In the financial industry, there are major disconnects between CMOs and their peers at the executive table. How does everyone get on the same page?
Every year, The Financial Brand fields an annual survey exploring the marketing challenges facing banks and credit unions. Insights from the “2016 State of Financial Marketing” report sponsored by Deluxe, and analyzed and published by the Digital Banking Report, reveal gaps between how senior marketers see themselves in their role and how other C-level leaders view marketing. Here are a few key areas where CMOs and their peers are split:
- Overall Strategy & Marketing’s Role – Executives outside the marketing department see marketing as a strategic discipline contributing to their institution’s success, but CMOs feel underappreciated and don’t feel like they have a seat at the planning table.
- Marketing Effectiveness: A Black Hole? – Members of the C-suite agree that measurement of marketing programs and results achieved are hazy at best. No one has any real idea how much their institution should be spending.
- Differing Views on Marketing Challenges – Executives outside the marketing department are more concerned about the need for digital marketing and a plan to navigate the transition from traditional techniques than are CMOs themselves. Are CMOs truly in control of their institution’s digital marketing journey, or are they out of touch?
- A Dearth of Marketing Analytics – While nearly absent from CMOs’ radar, on top of the list of issues troubling other C-suite execs is the lack of analytical capability in marketing.
- Branding in the Dark – About a quarter of all marketing resources are being spent on branding activities, but the objectives, measurement and ROI of these activities are all in question.
Alignment Between Marketing and Organizational Objectives
Marketers often lament that their teams’ efforts are not fully appreciated by higher ups, that they are overwhelmed by tactical requests, and that they don’t have a seat at the planning table. Ironically, while marketers are worried about lack of status and inadequate budgets, CEOs and CFOs are focused on entirely different concerns.
Nearly one in five financial marketers (18%) say they believe their only role is to run campaigns and product promotion. A quarter of marketing execs say their C-suite doesn’t understand how marketing helps achieve the organization’s strategic goal.
But at there’s some good news. When asked about marketing priorities, there is reasonable agreement among all internal constituencies about their organization’s top three goals: loan growth, deepening existing relationships, and acquiring new customers/members. However, marketing execs are more focused on acquiring new members, while the rest of the C-suite is more interested in deepening existing relationships.
Not Seeing Eye to Eye on Challenges
When it comes to the challenges facing financial marketers, there are some shared areas of concern. One thing that everyone tends to agree on: marketing and the C-suite share concerns over budget constraints and the ability to measure the performance of their marketing programs. The inflexibility of IT systems and tackling too many initiatives simultaneously are also among the challenges commonly cited by all participants in The Financial Brand’s survey. But the differences between CMOs and others in the C-suite are striking:
- 43% of marketing executives say they have insufficient internal resources and manpower, while only 28% of their peers agree.
- Nearly twice as many (38%) non-marketing executives see the definition of a digital marketing strategy being a major challenge than do CMOs (only 20%).
- Similarly, nearly half (49%) of non-marketing executives see marketing automation and personalization as a major challenge, while only 33% of CMOs agree.
- 34% of CMOs say their organization is risk adverse and slow to adopt new ideas, while only 20% of non-marketing execs feel the same way.
Why is there such a big a disconnect concerning digital marketing and marketing automation? Perhaps marketing execs believe the plans, tools and resources they have in place are adequate. But how have CMOs communicated their digital strategies to their broader leadership teams? Do other C-level executives understand the plan? Either marketing execs face an urgent imperative to get their digital plans together, and/or they must effectively communicate these plans to their C-suite.
CMOs Want to Feel The Love
Some of the most telling findings from The Financial Brand study involve how the C-suite views marketing. Non-marketing executives view marketing as a comparatively important strategic function within the organization, but marketing execs say they feel like they being painted into a tactical corner and feel underappreciated for their role and accomplishments. At least both groups agree that marketing is “taken seriously” by the C-suite, but that’s where the agreement ends.
- 85% of non-marketing executives say that marketing directly helps the organization achieve its strategic goals, while only 64% of CMOs feel the same.
- Three-quarters of non-marketing execs believe marketing is included as a significant component of their organization’s strategic plan, while only two-thirds of marketing executives agree.
- 76% of senior marketers don’t believe the C-suite is savvy about marketing, while only 61% of their non-marketing colleagues would agree. From either side’s perspective, that’s a lot of executives in the financial industry who believe their C-suite isn’t marketing savvy.
- 56% of non-marketing execs say the C-suite regularly engages in strategic marketing discussions, while only 36% of marketing executives feel the same.
These findings are troubling. Senior leaders overwhelmingly think that marketing is an important strategic function within the organization, and that the discipline of marketing is a regular part of the discussion around the C-suite table. 93% of C-level executives disagree with the statement that “the C-suite struggles to see the value in marketing.” This might be music to the ears of financial services marketing leaders, since their peers seem to believe their work is both strategic and valuable. Unfortunately, financial marketers either haven’t felt the love, or they don’t believe it. For every question asked, marketers rate the C-suite’s commitment to marketing lower than the C-suite does itself.
Could it be that C-suite members say they believe marketing is valuable, but act differently? Or is there a communication gap between marketing and the C-suite?
Most Financial Institutions Lack a C-Level Marketer
One possible explanation for all these misalignments and disconnects between the C-suite and marketing might be the fact that only 39% of financial institutions surveyed have a C-level marketing position. This means that at nearly two-thirds of financial services organizations, marketing may be talked about strategically at the C-suite table, but there is no one there to represent marketing to guide and inform the conversation. Who is responsible for developing and overseeing the marketing strategy? Who is responsible for ensuring the plan is executed and achieves its stated objectives? Who is communicating the marketing plan downward to other marketing staff, and managing resources accordingly?
For organizations lacking C-level marketing leadership, huge communication gaps could be occurring simply because “marketing” as a topic is talked about, but actual “marketing” people often aren’t part of those discussions.
Imperatives for CMOs in the Financial Industry
The C-suite seems to believe marketing adds value to the organization and plays a strategic role in its success. This at least creates a fertile and receptive environment for marketers to make their case, get their agendas heard, and (possibly) get critical initiatives funded. However, CMOs still need to focus on communicating their challenges and aligning everyone’s expectations. To have greater success building bridges and forging deeper relationships with their C-level peers, senior marketing leaders should:
- CMOs must understand the strategic priorities of the organization — and each member in the C-suite. Make sure the marketing team is aware of these priorities and that major programs are aligned with them.
- CMOs must make time to educate senior leaders — both one-on-one and in a group — about the marketing plan and its priorities, and how they align with the organization’s priorities.
- Digital marketing and marketing automation are significant concerns for your institution’s executives. Be proactive in educating your executive team in this area, and communicate your plans… and results.
- CMOs should schedule a formal update with the C-suite at least quarterly. Remember that results and marketing ROI are critical, so strive to have a results-driven dialog — don’t just review a laundry list of activities.
Purchase The Report
The 2016 State of Financial Marketing Report, sponsored by Deluxe, provides the most comprehensive guide of bank and credit union marketing and retail banking trends and spending. The report is based on a survey of close to 300 financial services executives and includes 62 pages of analysis and 40 charts.
You can download an executive summary of this Digital Banking Report by clicking here. Subscribers to The Digital Banking Report and those wishing to purchase the complete report can access it immediately by clicking here.