08/11/2023

Marketing’s Voice on the Board: What the C-Suite Needs to Understand About Marketing

Marketing’s Voice on the Board: What the C-Suite Needs to Understand About Marketing

Surveys and studies have highlighted a lack of understanding, trust, and appreciation for modern marketing within the C-suite.

 

Nine out of ten CEOs believe that the role of marketing is well-defined, yet only half of CEO-CMO pairings agreed on this. Furthermore, when it comes to understanding modern marketing, only about 50% of CEOs feel comfortable with it, while a staggering 66% of CMOs believe that CEOs do not comprehend modern marketing. This disconnect, paired with a lack of marketing experience among Fortune 250 CEOs (only 10% have marketing backgrounds), demonstrates an underestimation of marketing’s potential to drive growth, despite the rapid evolution of marketing capabilities.

 

Moreover, a study by Fournaise reveals that more than 75% of CEOs don’t fully trust their current CMOs, and a similar percentage of CMOs express dissatisfaction with their positions. These trust issues have contributed to CMOs being perceived as less influential in the C-suite when compared to other executive positions.

 

How can a Marketing Director promote the value of marketing under these conditions?

 

The Marketing Trap: Marketing’s Limited Scope

The head of marketing can often find themselves in a challenging predicament. Given that marketing is intuitive to most people, it often becomes a constant recipient of one-off requests from various departments. Yet, most non-marketers perspective is limited to the more visible parts of marketing, like advertising, with little to no appreciation for the full breadth of a marketing campaign.

 

Consequently, marketers are hired for their strategic thinking and creativity, but their role often becomes focused on executing existing sales and growth plans, with CEOs who want quick, easily quantifiable results. This trap prevents them from bringing the full cohort of their capabilities to the table.

 

The Full Breadth of Marketing Responsibilities: Customer advocate, user experience insights, shaping brand story, customer engagement strategies, competitor/market intelligence, driving market growth, innovating service offering, driving revenue growth.

 

When the board focusses too much on short-term outcomes, they fail to grasp the intricate nature of lead conversion and pipeline generation. These processes rely on a broad array of marketing elements. For instance, awareness is a crucial element in this mix. Without creating awareness, the target audience remains unengaged, and this can impede the generation and conversion of leads required for business growth.

 

It would be a mistake to underestimate marketing’s value in long-term business strategy.

 

Inter-Board Relations

A successful marketing lead doesn’t operate in isolation. To maximise their impact, marketers need to establish critical relationships with other C-suite members.

 

The Interconnections between CMO and other C-Suite Roles

 

CEO: A strong bond with the CEO is essential to ensure alignment on business objectives. When the CEO and CMO are on the same page, it becomes easier to drive the company forward cohesively.

CIO: Collaboration with the Chief Information Officer is essential for data-driven decision making. With an insight into business performance and customer behaviour, the CMO can make strategic decisions to support the areas that need it.

CTO: The CMO, acting as a customer advocate, can provide valuable insights on user experience and the tech that can improve customer engagement at all points of contact. They can also keep track of the latest innovations across the market to ensure the business stays ahead of the game.

CFO: It is essential that the value of marketing spend is fully understood. A strong relationship with the CFO means that CMOs can support their strategy with the necessary funding and the CFO can see exactly how marketing is making a tangible contribution to company goals.

HRD: Where marketing crosses over into internal comms, a partnership with HR can be extremely beneficial to employee buy-in. Marketing is at the forefront of promoting the brand mission and creating an engaged community.

 

Of all these relationships, the research shows that the relationship between CMO and CFO is the one to improve. A study by EY, titled “The Future of the CMO CFO Connection,” found that 90% of nearly 300 senior financial and marketing executives believe that closer collaboration is critical to successfully drive digital transformation.

 

Unfortunately, 44% of the marketing professionals surveyed admit to having a less productive relationship with the finance department than any other function, and almost half of the finance professionals feel the same way. However, bridging the cultural gap between these two functions is essential and requires full sponsorship and mandate from CEOs.

 

Which Metrics are Important to Whom?

Metrics are the backbone of decision-making in the C-suite. However, the choice of metrics and their focus can vary significantly between CEOs and CMOs. In fact, only half of CEO-CMO pairs agree on their company’s top three marketing metrics. CEOs often focus on metrics related to revenue growth and margin improvements, while CMOs prioritise brand awareness and recognition.

