Designing and Building a Marketing Organization that Grows Revenue
What’s the best way to structure and organize marketing in a modern commercial model? That’s an important question at a time when most marketing organizations are trying to become more digital, agile, customer centric, accountable and revenue oriented – all at the same time.
It’s also a loaded question – because there’s no one correct answer. Every marketing organization is as unique as a snowflake because the role marketing plays in driving financial performance depends on a wide variety of factors. In fact, academic research highlights ten design considerations. For example, marketing must support the business model, growth strategy, and primary channels to market. It must also enable the digitization of the business, the concentration of customer power and demand, and the mix of channels, systems, and capabilities needed to engage customers. If that’s not hard enough, defining the scope, remit, and objectives of the CMO job is even more bespoke. The fact that most companies build a high degree of misalignment and internal conflict into the job design from the start only compounds the challenge, according to research by Professor Kimberly Whitler. “If a CMO is expected to lead growth, but they only have responsibility for advertising, media, and communication (i.e., other C-suite leaders own innovation, data and analysis, corporate strategy, strategic partnerships, pricing, selling, distribution, and so forth), and the CEO is unaware of these critical peer contingencies, then there is misalignment that can make fulfilling the job difficult at best,” writes Whitler.
TEN DESIGN PRINCIPLES FOR BUILDING A HIGH IMPACT MARKETING ORGANIZATION
This is a problem that needs to be solved. “The industry lacks a common understanding of how the marketing function delivers value to the organization, which is leading some companies to deprioritize – and de-fund – marketing and limit the role of the CMO,” says Frank Findley, the Executive Director of the Marketing Accountability Standards Board (MASB). “The marketing function faces an array of headwinds that impact the ability of marketing to drive growth and value in a business,” adds Findley, who is co-leader of MASB’s Marketing Organization Best Practices Research Initiative, which seeks to identify ways leaders can design marketing organizations and roles that maximize their contribution to revenues, profits and firm value. “Marketers must deal with complex performance measurements, the fragmented ownership of growth resources and channels, accounting changes, and having other functions making key marketing decisions.”
Frank Findley is right. Ultimately, that’s the only answer to the question what’s the best way to structure and organize marketing? Do it in the way that creates the most value for your business. While that sounds very conceptual, it’s actually on point. Faced with these challenges, making the goal of creating firm value the scorecard for success is a north star that can lead marketers out of these woods.
One CMO – Lynn Teo the Chief Marketing Officer of Northwestern Mutual – has gone a long way to address these issues by embracing this north star, and the ten design principles to building a high impact marketing organization. Over the first 18 months of her tenure as CMO, Teo actively transformed and rebuilt the structure, composition and capabilities of the marketing function at Northwestern Mutual. She’s built a modern marketing organization that’s designed to unlock more value and growth drivers for the enterprise by unlocking new capabilities and new channels. – while continuing to reinforce the enduring brand truths of this 167-year old company in the context of today’s consumer needs.
To Teo, structural transformation starts and ends with value creation as the north star. “Northwestern Mutual’s business is a vertically integrated financial services company,” says Teo. “We manufacture our offerings and deliver them through our exclusive financial advisors to the client. It’s very much a B2B2C model with two businesses working in tandem to serve and convert a consumer. In this model, marketing contributes to the growth of the business in many ways: building the brand, generating awareness, showing up for consumers who are “in-market” for an offering or prompted to consider us when triggered by a realized need, supporting advisors with marketing capabilities, and stimulating demand to drive consumers to a best-fit advisor. Generating demand is every marketer’s entrée to competing for larger slices of the addressable market,” she continues. “But a less often deployed strategy lies in recruiting advisors – key to Northwestern Mutual’s business model and growth strategy.”
A significant aspect of Teo’s success was creating a bespoke organization structure that powers Northwestern Mutual’s marketing strategy and business model. “Our marketing strategy needs to be aligned to the business to create value,” Teo continues. “In the context of our business model, value is created by getting a return on our investments in support of the company’s B2B business model. We do this by demonstrating the impact of our brand when extended through the independence of our entrepreneurial advisors. We are enabling our advisors to serve as an extension of our brand. We help them deepen relationships with clients through comprehensive planning and by creating teamwork across all of the functions involved in our go-to-market motion.”
A meta-analysis of 96 academic, commercial, and market research studies by Slate Point Partners reinforces her point. The study found that a significant portion (50%) of future revenue growth can be attributed to interdisciplinary competencies that connect the dots across the teams, resources, systems, and data from across the business. The study identified eight ways that teamwork directly grows customer lifetime value, improves the customer experience, and enhances the returns on growth investments, actions, and efforts. The study also found that 40% of growth involves getting better returns on the knowledge, brand and channel assets that Teo has made her focus.
Transformation is daunting, but Teo embraces it as an opportunity for marketing to create and demonstrate more business impact. “Transformation can be an intimidating word to a lot of people because it implies change, pain, risk, and disruption – and it is hard – but it’s also necessary to compete” says Teo. “I’ve found it to be liberating and a way to unlock more value from my team and resources” she adds. “To me, transformation means having the opportunity to take a fresh look at the business through a different lens.”
The organization Teo has built is remarkable for a variety of reasons.
