Gut instincts or consumer research? - Top Questions for Your CMO

Chief Executive, The, April, 2003 by Karen Benezra

Love your product, but hate your ads." That's just the kind of feedback CEOs hate to hear--and understandably so, given the millions most companies spend on advertising each year. For chiefs with backgrounds in finance, operations or engineering, rather than marketing, understanding that end of the business can be a virtual mind bend--which is why it's critical to have an open line of communication with the company's marketing chief.

CMOs don't necessarily like to be grilled. But it's their job to make you understand why you have to have that multimillion dollar celebrity hawking your product, or that blowout ad spot during the Super Bowl. To help get the dialogue off the ground, we offer some critical questions to ask your CMO. The answers will tell you a lot about where your ad dollars are going, and how much your CMO relies on gut instinct versus hard research and consumer data.

"What's wrong with our advertising?"

If a marketer is keeping on top of his or her brand's performance, this question will come as no surprise. Whether your ad message needs adjusting, your media plan missed a key target or the commercials themselves are simply turning people off, your CMO needs to be on top of the data behind the decisions. "What most companies fail to do is put together enough qualitative research," says Dave Ropes, who has held top marketing positions at Ford, Reebok, Pizza Hut and Philip Morris. Now a consultant in New Canaan, Conn., Ropes urges clients to keep at their fingertips metrics such as consumer recall measures, market share and sales data to determine whether their advertising is on track. "You have to constantly ask, 'What are the consumers really telling us?'"

"How can we show a return on our marketing expenditures?"

One of the toughest questions for any marketer is how to justify that $50 million annual media budget or expensive new product launch. "It worries me a lot," says Arun Sinha, vice president and CMO of Pitney Bowes in Stamford, Conn. "It takes a long time to change perceptions or communicate your message to an audience--and [yet] sales needs returns right away."

But presenting yourself as a leader during a down economy is a smart move, notes Sinha, who launched a $10 million effort in March to reposition the integrated mail company as a "solutions provider" for those who want to improve communications with customers. To get Pitney CEO Michael Critelli to sign off on the company's most ambitious branding effort in 15 years, Sinha created a baseline tracking study to gauge current perceptions, with precise year-end growth targets for raising awareness about the company, along with a sales lead process for cross-selling products and services. "Whatever we do from a marketing standpoint has to build back to the growth plans of the company," he says.

"If we're the market leader, can't we cut spending?"

Not necessarily. "In most competitive markets, 'going dark' will mean a loss of share," says Arthur Shapiro, a veteran marketer who ran Seagram's spirits business, including its premium Absolut brand, before opening his own consultancy, A/M Shapiro & Associates in New York, last year.

Find out what kinds of integrated marketing efforts might be in the works --those that go beyond advertising to include public relations, sponsorships and events. "Just remember," warns Shapiro, "no one ever saved their way to greatness."

"Do we have a marketing vision? A brand position? Can I review our marketing strategy and plan for next year?"

Creating a clear marketing strategy that makes use of the proper communication tools to reach consumers and spark their interest may be the CMO's most important job. "One of the biggest mistakes a company can make is to lack a proprietary brand position," says Ropes. "Most have a product-selling message." The first defines your brand's point of difference and creates a platform for the second.

But developing the right positioning for a product or service isn't as easy as it sounds. Your CMO should start with an audit to determine the most important issues and objectives for your business and your customers, advises Ropes. How do you stack up against your competitors? What is your brand's core identity? Does your creative brief properly capture your brand's essence or personality? Is it simple enough for everyone in the company to understand? How is the strategy being executed?

"Why do we have so many agencies?"

It's not uncommon for a Fortune 500 company to rely on a constellation of partners to get the job done. Most use a general marketing agency to handle TV, radio and print efforts; a PR firm; a direct marketing shop; an interactive agency to steer Web site design and implementation; a media buyer; a promotional firm or two to handle contests and fulfillment; and a design firm to spruce up product packaging.

Many companies also hire outside agents or brokers to work on sponsorships, product placement deals for movies and the like. Long-term relationships are no longer a given in the client-agency realm, and marketers must make sure they're getting their money's worth.