Marketing is in trouble. Here’s how to rescue it.

1. The trouble with Marketing
And how to make it more business-friendly
Jalin Somaiya
jalinsomaiya@gmail.com
Summer 2020
z

2. Agenda
• The trouble with Marketing
• Taming risk
• Allocating resources better
• Avoiding ‘economic optimism’
• (Bonus track): Brand

3. “80% of CEOs don't trust or are unimpressed with their CMOs.
In comparison, just 10% of the same CEOs feel that way about their CFOs and CIOs.”
‘Why CMOs never last’, Harvard Business Review (2017)
CMOs struggle with their roles
C-suite tenure, by function
For largest US companies by revenue
(n=1000)
‘Age & Tenure in the C-Suite’, Korn Ferry (2020)
Tenure in years
For B2B tech companies in Europe & US
(n=100)
‘The Unicorn Trajectory’, Notion Capital (2019)
Tenure in years

4. • “A great deal of CMO turnover stems from poor job design”
• Confusion of roles & metrics between three different objectives:
- ‘Commercialisation’: driving sales through marketing channels
- ‘Strategy’: writing growth recipe based on customer & product insight
- ‘P&L’: commercialisation + strategy + product design
Harvard
Business
Review
CMO
Magazine
• “A big stumbling block is that CMOs still struggle to demonstrably prove value
and effectiveness.”
Korn Ferry
• The role is “exceptionally complex” and “today’s customer-centric CMO role
requires the right balance of left as well as right brain skills”
Why CMOs fail: multiple hypotheses…

5. The CMO role: Jalin’s perspective
• CMOs should drive growth (usually in partnership with other functions)
• They need analytical and aesthetic instincts (a rare combination)
• CMO should agree up-front with CEO what’s in scope, e.g:
- Narrow CMO remit: Comms & ads through ‘marketing channels’ (paid & quasi/free)
- Mid-sized remit: Onsite (upper) funnel (e.g. homepage to transaction page) as well
- Broad remit: Biz Dev or Product (e.g. as part of a ‘growth’ / ’customer’ function) too
• Critically, they are prone to three procedural failures:
- Failure to tame risk: Managing (large) initiatives with uncertain payoffs
- Poor resource allocation: E.g. Early vs late funnel, performance vs brand
- Economic optimism: Favouring tactics that break even at first but go on to lose money (at
scale / over time)
So how should CMOs…
- Tame risk?
- Allocate resources better?
- Avoid economic over-optimism?

6. Three remedies to three problems
§
§1
Bonus:
Have a clear process for experimentation & learning
Cultivate cheaper channels than you can ‘afford’
Invest more in your onsite upper funnel
Nurture your brand
§
§2
§
§3
Taming risk
Allocating resources better
Avoiding economic optimism

7. Three remedies
§
§1
Bonus:
Have a clear process for experimentation & learning
Just as you do for Product
Cultivate cheaper channels than you can ‘afford’
Keeping a special place for word-of-mouth
Invest more in your onsite upper funnel
And address it in a genuinely cross-functional way
Nurture your brand
With incredible consistency for years at a time
§
§2
§
§3
Taming risk
Allocating resources better
Avoiding economic optimism

8. It’s worth persevering, since strong CMOs are highly valuable
• Share price up by 3% incrementally for every year CMO is included in company’s top team
• Source: study (above) measuring performance of S&P 1500 companies with CMO as one of 5 most
highly-paid execs, relative to firms without
• Study corrects for other factors known to affect share price performance (market cap, market-cap-
to-book, momentum, risk-free rate)
• This ‘CMO effect’ is most associated with a set of five financial characteristics, four of which are
commonly found in software companies
- These four factors: high operating margin, high R&D expense, high profitability, low asset turnover
(proxies for product, rather than cost, leadership)
- The factor applying less consistently to SW companies: high advertising expense
“The Economic Relevance Of CMOs In Firms’ Top Management Teams”
Journal of Business & Economics Research (2013)

9. Agenda
• The trouble with Marketing
Taming risk
• Allocating resources better
• Avoiding ‘economic optimism’
• (Bonus track): Brand
Have a clear process for experimentation & learning
Just as you do for Product
§
§1

