The future chief marketing officers (CMOs) need to be much more familiar with financial data to survive, according to 97% of those in the role, yet the lack of visibility into margin is holding them back.

Based on a poll of 200 CMOs and Chief Financial Officers (CFOs) from across Europe, a growing number of business leaders expect the CMO to be able to affect an increase in margin, yet three in ten (29%) admit they would not know where to start.

Nearly half (46%) of CMOs plan to align themselves more closely with the technology department as they look to boost profits, and 58% believe better, or more, access to tools would improve insight into margin performance.

The in-depth report from profit optimisation experts, Vendavo, and academic Patrick Reinmoeller, Professor of Strategic Management at Cranfield School of Management, found that although margin is inextricably linked to pricing specifics and deal sizes, nearly half (46%) of the CMOs surveyed believe their sales teams still rely on gut feeling and six in ten (61%) believe they rely on personal relationships to agree the price of deals.

CMOs within organisations which are delivering relevant up to the minute pricing data into the hands of their sales teams are more likely to be performing ahead of market expectations than those that are not – nearly two thirds (63%) that use real-time data are performing ahead of market expectations.

Patrick Reinmoeller, Professor of Strategic Management, Cranfield School of Management, said: “To prove their worth, CMOs must be able to show they can drive higher value sales and help the business to beat market expectations.

“They can do this with the right approach to cooperation and working closely with CFOs to pull margins up. The right tools are also important as they allow CMOs access to margin data on every sales deal, at the right time. Margins can now be governed to unprecedented levels, and those who take advantage of this will perform best in their roles.”

Professor. Reinmoeller proposes an Eight Actions Model, which the report outlines in detail, to help CMOs increase margin and perform ahead of market expectations:

1) Increase awareness of growth drivers
2) Focus on margin
3) Create a common ground
4) Analyse how to increase margin
5) Open the data vault
6) Offer data that matters
7) Help client facing employees exert better judgment
8) Ensure that awareness, analysis and action are linked

Robert Irwin, Vice-President, Business Consulting, Vendavo Europe, said: “CMOs are increasingly being held accountable for shareholder value.

“To demonstrate a correlation between their marketing strategy and the financial health of the organisation they need access to the right tools and insights. Greater collaboration with the finance and sales teams is also required to align activities and inform pricing decisions.”

 

 

By Daniel Hunter

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