It’s 2020 and for many in marketing, life is tricky. Reports of layoffs, budget cuts—and plenty of uncertainty. When you think about it: it’s odd. Marketers live to help the firm find customers, drive revenue, keep the show on the road. Why would any CEO even think of marketing cuts—when growth matters more than ever?
Here are some important messages—pass them on to everybody inside the C-suite.
Fact 1: Strong marketing departments have a clear positive effect on firm performance.
A breakthrough study of 612 publicly traded U.S. firms over 16 years, across 60 industries, published in the Journal of Marketing, reported an important discovery: powerful marketing departments have a clear positive impact on long-term stock returns and short-term return on assets (ROA). Researchers Feng et al proved firms that gave marketers a prominent role execute stronger marketing and make overall better strategic market decisions.
> In short: A strong marketing function drives business performance.
Fact 2: Firms with a Chief Marketing Officer perform better financially.
A second breakthrough study proves that companies with a CMO in the top management team, compared to firms without a CMO, achieve on average 15% better financial performance (measured by Tobin-q). Using data from 155 publicly traded U.S. firms over a 12 year period, the findings of German et al make a strong case for the positive financial impact of having a CMO.
In short: CMOs drive financial performance.
Fact 3: CEOs recognize CMOs as the number one shapers of forward-looking company strategy.
With the support of INSEAD’s Global Leadership Centre, we analyzed how 5,302 company leaders from 179 countries rate senior marketers versus how they rate all their other direct reports for The 12 Powers of a Marketing Leader. CEOs rank senior marketers first compared to all other leaders when it comes to challenging the status quo, trying to change people’s opinions about the right course of action, and actively shaping company strategy.
In short: Marketers drive forward-looking firm strategy.
Fact 4: Marketing’s power is rising.
In the digital age, other C-suite leaders are becoming more and more involved in marketing, from the Chief Technical Officer to the Chief Operating Officer. You may have heard talk recently about the possible decline of marketing’s influence. Not true. Feng et al (see above) could prove that over a period of 16 years, the power of marketing departments in US firms has steadily increased.
In short: The trend is marketing’s friend.
Fact 5: Marketers can influence much of their own success.
Many marketers work in complex structures and often lack decision power over all four marketing Ps: price, product, promotion, and placement. But marketers are more powerful than many think. In a second study (also published in The 12 Powers of a Marketing Leader, we researched the causal effects of marketers’ perceived business impact and career success. In a large sample of 1,232 senior marketers from 74 countries, we could prove that leadership behaviors and technical skills combined drive over 52% of CMO’s career success and over 77% of their market success. Of course, external factors like budgets, aligned goals, company culture, role clarity, and top management support matter. But marketers can overcome many of these challenges by displaying strong leadership.
In short: Marketers have the power to drive both their firm’s and their own success.
There has never been more evidence for the importance of strong marketing teams.
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