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Market leaders: when should a startup hire a CMO?

Written by Josh Russell on Tuesday, 06 May 2014. Posted in Sales & Marketing

Given how vital it is for a startup to have a strong relationship with customers, we speak to some of the UK’s hotshot marketing executives to get a sense of how hiring a CMO can benefit a growing business

Market leaders: when should a startup hire a CMO?

For a lot of startups, considerations about the composition of the c-suite can seem a very remote prospect when you’re just focusing on getting your core product off the ground. However, as a company grows and specialised hires become more commonplace, making sure your bases are covered in terms of executive talent becomes a lot more vital. Getting a chief marketing officer (CMO) in place can then spell the difference between a successful global brand and a startup that drops by the wayside.

First of all, it’s important to define the areas in which a CMO would typically have oversight. “A marketing officer would be the one who ascertains whether there’s an opportunity with a particular product,” explains Kevin Sterneckert, CMO at eCommera, the analytics-driven e-commerce suite. “The role of a marketing officer also includes working with the investment community, building business relationships with other companies, identifying market opportunities and market size and understanding the investments you want to make with your initiatives globally.”

Dorothy Mead, chief acquisition officer for blur Group, the business services exchange, feels there is often a tendency for companies to assume that marketing simply equates to advertising and that, in this age of AdWords and social media, it’s something they can easily handle on their own. Unfortunately, this is a fundamental misreading of the true responsibilities of a marketing executive. “A CMO is not someone who’s just going to put ads in the local paper,” she explains. “It is someone who actually starts to look at a business’s key strategic requirements.”

But knowing how to recognise when you need a CMO might not necessarily be straightforward. As a recent hire himself – being brought on board to the company’s executive wing just this April – Sterneckert is in the perfect position to outline why a company takes on its first CMO.

“We didn’t have marketing leadership for the entire company that would generate the directives, the purpose, meaning and initiatives of our marketing efforts and unify the voice of the company in the marketplace,” he comments. “eCommera took me on to manage all the different marketing activities that are happening across the company.”

Zapp, the mobile payments startup, also recently found itself in the position of needing to take on a CMO. With its profile building rapidly, the company decided to hire experienced hand Justin Basini as chief product and marketing officer, who brought with him experience from plenty of high profile roles such as CMO of Capital One. “Zapp had spent quite a lot of time developing the core team and infrastructure,” he comments. “But they were at a stage where they had to bite the bullet, go external and get it out there. They needed to tell the story, position it in the market and start to get belief and momentum behind it.”

Maintaining consistency in many different markets can also present a very strong argument for taking on a CMO, meaning inevitably a business looking to go global is much more likely to need an exec with a handle on their variegated marketing efforts. “As the success of the company reaches beyond the borders of the United Kingdom, the challenge becomes messaging and maintaining that unified voice and tone in the marketplace,” says Sterneckert.

However, whilst there is plenty that is unique to the role of a CMO, it’s important to note that the role has plenty in common with other c-suite positions. Having worked previously as chief information officer (CIO) of a billion-dollar grocer, Sterneckert has plenty of experience of the things exec roles have in common. “There’s the management team decisions that need to be made, the efforts of working with the board and the leadership of people,” he says. “Regardless of the area of accountability, those are skills that you can learn and leverage.”

Despite their common ground though, it’s not always easy to know which c-suite hires you should prioritise. Both blur Group and eCommera made their marketing hires ahead of a lot of other exec roles but this is far from being the norm.

Often in earlier stage companies, marketing will get handled on an as-and-when basis, using external talent and consultancies. “They bring someone in to do a little bit of their sales support or do a bit of marketing,” says Mead. Taking on senior, full-time marketing talent is rarely a huge focus for companies at this level. She continues: “If there is a hire, it tends to be a bit more at the junior level, whereas you’re more likely to go for the chief financial officer (CFO) hire at a senior level.”

The stage at which a company does decide to take on a CMO can vary. “It depends on the nature of the business,” Sterneckert says. “It has to do with how the organisation has grown, in what area it has grown and if it’s grown organically.” Despite this, for enterprises like eCommera that work in the software space, he does feel there are average levels of turnover that can mark this sort of hire. “You tend to see a marketing officer being brought in at about the £30m mark.”

That’s not to say it’s not worth earlier stage enterprises and startups looking at taking on this sort of talent. “I would actually say a CMO is an ‘earlier the better’ hire,” Mead comments.

Ultimately, the success of any enterprise is built upon its understanding of its customer base and there is no point too early for an enterprise to be working on its relationship with its market. “The moment you’re either thinking ‘I really want to make sure that I’m building something that someone out there wants’ or ‘does anyone out there want it?’, that’s the moment you need your CMO,” Mead says. “You need someone who actually gets the market around you.”

Basini believes there’s no hard and fast rule, with the decision resting very much on the company involved. “It depends on the needs of the enterprise and what role they really want the CMO to play,” he comments. With businesses looking for someone to throw together an ad campaign and communication strategy for a completed product, a CMO can wait until a much later stage. “But if you’re coming in as the person who’s going to drive the company’s focus on customer and on product then you’ve got to get a seat at the table much earlier.”

And the stage that a CMO enters a business radically affects the relationship they’ll have with a brand. “I was always taught at P&G that you were a custodian of the brand,” Basini remarks. Working in a corporate environment, a CMO’s focus will be more on optimisation and improvement of marketing processes to create incremental value increases for the brand. By contrast, in the more entrepreneurial environment of companies like Zapp, the CMOs are trailblazing and creating the paths their successors will follow. “That is the real joy of a startup,” he explains. “You make a significant difference everyday.”

In reality, however, the stage at which you take on your CMO is probably less important than making sure you make the right hire. Certainly there are key qualities that make an excellent marketing exec and capturing these for a business can lead to a truly winning marketing strategy. “You have to be pretty rugged, persistent and organised,” Mead says. “It’s good to be creative, it’s good to be ideas-led but you also have to be pretty focused.”

And a growing enterprise can reap huge benefits from this sort of a mindset. “The people who thrive within those organisations are people who just roll their sleeves up and do it,” Basini comments. “If you can get someone who’s externally focused, a good communicator, has a good feel for the market, but who isn’t proud and will turn their hand to anything, then they can be a really great asset right from the start.” 

About the Author

Josh Russell

Josh Russell

Our former editor, Russell was the man in charge of properly apostrophising our publication and ensuring Oxford commas are mercilessly excised. Our former digital doyen, he’s also a Photoshop pro, a dab hand with InDesign and the man to go to if you need a four-hour soliloquy about the UK's best silicon startups.

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