Posted by The Bowdoin Group on July 30th, 2019
All companies need marketing talent to enable and fuel growth. In early stage companies, a multi-tasking marketing manager may be able to handle basic marketing execution, but as companies scale, the need for strategic marketing leadership becomes increasingly apparent.
It may happen when a company has gained traction with its core products and services and is ready to “open it up full throttle,” or it could entail creating new products and services or dramatically evolving a well-established solution suite. It could be that a company is focused on penetrating new markets, segments, or verticals; evolving channel strategies; or geographic expansion. These major shifts create added complexity across an organization—a time when forging ahead without a sound marketing strategy can be risky.
Digital Health leader, Medisafe, recently hit this point. They had partnered with us to find a CMO just as their company strategy was changing. The company, which sold its products to pharmaceutical companies, decided to seek growth by creating new solutions targeting patients, payers, and providers. As their business strategy became more complex, the CEO knew he needed a strong marketing voice at the leadership level to help drive business growth. The Board, in particular, wanted someone who had extensive experience driving revenue and who would own lead generation.
Jennifer Butler joined Medisafe as its first CMO. As she saw it, one of her priorities was to join clients’ executive conversations about what’s going on in the marketplace. Jennifer said, “We have to align to clients’ pain points and then demonstrate that we have the capabilities to solve them. It’s not just a product push, it’s a peer-to-peer conversation where we’re positioning ourselves in terms of what’s happening in the industry. We begin to drive the conversation versus simply contribute to it.”
When Do You Need More Marketing Muscle?
During times of growth, the stakes rise, as does the need for higher-level marketing capabilities. It becomes critical to firmly align marketing strategy with the new long-term vision. At the same time, it becomes more challenging to tie disparate marketing efforts together cohesively. And when these vectors converge, CEOs need a strategic marketing voice at the decision-making table working hand-in-hand with other leaders, board members, and investors.
In addition to tactical marketing execution, companies need someone who can:
- Define and refine go-to-market strategies – Robust go-to-market strategies pave the way for successful launches. Companies need a marketing leader who is adept at creating strategies that align compelling messaging and positioning with customer demands, create a strong path-to-market, drive product and service launches, and generate demand. Experienced CMOs are skilled at market and competitive analysis and can identify global industry trends that could impact commercial strategy. They develop a company-wide understanding of customer needs, desires, and pain points and can articulate the value of the company’s solutions.
- Drive marketing alignment with the new vision – Well-crafted go-to-market strategies are only powerful when they help companies meet their goals. Executives need a strong leader to align marketing with the company’s evolving vision and strategies. Talented CMOs help their colleagues understand how marketing can support growth efforts. They become a trusted partner to the executive team by working with them as strategy is developed. They interact easily with boards and investors to better understand how the growing company can craft a unique position and then drive the realization of its goals.
“When you don’t have that executive position, marketing is, at times, a second thought instead of being leveraged as a key enabler for achieving the company’s vision,” said Jennifer.
- Drive revenue – A CMO is responsible for converting marketing dollars into revenue—and when it comes to revenue, the more the merrier. This means being in lockstep with sales, understanding which lead generation strategies have been the most successful, consistently measuring impact, and pivoting when campaigns aren’t producing. It also means suggesting new and creative ways to create revenue, even if they require a complete strategy shift. As the first CMO of Medisafe, Jennifer Butler knew that she was expected to drive sales. She said, “It was no secret that my greatest contribution would be increasing Medisafe’s revenue, especially as I proved my value-add as its first CMO.”
- Develop thought leadership – Along with many other benefits, thought leadership becomes a powerful mechanism for sales. It communicates the company’s vision, provides differentiation and visibility, and lets the marketplace know what a company’s stand is. It provides value to others, which is often key to gaining the attention of decision makers and other audiences. Talented CMOs know how to use thought leadership to gain a seat at the executive table of prospects and customers to talk about challenges and how the company’s solutions can help. They’re skilled at connecting with other influencers, including industry analysts, to reach and form deeper relationships with people. They know the value of establishing partnerships versus pushing products, features, and functions, and they can walk that line gracefully. Medisafe, for example, has amassed proprietary data on medication adherence on over two billion successful medication doses for more than five and a half million registered users. Analyzing this data enables them to identify and provide insights into consumer behaviors, like actual dosing schedules, reasons for skipping medications, and overall adherence. They share their insights on monthly webinars and their blog, providing thought leadership to their original and new constituents to build their brand in the industry. It has been key to their forward progress.
- Keep up with marketing change – Technology and marketing approaches are advancing at a rapid pace. What worked last year may not be as effective today, thanks to emerging technology capabilities, like artificial intelligence and machine learning, and the shift to buyer enablement. The best CMOs embrace optimization and continuous improvement from a people, process, and technology perspective.
What to Look for in a CMO
In a competitive marketplace, companies need a strategic, motivated, results-driven marketing leader to drive growth—a board-level executive who acts as the right-hand person to the CEO and owns go-to-market strategies. In our experience, companies look for the following skills and experience (among others) in their first CMO:
- Strategic and leadership skills
- Ability to set the go-to-market strategy
- Ability to partner hand-in-hand with executives
- Ability to interact confidently to board members and investors
- Experience creating and executing strong go-to-market strategies
- Experience developing and implementing marketing campaigns
- Experience leading marketing functions and teams
- Ability to plan, execute, measure results and drive improvement on a continuing basis
- Excellent written and verbal communication skills
Importantly, companies should find a person who wants to lead, not just do. Many marketers are comfortable focusing on tactics or do not have the skills to apply ‘big picture’ thinking. Make sure your first CMO can get out of the tactical weeds, delegate, and be a leader of their people. This strategic leader will be key to meeting growth goals.
The Cost of a CMO
If you’re gearing up to hire a CMO, you know that it’s an investment, but just how much should you plan to spend?
We’re always asked to share “back of the napkin” compensation information for executives, so here is what it costs to hire a CMO, as well as a VP and Director of Marketing for comparison for the average small to mid-sized company. Keep in mind that compensation can vary extensively from an emerging Series A round company to a large company.
Chief Marketing Officer:
- Base salary: Ranges from $225-250K
- Bonus: 30%
- Equity: 1 point (for Series B or C round companies)
VP of Marketing:
- Base salary: Ranges from $175-200K
- Bonus: 25%
Director of Marketing:
- Base salary: Ranges from $120-140K
- Bonus: 20%
What are the triggers you’ve seen that indicate it’s time to hire a CMO? Are there other areas in which executive-level marketers need expertise? I’d love to hear your thoughts.