Recently, GGV Capital and Max Ventures hosted an Evolving E Commerce dinner that included 10 of the top CMOs in NYC. Besides everyone asking personal questions to the CMO of the NBA :-) the discussion was centered around strategic and operational challenges CMOs face at different stages of a company’s life. Below are the most interesting topics that were discussed. Thanks to the CMOs who joined us and to Bryan Goldberg for hosting the dinner.
(1) Finding the right balance between Brand Marketing and Performance Marketing is very difficult. In the short-term, a company is incentivized to over-emphasize performance marketing channels (FaceBook and Google) because there’s an immediate result and measurable ROI. But really good brand marketing campaigns are likely to have a bigger long-term pay off, but results are further out and harder to measure. What’s becoming even more difficult is establishing an incentive structure so your brand marketing and performance marketing teams don’t feel like they’re competing against each other for resources.
One of the guests — a CMO of a company that is about to go public — has faced this problem for years and has found an approach that’s working. As the brand expands and revenue increases the company has decided to give the performance marketing team a higher budget. Direct profits from performance marketing campaigns then get funneled back into the brand marketing team’s budget. Both teams are incentivized to work together and each team is rewarded when the other team executes. Internal incentives are aligned and resources are expanded based on production of both units.
(2) One of the most consistent flaws when a CMO hires marketing talent is not being specific on expectations. It seems like an obvious problem, but *every* person at dinner said they’ve directly or indirectly experienced the problem at least once. Marketing is often viewed as subjective and trying to make an impact as a new employee can be even more complicated at a founder led company because so much of the brand is directly tied to the founders. It’s critical to clearly set expectations and establish why the new employee is joining, set metrics that measure the employee’s success, establish a 100 day execution plan, among other things. There should be no uncertainty on what success looks like.
(3) Don’t move out of core markets/demographics too early. It’s very common and intuitive to feel urgency to be one step ahead of expanding your demographic or product categories. But, the reality is the company has to reallocate resources to execute it. If your company is performing extremely well within your core demo, then keep spending resources there and ride it as long and hard as possible. It might take you much farther than expected. Ride the core demo until it starts to become clear you need to spend resources elsewhere.
(4) Marketers need to have a deep understanding of their core audience. Again, sounds obvious, but too often the marketing team doesn’t fully understand or represent their entire core audience. It can be especially true as a company expands past the early adopter segment. For example, one of the companies at dinner ran an ad campaign about a specific topic that inadvertently offended a portion of their user base. It’s a big company that has been very successful, but the blindspot on the topic made it clear they needed to be closer to all of the customers. Marketers need to understand their customer’s values, biases, frameworks for making decisions, etc. One of the CMOs at dinner makes a point to schedule a call with at least one random customer per week to ensure they are staying close to all users.
(5) Brands are increasing focus on physical stores as pure branding initiatives. Especially in markets like NYC & London where people from all over the world visit and end up walking into their store. It’s imperative for the in-store experience to be fun and allow people to experience your brand in a memorable way. Don’t always view the physical retail experience as transactional because it should also be an amazing brand marketing opportunity.
Marketing is a critical function for all companies that’s becoming even more important as access to the consumer becomes democratized. It’s never been easier for a brand to reach consumers, but it’s never been more difficult to stand out. It’s imperative to deeply understand your customer base, their values, how they spend their time & money, what message resonates, and how to convey that message in a timely manner.
About the Cohosts:
GGV Capital is a venture firm based in Silicon Valley, Shanghai, and Beijing that has been partnering with leading technology entrepreneurs for the last 18 years. With $3.8B in capital under management across 8 funds, GGV invests in globally minded entrepreneurs in consumer/ecommerce, frontier tech, and enterprise sectors.
Max Ventures is a seed stage focused VC firm that is based in NYC. The firm has a strong consumer tech focus with investments in rapidly growing commerce companies in New York City, San Francisco, and Los Angeles. The partners have a decade of successfully investing early stage companies across the globe. Max Ventures primarily invests in Digital Commerce, Digital Media, Fintech, and Digital Health.