Does your startup really need a CMO?July 5, 2018
Originally posted on CIO Magazine: Many startups are in a mad rush to hire their CMO to take care of ‘marketing.’ Problem is twofold: First, there simply aren’t enough good CMOs around, and those that are great demand an equally fabulous remuneration package. Second, many CMOs simply aren’t cut for the “rolling up the sleeves” type of work that you’ll need them to do initially. Don’t feel pressured to hire a CMO just because other startups do, or because your investors want you to. Assess your real needs first.
Hiring the right people for your startup is necessary to bring your dream to life. But hiring at the right time is equally important. Do you need a CMO now? Or is that overkill - both budget and skills wise. The answer depends on two things - what stage of the product lifecycle you are in and how much marketing expertise your current team has.
Can you handle it?
Some common reasons startups feel the need to hire a CMO:
- To attract your first round of clients/users
- To create a buzz around your product
- To reach untapped markets
- To facilitate hockey stick growth
- To accelerate growth
- To satisfy investor demands
What stage of product life are you in?
There are typically four stages that every product (and therefore startup) goes through on its metamorphosis from a startup to a full-fledged tech company: Test, Launch, Growth, and Tech Company. Your marketing needs will change in each stage, as will your responsibilities as CEO. Determining which stage you are in and your immediate needs will help you establish whether you need a CMO.
Phase 1: Test
Type of marketing manager required: the analyst
In the pre-launch period, you need to gather the information and tools that will make your launch successful. And you need to conduct endless tests on every facet of your product. Your testing cannot succeed without:
- A relevant audience
- A great message
- Solid analytics
- Actual users
At this stage, you will be doing a lot of product and company copywriting, and brand workshops. You will also likely need help with PPC to secure a large enough test group, most likely from campaigns run via Google, Facebook, and LinkedIn. It goes without saying that the test group should be drawn from your target audience and that you should have enough users to gather solid data from your tests.
During the test period, small tweaks can make a big difference. I’ve seen clients make two-word changes to their messages that were met with a 100% increase in conversions. Don’t make assumptions or get stuck on specific ideas; the ability to test and adapt is critical at this stage of your startup.
To maximize results, you’ll need a brilliant organizer and analyst who can define your KPIs and oversee a creative team. This analyst will also need to look at the data critically to implement changes that can yield measurable results. The test phase is over when you run out of time or hit your KPIs.
Chances are you really don’t need a CMO during this phase!
Phase 2: The Launch
Type of marketing manager required: the marketing director
I cannot stress enough that a startup launch is not an event in itself; it’s a process. The launch period is when you’ll need to broadcast your story and leverage it to start generating qualified leads. You may not yet need a CMO, but you’ll likely need a creative marketing director to handle specific launch tasks. This person should use data from the test phase to determine your target audience, your most powerful message, and how to combine these to acquire leads from your core audience. Suzy Deering, the CMO of eBay, summarized this need in a 2015 tweet that remains highly relevant: “The stories that we tell as marketers need to mean something! Make it matter.”
The chief marketer of this phase will need to determine whether you should focus on B2B channels or B2C channels, in which industries, and decide which funnels to use within these confines. Less promising areas should be tested as well; you may find promising results in unexpected places.
Among the channels you should test for B2B lead acquisition are:
Inbound marketing with lots of content
- Paid lead generation
- Social media
- Industry reviews
- Conference attendance
In this phase, your chief marketer should be a Pareto specialist - able to pull 80% of the results from 20% of the work. The director must be adaptable and able to define KPIs for launch and beyond. Lastly, he or she must be able to execute a coherent, complicated plan by tying different channels together and using a holistic approach to measure the results.
Again, chances are you really don’t need a CMO during this phase!
Phase 3: Growth
Type of marketing manager required: growth marketing manager
Your startup is an adolescent now. This is the time to automate processes, create procedures and build a monitoring mechanism for all campaigns. Even Superman would have trouble handling these tasks single-handedly! Now may be the optimal time to hire a CMO who can properly coordinate and delegate these tasks to either company employees or external agencies that can bring real results.
The growth phase is not a linear process; it’s complex, multifaceted, and entirely ROI-focused. A CMO or experienced growth marketing manager will need to hire and manage the necessary experts including:
- Incredible content marketers
- SEO specialists
- PPC wizards
- Analytics gurus
- PR pros
At this stage, a successful manager will analyze data from the launch and integrate it into your business intelligence. He or she will then determine next steps, becoming intimately familiar with the inner workings of channels that show real potential. Delegation of daily tasks to experts while building the marketing machine is key.
A growth marketing manager will sweat hard to deliver:
- An annual marketing plan based on the company goals
- The yearly budget to reach those goals
- The dream marketing team
- Clear ROI goals
- Product feedback loop
- Channel innovation, breaking away from the pack in order to shine
You should probably hire the CMO during this phase!
Phase 4: Tech Company
Type of marketing manager required: the CMO
Congratulations, you’re no longer a startup! If you’ve reached this stage and haven’t yet hired a CMO, don’t wait any longer. You now have (or need to build) a marketing factory, and hiring a strong leader is imperative.
At this point, your CMO should be a face of the company - visionary and strategic to the core. He or she will be featured online, in print and the media, and will be responsible for creating strong, positive brand awareness. Behind the scenes, your CMO will refine your story and create a multi-market strategy while professionally managing the teams that implement each task. As additional products are born, your CMO will continue to make adjustments and to implement new funnels to fuel new product growth. This is someone with significant international experience who is capable of presenting to the Board of Directors and managing large and often diverse teams.
Yes, you need a CMO from here on!
The moral of this story?
Don’t feel pressured by investors (or the actions of other startup CEOs) into hiring a CMO before you need to. Look closely at the strengths of your team and analyze what you really need to get you to your next goals. In many instances, a CMO is a talent overkill and budget sinker.