Updated: Aug 21
Why Frequent C-Suite Shuffling Signals a Need for Customer-Centricity
Maximizing Revenue and Retention: Driving Business Success with a Unified Approach to Breaking Down C-Suite Siloes.
The Evolving Landscape of Growth Strategy Driven by CPO vs CMO Collaboration
Shortening tenures in the C-Suite is an indicator that companies are changing their Growth Strategy more frequently. How customer-centric is the basis for this strategy change?
In today's rapidly evolving business landscape, it's crucial to ask: Are these changes reactive or are they strategically aligned with a deep understanding of customer needs?
The roles of the Chief Marketing Officer (CMO), Chief Product Officer (CPO), and Chief Growth Officer (CGO) can often overlap and create confusion in organizations. With the rise of digital, product-led growth, the confusion only grows. This is a complex issue that involves growth strategy, innovation, customer experience design, organizational design, incentive alignment, and key performance indicators (KPIs).
The challenge is figuring out who has the understanding of where customer demand will be, who is responsible, and which teams are needed to improve products and go-to-market. It's also important to determine who will develop and own the systems for data and analytics to refine customer retention and improve monetization payback periods.
Roles and Responsibilities Rather than Titles
The terms CPO and CMO refer to two different executive roles within an organization, namely the Chief Product Officer (CPO) and Chief Marketing Officer (CMO). These roles, and what a CPO and CMO do, although different, are critical to the success of a company.
But as companies evolve, so do these roles.
Increasingly, there are overlapping responsibilities between the titles. For SaaS companies, CPO's are increasingly being tapped to CEO roles, as they have a superior vantage point across multiple departments and are deeply in tune with the voice of the customer. This shift suggests a growing recognition that customer-centricity should be at the core of business strategy.
The Chief Product Officer (CPO) is responsible for making all 'product' decisions. This encompasses the overall product strategy, overseeing the product and service department, including its development, and making crucial choices regarding product direction and features.
In essence, the CPO paints the product picture. In tech-focused companies, the CPO role can be significant given the reliance on product innovation and user experience. In particular, CPOs now significantly to reducing Top of Funnel Churn; and this critical leading indicator should no longer the sole responsibility of the CMO; Growth is a team sport, and requires cross-functional execution to have any meaningful impact. See how strategic CPO and CMO collaboration can improve Top of Funnel Churn.
Top of Funnel Churn should no longer the sole responsibility of the CMO; Growth is a team sport, and requires cross-functional execution to have any meaningful impact.
On the other hand, the Chief Marketing Officer (CMO) is responsible for the development and execution of the organization's marketing strategy. This includes determining the best ways to market the product to the public and to specific customer segments, deciding on advertising and branding strategies, and working to enhance the company's market position and brand reputation. The CMO presents the product in the best light to the public, focusing on attracting and retaining customers.
While these roles have distinct areas of focus, there is a significant intersection in their responsibilities.
Particularly, the CPO and CMO need to work together closely for a company to remain competitive. This could involve working on shared objectives such as growth marketing and market segmentation, and applying a holistic view of customers. Despite potential overlap, the CMO and CPO can turn potential conflict into cooperation through effective communication and alignment on the company's goals.
Solving the Puzzle: Understanding the Intersection of CMO, CPO, and CGO for Growth through Customer-Centricity
Fortunately, companies are becoming more sophisticated in their understanding of leading versus vanity metrics. It's no longer enough to chase short-term gains; the focus has shifted towards long-term customer value.
The growth of product-led and digital products is providing real-time insights into customer retention, new revenue growth, and reducing the risk of successful product launches. This data can guide the development of cross-functional teams with the skillsets needed to gather and react to the voice of the customer insights, which are crucial for solving growth dependencies.
It's no longer enough to chase short-term gains; the focus has shifted towards long-term customer value.
To ensure a customer-centric approach, it is essential to gather these "voice of the customer" insights to understand the unmet needs of core target segments. McKinsey suggests these insights should be brought to the C-suite both before building and after prototyping new products. This aligns and guides the C-suite to inform decision-making, better distribute resources and drive a customer-first strategy based on differentiation, relevance and sustained competitive advantage.
Driving Business Success with a Unified Approach: The Importance of C-Suite Alignment for Efficient Resource Allocation
The Age-Old Question: Who Owns Growth? CPO or CMO?
Who should orchestrate this process? Who in fact is now responsible for growth; Product leaders or Marketing Leaders? The CMO is often responsible for understanding and connecting with customers through marketing initiatives and customer research. However digital products increasingly acquire, engage and monetise online, increasing the dependency on product and marketing working intimately to align multiple touchpoints across customer journeys and time to achieve a singular growth strategy and competitive positioning.
