magazine | October 19, 2017
The Revenue-Generating CMO
Revenue-generating chief marketing officers create more shareholder wealth than any other type of CMO.
More than brand-building CMOs. More than lead-generating CMOs. More than product-positioning CMOs.
What is a revenue-generating CMO?
A revenue-generating CMO is a CMO who converts the marketing budget into revenue dollars. He or she, is the primary reason their company’s revenue growth rate is higher than the revenue growth rate of their industry and their competitors. For this type of CMO, revenue growth trumps brand equity, leads generated, and product marketing.
Why do they outperform?
They understand revenue attribution. They can prove how each marketing dollar spent generates revenue. This results in the board and the CEO, giving them more marketing budget to invest. And with each new dollar invested, organic revenue growth accelerates. As organic revenue growth leads to an increase in free cash flow, and multiple expansion, employing a revenue-generating CMO is tightly correlated to exceptional shareholder wealth creation.
I recommend you download the latest . In this special edition, we explore the importance of revenue attribution, the different types of revenue attribution, and how you may put this information to use (see “Piloting Revenue Attribution” on page 30).
Can you become a revenue-generating CMO? Hire one? Act like one?
Yes you can, and you should. The payoff is worth the effort.
Pay special attention to the feature articles. For instance, on page 44 I wrote a piece, titled “Account for the Length and Complexity of the Buying Process” which deals with the multi-touch attribution model. On page 50 Eric Bauer pens an insightful article on how to improve the relationship with sales by using the time-decay attribution model. And marketing expert Stephen Trask on page 54 discusses the first-touch attribution model and its role in determining the ROI of the marketing budget.
If you are a board member, or investor, who needs organic revenue growth to increase enterprise value, make sure you have a revenue-generating CMO running your portfolio company’s marketing department. This de-risks your investment and increases the probability of a successful exit.
If you are a CEO with aggressive revenue growth targets to make, and don’t have any time to waste, implement the ideas in this edition of SBI Magazine. This will result in your CMO converting marketing budget dollars into revenue growth dollars.
If you are a CMO struggling to prove marketing’s contribution to revenue, learn how to develop a believable revenue attribution model. This will improve your working relationship with your CEO and your board, who may not understand marketing as well as you do. The result will be more realistic expectations being placed on your shoulders.
Have you assessed your Marketing Strategy using SBI’s tool? Take the test and and rate your Marketing Strategy against the emerging best practices used by market leaders. It will help you plan for success.
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