Marketing leaders are used to obsessing over conversions and customer churn, and not just within their own ranks.
But lately, the conversation about the chief marketing officer's role has centered on what Mastercard's CMO Raja Rajamannar calls the company's “existential crisis.” Rather than eliminating this role and replacing it with a more similar role like chief revenue officer or chief growth officer, companies are looking to place ultimate responsibility for the marketing department under the COO or a similarly-minded next CEO. There is.
For example, after former Etsy CMO Ryan Scott left the company in December, COO Raina Moskowitz took over marketing for the online marketplace and the company eliminated independent marketing roles. Walgreens, UPS, and Wells Fargo recently made similar personnel changes, firing their CMOs and assigning marketing oversight to executives with strategy, operations, and business unit heads. Starbucks announced this month that Brady Brewer, the coffee giant's chief marketing officer, will become CEO of Starbucks International, leaving behind his previous title. The next person to lead marketing will be the “global brand chief, who is the leader.'' It's certainly a great position, but it doesn't have the dignity of a CMO.
This nascent trend to redistribute and possibly shrink CMO jobs may prove short-lived. Still, marketers keeping an eye on industry shifts may want to proactively respond to the underlying forces of these changes and rethink their career paths.
So a pivot to the COO track may even be warranted.
CMOs leverage data
Years ago, such a suggestion would have been far-fetched. Marketers have traditionally been top-of-the-funnel creative types who concoct compelling stories about brands and products and study consumer habits in detail like anthropologists. asks the marketer who made Crocs cool. What products do people love so much that they wear them at the airport?
Over the past two decades, the explosion of e-commerce, social media, direct-to-consumer categories, and numerous other structural and technological developments have made the marketing executive's job even more complex. While top CMOs remain skilled communicators and branding experts, they have also mastered performance marketing using data and analytics to hone campaigns and predict and measure results. They are already applying operational thinking to their work.
But many marketing executives need to learn additional skills to stay current, says Peter Mahoney, CMO of IT management company GoTo and author. The Next CMO: A Guide to Operational Marketing Excellence. He said marketers are under intense pressure to justify their values and budgets to CEOs and boards of directors, and for CMOs who have been in the job less than five or six years, the demands are overwhelming. It could be shocking.
Mahoney explains that many of today's inexperienced marketing leaders, especially in technology companies, have practiced their craft solely with a “growth at all costs” mentality. Economic forces are now requiring CMOs to develop deep financial literacy and a more holistic view of their work. When a COO encroaches on a marketer's turf, Mahoney says, it may be because her CMO doesn't speak the operations chief's love language.
Looking to the future, Mahoney says marketers who want to stay in the C-suite, regardless of their job title, should actively develop and deepen their finance skills, while at the same time focusing on areas that once seemed far away, such as data privacy and cybersecurity. We predict that you will need to become an expert on your concerns. “There will be better sorting algorithms,” Mahoney says. He says that if marketers are stuck in an outdated way of thinking, “they may not even be able to maintain their CMO position, let alone get promoted to the next level of COO.”
The COO's job has also evolved and expanded to become “more transformative than ever,” writes Darryl Piasecki, a St. Louis-based McKinsey managing partner specializing in strategy and operations. . The details vary depending on the size and sector of the company, but the COO is often considered the CEO's second-in-command and the top candidate for the corner office. Nowadays, the CEO is increasingly representing the brand externally, Piasecki says, and more companies are asking the COO to take over internal duties. In 2022, 40% of Fortune 500 companies have placed their COOs in executive positions, an increase of 8 percentage points from 2018.
Given the weight of their role, today's COOs require a clear cross-functional understanding of all executive functions and deep market knowledge. For example, while COOs manage supply chain and labor strategies, they are also immersed in the company's customer experience, the domain of marketers.
Piasecki argues that the most important thing for companies right now is to bring the roles of CMO and COO closer together through organizational chart changes and collaboration. Companies seeking a competitive edge are already optimizing within individual functions. The next step is to look for opportunities to reduce costs or spend more effectively, where the two functions overlap. For example, at a time when consumers and business customers are demanding superior, personalized service, CMOs are working with COOs to determine where spending on customer experience is most cost-effective and, conversely, where valuable capital is being used. can be identified as being wasted. Piasecki says his team's research shows that investing in customers can increase revenue by his 10% to his 15%.%reduce costs by up to 20% and increase customer retention by over 30%.
Integrating CMO and COO duties
AllTrails CEO Ron Schneiderman had such wins in mind when he joined the company nine years ago as CMO, which he combined with the COO role. At the time, AllTrails, an app that provided members with detailed maps of hiking and walking trails, was great at finding potential customers, but it wasn't always able to convince them to stick around. Adding his COO responsibilities to his responsibilities gives him a holistic view of the customer experience. “Do they create an account? Are they using your product? What is the retention rate? Are they signing up for our subscription plan? Are they using your product over time? Is it maintained?”
“As a CMO, if you were just focusing on, say, users installing your app, you can easily crunch those numbers and get a ton of app installs,” he says. “But that doesn't necessarily mean it's a good installation.”
That bet paid off for Schneiderman, who became CEO of the company in 2019. But he is careful not to suggest that his strategies are universally beneficial or applicable in all situations. The best way to allocate marketing depends on the size, complexity and strategy of your company, he says.
“Titles are in flux right now,” he notes, as companies try to stay lean. Titles aside, to prioritize growth, the executive team, including marketing leaders, must first understand who owns what. “Any ambiguity can slow down momentum,” he says.