10. Illustrative risk taxonomy
Reward
Risk
Head on
the block
Every
little helps
High
fives all
round
Shoot
for the
moon
Examples
• Every little helps: funnel optimisation test
• Head on the block: large TV campaign that bombs
• High fives: experimentally discovering & scaling
new acquisition channel
• Shoot for the moon: brand relaunch that works
• No one knows if most new projects will succeed
• If success is defined as positive outcomes, CMO
won’t take enough risks or drive quick enough
progress in metrics
• So reframe success as:
Testing more ideas (getting to a yes/no
answer) faster and for less money
• Like Product, CMO achieves this with:
- Roadmaps (of tests and launches)
- Sprints (shorter cycles to deliver in)
Reframe success as faster, cheaper experimentation

11. Roadmap is delivered through weekly sprints:
lists of key tasks and names, agreed together at the (sub-)team level
Marketing quarterly roadmap (sanitised extract)
• Roadmaps comprise experiments & launches. They ignore business-as-usual (which tends to fill the
time allocated to it)
• How to generate a roadmap:
- Marketing team long-lists all initiatives they can think of
- CMO leads group short-listing, informed by e.g. impact, effort & tech dependency
- CMO uses short-list to build roadmap accounting for co. priorities & team capacity
- (Leave c.20% of team time for ‘reactive’ work & review roadmap every c.1 month)
Use roadmaps to prioritise - and sprints to deliver

12. Sanitised example:
Acquisition nearly doubled while CPAs fell c.30%
£0
£40
£80
£120
£160
£200
0 500 1,000 1,500 2,000
Mar
Apr
Jul
(optimisations)
Sep
(DM exp)
Oct
Nov
Jan
Feb
Mar (DM
mistake)
CPAs
Sign-ups
Note: Some months, when TV advertising experiments ran, excluded from data
This process will improve your metrics faster

13. Sign-ups
(blue bars)
CPA in £
(black line)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
CPA
Sign-ups
Sanitised example:
Volumes up c.2.5x while CPAs broadly stable
This process will improve your metrics faster

14. Agenda
• The trouble with Marketing
• Taming risk
Allocating resources better
• Avoiding ‘economic optimism’
• (Bonus track): Brand
Have a clear process for experimentation & learning
Just as you do for Product
§
§2

15. Conversion to next stage:
3% 30% 50% 40% 70%
Illustrative onsite funnel
Conversion rate:
100%
Homepage Sign-up Confirmation Purchase
started
Purchase
complete
Where in your onsite funnel is ROI highest?
3%
30%
50%
40%
70%Typical funnel conversion
rates: low at top of funnel,
then getting higher

16. 3%
1.5%
30%
10%
50%
15%
40%
10%
70%
5%
* Observed uplift, ideally based on A/B splits, all the way through to transaction complete (since uplift at one
stage of the funnel is frequently often offset by worsening conversion at subsequent stage)
Conversion rate:
Impact (down the funnel*)
from 3 person-months' work:
Illustrative onsite funnel
Homepage Sign-up Confirmation Purchase
started
Purchase
complete
Where in your onsite funnel is ROI highest?
Illustrative uplift from work
on the funnel (by e.g. Eng,
Design, Marketing)

17. 3%
1.5%
30%
10%
50%
15%
40%
10%
70%
5%
50% 33% 30% 25% 7%
Conversion rate:
Impact (down the funnel)
from 3 person-months' work:
Impact (down the funnel)
on like-for-like basis:
Illustrative onsite funnel
Homepage Sign-up Confirmation Purchase
started
Purchase
complete
Not where you’d probably expect
This like-for-like calculation
(impact / conversion rate)
allows ROI comparisons

18. Conversion rate:
Impact (down the funnel)
from 3 person-months' work:
3%
1.5%
30%
10%
50%
15%
40%
10%
70%
5%
50% 33% 30% 25% 7%
ROI usually highest where
conversion rate lowest –
almost inevitably upper end
of funnel
Impact (down the funnel)
on like-for-like basis:
Illustrative onsite funnel
Homepage Sign-up Confirmation Purchase
started
Purchase
complete
ROI for funnel-optimisation usually highest at upper end of funnel

19. • To improve upper-funnel conversion rate, you need a very broad set of skills:
- Copywriting (from brand & performance perspective and with SEO consideration)
- UX, UI & Design (informed by brand thinking)
- Product
- Tech (front-end – and back, specifically to implement A/B testing with measurement of impact all the
way down the funnel and to customer lifetime value)
• People with that full range need to work in deep collaboration and iteratively, launching experiments e.g.
biweekly (depending on how long needed for statistical validity)
• Company needs the org and incentivisation structures to promote:
- Cross-functional collaboration
- Frequency of experimentation
- Accountability for the right metrics, e.g. transactions & customer lifetime value
• Incentivising upper-funnel metrics, e.g. sign-ups, often results in deterioration in ‘quality’ at
point in funnel directly afterwards
• Most companies lack appropriate org design & metrics – so their upper funnel suffers
The upper-funnel needs x-functional alignment and right metrics

