CMO GROW Outsourced marketing executives

Top 3 Reasons Why You Shouldn't Hire a Full-Time Chief Marketing Officer (CMO)

You probably did not know that over 80% of CEOs do not trust their Chief Marketing Officers (CMO). Now think about all the wasted time and energy CEO's spend wondering what to do about their CMO, it can be overwhelming and a significant distraction to say the least.

What if there were another, much more comfortable option for you to consider? Well, there is, but first, here are the top reasons why you should consider holding off on hiring a CMO.

Reason #1, Hold off on hiring a CMO

It's purely a matter of return on investment (ROI), an effective CMO most certainly will bring great value to any company, but it comes at a price that most early-stage companies cant afford. Many SMB companies can get by without a Chief Marketing Executive by hiring point marketing specialists to handle marketing basics like web and digital assets, direct response, and communications.

Successful growth companies need resources to create and build an outstanding product or service that is backed up by remarkable customer experience. No amount of advertising budget or marketing genius can cover up a poorly designed (or lousy) product or service.

Reason #2, Good CMO’s are very hard to find

An effective CMO needs to maintain a unique balance between right and left-brain functional skills and needs to possess unique leadership competencies. Finding an effective Marketing Executive is very difficult, and if you are fortunate enough to find a CMO who checks all the boxes, be prepared for the investment that will follow. A CMO's $200K+ compensation package, bonus, equity, and other might seem bad enough, but it will only be a fraction of the cost compared to the marketing investment appropriation and support that they will require to attain the company's revenue growth requirements.

Remember, it's not just the compensation of the marketing executive that you have to measure; it's the marketing budget spend requirement that also needs to be measured and optimized. If companies don't have resources to fund the work of the CMO, then they should wait until they do. Another factor complicating the situation is that savvy executive marketers are wary of being set up for failure by improperly aligned expectations and resource commitment from the CEO and Board. Ensuring that expectations and resource commitments are aligned and committed sufficient to achieve and sustain the revenue growth targets will be a critical hurdle prospective CMO's will want to verify.

Experience of the Past

It's easy to point to dozens of examples of companies that have driven exponential growth over a short period of time thru providing an outstanding product or quality of service, coupled with grit, determination, and hard work. In addition to offering excellent products and services, successful companies are effective at optimizing prospecting activities and are relentless at getting referred by the prospective and current customers as their primary source of lead generation. This growth recipe of references and getting referred has been leveraged successfully by thousands of companies for many decades.

Reason #3, CMO’s don’t last

On top of the rest, also consider the information below from Harvard Business Review and Fournaise:

  • 80% of CEO’s admit they do not trust and are not impressed by the work done by Marketing – while in comparison, 90% of the same CEO’s do trust and value the opinion and work of the CFO and CIO’s.
  • 73% of the CEO’s think Marketers lack business credibility: Marketers can’t prove that they generate business growth.
  • 90% of Marketers are not trained in Marketing Performance and marketing ROI, and 80% struggle with being able to adequately demonstrate to their top management the business effectiveness of their marketing spending, campaigns, and activities.

According to Korn Ferri Institute, CMO’s have the shortest life span of all C-suite executives somewhere in the three-year range, which is significantly shorter than other C-suite executives. Interestingly the average age of a CMO in the top 1000 US-based companies is early to mid-50’s, compared to the average age of CEO’s which is the mid to late ’50s.

Are CMO's Set Up to Fail?

Harvard Business Review published a report in 2017 entitled "Why CMO's Never Last" suggests that perhaps the problem with CMO longevity stems primarily from poorly defined responsibilities, expectations, and performance measures. They go to suggest further that often the CEO's expectations for there CMO's are not realistic, and that CMO's are set up to fail.

So, where does that leave us relative to where companies should invest their scarce resource dollars in optimizing their growth trajectory? The information above could suggest that perhaps companies should consider other potential options including the option of hiring fractional or part-time expert CMO services, like those offered by CMO GROW, and Chief Outsiders and others that can bring a high-level of marketing know-how and guidance to the company.

