing time exploring interesting—but less consequential—details.”
“It’s a balancing act to select metrics that are comprehensive, yet meaningful,” Graber adds, “so prioritize metrics that highlight marketing’s performance against key growth strategies.”
So, What Data Should be Delivered?
As suggested by the SiriusDecisions 2020 Metrics Study, these CMO dashboard metrics include, at the top of the list, marketing-sourced revenue/bookings, marketing-sourced pipeline and marketing-influenced pipeline.
As Graber puts it, many CMOs are “thankfully” not placing as much of an emphasis on lead metrics, such as conversion rates and lead volumes, but, instead, are looking at what he calls “more impactful dimensions of their marketing performance.”
The study also finds that high-revenue-growth organizations are focused in particular on “diversified” metrics, including data related to “value created during the customer lifecycle,” such as customer retention, satisfaction and advocacy.
“Higher-growth companies are less focused on reporting on leads and more focused on larger indicators of achievement. It’s a lesson more companies should take to heart,” advises Graber.
It’s also important to note the difficulty of extracting the right data from metrics that don’t provide context. Marketing performance can be hard enough to measure, but when it’s not delivered in the context of marketing’s plans—as well as other departments’ plans, and the overall company strategy—this reduces the data’s value and impact.
Sharing metrics on marketing-sourced revenue in the context of your own marketing plans might look impressive to your team, but everyone else in the C-suite needs to be impressed, too. If you’re not able to show your CEO how these metrics fare in relation to the advancement of overall business outcomes, you might not be fully proving the value of marketing and, thus, your role.
“Dashboard creators should display performance relative to targets so that executives can clearly see how marketing is performing against its goals,” advises Forrester in its CMO Dashboard Guidelines report.
In addition, when you make use of “additional summary metrics for drivers of marketing’s efforts,” such as revenue, you can then “create a basis for comparison,” the report explains. If not, you risk “tone-deaf assertions that marketing is performing wonderfully while the KPIs the function is expected to drive are suffering.”
Presenting Your Data
Once you’ve figured out what data is most meaningful for your organization, you need to present it in the most optimal way that proves marketing’s success.
For complex, highly matrixed organizations in particular, the CMO Dashboard report recommends using a hierarchy of views for marketing performance data, enabling “individuals in various roles to form conclusions and take action.”
Even though, as mentioned earlier, you shouldn’t waste time presenting information that isn’t relevant to your cause, that doesn’t mean your data can’t be as granular as needed. Segmentation is your friend!
The more summarized the reporting is, explains Forrester, the less visibility there is into specific areas where marketers are able to see what’s working and what’s not.
When your marketing technology enables segmentation, for example, you’re able to break up your marketing plans and align them to more specific goals and strategies. Marketing leaders must be able to calculate metrics and understand performance at each level of segmentation—or even at the intersection of several segments: e.g., demand gen leaders (persona) in the U.K. (geography), or, perhaps, customers who are repurchasing your product (buyer’s journey stage) in the U.S. Southwest (region) through a vendor listing (campaign framework).
When you peel back the layers and understand performance at the segment level, you get a better grasp on the meaning behind your KPIs, enabling you to continuously improve your plans—integral steps in the journey toward proving marketing’s ROI and value.
Marketing leaders need segmentation if they want to conduct any meaningful analysis of their results compared to their plan. It’s important to note, however, that all of your marketers must be on the same page in terms of terminology and language for your formal segments. Make sure everyone is aligned on what exactly defines each buyer’s journey stage, or how detailed you’re getting on geography, for example, before you establish your segmentation. This meta-data needs to be recorded for each of your plans, campaigns, programs and tactics.
When marketing leaders have this high level of visibility into plans, they have more confidence in their level of accountability, as well.
Armed with this visibility, accountability and deliverability of the right data, CMOs should be on a better path to proving just how truly valuable they are to their organization, especially in the long run.
To sum it up, fewer, more segmented metrics that are focused on business impact, aligned with business goals and communicated in context with plans, could be key to saving the job of the CMO.
Hive9’s marketing performance management solution uses the foundation of your total marketing plan to predict the business impact for the year and constantly compares it with actual results. This forward-looking approach produces dashboards that drive actions to continuously improve your plan.
Schedule a live, personalized demo to see how Hive9 helps revenue-centric marketing leaders gain better insights into metrics that drive results.