1. It’s aligned with the ways marketing creates value within the B2B2C business model;
2. It uses the inherent tensions and tradeoffs to build a stronger bridge to the customer;
3. It enables the teamwork required to create value in a modern marketing model;
4. It directly supports the core strategic brand, customer acquisition and expansion, and advisor recruiting and retention objectives;
5. It measures the business outcomes that create value, in terms of clients, sales and advisor performance.
To design and build her marketing organization – Teo let form follow function by understanding and focusing on where value is created in the business. “Value creation has to be the guidepost for the organization,” says Teo. “This means you need to deconstruct where value is created in the organization and get specific about how and where marketing can help create more value for advisors, and for clients. In our organization, multiplying the impact of the advisor channel is important because they are the primary engine of growth in our business.”
Another key to Teos’ success was to identify and harness the strengths of her existing marketing functions (e.g., social media, client marketing, and field enablement). She designed the organization to leverage all of the capabilities and functions that have historically contributed to value creation. The structure combines them in a way that promotes cross functional collaboration to drive greater value. Her team works horizontally within and across the organization to connect the dots to support all aspects of the go-to-market process. They must also collaborate vertically to ensure they make tradeoff, allocation and investment decisions that roll up to growing market share, revenue, profits and customer lifetime value.
In a sense, Teo has elegantly used the fundamental tensions within the business to build a stronger go-to-market by bringing together cross-functional problem-solving and collaboration. By design, her team works together to inform creative with insights, balance brand building with a throughline to product marketing, and ensure marketing campaigns are enabling advisor conversations. Like a roman arch, Teo has designed a go-to-market organization where these are purposefully connected and combined to build a stronger go to market capability and a team that is set up to create more value. For example:
· Brand and product marketing teams are aligned with client marketing to drive deeper relationships and more product ownership among clients. This alignment helps support the goal of delivering financial plans as a part of the selling motion. The Northwestern brand creates the awareness for who the company is and what they do. The brand also represents their industry-leading products that create the demand and ultimately propel consumers to take action.
· The management of paid, owned, earned and shared (sponsorship) media is highly coordinated and supports a full-funnel strategy. This ensures these investments are not only creating awareness but also moving consumers through the journey, including demand. “Media diversification along the entire revenue cycle is essential because an integrated campaign approach maximizes your efforts,” says Teo. “To make this happen our team implemented a campaign process that serves as our operating model. This process establishes the big picture, but also includes clear accountabilities and hand offs, leveraging the expertise in each area, including partners from other parts of the organization, such as our PR and Communications team who are a critical partner in brand amplification and activation.”
· Insights and creative are managed by a single leader to ensure messaging addresses client behavior and motivations which are extremely varied and nuanced across the segments they serve. For example, consumers make financial decisions based on both emotional and rational factors. People nearing retirement behave differently than millennials and are at different places in terms of their financial needs. Another example, the “sandwich generation” is in the middle and struggling to care for both kids and parents. “Our positioning, as well as our campaign and visual identity, are informed by consumer and client research,” says Teo.
· Northwestern Mutual’s advisors are a critical go-to-market channel, and a field marketing function , focused on enabling advisors, helps embed this necessity across the broader team. This ensures the creation of a symbiotic relationship with advisors. “It’s important that we leverage the advisor channel as an extension of the brand to increase reach, relevance and engagement,” says Teo. “So, advisors play a big role in our campaigns. Ninety percent of client and prospect touches are happening through the advisor. Just like with consumer research, the feedback we get from those advisors is critical to our success,” she continues. “For example, when we shared our first campaign concepts with our advisor base for input, they didn’t initially resonate with them. . When our teams heard the feedback, they went back to the drawing board. They reconceptualized our Fall brand campaign this year with a deeper focus on staying true to the brand of our advisors, who are in essence the flag bearers of our brand in the markets and communities we serve.”
And much like a Roman arch – Teo’s organization functions efficiently because of the ways the team members and functions have to lean on each other. These horizontal forces and tensions across the go-to-market process hold it all together.
A big key to making this work was finding ways to implement digital and measurement initiatives in the face of imperfect enterprise data. “One mistake I see marketing leaders make is to let perfect get in the way of optimizing current campaigns and marketing motions,” says Teo. “Marketing and go-to-market approaches have overlapping handoffs and dependencies because channels work together to drive the desired impact. You allocate resources and make investment decisions based on imperfect information. And the data and KPI and attribution you need to validate and improve those decisions is opaque for a lot of good reasons – legacy systems, limited enterprise resources, and data sets that don’t synchronize that support real-time decisioning. So, in my experience, it’s important to embrace imperfection with a pragmatic mindset. While full funnel analytics and complete attribution is the desired end state – don’t use the absence of watertight data as an excuse to stall campaigns informed by deep insight, sufficient historical data from past campaigns, and emerging hypotheses on consumer motivations.”
“We know our data isn’t perfect,” Teo continues. “That means sometimes we have to set KPIs that show incremental progress as we work towards our ‘north star’ of value creation and achieving full attribution through smaller scale experiments and tests. In our B2B2C business model, this means tracking leading indicators around the amplification efforts of our advisors and understanding where and how they are leveraging and extending marketing to reach more consumers and clients.”
Teo’s focus on building an organization designed to deliver more value is paying off. In 2024, for example, Teo’s team increased lead volumes by 40% and drove an increase in plans delivered and client sales.
Lynn will be presenting her experiences unlocking the value of marketing to drive customer experience and growth through structural transformation at the Digital Marketing in Financial Services Summit in New York City on November 7th.
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