Today’s marketer is faced with three major challenges that are forever re-shaping the role of B2B marketing:
- Digital Transformation
- Customer Centricity
This blog series is dedicated to exploring these challenges from unique perspectives and offering ideas on how to turn challenges into opportunities.
I’m all about Revenue Marketing which is the practice of transforming marketing from being a cost center to a revenue center. I created this term in 2011 as I had a front row seat to massive change in the role of marketing. In the world of B2B marketing then and especially today, if you don’t have some kind of direct revenue accountability as a marketing executive, don’t worry, you will. Recent studies indicate that over 80% of all B2B CMO’s are experiencing enormous pressure to show impact on revenue, yet, barely a third report credible financial numbers.
Early adopters in Revenue Marketing have been B2B companies from the tech, business services and financial services industries. Now, we are seeing a broader adoption to include industries such as manufacturing and hospitality.
As I’ve watched and helped many marketing organizations make this transition, I’ve also seen a lot of marketing executives ignore this fundamental shift in the role of marketing. We’re talking about ‘head in the sand’ type of behavior at worst and delegating this obligation to a lower level role and treating it like a tactic at best.
This observation causes me to ask a few questions about the role and responsibility of the B2B CMO:
What is the responsibility of the CMO in direct, measurable revenue growth?
What if the CMO doesn’t take the time to explore this potential role in revenue growth?
What if the CMO continues to insist “that’s not my job!”
Unfortunately, I see this too often in B2B companies, more specifically, larger B2B companies and in the late adopting industries. I think this happens as a result of two things – lack of education and the use of blinders.
First, lack of education. Many CMOs are more senior, a little older and were educated in an era in which the 4 P’s and branding were the job requirements – all things related to traditional marketing. Even today, you are going to be hard pressed to find an undergraduate or graduate program that has any type of focus on B2B marketing as it relates to technology geared for an executive.
For example, I teach an MBA class once a year at the Mason School of Business at the College of William and Mary. I’m their only exposure to CRM, marketing automation, revenue marketing and how the role of marketing in revenue production is changing. We are NOT preparing our up and coming marketing executives for how to take on this new challenge.
Second, too many executives still wear blinders concerning the role of the modern, B2B CMO. I was just on the phone with a friend who has a ten-year history in working in B2C marketing. During that time, he had P&L responsibility and Revenue Marketing was how he lived. In his current company, he is a B2B marketing leader for a manufacturing organization. His biggest job is educating his company to the fact that marketing can impact revenue growth. That the term “Revenue Marketing” is not an oxymoron. He is having to overcome the legacy of marketing being viewed as a cost center with no financial accountability. This is a bigger job than getting the right martch stack of organizing the right team. Of course, sometimes, it is the CMO wearing the blinders.
For me, this raises questions of what is the true responsibility of any marketing executive to the shareholders. If they are not optimizing a proven model for revenue growth through marketing efforts, what’s the penalty? Further, even if other executives still see marketing as the ‘event’ or ‘make it pretty’ department, what is the responsibility of the CMO to lead change in this kind of environment? Just because the CEO is fine with how marketing is doing, is that really enough? Shouldn’t the CMO be working with the organization to look at all available models where marketing can impact revenue? Where is the true marketing leadership?
This particular situation is an example of agency theory in practice (I’m a PhD learner and can’t help bringing in a relevant theory to explain what I’m seeing the market.) Agency theory explains the conflict between individual executives (the agent) doing what they want versus doing what is best for the shareholders. It also describes this “hidden” cost to a company of an agent not working 100% on behalf of the company. Examples include executives taking on pet projects for personal reasons or executives not taking advantage of relevant market opportunities. While this is often described as a “cost of doing business” there are certain situations where this borders on irresponsibility; but whether caused on purpose or caused based on ignorance, the cost is the same.
We live in a world that is drowning in evidence to demonstrate how marketing is making a tangible impact on revenue. It’s time for legacy CMOs to pay attention and work to educate themselves on their possibilities in their organization. It’s time for savvy CMOs to run the best campaign of their lives and get the rest of the executives on board with Revenue Marketing. We live in a new day and a new age. Revenue Marketing is not an optional activity if you want to keep your career and be responsible to your shareholders.