By RMG Founder Stuart Holt
Imagine a public company executive meeting with the CEO, CFO, COO, CIO, EVP of Sales, and the CMO. The meeting begins with the CEO stating the obvious, “As you all know, our shareholders don’t buy our current price, they are buying our future price”! The CEO continues, “our stock has declined a bit but not as bad as others, but we still need to figure out how to grow our revenue, watch our expenses, and maintain our excellent reputation for a top-notch product and service”. Therefore, “let’s spend this time discussing how to grow our revenue”.
We are confident many of you reading this have been in this type meeting.
The CFO pipes in and says, “we can’t save our way to profitability. This past year we have done an incredible job of lowering our expenses and we also had a substantial layoff. There is always room for improvement, but I think this past year was the year of cutting and little is left to do”.
The COO says, “we have been able to maintain solid product and service quality despite all the cuts but feel we have no more room to cut without affecting product quality and service”.
The CIO says, “all IT services are working well. Security of our data is improving daily. Our big-data initiative is going well and on schedule”. And continues, “as you all know the big-data initiative has been a $2.5 million decision, which I supported, but I hope this was a decision we can see the results from”?
They all then turn to the EVP of Sales and the CMO. “How do you think we are doing”? The three-legged stool of Sales, Marketing, and Advertising is now the center of the attention.
The EVP of Sales launches into all that is being done via the sales staff and that the close ratios have been maintained and not fallen, but the sales staff constantly complain that they need more solid and qualified leads.
Now the attention is on the CMO.
The CFO then asks before the CMO has time to speak, “I see our market share has stayed the same, but we aren’t growing. What’s up with that”?
All turn to the CMO again.
The CMO reminds everyone about the new branding initiative and the results of that effort will not be felt until another 9 months. “As you also know, we changed advertising agencies and we are thrilled with the new ads and the work they are doing. Our market share is solid. Our web site needs to be refreshed and we actually need a true mobile device platform. We have done a ton in social media”.
The CFO says, “but is the $11 million in advertising we budgeted working? We can’t wait for nine months to see the results of the branding”! The CEO asks, “and for my edification, what is our current cost per acquisition of a new customer, and is that up or down from in the past?” Both the EVP of Sales and CMO look at the other hoping the other answers first.
The answer to the headline question is both Yes and No. The average CEO tenure is 7.4+ years, the average CFO tenure 5.9 years, the average CIO tenure 5.1 years, and the average EVP of Sales tenure 2.6 years. The average CMO tenure is 3.5 years! Only the EVP of Sales is less. *
For those CMO’s not equaling their C-suite peers in tenure, which is not everyone obviously, it appears to be their lack of communicating mathematically verses communicating about the effects of the creative direction and market share. The executive team wants more. They want ROI analysis. They want specifics not just market share information. They want revenue growth.
That has become the new “normal” for successful CMO’s.
“CMOs are increasingly concerned that tight budgets and the lack of a clear strategy across the enterprise are hurting their company’s ability to compete” (Ad Age)
We at RMG meet all types of CMO’s and from every imaginable industry, private and public, large and small and everything in between. Our mission is to help CMO’s and those head of advertising realize that you don’t need to replace your ad agency. You don’t need to keep requesting more budget. You don’t have to be part of a meeting and not have definitive answers. RMG is all about providing answers to all those questions that many CMO’s don’t have at their fingertips.
What do we see as a solution to the Boardroom scenario?
We recommend using the data you already maintain, to better understand multichannel consumer behavior allowing you to measure and allocate marketing and advertising spend. The RMG Revenue FasTrack is the addition to your already built house. It’s the updated and fully integrated marketing roadmap, rooted in performance data. It does not diminish the main foundation of marketing and advertising a CMO has put in place. It works “parallel” and “collaborative” with all the other initiatives in place and agency relationships.
The RMG Comprehensive Communication Plan (CCP) accompanies the RMG Revenue FasTrack program, which develops a measurable matrix of communication where every single budgeted initiative can be measured with ROI’s. It also creates an aggregated “year-end” review of results and ROI’s.
RMG has been in business for 30+ years. We have seen it all. As one of the original founders and CEO of RMG, I saw RMG grow to the second largest privately held marketing firm in the US with 300 employees and approximately $50million in revenue. I sat in many meetings described above and know this scenario well. When RMG was acquired in 1998 by Havas, one of the largest agency on the globe, I was chosen to be part of an executive group that met to discuss the direction of Havas in the US.
Today, RMG is a small agile boutique marketing agency with best in class people with an emphasis on helping companies know how to measure and show results from their advertising dollars. There is absolutely no need in this information age to be put in a situation to not have ROI answers.
RMG has a passion for helping others succeed. If you would like to discuss this in a no hard-sell way, please contact us at 866-754-7665 or me at 804-240-3356.
* All the research information above is available if interested.