(This post originally appeared in Marketing Week).
Dominique Turpin was recently quoted in Marketing Week saying that ‘the CMO is dead’. He pointed to the rising power of the chief financial officer and the lack of accountability for marketing to the bottom line as evidence for why this role is redundant.
I often joke about how I gave myself a made-up title but in truth, there is a real weight behind why I’m referred to as the chief revenue officer, rather than chief commercial officer, head of sales or even CMO. My entire career has been spent in sales and marketing and I never thought I would stay up at night worrying about churn rate, cost of sale or gross margin.
When I joined Dyn, I was the only commercial member of the team sitting in a room of technical founders. We needed to get the business more traction but as you can imagine, the marketing budget did not exist. Guerrilla, responsive and relevant marketing campaigns can provide quality leads for a small spend.
Even today, we spend 58% of our marketing budget on people because we value a creative marketing strategy with strict ROI targets rather than splashing money on big sponsorship deals that result in no differentiation.
Each member of that team is responsible for growth. They know their number and they set out to hit it. It is shortsighted to think that sales are the breadwinners and the efforts of the marketing team are not tangible.
It’s that type of thinking that leads to infighting and lack of collaboration. Anyone client facing or anything revenue impacting falls under my purview, including customer service. It’s all about brand and culture and your people represent that better than any slick communication strategy.
Marketing generated 55% of our new customers in 2012.
The more leads we have coming in through marketing, the more the sales reps can focus on welcoming new customers. That is an efficient way to run a business. B2B technology companies spend on average 3.6% of their revenue on marketing. We spend 9.26%. This has jumped over the past four years of rapid growth, but we had to prove it first.
In start-ups or subscription-based businesses like ours, this investment couldn’t be more important, as retention is the key.
When you own both the sales and marketing budgets, you have the flexibility to prioritize on a wider influence and be able to back this up internally. There is growing respect for the chief revenue officer’s role: ultimate accountability.