Put marketing at the core of your growth strategy

Research shows companies that make the decision to put marketing at the core of their growth strategy outperform the competition. Specifically, those who view branding and advertising as a top-two growth strategy are twice as likely to see revenue growth.

Research shows that companies that make the decision to put marketing at the core of their growth strategy outpeform the competition.

Growth is a perpetual business priority. So it’s imperative that CEOs understand how their marketing function and chief marketing officers (CMOs) can contribute to that goal.

Few do – and that misalignment can be costly.

How do we know this? Because, with proprietary research and input from the Association of National Advertisers, we surveyed more than 100 marketing leaders and 21 CEOs from a range of industries and from companies of different sizes. We also looked specifically at marketing dynamics in Fortune 500 companies.

The results of this research are clear: Companies that make the decision to put marketing at the core of their growth strategy outperform the competition. Specifically, those who view branding and advertising as a top-two growth strategy are twice as likely to see revenue growth of 5 per cent or more than those that don’t (67 per cent to 33 per cent). This is true for both B2C and B2B companies.

In addition, high-growth companies – defined as those in the top quartile – invest, on average, three times more on marketing. As one senior executive of a consumer goods company told us: “Finance identifies where the money goes; marketing identifies where the money comes from.”

For CEOs and companies who aren’t using marketing to drive growth, it’s time to hit the reset button. Here’s how.

Define what you need

Do you have an innovation-led growth strategy? Are your customer relationships strong? Do you have the right capabilities, people and tech to build a world-class brand?

If you don’t know what marketing can do, you can’t know what it should be doing. That principle sounds obvious, but the practice is far from ubiquitous.

When we asked CEOs and CMOs in the same company what marketing’s primary role was – brand building, customer experience, digital growth, loyalty or sales support – half the time they gave different answers. In addition, almost half of CMOs ranked branding and advertising as a top-two growth tool; fewer than 30 per cent of CEOs agreed. Two-thirds of the time, these leaders didn’t agree or weren’t sure that they had the same definition of what marketing return on investment is. Fewer than 30 per cent of CEOs thought their CMOs were highly effective at driving growth.

All this is more than a failure of communication – it’s a fundamental disconnect. CEOs have a responsibility to provide their marketing leaders with a compass they can use to read the strategic map. Together they must create a marketing measurement framework that connects companywide outcomes to marketing growth strategies.

Nominate a chief customer advocate

Unlocking growth is a team sport. At a minimum, the marketing, digital, product and finance functions have to work together. Different players will execute different parts of the growth agenda, but you need a growth unifier whose task is to represent the voice of the consumer. In effect, that person is the quarterback.

In many companies, custody of the customer is fragmented. For example, two-thirds of CMOs in our survey said that there was more than one customer C-level role in their company. That can be a problem because when everyone owns the customer, then no one does.

Defining the role of chief customer advocate is critical. The CMO could play this part, or it could be someone else. Whatever the title, what matters is that there is a seat at the table filled by a leader who represents the consumer. The chief customer advocate must have real authority and be an integral part of every strategic conversation. According to research by Adweek, there is a strong correlation between high-performing CMOs and strong support from CEOs.

Too often, though, this support is weak. Our research found that four out of 10 Fortune 500 companies don’t have anyone in marketing and customer-related roles on their executive committees. Those that do are more likely to outperform; we found that companies with CMOs highly involved in strategic planning grow 1.3 times faster. As one marketing executive at a global beverage company put it: “Strategy should be multidisciplinary, but when marketing does not have a seat at that table, the whole system has failed.”

Become a growth coach

With a star quarterback in place, CEOs need to embrace their role as the coach. Their job is to draw up the strategy, not to toss the ball down the field.

CEOs should have a handle on the challenges and opportunities of modern marketing. Is the marketing strategy aligned with the overall growth strategy? Too often, the answer is either “no”, or “not enough”. Again, our survey results were revealing. Fifty per cent of the CEOs said they were very comfortable with modern marketing and only a third of CMOs agreed that they were.

Marketing today is more than branding and advertising. It is a multidimensional and technical discipline. Consider: the number of marketing technology solutions has been doubling every year, with more than 11,000 in 2023 alone. CEOs without a marketing background – and that describes most of them – must invest in learning, including spending time with their CMOs, to deepen their knowledge of the tools of modern marketing. Doing so will help them become
a better coach.

It’s also important to ensure that CMOs have the right mindset; accountability is not just for business unit leaders. Develop CMOs so that they act like they own profit-and-loss responsibilities. Hold them accountable for delivering tangible results that support the growth agenda.

For that to happen, the quarterback needs to have the ball; having too many customer voices can be as ineffective as none at all. Across industries, we found that Fortune 500 companies with one customer role in the executive committee grow significantly faster than those with multiple ones – from 20 per cent faster in materials and chemicals to more than double in travel and logistics.

The evidence is clear: Growth leaders generate 80 per cent more shareholder value than their peers over a 10-year period – and marketing can be a growth accelerator. But too many CEOs, too often, are not taking the actions that can put it in overdrive. That is a failing you cannot afford: leaving money on the table is not a good strategy.

Marc Brodherson is a senior partner in McKinsey & Company’s New York office. Jennifer Ellinas is an associate partner in McKinsey & Company’s Toronto office.
Ed See is a partner in McKinsey & Company’s Stamford, Connecticut, office. Robert Tas is a partner in McKinsey & Company’s Stamford, Connecticut office. Copyright 2024 Harvard Business Review/Distributed by NYTimes Syndicate.