Tips For Building Your CMO-CEO Relationship

Topline Summary

Honesty is at the heart of the CMO-CEO relationship. No matter what your marketing data may show, it won’t mean much to your CEO if the context is unclear. Few CEOs are as brutally honest as Alan Trefler of Pegasystems, who is also the company’s founder and chairman. Alan urges marketers to really understand the metrics they share with the board, and also be able to communicate why those facts are so critical.

This episode of Renegade Thinkers Unite covers some of the most important factors for the CMO and CEO to maintain a healthy relationship. Alan brings decades-long wisdom to the table, as he discusses some of the best—and worst—things CMOs can do for their organizations. You can listen to the episode here, or continue reading below for some selected questions and answers from the interview.

Drew: When you bring in a CMO, what are your expectations of the role that they’re going to play in and how they’re going to be successful?

Alan: I have the pleasure of working with what I think is a terrific CMO, and I also have the ability and routinely do interact with dozens and dozens of CMOs every quarter because our products are actually used in power. What CMOS are often trying to do, I find that CMOs make a number of interesting, perhaps predictable, but actually very serious mistakes when they talk to the CEO…There’s a tremendous challenge in the industry in which CMOs and marketing, in general, is hungry to prove that they’re having an impact. And there’s a tendency for CMOs to want to really I would say over-rotate on attribution. I’m going to go demonstrate that the sales in this region that this particular big deal for a to be company this particular launch for B2C Company was empowered by marketing because that’s how I justify my budget and I make things good for everybody. The trouble is CEOs are very by their nature suspicious of what I would describe as soft estimates. And so when they hear things that sound like grand claims and they look at the data and they say, “Well, that’s really an estimate. This isn’t really a great estimate. This isn’t something that can be provable,” they become very critical. And I think CMOS set themselves up sometimes.

Drew: If you had a group of CMOs sitting here, what’s one bit of advice you would give them in terms of interacting with the CEO and the board?

Alan: The interactions obviously with the board are going to be much more brief and episodic. I would say from a CEO point of view a great CMO is constantly working with the CEO. If you think about it, arguably the brand of our time, Apple, that CEO came to love the concept of branding and marketing and lived it. I think that CMOs will do a great service for the whole company if they really invest the time and effort to these concepts as opposed to just “delivering measurable results.”

Drew: What should marketers do to get next-best action?

Alan: What you need to be able to do is when you touch a customer, either because the customer is coming into your owned property or this customer is one which you’re choosing to make an outreach to or this customer perhaps is in a paid channel and you’re looking to push some form of promotion to them, you need to think of it in terms of: What is the customer seeing? What has the customer done? Is this a customer who’s typed something anxiety-producing on your website, for instance, by searching for “termination fee,” which should definitely raise some red flags. Pulling this information in real-time or near-real time is critical because you really don’t want to inundate the customer with things that they don’t care about. Traditionally targeting starts to feel like abuse to customers. I remember I looked at the TiVo site for a TiVo I bought. For months after I bought it, I was chased around the Internet by TiVo. It was really quite irritating and menacing to go back to that site.

Drew: Are companies wasting a lot of money on chasing acquisition?

Alan: There’s a lot of money that’s being wasted out there. There’s simply no question that by blindly targeting with traditional campaigns, you really have very low hit rates and it can be expensive, particularly when you’re buying digital media. I think that acquisition needs to be thought of in two contexts. One context is: How do I increase what I can sell my existing customer base? That’s sometimes the absolute best way to magnify your portfolio of products that you’re selling because those customers are ones that you already have reasons to contact. They have reasons to come to you. If you can get them to give recommendations to friends, you’ve got something that is a much warmer introduction. If you could reach out to those friends based on their suggestion, they get some sort of benefit from that. Those sorts of approaches, which is leveraging your existing customer base are ones that can be extremely valuable. You have to make sure you don’t offend those customers. It’s so easy to upset a customer by bugging them about things that you’ve bugged them about the seventh time, or going and blindly doing things without being sensitive to aspects of how you work with them and their demographics. Blind acquisition, just reaching out blindly or buying ads, can be effective though only in very limited circumstances. You really need to be able to also target those where they have no hope at all. There’s just so much noise out there.