Saving The CMO

Jack TroutMarch 31, 20084 min

Chief Marketing Officer CMO Position

Chief Marketing Officers have a shorter tenure than NFL Coaches. In fact, as you can see by the chart, they barely get beyond two years before they are gone.

Average number of months at a position.


As Business Week commented in a recent article on the subject, “The job is radioactive.” The problem as layed out in the article quoted a well known search company as stating that 70% of the companies don’t know what they’re looking for when they recruit a CMO.

Jeff Jones, who was the chief marketer at Gap for two years reported that he discussed 22 CMO positions over a five month period. Not one, he says, spelled out coherently for what he could be accountable for.

It’s gotten so bad that Advertising Age editorialized “Perhaps we should just call for the end of the CMO position”. They went on, “Put the job out of its misery. It isn’t really working anyway, is it?”

All this caught my attention so I’ve decided to take a closer look at this problem to determine what is going on here? I started with a Peter Drucker quote that I’ve often written about that’s worth repeating: “Because the purpose of business is to create a customer, the business enterprise has two – and only these two basic functions: marketing and innovation. Marketing and Innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

So there it is. The father of business consulting pointed out that the CMO has one of the most important jobs in a company. And he went on to even describe the job description of the function, which is in charge of developing “The distinguishing, unique function of the business.” In other words, what is it that makes the company or product unique and different? That’s the assignment. So in simple language, marketing’s role is to turn a differentiating idea into a full scale program. The idea is the nail. The program is the hammer that drives it into the mind of the prospect. What could be simpler? Why all the fuzziness?  In fact, I wrote a book on this subject entitled “Differentiate or Die” that lays out how to do all this in great detail.

Then, one day, I opened the November 26, 2007 issue of Advertising Age and came across an interesting piece of research taken among senior marketers. It was done by Anderson Analytics among a group of 1,657 senior marketing executives. (600 replied.) Wow, that should tell me what’s going on. And sure enough it did.

In this research, they asked respondents to rank the marketing concepts that they pay most attention to in their jobs. The following list is where they spend the most time.

Top 10                  Percentage

Customer satisfaction…………88
Customer retention……………86
Segmentation …………………83
Competitive Intelligence………82
Brand loyalty………………….82
Search engine optimization……81
Marketing ROI………………….80
Quality    …………………………79
Data mining…………………….78
Personalization…………………79  (one-to-one marketing)

There, in graph form, is why CMO’s are being fired left and right. In their top ten things on which they are working, “Differentiation” doesn’t even make it onto the chart. While they are worrying about customers or segmentation or ROI or search-engine optimization, their brands are sinking into a sea of commoditization. Drucker told them what to do and they ignored him.

Forget all about data-mining or number slicing or niche segmenting. Why should a customer buy your company’s product instead of the ten or so competitive choices that are probably chasing the same customer? That’s the question you should be answering and building a program around the answer.

But be careful. Don’t expect the advertising agency to come up with this answer. Chances are they will try to sell you on entertainment or something that doesn’t supply that reason to buy. I saw another study by a well known research company that looked at 340 commercials shown in prime time and identified a differentiating brand message in only 7% of those ads. Ugh. (If you look at much television I’m sure you’ll agree with that observation.)

Figuring out the right positioning strategy is only the beginning. You’ll have to convince the CEO and CFO that building or even maintaining a brand is a long-term process that requires patience and incremental change. You’ll have to avoid line extensions that just undermine what the brand stands for in the mind. And Wall Street will be problem that you will have to get around with their focus on quarterly and monthly results. I never said it would be easy.

All you can do to fight off the financial sharks is to point out that without that point of difference or what Drucker calls “distinguishing and unique”, you had better have a very low price. There’s nothing in the middle. And low prices mean very low profits.

Trust me, if you follow Drucker’s advice, you will get to keep your job since you’ll be generating new customers.

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Jack Trout

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