“My CEO doesn’t get marketing”
As companies are switching from super-growth to efficient growth mode, you might have started hearing or saying this sentence a lot more often
As companies are switching from super-growth to efficient growth mode, you might have started hearing or saying this sentence a lot more often: “My CEO just doesn’t get marketing.”
While there is some truth to that — many CEOs are completely incapable of thinking intelligently about marketing — I also want to unpack the other side of the matter. There are actual great CEOs out there who marketing execs say they don’t get marketing. The conversation between them and marketing goes a bit like this:
CEO: Where are we at with marketing’s performance this quarter?
Marketing: Well, we spent $500k on ads, $100k on tooling, $100k on events, and $50k on our marketing agency. We have about $3M in inbound pipeline, but we also put a lot of new initiatives in place that is set to bring $10M pipeline over the next 3 quarters, and we invested a lot on brand marketing that is influencing our outbound deals.
CEO: $3M in inbound pipeline, we close at 23%, so you made $690k total marketing revenue out of $750k spend + $600k in employee salaries? And last quarter you were at the same mark. Do whatever you can to get to breakeven within the next 2 quarters, and we’re cutting marketing budget by 50% until we get there.
Marketing: …
Both sides have their mistakes. The marketing exec is right, in that “inbound pipeline” doesn’t really mean make sense as the only point of measurement if a lot of the marketing spend is allocated towards demand gen. The company in question doesn’t have HockeyStack, so they aren’t able to trace demand gen activities down to revenue, regardless of it being inbound or outbound. So the CEO seems like she doesn’t get marketing. But, the CEO is right that, with the amount of visibility they currently have into marketing, marketing is performing exceptionally poorly. And the worst part is that the marketing exec is not owning up to the performance, and does not show signs of changing his approach.
The CEO does not care about how great of a brand you’re building, or how creative marketing is, or how much content you’re putting out that people enjoy reading. All of these things are signs of great marketing, but unless they are tied to business outcomes, they don’t constitute an argument for any type of decision making in the mind of the CEO.
From the CEO’s point of view, if she doesn’t act like this, a mediocre marketing exec would be completely indistinguishable from a great marketing exec.
All too often, you see companies that bring on “superstar CMOs”, only to kick them out 18 months later due to poor performance. Because at around the 12-month mark, day 1 initiatives 100% should have turned into business outcomes, and the mediocre marketer has no excuses left to hide behind. At the 18-month mark, the mediocre marketer has had enough time to try to remediate, and it becomes clear he is not fit for the job. The company loses 18 valuable months they could have spent actually building up their marketing engine.
Instead, a great CEO tries to determine if the marketing exec is a fit or not from day 1. The way she does that is demanding a commitment to business outcomes from day 1. Within one quarter, a great marketing exec, when demanded business outcomes, will deliver those business outcomes. When they deliver enough, the CEO starts trusting the marketing exec more and more, and grants him the right to take big bets on unknowns. The mediocre marketing exec takes huge bets prematurely. The great marketing exec is ambitious, but cautious. And when he takes a bet, it plays out.
So, funnily enough, mediocre CEOs look like they get marketing, and great CEOs either look like they don’t get marketing, or they somehow trust their CMOs with their lives. The midwit meme really does apply to everything. Even funnier, all of the most successful CMOs I’ve met think a lot like the CEO. And in those orgs, it’s often the management layer reporting to the CMO who says “My CMO doesn’t really get marketing.”
If you’re reading this, you are likely a marketing person experiencing this problem. I’ll tell you what your CEO would like to see you do.
1. Get wins, early on, and consistently
The great marketing exec makes a difference within one quarter, and continues to get visible wins for the company throughout his tenure. If the marketing exec doesn’t get an early win, it’s harder for the CEO to trust him. If he gets an early win, but doesn’t keep winning, the CEO will lose more trust in him than if he never got any wins.
The great marketing exec owns a number, sets goals for that number, and keeps hitting that goal. If he doesn’t hit the goal one quarter, he owns the miss, and comes up with an action plan. The mediocre marketing exec blames the miss on economic conditions, lack of budget, Sales, Product, CS, the CEO.