Benefits of outsourcing

Outsourced marketing executives can bring many benefits to an organization in the following ways:

  • Part-time Chief Marketing Officers (CMO) represent the fastest way to grow your company, the lowest cost, and the lowest risk. Part-time CMO's are driven to demonstrate immediate and continual results, and they understand that if they don't, they will (and should) be terminated. Part-time or fractional CMO's are not like lawyers, and at least for CMO GROW CMO's, we will excuse ourselves if, in the "unlikely event," we are not driving real revenue growth.
  • Experienced outsourced marketing executives can quickly spot trends, gaps, and holes in company sales and marketing strategies and will bring years of experience in "actually growing businesses." This growth experience and perspective provide enormous value to bring focus and effort to the highest ROI marketing activities.
  • Executive outsourcing is much more effective and more economically viable, then hiring an agency or in-house executive. Companies like CMO GROW can quickly assemble a group of their colleagues to brainstorm and workshop growth challenges of their clients. CMO GROW clients benefit from the collective whole and strength of its executive
  • Demand for competent and experienced and Chief Sales and Marketing executives is high, finding and winning the "recruiting game" can seem like "Mission Impossible" and if you do happen to find the right-fit candidate, a competitive compensation package will be required. An outsourced CMO costs a fraction of the hiring price and allows you to invest in profitable growth programs rather than high salaries and compensation packages.
  • Forward-thinking companies understand that an outsourced CMO (for hire) is an innovative and sustainable alternative and competitive advantage. Business growth and success are tied to creating and executing effective growth plans. Successful companies are intentional in planning and implementing their strategies.

Why Companies Fail

Growth companies need to understand and audit risk factors associated with their business model. CB Insights recently publish research prioritizing the "Top 20 Reasons Companies Fail", these mistakes can be avoided with a cautious approach and a willingness to confront the brutal facts. Companies need an outsider who will audit and provide frank and real feedback. Companies like CMO GROW, Chief Outsiders, and others are well equipped to handle this punch list of items, and they can function in many ways, as a part-time member of the executive staff, or in an advisory role, similar to the way board members advise and guide companies.

Once a company has checked the boxes and pass the audit, they need to get revenue flowing as soon as possible. Revenue is the oxygen that determines their wellness and growth potential. At this point, companies need hard-charging sales and business development resources to convert opportunities. And if they haven't already, they need to get busy building their digital strategy and integrated multichannel programs and campaigns. While these tasks are critical and can be challenging, they don't require a seasoned or expensive, full-time CMO.

Conclusion

Timing plays a vital role in business, getting the right C-suite executives into the proper function at a company (especially CMO) at the correct inflection point of its life-cycle, whether as a new hire or through the new fractional or part-time model can be game-changing.

The critical performance results, ultimately revenue, for the CEO, the shareholders, and the customers will determine your future success. For me, helping clients think through the effect and impact of alignment with marketing, sales, and operations within their organization is most satisfying, and the primary reason I founded CMO GROW.

Outsourced CMO's

 

Marketing and Sales Alignment with CMO GROW for Revenue Acceleration

Travel with me, if you will, back to 2008. It was a time, in the corporate world, when the sales team had all of the power and most of the fun. A company credit card in hand, they would organize meetings at conferences, trade shows, meetings on the golf course, or at their favorite hospitality event. Pleasantries were exchanged, orders were placed – and business kept rolling forward. Those were the good old days of yesteryear.

It is truly amazing how things change so quickly, and the landscape has been forever transformed. The business-to-business (B2B) sales process – once solely the domain of the million-miler set – has been joined, out of necessity, by the marketing team.

Yes, those guys (and gals) once known for coordinating trade shows, creating sales collateral and brushing up PowerPoint presentations, are now the integral part of a sales blueprint that requires a lot more than just sizzle -- and steak – to traverse and close a complex sales opportunity.

The New World

Today the lines between marketing and sales and have become increasingly blurred. It's difficult to really know within the sales cycle where the marketing role ends, and the sales role begins. The truth is that today marketing team is involved every step of the way if not in helping to close a deal, then its to inspect, understand and underwrite the customer journey. The need for alignment between sales and marketing has never been greater.

Because we live in a digital world, sales organizations need to be informed and trained on marketing programs and multichannel campaigns; and marketers need to clearly understand the sales cycle and customer journey, and to be able to identify and optimize each touch point along the sales continuum.

