The individual who holds the title of Chief Marketing Officer, or CMO, also carries a dubious distinction: it is the C-level executive post with the shortest tenure.  Writing in Forbes.com this past May, former eBay CMO Mike Linton lamented that the average span of a CMO appointment is just over 28 months.  And that may be a generous estimate.

To a great extent, the position’s limited lifespan results from the fact that what was once primarily a circumscribed branding function has ballooned into a diversified strategic and operational role. In addition to traditional market planning and communications, CMOs today are often responsible for sales management, product development, channel management, public relations, market research and customer service – a broad assortment of specialties, some of which used to report into other areas of the organization. 

The shift is rooted, in part, in the growing trend to lead companies by core values and purposes instead of traditional business metrics.  The ways those values are communicated and reinforced often falls to Marketing.  As a result, CMOs have increasingly become strategic advisors to their CEOs who are struggling to simultaneously balance the familiar and unfamiliar challenges of internal distribution of power, sustaining a strong customer focus, building a learning organization, gazing into the future, and maintaining an orientation toward community service.  So how should a CMO navigate these changes to increase their success and longevity?

1. Know the Numbers

Maintain a detailed knowledge of the company’s financials. Not just the financial statements but product and sales margins, pipelines, forecasts, distribution costs, channel margins and the root causes for why Sales and resellers either do or do not make their revenue and margin targets.

Understanding the financials will give the CMO better insight into how marketing can positively impact overall performance, which industry benchmarks really matter,  and where changes need to occur in order to drive profitable growth.  Of course, knowing the numbers inside and out will also enhance credibility during management committee and board meetings.  They will be more likely to consider recommendations seriously if the CMO speaks their language.

2. Be Strategic

Understand the totality of the business, the marketplace, and the interactions between them – both actual and potential.  Over the past decade, strategy has gravitated from being predominately financial- and operations-focused and into market shaping.   Marketing is on the front-line of these interactions and it is ideally positioned to detect shifts competitive landscapes, the ecosystem, and the interests of various constituents including customers, government regulators, the media and Wall Street.  That also fits directly into Marketing’s charter of shaping the company’s long-term brand within those same groups. 

Beyond shaping the brand, product mix, and go-to-market strategies, the CMO should leverage Marketing’s ability to look ahead at evolving market trends.  It’s not just to ‘know the numbers,’ but to do forward trend analyses, signpost monitoring and strategy development.  By building the Marketing team’s competencies in financial, analytical, research and modeling Marketing can bring to Board a solid analysis of emerging 24-month trends along with the threats and opportunities they pose for the company.  Come to the table with fleshed-out, company-wide strategies that are capable of being successfully implemented and which address those trends.  If Sales is the first to discover a new trend that impacts their pipeline, then Marketing is simply not doing its job.

3.  Forget ROI

It’s misleading.  The corporate mantra for years has been to improve Marketing’s ROI.  The problem with ROI is that it forces a myopic focus on short-term objectives while disregarding the fact that it is very rare for any single marketing activity to be directly responsible for new net revenue.  The focus on ROI fuels a never-ending debate about spending levels for brand building activities while disregarding the fact that customers typically buy only after being repeatedly touched by a series of separate and discrete marketing activities.  The current debate about the ROI of social media is an excellent example of why this is the wrong metric.

Instead, replace ROI with benchmarks.  Benchmark Marketing’s performance against itself quarter over quarter and year over year.  Benchmark against comparable competitors.   Benchmark on the number of leads passed to sales which closed, the average revenue per lead, the percentage of the forecast that was generated by Marketing, the percentage of customers actively engaged in advocacy programs, or the number of lead referrals from industry analysts.  And so on.  This requires two things – a single information system trusted by both Marketing and Sales, and robust Marketing operations.  Ideally, Sales and Marketing operations should be one team.  Then the CMO should evangelize those benchmarks with his or her peers by showing them how to track the things that really matter to them.

4.  Compensate for Revenue

A person’s pay should reflect the revenue they generate.  Traditional models for compensating people in Marketing do not directly link the various roles of Marketing with the company’s revenue and margin objectives.  Marketers are paid fixed salaries, perhaps with bonuses tied to company and individual performance.  These performance bonuses typically focus on long-term process improvements or making progress toward future goals. 

However, all levels of Marketing need to recognize that part of the job is to directly produce revenue. Consequently, where marketers are responsible for successful lead-generation and “deal closing” activities, their pay structure should reflect this sales-based focus.  Performance plans should include sales-based performance criteria that can be tailored to individual contributors with specific metrics.  Among the marketing positions directly involved in the sales process are product marketing, field marketing, demand generation, sales training, sales enablement and customer advocacy.

However, not every position in Marketing can or should be tightly linked to revenue goals.  That’s because Marketing’s charter encompasses both immediate and long-term strategic initiatives.  Only those positions which are core to revenue generation should be compensated according to the sales model. 

5.  Experiment or Die

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