Chief marketing officers are having a tough time tying their work to improved company performance, a study found.
The “CMO Pulse Survey 2018” by Korn Ferry surveyed 220 CMOs, and 52% of them said they can’t make a direct, obvious correlation between marketing efforts and company performance, although the survey also found that they consider financial performance to be the most important factor in determining the size of their bonuses. Forty-five percent said that their own performance-based compensation is based on the company’s performance, followed by leadership and management at 16% and customer satisfaction at 13%.
“Today’s marketers have more data and analytics than ever before, so it would seem they should be able to tie their efforts directly to the success of the company,” said Caren Fleit, managing director of Korn Ferry’s Global Marketing Officers Practice, in the report. “Unfortunately, many measure the effectiveness of initiatives only in terms of marketing metrics and miss the opportunity to connect it to overall business performance as measured in terms of sales and profit, among other factors.”
Still, 48% of respondents said they could tie marketing and performance together. Thirty-five percent said they could tie results very well, while 13% said they can make an obvious and direct connection
The tool CMOs said they most need to advance the marketing function is analytics (39%), followed by personalization at 30% and brand at 12%. Looking ahead, the most important tool for taking marketing into the next generation is data science, according to 45% of respondents. Digital technology came in second at 19%, and content creation took third at 11%.
To be more effective at work, 43% of respondents said they need better organizational alignment. Nineteen percent cited a need for more resources, while 5% said they need more authority.
Eighty-five percent of respondents said their company has a clear and well-articulated purpose, but only 69% said that purpose was authentic and aligned with how the company actually works. In addition, 49% said employees don’t understand or embrace the purpose. “In order to be both customer-centric and an employer of choice, organizations need to live out their purpose in all interactions and initiatives,” Fleit said.
Moving forward, CMOs need to work closely with chief human resources officers, especially to understand what digital skills they need, and with chief executive officers, she added. That could be tricky at some companies; 16% of respondents said a different CEO would make them more effective, and 29% said the CEO doesn’t understand what CMOs do. In those cases, CEOs most often underestimate the complexity of brand-building, 21% of respondents said. Fourteen percent said the CEO doesn’t get the return on investment in the CMO position.
“CMOs should work to be transparent and seek CEO input on key initiatives early and often, and ensure there is alignment on what success looks like and in what time frame,” Fleit said. “For their part, CEOs need to position marketing as a key business driver rather than a cost center and ensure they have a CMO that can embody that role.”