In fact, companies that have a firm grasp of how to cultivate leads in our brave new world generate 50 percent more sales than those still stuck in the go-go pre-recession days. And those B2B enterprises unable to align sales and marketing around the right programs, processes and technologies can bleed 10 percent – or more – of the cash off their bottom line!

Acceptance of the marketing team at the sales table, if not managed properly, can be a difficult proposition. Fortunately, seasoned, well-trained Chief Marketing Officer – like my colleagues at CMO GROW – has the ability to restore balance and order to your go-to-market ecosystem.

Alignment Redefined

It all starts with becoming aligned on the critical notion of how leads are found, cultivated and nurtured. We live in a world of
information symmetry. In fact, the majority of our B2B prospects have learned about what we sell – and how it will help them – before we have that first discussion.

This means that our digital presence – websites, content, drip marketing and social media channels – must be optimized for the challenge. This body of information ultimately represents the holistic narrative of why you’re relevant to today’s consumer. When done with skill, it can invoke the right emotional levers, at the right time, and in the right way that can lead to a closed/won deal.

Even though 88 percent of B2B marketers are currently employing some content marketing techniques, only 32 percent have formalized this strategic approach for the lead cultivation process.

This statistic reminds me of an alarming discussion I recently had with a company that complained of having a “sales” problem that has inhibited its ability to grow and expand in the way they had expected.

To this executive, the solution was to brute-force the challenge by hiring a senior sales person – someone with a Rolodex who
would hit the phones hard and book appointments. As our discussion progressed, it became evident to me that this executive had not considered the root cause of his “sales” problem. Though well-intentioned this executed had a hammer in his hand and was searching for any nail he could find to pound.

Funnel Creation

Marketing, it turns out, is best equipped to fill the top of today’s sales funnel. The rise of marketing automation has fueled the trend of “inbound marketing” – defined as the promotion of a company through blogs, podcasts, video, eBooks, newsletters, whitepapers and other forms of content. All of these channels give us the ability to both target the right type of influencer, and to then track their activity into, and through, our sales funnel.

It also means that marketing can and should be held accountable for a hefty portion of our overall sales success. In today’s realigned sales and marketing paradigm, nearly three-quarters of corporate marketers now have a quota for lead sourcing – and must track metrics like conversions, cost per acquisition and cost per closed account.

Closing the Deal

Much of the sales “top of funnel” responsibility has shifted from sales to the marketing team, there’s still plenty for the sales executive to accomplish. Their role, though shifted a bit, is still quite important in this ecosystem. Today’s sales managers should prepare and position themselves to be a trusted advisor – someone who facilitates the customer journey, ensuring that there company’s offerings are consistently delivering value to the relationship (and also considering areas to “upsell” the customer on new products that can further enhance the value proposition).

Though a recent study warns that by 2020, customers will manage 85 percent of their relationships without talking to a human, it’s critical that company's sales team reaffirms its value to be included in the 15 percent minority.

How is your company aligning its sales and marketing teams?

Why Do Growth Companies Stop Growing? Can the CMO Restart Growth?

By Elizabeth Giuffrida, CMO at CMO Grow.com

I am a hopeless romantic. And “RomComs” are my absolute favorite film genre. I love the simplicity of the girl meets boy plot and the sentimentality of the protagonist’s rollercoaster ride to true love. Shakespeare once said, “The course of true love never did run smooth.”

Interestingly, the same could be said about business—I’m referring to the “run smooth” part, of course. Many if not most growth companies experience an inflection point—a significant change in the progress of the company, customarily a perceptible slowdown in growth. Similar to the romcom rollercoaster, this experience can be sickening, like a rollercoaster drop so steep that it makes a bungee jump seem like child’s play. There are myriad reasons that companies reach an inflection point—economic down-turn, changes in the competitive landscape, challenges with supply chain, failure to identify new opportunities, market saturation, losing their connection to the customer, lack of innovation, and many more.

So how do some companies prosper, while others struggle to keep the lights on? It comes down to a company’s ability to create a blueprint for success.