20. Agenda
• The trouble with Marketing
• Taming risk
• Allocating resources better
Avoiding ‘economic optimism’
• (Bonus track): Brand
§
§3 Cultivate cheaper channels than you can ‘afford’
Keeping a special place for word-of-mouth

21. • <$10
• $10 to $100
• $100 to $1000
• >$1000
• In-product, word-of-mouth, SEO, content, socmedia
• Paid marketing channels (plus above)
• Remote sales (plus above)
• Direct sales (plus above)
Channel affordability, indicatively
CLTV determines channel affordability
Customer lifetime value (CLTV)
Channel economics cheatsheet

22. • Companies often pin hopes on the highest-cost channel they can ‘afford’
• Even if that channel breaks even in a test, difficult to make it work at scale and over time
• Better to seek excellence in low-cost or free channels
But cheaper channels are better channels
• <$10
• $10 to $100
• $100 to $1000
• >$1000
• In-product, word-of-mouth, SEO, content, socmedia
• Paid marketing channels (plus above)
• Remote sales (plus above)
• Direct sales (plus above)
Channel affordability, indicativelyCustomer lifetime value (CLTV)
Channel economics cheatsheet

23. §
§
• Word-of-mouth is:
- Free (more or less)
- Scalable: grows with customer base (or with rate of customer acquisition, if ‘promoters’
most likely to evangelise directly after first transaction)
• Evidence that incentivised referrals work without ‘cannibalising’ free ones is patchy…
• Ultimately, aim for high portion of all new customers coming from free word-of-mouth
• Best way to increase free word of mouth: deep company focus on Net Promoter Score (NPS)
- “How likely are you to recommend [this product]?” predicts referral behaviour
- NPS metric (or versions of it like customer service NPS or onboarding NPS) should be
pursued by multiple functions (and not just e.g. Product)
- Through an iterative, experimental process (as described in 1 )
Word-of-mouth is especially cheap & scalable

24. Agenda
• The trouble with Marketing
• Taming risk
• Allocating resources better
• Avoiding ‘economic optimism’
• (Bonus track)
Nurture your brand
With incredible consistency for years at a time

25. • Psychotherapy: self-analysis ending in deeper understanding & modified behaviour…
• Stronger brands ultimately drive lots of extra growth in revenue & valuation
- On their own, ‘emotional’ headline tweaks on homepage can drive >10% improvement in
volumes down the funnel. Combined with design changes, uplift can be 30%
- Strong brands also benefit: customer acquisition, NPS & retention
Defining your brand: psychotherapy for your company (Tide example)
Consider impact of Apple’s brand on its growth & margins
Nurture your brand
Tide member
Tem Mellese, Cold & Blac
Tide member
Michelle Oh, Michelle Oh Jewellery

26. • A brand needs to come to life consistently across as many areas as possible, e.g:
- On site & through funnel
- In product (its vision and features)
- Through colourful marketing (e.g. videos, content, public ‘manifesto’, stunts)
• Brands also need consistency over time
- Companies often tire of messaging more quickly than their customers…
- New CEOs / CMOs / Heads of Brand often come with new messaging: this ‘changing of the
guard’ is usually bad for brand
The drum-beat of consistency
2004 2011 2020
Do it with incredible consistency for years at a time

27. 27
z
That’s all, folks!

28. • Tide (leading ‘banking challenger’ for SMBs)
• Prodigy Finance (international lender of >$1bn)
• Trussle (top-rated online mortgage broker)
To companies
with ambition
• Google, L.E.K. Consulting, Oliver Wyman
• PPE at Oxford, MBA at INSEAD, Japanese at SOAS
• Linkedin.com/in/jalinsomaiya
Applying a
blue-chip
background
A personal project
More at tiny.cc/DartmouthRow
• Index
• Balderton
• Goldman Sachs
Backed by
leading
investors
Jalin Somaiya: CMO & more
Marketing & more, for scale-ups with ambition:
jalinsomaiya@gmail.com