The future Chief Marketing Officer (CMO) needs to be much more familiar with financial data to survive, yet lack of visibility into margin is holding them back, according to new research.
The study, from profit optimisation firm Vendavo, and academic Patrick Reinmoeller, Professor of Strategic Management at Cranfield School of Management, is based on a poll of 200 CMOs and CFOs from across Europe.
Key findings:
· 97% of CMOs believe more familiarity with financial data is critical to their future success
· 58% think better access to tools would improve insight into margin performance
· In-depth report by Vendavo and Cranfield School of Management academic proposes Eight Actions Model to help CMOs affect an increase in margin
The future CMO needs to be much more familiar with financial data to survive, according to 97% of those in the role, yet lack of visibility into margin is holding them back.
This is one of the key findings in an in-depth report from profit optimisation experts, Vendavo, and academic Patrick Reinmoeller, Professor of Strategic Management at Cranfield School of Management, based on a poll of 200 CMOs and CFOs from across Europe.
A growing number of business leaders expect the CMO to be able to affect an increase in margin, yet three in ten (29%) admit they would not know where to start. Nearly half (46%) of CMOs plan to align themselves more closely with the technology department as they look to boost profits, and 58% believe better – or more – access to tools would improve insight into margin performance.
Margin is of course inextricably linked to pricing specifics and deal sizes. Yet nearly half (46%) of the CMOs surveyed believe their sales teams still rely on gut feeling and more than half (61%) believe they rely on personal relationships to agree the price of deals. CMOs within organisations which are delivering relevant up to the minute pricing data into the hands of their sales teams are more likely to be performing ahead of market expectations than those that are not – more than half (63%) that use real-time data are performing ahead of market expectations.
“To prove their worth, CMOs must be able to show they can drive higher value sales and help the business to beat market expectations,” said Patrick Reinmoeller, Professor of Strategic Management, Cranfield School of Management. “They can do this with the right approach to cooperation and working closely with CFOs to pull margins up. The right tools are also important as they allow CMOs access to margin data on every sales deal, at the right time. Margins can now be governed to unprecedented levels, and those who take advantage of this will perform best in their roles.”
“CMOs are increasingly being held accountable for shareholder value,” commented Robert Irwin, Vice-President, Business Consulting, Vendavo Europe. “To demonstrate a correlation between their marketing strategy and the financial health of the organisation they need access to the right tools and insights. Greater collaboration with the finance and sales teams is also required to align activities and inform pricing decisions.”
Patrick Reinmoeller proposes an Eight Actions Model, which the report outlines in detail, to help CMOs increase margin and perform ahead of market expectations:
1) Increase awareness of growth drivers
2) Focus on margin
3) Create a common ground
4) Analyse how to increase margin
5) Open the data vault
6) Offer data that matters
7) Help client facing employees exert better judgment
8) Ensure that awareness, analysis and action are linked
The full report can be accessed here
About the research
The survey took place in Q4 2015, and was carried out by independent consultancy Vanson Bourne who polled 200 CMOs and CFOs of companies with more than 1000 employees and with revenues over $1 billion in the UK, DACHs, Nordics and Italy.