Marketing needs much better marketing – ‘the inside story.’ A prequel.
Last week I wrote a post titled ‘Marketing Needs Much Better Marketing.’ This was ‘the outside story’ of how there’s an enormous opportunity to improve marketing effectiveness. Specifically by taking a leaf – or three – out of canon of work from the ‘International School.’ This includes the likes of Ehrenberg-Bass Institute – Byron Sharp & Jenni Romaniuk. The ‘Godfathers of Effectiveness’ Les Binet, Peter Field and the IPA (Institute of Practitioners in Advertising). And the curation and evolution of thinking from Peter Weinberg and Jon Lombardo of the LinkedIn B2B Institute.
After receiving some provocative comments – thanks Roger Evans – this week’s post has the same title, but on reflection it’s a prequel. It focuses on how marketing needs to do a much better job at marketing its effectiveness to business leaders and those in corporate authority – ‘the inside story.’ Ideally, although business reality may dictate differently, this tale should told and bought into by senior leadership, before embarking on the ‘outside’ consumer facing journey. This then provides the mandate needed for success and allows marketing’s ambitions can be aligned with broader commercial plans, targets, resources, investment and rewards of the business as a whole.
There has been much talk about the diminished influence of today’s CMO. In many organizations the role and responsibility has been removed, often replaced with titles like Chief Customer Officer, Chief Growth Officer or Chief Value Officer, all of which to me are just synonyms for a CMO. Then in an about-face, as quickly as the CMO was dispatched on gardening leave, they’re reinstated demonstrating the fallacy of the original decision. Companies need a CMO. Yet regrettably, in most cases it’s true that today’s CMO struggles to be the indomitable force that inspires and helps define Corporate Strategy and general corporate leadership. Nonetheless, having experience in large global organizations, right down to bootstrapping start ups, I can confirm that all businesses need to have a shared strategic ambition in order to align limited capabilities and resources – especially for marketing.
A learned former colleague, told me that the CMO of one of the most famous tech companies would start every meeting by reciting the brand positioning. That’s a great idea, but the shared strategic ambition goes above and beyond that. It sits above, but aligns with, the vision / North Star the brand provides. The Chairman, the Board, the CEO, the full C-Suite and in fact the entire organization, needs to share a common ambition for the business truly succeed.
When the ambition is understood the very next question needs to be what is the life of this ambition. Is it the next sales meeting? Is it the next Q-ly results? Is it the next shareholder dividend? Is it the year-end number that the annual bonus is calculated on? Is it a valuation for an IPO? Or, is it something that could seem more altruistic today, like the results in 3 / 5 / 10 years time? As Warren Buffet said “Someone’s sitting in the shade today because someone planted a tree a long time ago.’
It is the duty of the CMO – for the sanity of the whole marketing community – to very quickly determine the life of that ambition. This then allows the CMO to develop a marketing strategy and plan of execution to bring that ambition to life, in the appropriate timeframe. Marketing needs a top-down championotherwise it operates in a constant inefficient and demoralizing swirl. Ultimately the CMO needs to be seen as the marketing champion. But unless the CMO is executing the ambition of those in authority it becomes a moot point.
So, here are some scenarios and there are undoubtably many more:
- Those in authority have an immediate and long-term growth ambition. They’re running the day-to-day whilst also planting trees for the future. Huzzah!
- Those in authority have limited long-term ambition and are ignorant to the perils of such an approach. So in this case, it is beholden on the CMO to evangelize the benefits of a long-term ambition. Why plant trees as we harvest today?
- Or, those in authority are solely short-term focused. If this is a fixed mindset, it actually makes life easier for the CMO, as they only need to focus on in-market / bottom-of-the-funnel / sales activation. That said, in this scenario you might find you’ve picked all the low hanging fruit, squeezed the juice, then squeezed it some more – with ever diminishing returns – and in 12 / 24 months the juice stops flowing because you haven’t invested in growing any new fruit. A selfishly fine approach to marketing if the leaders only plan to be with the business for the short-term.
Of these three scenarios I’d always recommend and prefer to operate in the first. But I’m also fascinated by the idea of evangelizing the benefits of a long-term growth mindset. Basically because a future cashflow case for marketingis the logical and sensible road to take if you’re building a business for any extended period of time. Whether you’re privately held, or listed and traded on an exchange, who isn’t looking for a path to future profits? So, how does a CMO break the short-term trap and help the organization have a long-term growth ambition?
Here’s one idea. The Oracle of Omaha said that Charlie Munger – who sadly passed away last month at the age of 99 years – thought about business, economics and investments better than anyone he knew. And I love Charlie’s quote “show me the incentive and I’ll show you the outcome.” I think this at the heart of setting authorities’ ambition. If they’re incentivized for long-term growth you have a chance to succeed with the first scenario and transition those from the second scenario to the preferred model. If not forget it. A 2021 article from the Harvard Business Review – Compensation Packages That Actually Drive Performance – found that most CEO’s compensation is heavily weighted to equity – ‘Our analysis showed that on average 41% of senior executive compensation is paid in cash, and 59% in equity’. This would suggest that selfishly, and not altruistically, CEOs should focus on a long-term growth ambition.
We constantly hear about Wall St’s insatiable appetite for short-term corporate results, yet I remember reading that 80% of the money that supports today’s stock price of a company comes from the expectations of 10 years worth of future profits. So, if this is how Wall St. values the business surely the CEO and Board must be aligned to their long-term view? If that’s the case, it’s imperative marketing is empowered and resourced to create long-term Brand Building, which in-turn delivers the future profits expected by The Street.
Yes, we still need Sales Activation to help deliver current profits. But there needs to be coordinated plan of Sales Activation and Brand Building – bothism– and the balance needs to be tilted towards long-term brand growth.
A big thank you to Field & Binet’s ‘The Long and the Short of it’ and all the other work of the ‘International School.’ Hopefully your rational empirical and evidence based approach will help us marketers better market the effectiveness of our work to those senior leaders – as we have the conviction to speak truth to authority with some emotional credibility.
What other ways can marketers tell a better ‘inside story?’I’d love to hear your thoughts.