February 10, 2021
CMO’s have the highest churn rate among the C-suite -- what’s the underlying issue? It’s a loaded question, but an important one for B2B companies, and especially now, more than ever.
Maybe the answer lies in the age-old saying by Confucius: “The green reed which bends in the wind is stronger than the mighty oak which breaks in a storm.”
Time and again, companies tend to hold on to old marketing mindsets for too long. This stymies a company’s ability to grow and compete with more nimble or larger rivals.
At the heart of the problem lies a marketer’s fluid journey. When a company reaches the next stage of revenue growth and market share, it may need a vastly different marketing mindset. The quandary comes in knowing when and how to navigate this transition.
As a marketing leader, you have to cross the chasm in a thoughtful, purposeful and data-driven way. You need a CMO with a mindset that can solve your problems today, by either evolving or passing on the baton.
Pity the plight of the modern CMO whose job has become even more complex, perilous and always in motion.
Consider everything marketing encompasses: brand strategy, demand generation, product marketing, field marketing, content marketing, events, corporate communications, analyst relations, public relations, partner marketing, industry marketing, competitive intelligence, etc. (Note that we did not say “digital marketing” because, today, everything is digital.)
Then sprinkle in well-informed customers, ever-morphing competitors, and dynamic market forces that can upend marketing’s efforts overnight. If that’s not enough, the CMO’s budget hangs over the head like the sword of Damocles. Marketing always has a key question they need to answer: Is any of this investment really moving the needle? What’s the ROI?
There’s no question these are major reasons why the average CMO tenure is only 40 months and falling, compared to the CEO’s at more than 70 months. Another more insidious reason for this, quite simply, the company has outgrown old, traditional approaches to marketing.
There are some successful CMOs, however, who’ve stayed throughout a company’s rise from startup to behemoth. They tend to have a deep understanding of the product, market and competition, and intuitively know the customer’s journey. And, most importantly, they are committed to ongoing modernization. They can also scale quickly and make great hires in critical areas, such as digital, AI and data. They are a rare breed that should be emulated.
So, do we need a different CMO mindset for different stages of a B2B company? Yes we do – let’s dig in!
We’ve broken out a B2B company into three distinct growth stages based on their size: small and medium-sized business, small and medium enterprise, large enterprise. Each stage needs a different kind of CMO mindset. In some cases, a CMO can’t make the leap to the next stage; in others, the company hires the wrong person.
Small and Medium-Sized Business: A Tactical Wizard
With annual revenues under $60 million and some 200 employees, the company is looking to break through the rank and file of small businesses. To get to this point, the marketing leader has had to be purely tactical and hands-on with events and field marketing. During the pandemic, for instance, the marketing leader needed to quickly pivot and stand-up digital channels at a baseline level so that customers could engage with the company.
Here’s the problem: Having drunk from the firehouse of strategic marketing, the marketing leader now wants to take on more responsibilities, such as setting strategy and growing revenue. The marketing leader aspires to be part of the emerging modern, data-driven marketing movement and dabble in new AI-driven digital technologies, such as personalization and intent.
But the company might be just too small for such advanced marketing, and so the marketing leader gets frustrated. Meanwhile, there’s still much work to be done in basic blocking and tackling, which falls by the wayside as the marketing leader tries to take on too much.
Small and Medium Enterprise: A Leader with Credibility and Gravitas
The mid-size company really does need to think more strategically, to accelerate growth into a large company, one day. Not just marketing strategy, but how marketing fits into the overall company strategy. The company as a whole is starting to see the relevance of its offerings in the market, and it needs a marketing leader who can lead or create a market category and get industry validation.
Here’s the problem: Once the company gets validation and enters the upper bands of mid-size, it tends to rest on its laurels. The company gets conservative, because now it has much to lose. What it really needs is a marketing mindset that is hungry, aggressive and ready to make risky bets to get ahead. In short, a CMO who can walk the talk and has credibility with customers, sales and analysts.
Once you start thinking about how to lead the market, you need a different mindset. Maybe you find a VP-level marketer at a bigger company that helped her company make it into and lead in a Gartner Magic Quadrant, who wants to be a CMO of a smaller company.
This CMO has a lot going for her. It’s one of the more exciting marketing leadership positions, with new challenges for raising awareness and accelerating demand gen at every corner. She has significant resources to fuel her marketing ambitions and the agility to pivot in new directions, since she’s not saddled with a big brand name.
Large Enterprise: A Modern Marketer’s Sweet Spot
But marketing’s real sweet spot is in the enterprise, a company with over $1 billion in annual revenue. It’s also the most demanding. Given the depth and breadth of resources and data in an enterprise, the CMO holds the reins to some of the most pivotal “digital” practices and technologies in all of MarTech, such as AI and hyper-personalization. At the same time, the CMO is expected to be a master at scaling and getting more out of digital channels, while also being a master storyteller.
You have to separate noise from reality in digital channels. Messaging, positioning, and differentiated content (substance, amount and format) are the most important right now. Do I have the right contacts in the database? Am I targeting correctly? Is the right content on my website? Is there any personalization? Are we driving the right campaigns for the right segments? What offers do we have lined-up? How well am I following up and nurturing leads? How well am I aligned with sales?
Here’s the problem: Enterprises are chasing the leaders in their industry, household names where branding and advertising has risen to an elite level. Consequently, enterprises tend to think they need someone with just a brand mindset, and make the mistake of ignoring the rest of the skills needed.
But becoming an industry-leading company is at least a few years away. By turning their focus too soon only towards branding, enterprises risk losing ground on the hard work of staying connected to the customer’s journey, scaling digital marketing best practices, and adopting game changing MarTech.
So, why do CMOs have mixed results at various stages of a company? It’s tough to know when to make a mindset change. Different stages call for different skill sets, much like a CEO of a tech startup differs greatly from a CEO of a public company. Speaking of CEOs, the CMO needs to understand the company’s strategy intimately, and enjoy the respect of the C-suite, especially the CRO and the CPO. Change is also difficult, leaving many companies to either wait too long or jump too early.
It’s an adaptability and tenacity problem, as CMOs have to commit to constantly modernize themselves. After all, it’s about being the best green reed in the storm.
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