 

The excessive emphasis on return on investment (ROI) can also be detrimental. Nearly 48.1% of marketers believe their companies are too focused on ROI, potentially leading to a weakening of brand equity and long-term performance issues.

 

What a board should realise is, there are a whole range of marketing metrics beyond ROI that can communicate the influence marketing has on business strategy.

 

Marketing Metrics for Early- and Late-Stage Organisations

 

Budget Considerations

Marketing budgets often find themselves on the chopping block during challenging economic times. A Forbes Insights survey reveals that 69% of CEOs believe their companies waste money on marketing initiatives. This is despite ample evidence suggesting that reducing marketing budgets is counterproductive. The reason behind this is partly a C-suite mindset that perceives marketing budgets as non-essential or inferior compared to essential business costs. Marketing leads often find themselves in the position of having to advocate for their own department’s worth.

 

It’s true that marketing budgets can be complex due to many moving parts and the inherent challenge in measuring and attributing their impact. However, companies that reallocate at least 49% of the previous year’s budget back into the business achieve a compound annual growth rate of 10% in total returns to shareholders. This underscores the long-term benefit of maintaining marketing investment, even in challenging times.

 

Marketing Budget Considerations: growth rates, business strategy, go-to-market model, company profits, industry category, maturity.

 

Again, we come back to the importance of aligning marketing goals with overall business goals for growth. When building the case to CEOs and CFOs who value frugality, understanding where growth is going to come from is essential. With this information, Marketing Directors can allocate their budget for maximum efficiency. Targeted, streamlined campaigns can save 10-30% of marketing spend which is sure to please any finance-focussed CEOs.

 

The Marketing/Information Dream Team

Most marketers will know that, for truly effective marketing, data is king. In some C-suite circles, market research is viewed as a non-essential expense and often becomes one of the first areas to be cut when budget reviews take place. However, quality brand research can pay off handsomely over time, which is why marketers should work hand-in-hand with the CIO.

 

Well-defined research can be repeatedly used to inform future decision-making. Market research not only directs a brand’s focus but also reveals areas where it can pull back, potentially saving millions on misguided future initiatives. Investing in research is a small price to pay for enhancing decision-making confidence among executive teams striving to achieve ongoing organisational success.

 

What Marketing Channels Should the Board Be Aware Of

In our increasingly digital world, staying up to date with the plethora of marketing channels is large part of the marketing department’s remit. So is communicating all possibilities to the board.

 

Fixating on only a few familiar channels can lead to missed opportunities and hinder the company’s ability to adapt and thrive in the face of evolving market dynamics. By fostering a culture of ongoing learning and an openness to new marketing channels, the board positions the company for greater success and innovation in the long run.

 

Marketing Strategies the Board Should Be Aware Of

 

To prevent the board getting stuck in the habit of traditional marketing methods or, conversely, getting swept away with the latest craze, marketers must promote the value of a mix of channels.

 

An omnichannel approach helps to create a cohesive experience for the customer, as well as mitigating the risk of putting all one’s marketing eggs in one basket, so to speak. The marketing lead can guide the boards ideas while also taking into account the cost-efficiency, audience-reach, and competitive advantage of each channel.

 

Conclusion: Marketing the Marketing Department

In conclusion, it’s crucial to recognise the significance of marketing within the C-suite. Marketing isn’t just an operational function; it’s a strategic driver of growth and success. While marketing’s role is multifaceted and often misunderstood, building trust and understanding between the marketing department and the rest of the board is essential for achieving long-term business goals.

 

Messaging to the C-suite should be focused on ROI, long-term objectives, thought leadership, and risk reduction. Sharing success stories can highlight the value and impact of the marketing department within the organisation.

 

Fortunately, there’s hope on the horizon. More marketers are taking the leap into the top leadership role, with examples like Tesco’s CEO, who was previously a marketing manager at Unilever, and M&S’s boss, who had a marketing background at British Airways and McDonald’s before joining. This shift underscores the growing recognition of marketing’s significance within the C-suite.

 

For help finding a marketing lead who can work with your board and maximise marketing effectiveness, get in touch today.

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