The CMO Survey Blog

Does Pressure to Prove the Value of Marketing Help or Hurt Company Performance?

Two-thirds of all top marketers feel pressure from their CEO or Board to prove the value of marketing according to August 2013 results from The CMO Survey. Of those, 60% describe that pressure as increasing. These numbers are consistent with the fact that most CMOs continue to find proving the value of marketing elusive. Survey results indicate that only 36% of top marketers report being able to prove the value of marketing quantitatively in the short-run and 31% in the long-run. Demonstrations of the value of social media are even more elusive with only 15% able to offer quantitative evidence for the value of social media spending.

A key question that needs to be asked is whether pressure on CMOs to prove the value of marketing helps or hurts company performance. These are reasonably good arguments on both sides. On the positive side, increasing pressure might make marketers work harder. On the negative side, increasing pressure could make marketers focus on strategies that are easily measured or that only provide short-term boosts so that proof is in hand when the CEO or board comes knocking. This means that instead of designing and selecting strategies that are optimal for company goals, strategies are selected to help marketers defend their spending decisions.
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Overcoming the Marketing-Sales Turf War: Six Strategies to Integration

Marketing needs sales and sales needs marketing. Unfortunately, “need” does not equate to a “successful partnership” between the two groups. Conflict and distrust are more common. Such a dynamic can hurt the bottom line, especially in companies that use sales groups to interface with their customers. The CMO Survey® asked top marketers to describe how their companies structure the marketing-sales relationship. 7% stated that sales is within marketing (marketing has the power), 10.3% noted that marketing is within sales (sales has the power) and 72% indicated that marketing and sales work together on an equal basis. These data from the February 2013 issue of The CMO Survey have not changed much over the last five years. Bottom line: As equal partners, marketing and sales must find a way to work together.

It is easy to blame stereotypes of these two powerhouse functions as the reason for the well-documented sales-marketing turf war. Marketing is analytical and sales is interpersonal. Sales has a short-term focus and marketing has a long-term focus. Marketing is more strategic and sales is more tactical. Marketing is pull and sales is push. However, these stereotypes obscure the truth. In reality, the roles that sales and marketing play and their subsequent relationship depend on how the company chooses to manage and structure these two functions. (more…)

Marketing in a Technology Company: GE’s Organizational Platform for Innovation

This post was co-authored with Anna Chavis and Jace Moreno, MBA students, Fuqua School of Business, Duke University.

At a recent roundtable discussion at Fortune’s Most Powerful Women Summit, Beth Comstock, the Chief Marketing Officer of GE, described how GE approaches marketing: “You have to create a platform that invites innovative ideas.” Unfortunately, we teach marketing and many companies approach marketing as if the organization does not exist. As a result, marketing often fails because it sits outside, or is layered on top, of the most important activities in companies. Marketing needs to be down in the trenches and marketing leadership needs to foster a culture of innovation that creates new products, new services, and new customers.

GE has written this approach into its DNA. In particular, GE’s culture ensures that technological innovation (the historical backbone of GE) and commercial innovation (managing with deep consideration of the customer’s needs and wants) are inextricably entwined. We interviewed Beth Comstock during her visit for the Distinguished Speaker Series at the Fuqua School of Business, Duke University. From this talk and from other press accounts, we derived four capabilities that constitute GE’s organizational platform for innovation. We discuss these capabilities and offer examples of the new products, services, and customers that have resulted.

Capability 1: Create Marketing Innovation Internally

A big feeder of GE’s marketing innovation is the ECLP—Experienced Commercial Leadership Program—GE’s first externally focused leadership program. ECLP began in 2002 as part of Jeff Immelt’s commitment to grow GE’s commercial pipeline and aims to position GE as the “gold standard in marketing.” The two-year post-MBA program develops a pipeline of future leaders and also teaches the company what good marketing is and how it has the potential to change traditional views of product development. The program is viewed as a mutual learning experience—the graduates bring an external perspective and unique talent to GE and program participants learn from GE’s R&D expertise. As Comstock noted, “Marketing must bring a different viewpoint to tough problems. This involves data analytics that produce customer insights and the ability to address customer needs in a creative manner.” She went on to point out that “The best marketers are the ones who have both the creativity and analytical skills in the right proportion.”

Capability 2: Integrate Collaboratively Within GE

There are two key illustrations of this capability—the Commercial Council and the Imagination Breakthrough Process.
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The Social Media Integration Gap

Last week I reported on the expected increase in social media spend from an already high 7.4% of marketing budgets to 10.4% within a year and 19.5% within five years. It is therefore both interesting and somewhat disturbing that we continue to see a sizable fissure between what companies are doing with social media and what they are doing with the rest of their strategies. I asked CMOs to rate “How effectively is social media integrated with your firm’s marketing strategy” on a seven point scale where 7 is “very integrated” and 1 is “not at all integrated.” Results from The CMO Survey indicate an average score of 3.8 with a standard deviation of 2.0. Sadly, only 7 percent of respondents believe that social media is “very integrated” to the firm”s strategy while 18.4% rated social media as “not at all integrated.” The full distribution of responses is shown in Figure 1.
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Outsourcing Marketing

I asked top marketers to report how much they expected their companies to outsource marketing in the next 12 months. This percentage has grown over time as shown in Figure 1. In fact the last measurement, taken in August 2011, grew by over 100% over the prior year! (more…)

Investing in Social Media

The August 2011 CMO Survey reported that companies are increasing spend on social media (from current levels of 7.1 percent of marketing budget to 10.1 percent over the next year and to 17.5 percent in the next five years). These are big numbers and they have been waved around a lot on the internet. What’s striking to me is these same companies report that they employ, on average, only two people dedicated to actually doing social media (standard deviation 4.8). Houston, we have a problem—well, maybe three problems. (more…)

The Lure of Disintermediation

Disintermediation refers to companies going directly to customers with products and services. No channel partners are used to move offerings or to manage interactions with customers. The CMO Survey has asked managers to report whether their companies will increase their level of disintermediation in the next 12 months. The percentage responding “yes” has increased over the last three years as shown in the figure. In fact, there has been an increase of over 100% between August 2009 and August 2011! Because internet sales and the use of social media have also soared during this period, I think it is a good bet that disintermediation does not mean bricks and mortar for most companies. (more…)

Why Have a Marketing Function if Your Company is Market-Oriented?

As marketing gains increasing prominence as an orientation that everyone in the organization shares and as a process that all functions participate in deploying, a critical issue that arises is the role of the marketing function. Jerry Wind (1996) says it well when he notes, “Marketing, as a management function, appears to be in decline. Marketing as a management philosophy and orientation, espoused and practiced throughout the corporation, is however seen increasingly as critical to the success of any organization.” (more…)

How to Invent a Marketing Function

Studying organizations over the years, I have found that new marketing leaders often join companies that have only the beginnings of a marketing function. Facing such a situation, how do you invent a marketing function? What are the key steps? What capabilities help marketing deliver what it can offer companies? (more…)

A Social Media Integration Report Card

Is your company being strategic about social media?

The August 2011 CMO Survey reported that companies are increasing spend on social media (from current levels of 7.1 percent of marketing budget to 10.1 percent over the next year and to 17.5 percent in the next five years). (more…)