Marketing Experience on the Board - Being Customer Centric
The contemporary business landscape is a dynamic arena where success is not merely a destination, but an ongoing journey marked by ever-evolving market dynamics, shifting customer preferences, and relentless competition. As such, boards of directors (BODs) and the organizations they support need more than traditional strategies and decision-making processes. They require a guiding force to help them set the organization’s future direction.
Numerous studies demonstrate the importance of adding a customer-centric marketing professional to the board. One example is from the study “Marketers on Board: The Secret Ingredient to Firm Growth” examined 64,086 board member biographies (from Standard & Poor’s 1,500 firms between 2007 and 2012). The research revealed that a firm can expect its annual revenues to increase by nearly six percentage points when at least one marketer is on the board.
Six Ways Customer-Centric Marketers Optimize Decisions and Outcomes
Barbara J. Cooperman, who served in various CMO roles for nearly 20 years, today is a director on two boards: Research Solutions and the Mintz Group. She claims that customers are a firm’s most important asset. Accordingly, it’s not surprising that she said, “I believe all board members, and especially those of us with marketing expertise, need to safeguard the customer perspective as true north.” How does this expertise make a difference? Barbara explains that “board members with marketing expertise can help embed governance-level customer metrics, ensure customer trends are part of earnings releases, inquire about creative customer strategies to make and grow markets and drive deep and permanent culture change and boost top and bottom-line results." With this in mind, here’s how a board can use their hands-on involvement and oversight expertise to drive organizations forward.
- Set clear performance measures and growth targets. According to a 2022 McKinsey study, companies with clear growth targets are more likely to achieve profitable and sustainable growth. These individuals excel in defining and communicating performance measures and goals, providing clarity in organizational direction.
- Provide informed decision-making. In the age of data, making decisions based on gut feeling is no longer enough. Customer-centric marketers supply the data required to assess the impact of past decisions, enabling organizations to make educated adjustments and chart a course for the future. McKinsey’s research indicates that data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable as a result.
- Foster accountability. Accountability is essential for organizational excellence. When key performance indicators (KPIs) are established, teams have a clear target to aim for, and individuals can take ownership of their contributions. Board members with a customer-centric marketing focus create a culture of responsibility and excellence, resulting in improved performance.
- Ensure resource allocation. Wise resource allocation is a top priority in boardroom discussions. Marketing professionals help the board to identify initiatives that deliver results and those that require additional resources or a change in strategy. The balanced scorecard, a performance measurement and management tool, aids in identifying strategy gaps, strengths, and weaknesses, allowing for adjusted resource allocation.
- Practice adaptability. Customer-centric marketing board members enable organizations to adjust to evolving market dynamics, changing customer preferences, and competitive landscapes. Data-driven insights facilitate timely course corrections, ensuring the business stays on the right track.
- Focus on continuous improvement. The essence of business growth lies in continuous improvement. When it comes to marketing, it is important not to focus solely on the present. Future-oriented board members anticipate emerging trends and opportunities for improvement, ensuring that their organizations remain competitive and relevant.
Quantifiable Top and Bottom-Line Benefits
Customer-centricity is a corporate value. It requires a commitment from leaders to build an intentional culture through words, actions, and deeds. In this way organizations are primed to achieve sustainable, profitable growth in any initiative, including market penetration, market expansion, product development, diversification, new partnerships, and mergers and acquisitions.
The ROI of adding a customer-centric marketing expert to the Board is high. According to the Research Gate survey report—Darden School of Management’s “When and How Board Members with Marketing Experience Facilitate Firm Growth,” its analysis of 64,086 board member biographies found that a company’s annual revenue increased by 6.7 percent if the board included at least one marketer. The research also revealed that not having a marketer on the BOD puts companies at a competitive disadvantage.
In his article, “Marketing Governance; Oversight Overlooked,” in the Ivey Business Journal, Ian Gordon writes:
“Marketing has built fortunes and depleted others, so it does behoove directors to provide close scrutiny of, and governance to, the firm’s marketing function and initiatives. A review of the Management Information Circulars issued by publicly traded companies suggests few directors have had hands-on marketing roles and fewer participate in board committees focused on marketing. Given this lack of experience and attention, boards have difficulty providing effective governance of the marketing function.”
Including individuals with a customer-centric marketing focus on the board paves the way for an organization to deliver meaningful value and brand equity in the marketplace. In addition, the guidance from a board member with customer-centricity expertise enables companies to seize growth opportunities more rapidly, resulting in faster growth rates and adaptation to changing customer dynamics.
Planning for the Future
In a dynamic business environment, it’s a strategic imperative to have customer-centric marketing executives on an organization’s BOD. They bring invaluable expertise to steer the organization toward success, ensuring it remains competitive and adaptable in the ever-changing landscape. By prioritizing the inclusion of these experts, companies can optimize their decisions and outcomes, resulting in sustainable growth, profitability, and a strong brand presence. In an era where data and customer-centricity reign supreme, board members with marketing savvy are the key to unlocking an organization’s full potential and securing a prosperous future.
About Laura Patterson
Laura Patterson is president of VisionEdge Marketing. Since 1999, her firm has helped more than 250 companies grow by delivering customer-centric, data-driven, outcome-based strategies. Laura is an award-winning author and recognized thought leader. For more information, visit visionedgemarketing.com; https://www.linkedin.com/in/laurapattersonvem/
Disclaimer: The views and opinions expressed in this blog are solely those of the authors providing them and do not necessarily reflect the views or positions of the Private Directors Association, its members, affiliates, or employees.