CMO in a Box continued -- page 3 Media Distribution After the creation of the media, the sixth responsibility area of the CMO is media distribution. For catalogs, this is the mailing and postal component of the print distribution. If we examine this from a traditional catalog vantage, there are hundreds of details that make up the postal and distribution component of the catalog channel beginning with list selects, key codes, route sortations, and ending up with monitoring and seed tracking. In between are dozens of checks and counter checks to assure each vendor and each step of the mailing process is accurate and timely. Simply manipulating the segments, mailing quantities, mail dates, in-home dates and other variables to arrive at the lowest possible postage cost requires wizardry of the Harry Potter kind. And that is the catalog mail channel only. The integration of the online channel with the catalog channel to produce a catalog-assisted online channel performance is double the effort and double the concentration. To build in A, B, C, D test splits in both channels and to time them to coincide with much more rapid E, F, G, H, I, J, K, and L test segments across the online channels in order to obtain readings prior to the next catalog mailing date is, stated at the minimum, Herculean. Yet, it is being done every day and the complexity doubles about every six on-line months. For those in DRTV, cable, broadcast or radio, the scheduling, negotiating and buying of media time is an art form not for the weak hearted. If you are a CMO with this responsibility and you have no prior experience in this arena, you will quickly come face to face with the lions. And the lions will win. E-mail campaigns, whether customer-based or prospect, are a distribution art form that cannot be learned in a day. Increasingly effective, e-mail has great potential in business-to-business, but the channel is a unique channel like any other with its own protocols, foibles, intricacies and quirks. If the truth were known, there are probably less than a dozen true experts in e-mail marketing walking the Earth (excepting, of course, the 300,000 Nigerian oil ministers who want to put $11 million in your bank account if you’ll just send them the account number). If this is a primary channel for your company, the CMO should have a successful background in this form of marketing access. Telemarketing is media distribution, albeit a giant segment. Telemarketing is as big as the catalog channel. Each are soon to be $1 trillion dollars. The CMO who has a large telemarketing component, either inbound or outbound, or both, has to have primary telemarketing knowledge and skills in order to integrate this media effectively into the overall marketing plan. Quiz most CMOs on routine telemarketing benchmarks and you will quickly find out they have minimal knowledge in this very old, primary marketing sub-discipline. If we conceive of search engine marketing as, essentially, media distribution, then the CMO has a sizeable responsibility for all things ‘search.’ Search engine marketing is to 2005 what database marketing was to 1987. It is the direct marketing of the immediate future. I will not labor the point here; rather, simply refer you to what I said about it in the July 2004 (only a year ago) newsletter. You can quickly read it on my web site: www.libey.com . Go to the section “The Library,” click on newsletters, and then on June 2004 and go to “page 3.” The whole article is there and all of it has come true in the last year. Not only does the CMO have the ‘all things search’ province, but the experience better be good and better be proven, given the dominant search environment in 2005. Coupled with all of the external media services, the media distribution of a major multi-channel company is a very significant undertaking and one that the CMO must have full responsibility and accountability for managing. Because of its interface aspects, media distribution is a business threatening area if it is improperly managed. After all, it is the actual execution of the all of the multi-channel marketing plans and is, therefore, the bulk of the expenses. Analytics It may be that analytics belongs with the finance department. Over the years, I have reversed my original position that marketers should be the analytic mavens. I now believe that marketers should be accountable through the analytics and that analytics are best accomplished by numbers people who have financial responsibilities. Marketers who prove or disprove their own strategies through their own analyses are a little too much like the chickens, hen house, and fox thing. To be fair, however, marketers and the CMO must have the ability to do their own analyses to gauge the performance and to make decisions. Those analyses should be either verified or independently accomplished by the financial arm of the company, as well. Perhaps the ideal situation is co-analysis with interpretation the purview of finance. The analytics are today arrayed by channel. Catalog analytics include classic square-inch analysis, RFM, product profitability, and numerous others. Web analytics include hit rates, cost per click, cost per sale, SEO cost and position performance, among many others. The point: Each channel has its own analytics and the CMO, as well as the CFO, must speak those differing analytic languages and reach performance and profitability evaluations by channel with ultimate financial oversight. Relational Marketing: Relationships, Partnerships and Affiliations Increasingly, in the multi-channel evolution of direct marketing, outside relationships, partnerships and affiliates are becoming more critical to acquiring new customers. As these external relations emerge, they become closer to wholesale or commission relations than direct or retail relations, but the very real customers that result render the definition academic. This whole area of ‘relational marketing’ is a vast new customer machine and, in some instances, can be the fastest method to creating very large organizations quickly, particularly through affiliate web-based businesses and referrals. Amazon is the perfect example of what can be done with relational marketing. As classic direct marketers seek to expand channels, some turn to wholesaling and distributor relationships. Others turn to mass merchandisers, such as OfficeDepot, Target, or Home Depot. Still others prefer to develop resellers, or web-based referrers. The mix varies, but the objective is clear: Sell more stuff to more people any way you can. Because relationship marketing is a large and constantly growing channel today, the Chief Marketing Officer should have background and experience in forging and maintaining these external relationships. Of course, this requires considerable skills in negotiating, pricing programs, promotional packages and seasonal and supply chain logistics. These are complex programs to run and to manage, and the tracking and financial elements are critical to control, especially as the margin gets thinner. In the years since 1985 when direct marketing was essentially catalog, the concept of ‘walking several sides of the street’ was anathema. If you sold by catalog, you could never sell to dealers, or to wholesalers, or to distributors. It was unheard of. Today, you can sell to anybody, anyhow, anytime, and you’re a hero. Today’s CMO has to have that understanding and the skills and talent to work successfully on a variety of distribution levels. People Skills Of course, having all the technical and experiential skills is wonderful, but if you can’t promote teamwork or leadership, it’s all for naught. The CMO—perhaps more than anyone else on the senior management staff—has to be a people person. The fit has to be there and the caring about teaching and mentoring has to be present. Marketers are by nature outgoing. Beware a CMO without a personality. In my experience, CMOs tend to smile and laugh a lot. They don’t take themselves too seriously. But, they do believe their own B.S., and that ain’t all bad. Conclusion Well, there it is. The CMO in a Box. There are so many other things that are not included in this article, but I hope you’ll agree these are the bones of a good Chief Marketing Officer. I also hope it helps clarify some things as you expand and as you constantly seek new talent for your businesses. One of the questions that always comes up is what is a top CMO paid? You know the answer: It varies. Today, the range is anywhere from $120,000 to $225,000 with 30 percent to 100 percent in bonus, 401-K, plus a full executive package of insurances and car allowance. You would expect to see this pay range in a multi-channel company in the $50 million to $100 million plus size. Copyright © 2005 by Donald R. Libey. All rights reserved. May not be reproduced by any means without permission of the author. Contact Libey LLC; www.libey.com or call 877-903-9448. Previous | Next |
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