Got Brand? Why Companies Need a CMO
Is the chief marketing officer role on the way out? Opinions vary. A 2019 Wall Street Journal article on the topic noted that slightly fewer large companies have a CMO now than a decade ago, but the majority — 70% — still maintain the title. Wells Fargo sparked renewed speculation about the CMO role recently when it announced it is retiring the CMO title. Does this signal a trend?
The answer to that question depends on several factors, the most important of which include why companies are abandoning the role and how they distribute the essential functions of the CMO position. In the case of Wells Fargo, the reported rationale behind the move is to decentralize the marketing function. Decentralization makes sense in some specific scenarios but not when it comes to core marketing purposes.
The CMO role covers three core functions that are necessary for brand success: ensuring consistency, managing the brand, and evolving the brand as the company and marketplace change. Someone has to be in charge of those functions; if not, the brand is in danger of becoming inconsistent, disconnected and out of date.
Centralized vs. Decentralized Marketing
Wells Fargo cited decentralization as its motive for eliminating the CMO role, announcing that separate divisions (consumer banking, small business banking, etc.) will have marketing leaders who report to that unit’s CEO. This approach might work for enterprises that have units that operate in different sectors, such as a conglomerate with divisions that sell consumer appliances, process raw materials, etc.
But will it work for a company with an iconic brand like Wells Fargo and related lines of business? It will be a challenge unless someone makes sure customers have a consistent experience across all operating units and that the brand evolves as business conditions change. The person who takes on those duties doesn’t have to be called “chief marketing officer,” but the functions are essential.
Some enterprises that eliminate the CMO role reverse course and resurrect the title when the necessity of CMO functions becomes apparent, as McDonald’s did last year and Coca-Cola did the year before that. It’s almost certainly no coincidence that McDonald’s and Coca-Cola are two of the most recognizable brands on the planet.
Marketing as Art and Science
Why are CMOs vulnerable?
An often-cited survey conducted nearly a decade ago found that 80% of CEOs didn’t trust their CMOs, while 90% of CEOs said they did trust their CFO and CIO. The top reason? CEOs thought their CMO was “too disconnected from the financial realities” of the business. The marketing function has changed dramatically over the last decade, but it’s possible some lingering CEO distrust is responsible for higher than average CMO turnover and a decline in the prevalence of the role.
Some CEOs may persist in thinking the marketing function is more art than science and therefore disconnected from financial realities in 2021, but the truth is, the best marketers have evolved along with the marketing function in the digital age. Data is so much more accessible now, and more CMOs than ever have embraced the numbers and are using data to tell marketing’s story.
Today, it’s possible for CMOs to make direct links between marketing campaigns and revenue and use those insights to make smarter campaign investments. Marketers can also track leads through the sales funnel to better align marketing and sales teams and create greater process efficiency. When marketing and sales track data inside the company’s CRM, having that “single source of truth” bolsters marketing’s credibility throughout the organization.
Keepers of the Brand
The practice of marketing has evolved over the years, and the concept of the brand has evolved too. Marketing executives don’t have carte blanche to spend enormous sums on advertising without directly accounting for the value they deliver in terms of sales. And now it is widely understood that a company’s brand is much more than a logo and a color palette.
With economic optimism surging as the end of the pandemic comes into focus, will CMO prestige follow a similar trajectory? That’s hard to predict with any accuracy, but one thing does seem certain: Even companies that are retiring the CMO title at the corporate and/or global level recognize that CMOs are the keepers of the brand.
A Wells Fargo spokesperson told Business Insider the organization will appoint a CMO for the brand’s consumer and small business banking divisions. It remains to be seen whether eliminating the corporate CMO role was the right decision or not, but if no one takes on the role of managing and evolving the overall brand, it wouldn’t be surprising to see the company hire a top CMO again eventually.
The bottom line is that the brand is inseparable from the customer experience. No matter what a company calls the person who is responsible for making sure the experience is consistent and meets customer expectations and marketplace needs, the function is critical. And that’s why every brand needs a CMO who can deliver on the company’s promise to its customers, regardless of title.