Given this complexity, it's vital for businesses to adopt an integrated approach to resource allocation and strategy execution.
Addressing Strategy depth can significantly improve Execution effectiveness. Since each is a dependency, Growth requires identifying and addressing the 3 Gaps. Download the actionable framework for this here. Subscribe for updates on when the downloadable template will also be released.
Breaking Down Silos for Growth - Shifting Mindsets and Focus
The Changing Face of the C-Suite
In signs of proactive organisational re-design and growth alignment, Conny Braams’ of FMCG giant Unilever, has a new title – Chief Digital and Commercial Officer (CDCO!). This indicates an organisation shift in mindset to remove the “silos” between marketing and sales. Dropping 'marketing' from her job title in favor of ‘commercial’ is geared to better influence the integration of marketing, brand building and sales teams.
Companies are beginning to understand the importance of a unified approach, not just in rhetoric but in organizational structure.
It's a sign of the times, CMO's don't launch ads, they own revenue impact. CPO's don't build platforms, they capture and share voice-of-the-customer insight company-wide to improve all aspects of acquisition, retention and monetization, both on-platform and off-platform.
Each of the C-Suite with voice of customer access should be actively involved in gathering customer insights and ensuring that customer needs are rapidly and broadly made available to the C-suite for timely and regular adaptation to market and competitor conditions.
It's a sign of the times: CMO's don't launch ads, they own revenue impact. CPO's don't build platforms, they capture and share voice-of-the-customer insight company-wide to improve all aspects of acquisition, retention and monetization, both on-platform and off-platform.
The Power of North Star Metrics: A Path to Incentive Alignment and Resource Orchestration
A Singular focus aligning Product and Marketing Teams
Aside from the obvious focus on growth and revenue in 2023, organizational design must encourage a focus on overall business impact rather than divisional KPI’s.
It is not uncommon for marketing teams siloed from business strategy to have “achieved their KPI’s” only for sales to be unhappy with the quality and conversion potential of the leads brought in.
Without joint and aligned North Star, leading indicator metrics, teams inadvertently optimise, and often in competition with each other. Therefore incentives must be design to orchestrate their cooperation and co-design for growth.
In fact, focusing on a singular, customer-centric North Star Metric can align disparate teams and ensure everyone is pulling in the same direction.
To ensure that teams are working towards overall business success rather than siloed goals, companies could, for example, shift their focus to North Star Metrics based on customer retention. A North Star Metric is a single, leading indicator that measures the core value a product provides to its customers. By tracking retention, companies can gauge their success in satisfying customers and generating long-term value.
According to research published by data analytics giant, Amplitude, customer retention is a crucial driver of business growth. By setting retention-based North Star Metrics, companies can create a shared goal and foster a customer-focused culture, tying bonuses, promotions, and other rewards to prioritize serving the customer and building long-term value, instead of solely focusing on metrics that may not contribute to business success.
In summary, companies can incentivize teams and set KPIs that drive business outcomes by:
A New Paradigm for Growth:
When searching for new growth, the role and responsibilities of CMO, CPO, and CGO can overlap and cause confusion, but it is crucial to determine who is responsible for understanding customer demand and data analysis.
The Era of the Informed C-Suite:
Gathering "voice of the customer" insights is essential to drive a customer-centric strategy based on differentiation, relevance, and sustained competitive advantage.
The C-suite should be actively involved in gathering customer insights to adapt to market and competitor conditions.
Unifying Metrics for Unified Success:
Companies should adopt North Star Metrics focused on long-term customer value to align incentives and drive business success.
Organizational design should focus on overall business impact, not just divisional KPIs, by using North Star Metrics based on customer retention.
Teams should be incentivized to work towards overall business success by focusing on retention-based North Star Metrics, linking rewards to their achievement, and building a customer-centric culture.
Boldly into the Future with Organizational Transformation
By prioritizing customer satisfaction, companies can achieve sustainable growth and better serve their customers.
The CMO and product leaders should work together to align multiple touchpoints and achieve a singular growth strategy.
In an age where the customer has more choices than ever, understanding and meeting their needs isn't just good business—it's essential for survival.
For more on driving growth, check out our new series on addressing churn in your funnel to help you get to stickiness and scale. Address dependencies that can be tackled to cover both Top of Funnel and Bottom of Funnel Churn, and how they can enable more reliable Growth from data-driven decision making and customer centricity positioning strategy.