[Sarah Essex Photo]

Becoming an Empowered CMO

Viewpoint by Sarah Essex, Senior Partner

"Discretionary" budgets have always been under pressure. If you can't pin-point what the return on an investment will be (and why) you're simply not going to get the money. Now more than ever, we’re seeing tighter budgets and an increased pressure to deliver. CMOs are not immune - they are particularly vulnerable when unlike their peers in finance, supply or manufacturing 84% of them say they do not know how to assess ROI for their spend (according to Prophet’s 2007 Marketing Effectiveness Survey).

While CMOs need to achieve many things to deliver, there are three principles I believe are the most salient:

  1. Make bold choices - Developing a successful strategy comes from making clear, bold choices about what to do and what not to - where to focus and where not to. Marketing strategy is no different. Make bold choices about which customers and channels to focus on and how to change customers' behavior in your favor. Bold choices apply to investments too. If a particular customer group is not going to be a key driver of growth why spend a penny on it? 
  2. Measure and maximize return on marketing investments - Measure and adapt investments in marketing and brands using ROI and IRR (or economic profit) just as your finance, supply and operations colleagues do. Assess the expected ROMI up front (in deciding to make that marketing investment and to set the bar for success or failure) and then estimate the actual ROMI after the event. While econometric modeling is helpful to provide rigor in quantifying returns after the event, also put in place an ongoing program of in-market "test and learn" activity to enable the company to understand the effectiveness of spend in the current environment.
  3. Employ a structured, replicable and data-driven marketing strategy decision process - Such a process allows for bold decisions and choices about where to focus and how to win in a comparable and replicable way. It allows you to convince your colleagues and make choices about marketing spend across the former silos of business units, countries, or brands.