Marketing has always been linked with revenue generation and growth, but a rising number of marketing leaders contend that business growth is now the “prime directive” of the marketing function. Recent research shows that many marketing leaders believe they have become primarily responsible for driving growth in their organization, and that this belief is shared by CEOs and other senior executives.
- In the February 2019 edition of The CMO Survey, 37.9% of surveyed marketing leaders identified driving growth as their top challenge. Delivering a powerful brand that breaks through the clutter came in second at only 13.7%.
- In a recent survey of over 200 CMOs and senior VPs of marketing by the CMO Council and Deloitte, 27% of respondents said that the CMO is primarily responsible for growth strategies and revenue generation for their organization. The CEO came in second at 22%.
- The CMO Council/Deloitte survey also asked participants what level of expectation there is among senior executives and board members for marketing to be a growth driver. Thirty-five percent of the respondents put the expectation level at high, and 33% said senior company leaders think growth is the primary mandate of marketing.
Most Marketers Still Live in the Brand Comfort Zone
Despite this view, however, the recent research also indicates that most marketers have not moved beyond conventional marketing communication tactics in their efforts to drive growth. For example, in the February 2019 edition of The CMO Survey, senior marketing leaders were asked to identify the activities or functions that marketing is primarily responsible for in their company. The top four activities identified were:
- Brand (90.9% of respondents)
- Digital marketing (83.3%)
- Advertising (80.3%)
- Social media (77.3%)
Other activities identified by more than 50% of survey respondents included promotion (71.7%), positioning (71.7%), marketing analytics (71.7%), and marketing research (69.7%).
In contrast, only 43.4% of respondents indicated that marketing is primarily responsible for revenue growth, and even fewer respondents indicated that marketing has primary responsibility for market entry strategies (32.3%), new products (31.3%), and market selection (26.8%).
The CMO Council/Deloitte study paints a similar picture. In that research, more than 40% of survey respondents said they were working on brand shaping and campaign execution activities, but only 6% said they were actively involved in growing revenue across all business activities, only 4% are providing sales intelligence and key account insights, and only 13% are working to retain and grow customer relationships through improved customer experiences.
Both Customer and Market Expertise are Necessary
Some industry commentators have argued that the most effective way to expand the impact of marketing on growth is to focus on customer insights. A recent article in the Deloitte Review urged CMOs to “relentlessly pursue customer expertise” and use that expertise to gain influence with other business functions. The authors contend that marketing leaders should develop expertise about the entire customer journey (including those parts owned by other business functions) and then leverage that expertise to build partnerships with other company leaders to improve customer experiences.
Developing expertise about the customer journey is obviously a critical part of marketing’s job, but it’s not the whole job. In order to identify and effectively exploit all growth opportunities, marketing leaders need to develop market expertise as well as customer expertise.
Market expertise includes customer insights, but it’s broader in several ways. As the term implies, the primary objective of market expertise is to understand the economic and competitive characteristics of the market in which the company operates. Developing market expertise requires marketing leaders to perform an analysis of several factors, some of which are:
- What is the size of the market?
- How fast is the overall market growing? Are some segments of the market growing significantly faster than others?
- Who are the major competitors in the market? Is the market fragmented, or is it dominated by a few large competitors?
- How profitable is the overall market? Are some market or customer segments significantly more profitable than others?
- Is the market composed of a large number of small customers or a relatively small number of larger customers?
- How easy or difficult is it for new competitors to enter the market?
- Is the market vulnerable to substitute products and/or services?
This list is far from complete, but it provides an indication of the kinds of issues that marketing leaders should be analyzing on a regular basis.
Focus on Critical Buyer Behaviors
Market expertise also requires a clear understanding of the behaviors of potential buyers. The recent emphasis on delivering outstanding customer experiences has elevated the importance of understanding how and where customers and prospects interact with the business and what they are trying to accomplish during those interactions. Customer insights like these can be used to improve customer experiences, which will contribute to growth.
These insights are important, but growth-oriented marketers also need to understand the behaviors of potential buyers who do not become customers. More specifically, marketers need to identify whether potential buyers who become customers engage in different behaviors (or certain behaviors more frequently) than potential buyers who do not become customers. In many cases, these behavioral differences will reveal where marketers can have a major impact on business growth.
In my next article, I’ll discuss how identifying and quantifying the behaviors of potential buyers can help marketers exploit untapped growth opportunities.
Image courtesy of ccpixs.com (Creative Commons License).
A version of this post originally appeared here.