forethought comic

FORETHOUGHT

Based on brand building, how long would you expect it to take to shift a brand from share losing to share gaining? Forethought has been deeply involved in dozens of major brand-led, corporate turnarounds and can report that in terms of the actual time for a turnaround to be achieved, 18 months is fast, three years is expected, and five years should not be surprising.

Now consider the average tenure of the CMO. Last I checked, it was less than 3.5 years. If a CMO shrewdly takes their first 6-12 months to assess the situation, gain consensus on a strategy, probably appoint a new creative and media partner, and roll out the new brand communications, then by any reckoning, the organization, in many instances, is unlikely to witness the full benefits of the CMO’s achievements before that CMO is asked to move on. Such is the short tenancy of a CMO that in most instances, the damage or the benefits are not fully realized during that CMO’s own tenure.

Blurring accountability for success and failure

Take the example of two competing discount department stores. The turnaround became evident in 2014. The CMO who masterminded the turnaround (red line sales) was hired in 2011. Retrospectively, people involved with this turnaround attribute the success to the 2011 CMO although, based on the data below, you might believe it was the 2014 CMO.

Chart of Sales at Australia’s largest two discount department stores, 2010-2018

FORETHOUGHT

Given the lead time for brand restoration, how can a CMO maintain executive support and keep the organisation adhering to the plan while the seeds are still germinating? The answer is part charisma, part persuasion, and lots of fervour, all whilst hoping for some early “green shoots” to appear.

In the case of our 2011 CMO, the green shoots that appeared in 2012 were unique foot traffic; up by 3 million new customers, EBITDA up 5.8%, and earnings growth was 31.4%.  These “early” signs were critical to the survival of the strategy during those early “winter” months. Despite this initial evidence, there remained an abundance of loud internal and external naysayers. The battle was constant for the CMO to remain on course. In the form of relative sales, three years on, there was irrefutable evidence of the success of the strategy. The CMO was vindicated; trouble is, the arduous journey had resulted in his resignation in 2014.

“Brand momentum can propel a brand to enjoy market success even when the brand’s substrate is being undermined.”

The 2011 CMO was a strategic marketer to the end, yet never got to experience the fruits of their vision and discipline. By the way, the opposite can also be true. Brand momentum can propel a brand to enjoy market success even when the brand’s substrate is being undermined. A sub-optimal CMO can glide along on the coattails of their predecessors with their poor performance going unnoticed for most of their duration as CMO. In the following consumer financial services example, the 2014 CMO took the creative in a different direction, which caused the building trajectories (in this case, brand awareness) to be lost and sales growth to flatten. The less than successful CMO was not moved on until the end of 2016.

National unprompted awareness, consumer financial services, 2009-2016

FORETHOUGHT

If you were given only 2.5 years…

If you had perhaps 2.5 years remaining as CMO, to demonstrate to your executive colleagues a return on your marketing investment, where would you invest? The choices are brand building, performance marketing, or both (please see The Folly of the ‘The Long and the Short of It’). In most instances, however, as the time horizon narrows, the answer becomes “come and get it”, activate now, performance marketing which necessarily includes leading with a price offer. And therein lies the rub. Marketing commentators rightly bemoan the “short term-ism” of marketers. However, it is easy to empathize with why in the CMO’s thinking, self-preservation might rank ahead of the long-term health of the brand.

“By the time the remaining period of tenure is less than a year, the marketer has only the crudest of tactical tools available, some of which may be brand damaging.”

Marketing planning for a three-year horizon opens the possibility of engaging in a broad range of marketing strategies. As the time horizon narrows, marketers’ strategic discretion is lost. By the time the remaining period of tenure is less than a year, the marketer has only the crudest of tactical tools available, some of which may be brand damaging.

Regardless of strategy or tactics, to be effective in market change, management needs to display tenacity, endurance, and brutal singularity. Below are some rules-of-thumb of what we have observed in how long it takes to positively alter the relative position of the three elements of brand communication; that is, price, quality, and emotion (the communications triple play).

CMO potential timeframe

FORETHOUGHT

Zooming out to better measure CMO success

The trouble is two-fold; first, in the short to medium run, it is not obvious to the CEO if the CMO is likely to bring success. Success and failure take about the same time to identify.  Identifying green shoots is an important indicator for a strategy to remain on track. Having a sufficiently sensitive marketing measurement is key.

Second, usually, a CMO begins their tenure optimistic and philosophical however, the closer the CMO gets to their suspected end of tenure, the more likely they will adopt purely tactical, often price-based offers. The average duration of a CMO’s tenure is about as long as it takes for a brand turnaround to be completed. As the time-horizon narrows, marketers’ strategic discretion is lost and tactical impetus heightened.

Good CMOs are not always recognized in their own “lifetime”. A CMO can be moved on before the success of their strategy is fully realized. The opposite can also be true. Brand momentum can propel a brand to enjoy market success even when the brand’s substrate is being undermined by a poor-performing CMO.



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