Fournaise: 70% of CEOs Admit They May Be Responsible for Marketers’ Poor Perceived Performance

LONDON – In a July 2012 release, The Fournaise Marketing Group, one of the world’s leading Marketing Performance Measurement & Management (MPM) companies, tracked that 80% of CEOs were not very impressed by the work done by Marketers and believed Marketers were poor business performers. CEOs thought Marketers: (1) could not adequately prove the positive business impact their marketing activities had, (2) had lost sight of what their job really was (i.e. to generate more customer demand for their products/services), and (3) were not business performance-obsessed enough.

Probing this further, Fournaise recently tracked that 70% of the same CEOs admitted they may be somewhat responsible for Marketers’ poor perceived business performance and reputation – but purely as a consequence of:

a) Having steadily lost trust in Marketers’ business abilities; and
b) Subsequently having given up on holding Marketers accountable

That’s one of the latest insights identified by Fournaise through its 2012 Global Marketing Effectiveness Program, in which it recently interviewed more than 1,200 Large corporation and SMB CEOs and decision-makers in North America, Europe, Asia and Australia – to better understand the pains, needs, wants and expectations of CEOs towards Marketers, and analyse the CEO-CMO divide.

1) CEOs Have Steadily Lost Trust in Marketers’ Business Abilities

69% of CEOs admitted that over time, they had stopped imposing specific business-focused Key Performance Objectives (KPOs) and Key Performance Indicators (KPIs) for Marketers to achieve.

The main reason? They think Marketers have continuously failed to unquestionably and consistently prove in the boardroom that their marketing strategies, activities and campaigns generated actual business growth (customer demand) for the organisations. They therefore concluded it was useless to continue defining and imposing KPOs and KPIs Marketers have difficulties relating to and achieving. These CEOs ended up having a Marketing department purely out of tradition.

For these CEOs, CMOs are outside their circle of key business decision-makers within their organisations (such as CFO, COO, CIO). These CMOs either rank low in these organisations’ executive/management committees, or are simply not included at all.

2) CEOs Have Given Up on Holding Marketers Accountable

67% of CEOs admitted they may be guilty of not holding Marketers accountable enough (or at all).

They confessed they would like to be able to work with business-focused, no-nonsense Marketers who are 100% ROI- and performance-driven – where they know every marketing dollar spent across all activities, channels and media is tracked and optimised to have a (proven) measurable, quantifiable and direct positive impact on the company’s P&L and operations, and where marketing wastage is minimised.

But the reality of their CEO experience shows that these ROI Marketers are rare creatures. Too busy running the business and tired of dealing with one-dimensional Traditional Marketers (that they believe live too much in their brand, creative and social media bubble), these CEOs have given up talking accountability with Marketers, and have made the conscious decision to not expect more of Marketing than branding, look-good/feel-good ads and running promotions.

3) Unhappy CEOs Have Reduced the Portfolio of their Marketers

Going one step further, 64% of these Marketer-unhappy CEOs have removed over time one or more of these three critical Marketing responsibilities from the traditional 4P umbrella portfolio of their Marketers: product development, pricing and channel management – essentially reducing the scope (and definition) of their organisations’ Marketing department to just Marketing Communications, i.e. the last P of the 4Ps.

These CEOs believe product, pricing and channel management are too critical for the business growth (revenue, profit) of their organisations and needed to be led by more pragmatic, performance-driven specialists directly reporting to the top management.

4) But the Story is Different for ROI Marketers

On the opposite side of the spectrum, 20% of CEOs consider their Marketers to be ROI Marketers, known to be focused on (A) generating more customer demand, (B) constantly tracking, boosting and reporting the actual business impact of their marketing spending on the company’s P&L, and (C) working hard to minimise their marketing wastage.

These CEOs value that these ROI Marketers have accepted for their performance to be judged on business-focused KPIs: Sell-in, Sell-out, Prospects, Market Share, Marketing Effectiveness, Marketing ROI. And value that these Marketers have put in place the all-round performance-tracking and performance-boosting teams, systems and processes to push their strategies, products, customer value propositions (CVPs), ad campaigns and activities to deliver better (quantifiable) results.

These CEOs admitted business-savvy ROI Marketers have a solid influence within their organisations, are trusted by the top management, are perceived as key players when it comes to revenue/profit generation, and have been identified to be groomed for bigger things.

“Whether we like it or not, what CEOs are telling us is clear cut: they don’t trust Traditional Marketers, they don’t expect much from them. CEOs have to deliver shareholder value. Period. So they want no-nonsense ROI Marketers, they want business performance, they want results,” said Jerome Fontaine, Fournaise’s Global CEO & Chief Tracker.

“In this context, the questions to Marketers are simple: what type of Marketer do you want to be? How much of a business driver do you want to be known for? How much respect and trust do you want to earn from your CEO? How far up do you want to go within your organisation?” Fontaine added.

“At the end of the day, Marketers have to stop whining about being misunderstood by CEOs, and have to start remembering that their job is to generate customer demand and to deliver performance. This is business. When is the last time you heard CFOs whine about being misunderstood by CEOs?” Fontaine concluded.