Ten Signs Your CMO Runs A Cost Center

Given the advances in marketing operations, web analytics, and B2B marketing and sales alignment, CMOs have few excuses to accept second-string status.


When I turned seven, my parents moved from a bucolic small town in Connecticut to Morris Plains, New Jersey, a sprawling suburban jungle. It was a major transition for me. I went from “local kickball hero” to “zero” within no time. For weeks, I was the last person selected for the coed kickball team. It was a crushing blow.

I have met many CMOs who feel the same way in the C-suite, especially when they have accepted a new position. Over the past month, I interviewed a dozen CMOs across North America to find out how they managed.

Respondents agreed that being pigeonholed as a cost center can be very career limiting.

According to Ed Macri, VP of Marketing for Wayfair in Boston, Massachusetts, running a marketing department like a cost center offers few perks. “When you are treated like a cost center, it’s all about the budget. Someone tells me how much I can spend. On the other hand, marketing ‘profit centers’ project how much top line growth marketing can contribute to the company’s reputation and EBITDA.”

Jackie Yeaney, Executive VP of Corporate Strategy and Marketing at Red Hat, accepted the role 20 months ago, and immediately noticed that the group operated mostly as a cost center. Jackie has witnessed both ends of the spectrum during her 20-year career. She has worked at Boston Consulting Group, Delta Air Lines, and Earthlink. According to Yeaney, “It’s very common in high growth companies for marketing to be given a budget, then be expected to spend it on kickoff meetings, branding and PR. It’s activity based. You are just doing tactics.”

If you’re a marketing leader and you experience any of these practices, your revenue impact and long-term potential are limited:

1. Your teams act financially complacent. During budget planning cycles, your managers say “I have this in my budget, so I will spend it.” Marketers with a profit center mindset think differently. They say “this campaign generated a good return a few months ago, so we will repeat it.”

2. Field marketers act like sales support staff, not market trend-setters and trend spotters. While sales support often works for sales and can impact the selling cycle using webinars, onsite demos, direct mail, and events, etc., a field marketer acts more like a sales partner. Yeaney stresses that effective field marketers craft go to market plans, assess competitors, refine messages, formulate content strategies, and implement tracking mechanisms.

3. Marketing is ignored during executive team meetings. When discussing revenues, customers, and results, all eyes turn to sales.

4. Your model is outdated. You have a fixed, and potentially antiquated perception, of the purpose of marketing. As my friend Marshall Goldsmith says, “What got you here won’t get you there.” Given the radical shift in how B2B buyers evaluate solutions today, marketing needs to pay attention and be prepared to change direction.

5. Marketing’s current KPIs limit your true potential. Traditional marketers often focus too much on awareness building and avert lead generation and lead conversion statistics. The advent of social media is partially to blame. Social media mavens obsess over number of visitors to web, number of events hosted, and Twitter followers. These do not necessarily translate into revenues nor improved brand repute, yet some social media experts and marketers still believe that executive management cares greatly about them.

6. You report different metrics and results at each quarterly or monthly executive session. Think about each department leader seated at the table. When they share progress over the previous reporting period, do they change metrics midstream? According to Joe Payne, CEO of Eloqua, a revenue performance management firm, “One reason that marketers are not well respected is that when they interact with the board, they don’t report results with a regular cadence, they don’t use benchmarks, and they don’t show the same metrics quarter after quarter. Conversely, when CFOs attend these meetings, they say ‘Here’s what the balance sheet looks like. Remember what I told you last quarter? Here’s the progress we made this quarter.’ The same is true with the CIO and the head of sales. Over time, CEOs get accustomed to that.’ Marketers seem to think it’s more important to discuss what’s hot and different. That’s neither healthy nor helpful.”

7. You lack a simple, consistent marketing process. If you are currently lacking respectable analytics tools to track the buyers’ journey, each stage of their buying cycle, and the common touch points that customers experience with your company, your marketing strategies are costing you a fortune.

8. Marketing is viewed as superfluous. According to Ed Brice, the CMO of Lumension Security, Inc., “before I joined the company, we were the ‘cakes and cookies’ people. Sales used us to organize special events. I realized we had to change that perception quickly.”

9. Product management builds most of your content. When I worked as a marketing programs manager at BMC Software, I ensured that our team was the single repository for all sales-related content. I truly enjoyed building bridges between sales, product management, and R&D teams to develop those materials. I saw my role as a translator, evangelist, and facilitator. By the time we announced the new product to hundreds of sales people across the globe, I had already created sales champions who committed to getting our first few customers.

10. Nobody within your company can tell you what marketing SHOULD be doing. When was the last time you walked the halls and randomly asked people “what is the purpose of our marketing organization?” When Brice joined Lumension Security, he was appalled with the disparate answers he received.

Given the advances in marketing operations, web analytics, and B2B marketing and sales alignment, CMOs have few excuses to accept second-string status. It’s time to step forward and kick the ball out of the playground boundaries.

Related Posts:

Why Marketers Need to Channel Captain Kirk

Why Today’s Marketing Planning Models Fail to Deliver in the C-Suite

Why Too Much Focus on Marketing ROI Can Limit Growth

[Image: Flickr user Cristian Bernal]

copyright 2012, Lisa Nirell. All rights reserved.

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