Good news CMO – you’ve just become the chief value officer
The chief marketer job title is endlessly being rebranded. But every so often, a pitch for a new acronym makes sense when you look beyond the initial idea.
You’ve heard that the chief marketing officer is being renamed. You are now the chief customer officer. Or maybe you’ve been reborn as the chief experience officer. Or the chief marketing technologist. If you work at AOL, you can even be lucky enough to be titled ‘Digital Prophet‘. It’s hard to keep up, let alone print the business cards before the next rebrand occurs.
The latest rebrand sees the chief marketing officer recast as the “chief value officer” by Luc Bardin in a piece for the Marketing Society and its publication Market Leader. He suggests that a complete remodelling of the marketer’s role is needed.
Now hang on a minute. I can see you rolling your eyes at the thought of another rethink of roles, responsibilities and reorganisations. But this isn’t another trendy piece of thinking. The idea of becoming the chief value officer has some credibility.
Companies with a CMO tend to perform 15% better, on average, than those without one, according to a study published in the Harvard Business Review this month. And this rather pleasing headline is underpinned by a large in-depth study led by Frank Germann at Notre Dame.
Germann’s research team analysed 155 publicly traded US firms to analyse performance from 2000 to 2011 using a broad range of econometric models.
They were seeking to gather enough data to offer a definitive answer on the value of the chief marketer, following a whole bunch of studies that variously claim CMOs add enormous value or no value or enormous value or no value…..you get the idea.
Now, the 15% figure is pleasing and demands immediate addition to your LinkedIn profile. But it probably isn’t enough for you to storm into the CEO’s office and demand a similar rise in salary.
More interesting and valuable information is hidden in the detail of the research where three conclusions are drawn about the kind of firms where a chief marketer makes most difference.
First, organisations with robust sales growth see most benefit from a marketer. Where the company is quick to act on customer information, the presence of a chief marketer who advocates for the customer in the boardroom seems to help boost this effect.
Second, firm size makes a difference. The smaller a business, the more important the CMO role seems to be as the marketer is able to wield more influence over strategy and corporate direction. So far, so common sense.
Third, short CEO tenure also makes a difference. The companies with short CEO tenure see marketers make more of an impact. The researchers suggest this could be because, like many other senior managers, the CMO has more impact when the CEO is new before they go onto assume more power themselves.
So that’s the science bit, as they say in the ads. Chief marketers and their teams can add value and under the right conditions, seriously boost revenues. With that in mind, let’s return to Bardin’s pitch that the role deserves to be renamed the chief value officer.
Bardin argues that the role of the CVO should be underpinned by marketers taking control of key organisational territories, from relationships through to innovation.
I particularly like Bardin’s useful framework that marketers can use to order their thinking.
He lists four buckets that help marketers organise their activities.
- Coordinate – where the CMO leads and organises the activities in the areas they ‘coordinate’
- Own – the CMO applies full integrator leadership and accountability in the areas they ‘own’
- Watching Brief – the CMO actively decides areas where they and their organisation will not contribute and will only be a receiver
- Intelligence – the CMO intervenes and contributes to the strategy and activation of areas they ‘influence’
I’m not sure that this necessarily takes the CMO job into new territory but it certainly helps order the mind. Sometimes exposing your value to the rest of the organisation can help the board appreciate just where you can add most to the company and drive that 15% figure even higher.
So while Bardin’s assertion that it’s time for the CMO to be acknowledged as the chief value officer may at first seem like a leap onto the wacky job title bandwagon, stand down your cynicism. Stop cursing Marketing Week for highlighting another new trend and hoping that nobody else in the your team reads the headline.
You don’t have to start ordering your new business cards yet, marketers, but there are worse things than genuinely believing you’re the executive driving value.
How do you measure customer value?
To the company as: revenue and contribution.
To the customer with nps and engagement.
Or a combination of both with lifetime value?
I like CLV, but then I am bias.