Insights Into the Modern CMO
We recently had the privilege to conduct an e-mail interview with Christine Moorman of Duke University’s Fuqua School of Business which is one of the top business schools in the United States. Christine is a professor at the university but she is also the head of the CMO Survey. We here at Marketing Pilgrim look forward to the findings of the survey each February and August.
A lot happens in the world of marketing and, in particular, of the Chief Marketing Officer (CMO) position. Today’s CMO is faced with more marketing and communications options than ever before as well as greater responsibility to justify the activities of marketing initiatives with proven ROI measurements. No easy task at all.
We asked Christine a few questions that help to put the role of the CMO into sharper focus.
MP: How is the role of CMO different than it was 5 years ago?
Moorman: Based on data from The CMO Survey, I can point to a few trends:
- More focus on social media and marketing analytics
- A greater tendency to have marketing and sales on equal footing in companies, as opposed to marketing in control of sales or sales in control of marketing
- Less emphasis on tactical activities such as promotion and more emphasis on strategic activities such as innovation, customer relationship management (CRM) and market selection (The chart below from February’s CMO Survey emphasizes this shift)
MP: With the current “time to live” for CMO’s being relatively short with the last numbers we saw was at an average of 23 or so months. Is that accurate?
Moorman: I wrote a blog post on this very topic that is pretty complete but to summarize, the popular perception is that it’s two years and out for most CMO’s. Our results from the most recent CMO Survey don’t back that up at all. In fact, it showed a degree of steadiness that might surprise many. From the post I mentioned I wrote “We found that the number of years a top marketer is in his or her current role in a company averages 4.4 years and that this number has not changed dramatically over the last three years: 2009 (4.3 years), 2010 (4.6 years), and 2011 (4.3 years). If CEO and boards took out performance frustrations on CMOs, we would have surely seen these figures bottom out over the last few years.”
MP: In what areas have the CMO’s of today fallen behind? What should they be doing to get ahead of the curve?
Moorman: The biggest areas where CMOs need to retool are in the areas of social media and marketing analytics. Companies are spending a larger proportion of their marketing budgets on social media and on marketing analytics which means that top marketers will need to be prepared to generate a return on these investments. What companies can do in these areas is changing so rapidly that top marketers need to be in a continuous learning mode just to stay on par.
MP: How reliant are CMO’s on younger employees with less business experience when it comes to social media and Internet marketing as a whole?
Moorman: I do not have any data on the age of these employees. However, I believe that companies are relying on younger employees to do this work for them, both inside and outside the company. There is still outsourcing of social media going on because companies still catching up on building this capability (see chart below). This is needed to fill gaps that may be occurring at the staff or even managerial levels. It appears to be less of a need as we move forward, however.
When top managers are not involved in the company’s social media strategy, this can lead to a gap between social media and the marketing strategy. The issue is less a generation gap than it is an integration gap. I stated in a post I wrote concerning this issue “Closing this integration gap is a huge challenge facing companies today. If the gap is closed, social media will take its place in the pantheon of effective marketing strategies. If not, I predict that social media will not generate a respectable return on investment.”
MP: Where does the position of CMO stand in relation to other C-level positions? Do they have a truly equal seat at the table? Is their role increasing in importance as we move further into the Internet age?
Moorman: I don’t think that marketers have an equal seat at the table yet. However, as we develop a deeper appreciation for the value of managing customer relationships and brands and the impact of doing so on long-term firm profits, this will continue to improve. I think in the best companies marketers have earned this seat. Yes, I think CMOs are increasingly important given what we can now do to reach and interact with customers on the web.
MP: What are the most frequently relied on tools used by C-level marketers to measure marketing effectiveness?
Moorman: Most companies still rely on revenue metrics, such as sales and market share. I recommend focuses on customer metrics, such as net promoter score or measures of customer loyalty and satisfaction. It is also essential that firms rely on profitability measures to assess marketing because marketing can drive down costs as well as increase revenues. Finally, I am teaching my students how to measure the stock market impact of marketing activities.
MP: What recommendations would you have for aspiring C-level marketers regarding what they need to do to get to the top of their profession?
Moorman: The following three areas will help any marketer on course to move up the corporate marketing ladder.
Focus: It is impossible to help your company unless you focus your marketing strategy on your most valuable customers and on a simple, distinctive, and differentiated value proposition. You cannot be all things to all customers. Finally, focus on a few key customer-based metrics that will serve as leading indicators for your firm.
Listen: To your customers, to your front-line employees, and to other leaders that have questions about customers. Listen so you can provide the greatest value to customers, employees, and your fellow-leaders to help your firms succeed.
Build capability: The only way to succeed over the long run it to build marketing capabilities for identifying customers, uncovering sources of value, delivering that value, and measuring how well you are doing. Building capability means investing in people and processes for doing marketing systematically.
Our thanks to Christine for her time and we look forward to the next CMO Survey in August.
About Christine Moorman
Moorman is the Director of The CMO Survey. Moorman is a senior member of the Marketing Area at The Fuqua School of Business and the T. Austin Finch, Sr. Professor of Business Administration. Her teaching/research interests are focused on marketing strategy with a particular emphasis on how consumers, managers, and organizations learn about marketing. As the Director of The CMO Survey, Moorman is the primary spokesperson and is available to discuss the results and conduct follow-up interviews about the survey with major print and broadcast media