(Reprinted from The CEO Magazine, June 6, 2017)
CEOs run organizations. They are the highest-level executive officers in the company, and their primary duties include driving revenue and profit, making major corporate decisions and managing the overall operations and resources of a company. Even if the company is small, there’s still only one person at the top responsible for those key functions. As business becomes more competitive, complex and global, the need for CEOs to expand their knowledge beyond finance and operations to sales and marketing is an imperative.
CEOs’ Backgrounds—Then and Now
In 2013, 28% of the top Fortune 100 companies had immediate past experience in finance, and another 20% in operations. However, according to a 2017 study a scant 4 years later, CEOs with marketing experience are becoming more in demand, with 25% of CEOs having marketing or sales background.
The trend is noteworthy. CEOs of the largest companies in the U.S. were responsible for half the employment in this country in 2014. However, the SBA counted 29.6 million small businesses (defined as fewer than 100 employees) in the U.S. that employed the other half or 47.8% of workers. Regardless of a company’s size, CEOs need to keep up with the times since any business entity faces the potential of becoming irrelevant when it loses sight of who they are, what they do and why it matters to customers.
What Do CEOs Need to Know?
Peter Drucker, often called the father of modern marketing stated, “Because the purpose of business is to create a customer, the business enterprise has two–and only 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.”
There’s no doubt that CEOs need to analyze and interpret data, attend to operations and focus on product development, but recent trends indicate CEOs are realizing they need to be more aware of sales and marketing functions. “Sales” brings in dollars. Marketing supports sales and business development. Functionally, marketing includes, but is not limited to, advertising, direct mail, promotional materials, telemarketing, tradeshow participation, public relations, webinars, websites and other specialized activities. Determining the right mix is especially important as marketing channels and preferred modes of communications evolve.
Four Ps of Marketing
The age-old 4Ps of marketing—Product, Place, Price, and Promotion—may have already been replaced with a modern-day interpretation: S.A.V.E., which stands for Solution (Product), Access (Place), Value (Price) and Education (Promotion). The need to interact with the customer is inherent in each instance of the old and the new acronyms, now handled in great part by the internet in every facet. Why does the customer buy? Without a leader knowing the answer to this key question, it is difficult to focus on marketing and innovation. Without this clarity, companies of any size will struggle. The emphasis on and attention to marketing, even though it has changed in form with content marketing and social media, still needs to address the future customer (prospect) without neglecting current customers.
A Strategic Marketing Plan
All organizations need functions provided by CEOs, CFOs, CMOs, COOs and CTOs, but the formula for sustainable growth requires devising a strategic marketing plan. Without a CMO as part of the executive team, the members of the “C-Suite” will need to take on that key role and work together to create the marketing direction for the company. A sound marketing plan starts with the vision and mission of the company, famously recapped on the TED stage by Simon Sinek, author of Start With Why. Smaller organizations can learn the value of a marketing plan in books on marketing such as Guerilla Marketing by Jay Conrad Levinson, who says simply, “Start with a plan. Commit to that plan.”
Before developing a plan, leaders might begin with a SWOT analysis: Strengths, Weaknesses, Opportunities and Threats, and move on from there. With a working knowledge of the results of the SWOT analysis, the marketplace in which the company operates and the competitive landscape, the CEO’s vision will form the basis for the additional components of a well-constructed, actionable plan. They often include: quantifiable goals and objectives, key strategies, tactics (activities and promotions), a budget, schedule, assignment of responsibilities, and monitoring and measurement functions.
Marketing Plan Pitfalls
Creating and adhering to a marketing plan requires hard work, so it is critical not to fall prey to some of the following pitfalls in the process:
- The belief and expectation that every marketing initiative can be measured. Some “softer” but very valuable metrics may not be easily quantified.
- Just because the plan is written, it will be followed. Sometimes marketing plans fall through the cracks because goals weren’t clear or team members didn’t know or understand their responsibilities.
- The marketing plan does not link to the corporate brand. Muddy and inconsistent messaging confuses customers.
- There is a lack of communication. Too often sales and marketing teams work in silos when they really need to be collaborating. In addition, if CEOs do not share the marketing plan throughout the organization, it decreases engagement and the desire to contribute to the company’s growth.
- No one is keeping an eye on both the long- and short-term. It’s essential to keep focused on “low hanging fruit” while watching key indicators to make sure the big goals will be met.
The Buck Stops Here
The necessity for CEOs to get involved in creating and monitoring the marketing function stems from one basic fact: Every company’s survival requires fostering of 1) customer loyalty and satisfaction and 2) attracting new customers. And what better individual to do that than the person at the helm? As President Truman once said, “The buck stops here.” Without the leadership and commitment of the CEO to this core process, the sustainability of the company’s future might be in jeopardy. Yes, operations, finance, data analytics and human resources are all critical, but marketing is vital too. And to ensure on-target, relevant marketing, seek the answers to two fundamental questions: “Where do we go from here, and how do we get there?” Minus that mindset, today’s companies may be tomorrow’s distant memories.
This article originally published at The CEO Magazine June 6, 2017.