Take the blinders off! Don’t be the unsuspecting and complacent romcom protagonist, who is completely unaware of the impending conflict. Just because the sales team is hitting it out of the park this month, this quarter, or this year, doesn’t mean that the rest of the business is running smoothly. Similarly, a great NPS doesn’t mean that you can stop product innovation. Organizations that have a transparent and communicative process for reviewing metrics (aka key performance indicators or KPIs) can more easily identify areas of the business that could be susceptible to an inflection point. This candid self-analysis coupled with the honest answering of some tough questions can and will accelerate your company’s ability to see gaps in critical areas—namely, people, product, and process, and allow you the opportunity to pivot or in some cases execute an outright strategic transformation.

Questions you might ask:
• Do we have the right people in the right roles?
• Do we need to recruit new talent?
• Is our product still relevant or do we need to innovate?
• Do we need to augment our product line? Or sunset old products? Or both?
• Do we need expansion capital? Or did we expand too much? Or too quickly?
• Does our distribution model still work? Or do we need to develop new channel partners?
• Is our pricing still competitive?
• Do we need new systems to streamline operations?

If you don’t look at your business as a whole, you may risk your only opportunity to create and actualize a blueprint for success that propels you through inflection points. I’ve personally found this process of self-evaluation challenging for some companies, at least initially. This is especially true of newer companies with $5 or $10 million in sales, where the leadership team that built the company may not be the leadership team that can grow the company—at least not without some level of transformation.

Most companies reach their first inflection point at about $5 or $10 million in sales. The reason for this is that your people, product, and process don’t necessarily need to be dialed in for this level of success. However, to overcome and continue to grow past an inflection point, a company needs to make changes, it needs to transform—sometimes a little and sometimes a lot. But before you run off and start implementing a bunch of changes, perhaps you should take a step back and ask yourself if you’ve laid the groundwork necessary to restart growth.

Whether you have $10 million or $100 million in sales, if you’ve hit an inflection point, it may be time to revisit your position in the market or visit it for the first time in some cases. Positioning is different from branding and actually comes before branding. So, if you’ve branded your company without first going through the rigor of positioning, it’s likely that your brand is unconvincing and possibly inauthentic. Precisely identifying the position you own in the mind of your prospect is key to laying the groundwork required to create a blueprint for success. And comes down to two simple questions—"Who are you?” and “Why do you matter?”

If you cannot concisely answer these questions, then how are you going to convince people to buy your products and/or services over those of your competitors? Although challenging, answering these questions is essential to forming your company’s positioning statement … and a positioning statement is essential to cohesively align your entire organization around what your company stands for. Positioning is the “secret sauce.”

In our overcommunicated society your company and the products and services you offer need to own a position in the mind of your prospect, a position that is unique and authentic to you. Make no mistake, developing your positioning statement is no easy task and cannot be done in a vacuum, nor can it be the sole responsibility of your CMO or Marketing department. The key stakeholders of your company need to be engaged, starting with the CEO. The position you own in the mind of your prospect is a concept that needs to live and breathe throughout your company. Everyone needs to buy into it. And it needs to be at the core of decisions made at every level.

The Internet along with social media have created a level of transparency which limits, if not completely eliminates, a company’s ability to create an image that is not authentically theirs. For this reason, your positioning must reflect the real you—who you are and why you matter. Your positioning is then manifest in your brand, which is why positioning comes first. In essence, your brand is the emotional outward expression of your internal rational positioning (Figure 1). Once solidified, it will eliminate confusion about what your company stands for, enable you to streamline company-wide decision making around your people, product, and process, and optimize opportunities for growth—all of which enable you to create a blueprint for success.

Image by Andy Cunningham

So how do you prepare for future inflection points?

  1. Diligently measure and analyze key metrics to spot trends (good and bad) in your business and/or the market.
  2. Ask yourself tough questions about your people, product, and process.
  3. Be open to transformation, especially strategic transformation.
  4. Stay true to who you are and why you matter (positioning)—inauthentic perceptions don’t sell.
  5. Create a blueprint for success and be ready to implement it at every inflection point.
  6. Rinse. And repeat.

Much like the white-knuckled rollercoaster ride of a really good, albeit cheesy, rom-com, an organization's journey through an inflection point can conjure feelings of nausea. But once collaboratively navigated, a path for impending growth lay ahead.

Elizabeth Giuffrida is CMO and managing partner of the growth strategy consultancy, CMOGrow, a boutique agency focused on empowering companies with a robust sales and marketing blueprint for growth and performance.