CMOs, You Must Differentiate or Risk Losing It All

At Stake: Tenure Depends on Proving Uniqueness and Worth

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Chief marketing officers have a shorter average tenure than NFL coaches. In fact, they barely get beyond two years before they are gone.
Jack Trout is president of Trout & Partners, an international marketing consultancy based in Old Greenwich, Conn. His latest book is 'Trout on Strategy.' He has consulted for such companies as Hewlett-Packard.
Jack Trout is president of Trout & Partners, an international marketing consultancy based in Old Greenwich, Conn. His latest book is 'Trout on Strategy.' He has consulted for such companies as Hewlett-Packard.

As BusinessWeek commented in a recent article on the subject, "The job is radioactive." The problem, as laid out in the article, quoted a well-known search company as stating that 70% of the companies don't know what they're looking for when they recruit a CMO.

Jeff Jones, who was the chief marketer at Gap for two years, reported that he discussed 22 CMO positions over a five-month period. Not one, he says, coherently spelled out what he could be held accountable for.

It's gotten so bad that Advertising Age editorialized, "Perhaps we should just call for the end of the CMO position." It went on, "Put the job out of its misery. It isn't really working anyway, is it?"

'Marketing and innovation'
All this caught my attention, so I decided to take a closer look at this problem to determine what is going on here. I started with a Peter Drucker quote that I've often written about: "Because the purpose of business is to create a customer, the business enterprise has two, and only these two, basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

So there it is. The father of business consulting pointed out that the CMO has one of the most important jobs in a company. And he even went on to even give a job description for the position, which is in charge of developing "the distinguishing, unique function of the business." In other words, what is it that makes the company or product unique and different? That's the assignment. So in simple language, marketing's role is to turn a differentiating idea into a full-scale program. The idea is the nail. The program is the hammer that drives it into the mind of the prospect. What could be simpler? Why all the fuzziness? In fact, I wrote a book on this subject titled "Differentiate or Die" that lays out how to do all this in great detail.

Then, one day, I opened the Nov. 26 issue of Advertising Age and came across an interesting piece of research taken among senior marketers. It was done by Anderson Analytics among a group of 1,657 senior marketing executives. (600 replied.) Wow, that should tell me what's going on. And, sure enough, it did.

In this research, Anderson asked respondents to rank the marketing concepts they pay most attention to in their jobs.

There, in graph form, is why CMOs are being fired left and right.

Commoditization trap
"Differentiation" doesn't even make the top 10. While CMOs are worrying about customers or segmentation or ROI or search-engine optimization, their brands are sinking into a sea of commoditization. Drucker told them what to do, and they ignored him.

Forget all about data mining or number slicing or niche segmenting. Why should a customer buy your company's product instead of the 10 or so competitive choices that are probably chasing the same customer? That's the question you should be answering, and you must build a program around the answer.

Figuring out the right positioning strategy is only the beginning. You'll have to convince the CEO and chief financial officer that building or even maintaining a brand is a long-term process that requires incremental change. You'll have to avoid line extensions that undermine what the brand stands for in the mind. And Wall Street will be a problem you will have to get around.

All you can do to fight off the financial sharks is to point out that without that point of difference, you had better have a very low price. There's nothing in the middle. And low prices mean low profits.

Trust me, if you follow Drucker's advice, you will get to keep your job, because you will be generating new customers.
Source: Anderson Analytics
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