CMOs have the shortest tenure of the entire C-suite. But why? CMOs have a reputation problem in the organization. Of all the leaders in the C-suite, they have the hardest time proving the positive impact and ROI that marketing spend has on the business.
This needs to change. CMOs need to create a more direct line of visibility into the work they’re doing and the results they’re delivering. This blog will explore the need to shift from an operational focus to a strategic focus when it comes to KPIs and measuring marketing results.
Why Marketing Leadership Turnover Is at an All-Time High
It’s a common quip among CMOs that their average tenure is 18-24 months. Though this insider joke is a little off — the average CMO as of 2017 lasted an average of 44 months — it’s worth noting that CMOs are almost always the first to go among the C-suite when a disruption is needed in the business. And in 2018, we saw big disruption in the marketing world among top brands.
In the graphic below, SpencerStuart tracked the movements in the CMO role across big brands to discover that 2018 was an especially hard year for marketers. There was a lot of change and a lot of disruption to marketing leadership, not only in e-commerce and retail, but across industries.
But, why do we see such a short tenure for CMOs and why so much disruption in 2018? For most companies it points back to the one big elephant in the room — ROI.
Marketing leaders have a difficult time proving the financial benefit of marketing spend to the company. And, when it comes time to point the blame at a department that isn’t pulling their weight, it’s easier to look at a department head who can’t prove their financial impact than someone who can directly tie their results to business objectives.
So, CMOs often find themselves packing and looking for their next opportunity to grow.
Growth is another area that affects marketing leaders more than they might realize. Not growth in their role or career, but the growth they are providing to the business.
Growth should be a huge focus for any member of the C-suite, but marketing should be especially savvy to growth metrics. Revenue and customer growth should be at the forefront of any marketing plan.
In fact, some companies are even throwing out the idea of CMOs to replace them with Chief Growth Officers. The candy giant Mars appointed a CGO in early 2019 in an attempt to reframe marketing and focus on growing the business with marketing.
This move positions marketing leaders to become growth leaders and align directly with the business objectives. Many CEOs find themselves frustrated with the reporting and metrics they see from marketing. Operational and channel-specific KPIs that give little indication of how the business is affected by marketing.
But, focusing in on growth gives marketers the opportunity to shift their focus to strategic KPIs that actually impact the business. This gives them the ability to become a strategic asset to the company and removes the disconnect between the CEO’s goals and the CMO’s strategy.
The Shift from Operational to Strategic
Operational KPIs are an important part of the day-to-day work we’re doing as marketers. They help us understand what’s working on a daily basis, but give us little insight into how we’re doing strategically.
A channel-specific metric like email open rates is a good example of this type of metric. It serves an important purpose in understanding if the email we’re sending is being opened, but it does little to help us show how valuable the work we’re doing is.
If you took a report showing a 10% open rate on a welcome series email to a board meeting, you’d probably be faced with a lot of “so what?”s.
For marketers, these metrics are important. They tell a very specific story about the work we’re doing — whether that is validating a subject line or understanding the timing of our email sends — but for other leaders in a business they don’t give a full picture of how a campaign or strategy might be doing. That’s why these metrics aren’t enough and marketers must shift their focus to include strategic KPIs.
Strategic KPIs give us a much broader picture of what’s happening with our marketing work. These KPIs aren’t typically measured daily as their focus is more on measuring the progress toward a goal.
Increasing Average Order Value is a good example of a strategic KPI for e-commerce marketers. Average Order Value isn’t something marketers can snap their fingers and increase every day. It’s a strategy that you work to improve through different tactics. But the results of increasing a KPI like Average Order Value can have a direct impact on a higher-level business objectives like revenue.
The image above shows a benchmark report from Benchmarketing.io for Conversion Rate and AOV for e-commerce clothing stores.
As a marketer, it’s important to understand the need to shift from operational only to operational AND strategic KPIs. When these metrics work together, they can give you a more complete picture of the work you’re doing and where you can make the most impact.
Identify the strategic KPIs your business should be tracking with Benchmarketing.io
Understanding Your CEO’s Business Objectives
As mentioned above, moving from operational to strategic KPIs means shifting your focus to include a broader understanding of the higher-level business goals.
If you want to become a strategic asset to the business and become a long-tenured part of the leadership team, you need to understand the goals the business has as a whole. Usually those business objectives come directly from the CEO. For e-commerce businesses, they usually focus on revenue and customer growth.
It’s important to understand what these objectives are because these are the areas of the business where CEOs, board members, etc. want to see marketing impact. If marketing can’t show how they are impacting these higher business objectives, it becomes easier to not consider them a strategic asset to the business and push them aside.
As marketers, you’re not exclusively responsible for impacting revenue and customer retention. These metrics are the goals you should work towards with the rest of the company. But by being aware of them, you’ll be able to start planning marketing strategies that can make an impact on those metrics and show leadership why your department deserves a seat at the strategy table.
Identifying Strategies (Not Tactics) that Impact Business Objectives
We all know that revenue growth is a crucial part of any business. But how can we create a strategy and make an impact on something that feels so far from the work our team is doing day-to-day?
What if I told you it’s not that far from some of the work that’s already being done? Chances are, marketing is already executing tactics that affect strategies that impact these results — but we’ve all just been thinking about it wrong. We’re starting with tactics rather than focusing on the goals we’re trying to achieve and aligning our strategies with those.
But how can marketers quickly identify the right strategies that can have an impact on their e-commerce business? Benchmark marketing is a great way to identify KPIs and strategies other successful business in the e-commerce space are tracking and executing on.
This allows you to identify opportunities — things you aren’t doing and things you could improve on — to create a more business-focused marketing strategy.
The image above shows a benchmark report form Benchmarketing.io for Revenue Growth Strategies for e-commerce clothing stores.
In the image above, you can see the top strategies e-commerce marketers in the clothing sector are using to grow their revenue. If revenue is something your company wants to increase (which it is), you should consider using these strategies to impact the bottom line.
Making the CMO a Crucial Part of the C-Suite
Just by shifting your focus to align more with the CEO’s business objectives, you’ll already be setting yourself up for success. Alignment is a key factor in becoming a strategic asset to the business.
Too often, marketing leaders come into a company looking to prove themselves with grandiose strategies and marketing plans that don’t take into account the overall business goals.
By stepping back and aligning to company goals and then planning out your strategy, you’ll be setting your department up for success by focusing on growing revenue and your customer base which will have a great impact on the company.
Learn more about the KPIs that could be creating better alignment between the CMO and CEO.