The mediocre marketing exec focuses on incremental wins. The great marketing exec both hits his numbers on the existing marketing initiatives, and finds a way to create new marketing initiatives that drive large business outcomes in a very short time. The mediocre marketing exec only knows how to maintain a team, while the great marketing exec is always able to think 0 to 1 (Bezos famously calls this the “Day 1” mentality)
2. Don’t be married to your budget
There are hundreds of 10-person startups that have much better marketing than 100-person startups, and hundreds of 100-person startups that will overtake their 10,000-person competitors using their superior marketing. Clearly, the differentiator between a great marketing org and great numbers vs bad marketing org and bad numbers is in no ways the budget. In fact, budget comes after great results, so that you can get even greater results. The CEO expects the marketing exec to post great results without budget. The great marketing exec can post those results with 0 budget if he wanted to, and only uses budget to make his job a bit easier. Think of all the tools that you’ve bought. Do you really, really, really think that you need an ABM platform to prove that you can make ABM work? The mediocre marketing exec buys an ABM platform before they do ABM, and that’s the reason nobody really seems to get enough value out of ABM platforms.
The CEO expects the marketing exec to know how to be scrappy. I’m not saying that he has to be scrappy when he is able to spend money to get results. I’m saying he must know how to be scrappy, and channel the scrappy marketer whenever needed. Especially when the CEO is the founder, the CEO knows that she, by herself, with 0 budget, delivered 3x more results than you, while building product, taking demo calls, pivoting, raising money, and more.
3. Give the CEO visibility
The CEO doesn’t demand 100% visibility from the marketing exec. Neither does she expect the marketing exec to be a tenured scientist. The CEO wants to agree on a sensible set of metrics that she can use the track the marketing exec’s performance. She wants the marketing exec to be able to talk about the business and his decisions using those metrics. And she will hold the marketing exec to those metrics whenever she can.
If the agreed upon metric is “inbound pipeline” and “inbound pipeline / marketing spend”, you can bet that the CEO will not want to hear about your wonderful brand marketing ideas unless they can prove to contribute to pipeline. If you do want to talk about brand marketing and dark social and media companies, it’s your job to make sure the CEO can track it.
So here’s what the greatest marketing orgs are doing:
They build a healthy mix of leading, real-time, and lagging indicators, while mediocre marketers stick fully to (mis)leading indicators until the lagging indicators reveal their mediocrity.
They think about efficiency as much as a war-time CFO does. When you think about efficiency that much, you become the best analyst in the company.
They track everything that is trackable. “Brand marketing” is untrackable. Direct traffic is trackable. “Dark social” is untrackable. Brand search volume is trackable. Branded google ads clicks are trackable. LinkedIn engagements are trackable. Podcast listeners are untrackable. The mentions of podcasts on sales calls and in self-reported attribution is trackable. Great marketing orgs find ways to track things. Period.
They find a way to measure marketing’s influence on the entire buyer journey, instead of sticking to inbound pipeline. Great marketing brings qualified leads and pipeline. But it also makes a huge impact on the post-lead journey. Great marketing converts better, faster, and at a higher value, both on inbound leads and outbound leads. The best marketing execs spend a significant amount of time thinking about improving Sales performance, and it reflects to what they measure and what numbers they post.
They use HockeyStack to do all of the above.
4. Don’t take huge bets without testing them
I mentioned the CEO doesn’t expect the marketing exec to be a tenured scientist, but she does expect the marketing exec to know how to experiment small before taking huge bets.
Every bad CMO ever has executed a big overhaul of positioning, messaging, content, strategy, team structure, or something else within their first 6 months. Why are they doing that? Because they want to start with a big win, and they think the CEO will see a superficial improvement that took a long time as a big win. Mediocre CEOs fall for it, while great CEOs shut it down.
The great marketing exec creates a small experiment to prove that the huge overhaul will work. Create a doc outlining your hypothesis, reasoning, experiment procedure, costs required for experiment, and what success looks like. Set expectations. Deliver on expectations. Ask for more. And if you can’t deliver on the expectations, your bet was going to flop anyways.
As the great marketing exec turns out to be right more often than he is wrong, he gains the trust of the CEO and earns the right to take some bets that cannot be tested at a small scale. We’ve had to take a number of these bets over the years, most recently in starting The Flow, the B2B streaming platform. Some flopped hard and we lost months of productive time and money. Some turned out to be grand slams. The reality is that these bets are needed. Incremental improvements can only go so far. In our situation, we are co-founders, and we trust each other completely to be right. We still experiment small for all of the bets that we can. But we are also able to take the bets that need scale to work. In your situation, you have to build up to it by being right a lot of times. The only way to ensure you are right before taking the bet is the experiment.
In the end, the great marketing exec manages the CEO. He sets the goalpost, the process, the commitments, and achieves everything that he says he will achieve. If there is no such management or the commitments are not being held, the CEO defaults to behavior that you think is her “not understanding marketing.” This is completely fixable.