Originally published on ClickZ
C-suite titles are a mirror of our current business priorities, and when they change, it is a signal that new threats or opportunities have entered the business landscape. Consider the Chief Data Officer, Chief Diversity Officer, or Chief Compliance Officer, and what the creation of those titles signified about social and economic shifts. Chief Market Officer is one that has just entered the lexicon, reflecting a need for the traditional CMO to understand complex global market dynamics vs. simply demand gen.
In the past few years, the CGO label has become commonplace. Forrester predicted as much in 2017, seeing the rising “obsession with the customer” as requiring much more than what traditional CMO could provide. The role is described as an active catalyst for growth and a disruptor. It has an emphasis on the customer and a heavy reliance on marketing technology and is tasked with building growth into product, service, and support, and marketing.
More recently, the Chief Partnerships Officer (CPO) title has taken root in the executive garden for reasons we will delve into below. And even in the absence of a CPO, a smart CGO has much to gain by taking a page from a partnership leader’s playbook. With a 2019 Forrester report showing that partnerships on average drive up to 28% of revenue growth at organizations that take them seriously, understanding the partnership economy and how modern partnerships work is wise for any business leader.
Here we take a closer look at these two roles and why partnerships, titles aside, deserve a seat at the table.
The emergence of the CGO
According to a report by Singular, the number of CGOs has doubled over the past five years, and it is estimated that at least 14% of companies in the United States have a CGO. The report describes the CGO as an evolution of the CMO driven by the growth management movement and defined by “driving growth through customer obsession and empowered by digital investments.” Many CMOs have either become CGOs or now collaborate with the CGO to ensure cross-functional collaboration with sales and product.
In the case of the CGO, technological changes and customer-centric strategies created a need to manage for growth specifically. In the cast of the CPO, it was a change in consumer attitudes and the empowerment created by the internet that brought partnerships into the C-suite.
Partnerships take off and the CPO takes charge
Partnerships in the modern business context are an indirect channel that has the potential to reach a larger audience than conventional marketing with more targeted content at every part of the customer journey. Traditional marketing involves messaging to consumers directly with a tight control over brand. Partnerships, on the other hand, communicate through partners to the consumer — partners that may include social influencers, media houses, affiliates, mobile app developers and integrations, charitable causes, and any other kind of trusted third-party capable of influencing consumers to become customers.
With partnerships, in fact, exercising too much control over branding is counterproductive. It limits the creative potential of your partners and creates a level of inauthenticity that erodes the all-important trust these partners have with their customers.
As this model of referral partnerships as a distinct channel has taken shape, CPOs have become more commonplace.
At Impact, we announced our own CPO earlier this year. Partnerships are one of the growing economic engines for our company as they are for a growing number of global enterprises, and something that vital growth merits a designated advocate and overseer in the C-suite.
It’s all about growth, so why two roles?
Although the CPO title does not have the word “growth” in it, like a CGO, a growth mindset is a prerequisite to being a successful CPO, and a history in performance marketing certainly helps.
But the CPO emerged as a distinct role in response to the scale of the opportunity and the distinctive skills required. Research shows that modern referral partnerships have enormous potential to bring about incremental growth at an ROI well above other digital marketing investments. Forrester’s report calculated that companies with the most mature partnership programs brought in $162 million more than comparable competitors that weren’t fully utilizing the channel. In addition, partnership-mature companies were up to 5x more likely to outperform expectations on a range of critical business KPIs, such as revenue growth, bottom-line profitability, and market valuation.
So while a CGO has multiple channels to wield for growth, it makes sense for a CPO to be all about the partnerships.
Where CGOs and CPOs diverge
There are clear similarities between partnerships and growth marketing strategies and overlaps in skillset. Growth marketing can be seen as a healthy evolution of the marketing mentality that focuses on both acquisition and retention and looks at the effectiveness of customer acquisition programs throughout the entire funnel, not just at the top. Its special emphasis on experimentation is also an important tenet.
Those same principles are relevant for successfully managing the partnership channel. Similar to growth marketing practices, the most successful partnership programs:
- Design and diversify their partnership relationships such that they cover the full journey of a customer to acquisition and beyond (some partners generate awareness, others close the deal, still others keep them close)
- Look at the lifetime value of the customer and seek to identify partnerships that are good at introducing, influencing, or closing a company’s most valuable customers
- Continuously collaborate with their partners and experiment on the types of messaging and offers that produce the best yield
The goals of growth marketing and partnerships are similar, too: To drive growth, acquire high-value customers that become long-term customers, and increase engagement and value of existing customers.
But the tactics to achieve those goals are different. Partnerships are by nature far less transactional and far more collaborative than most marketing relationships. To foster successful partnerships that bring significant growth to your business, you need to view them as long-term collaborations and orchestrate the relationship through the full partnership life cycle. That not only means discovering and recruiting the right set of partners across different partnership types, but also negotiating mutually beneficial contracting and payout terms, tracking their contributions and ROI, continuously engaging and educating them on new campaigns, products, and promotions, and more. In addition, partnership leaders orchestrate a range of activities that go well beyond traditional marketing activities, and they must develop and hone skill sets that span sales, enablement, finance, legal, business development, and operations
Perhaps most important, while marketers retain a mentality of pushing brand messages to a consumer, the partnership channel engages the savvy consumer who prefers to pull information by doing their own research. Indeed, there’s a body of research that shows that push marketing is rapidly losing its effectiveness. Millennials in particular are more likely to research on their own and pull information they need to make a purchase decision from authentic sources they trust. That’s why the successful partnership professional is about enablement, not broadcasting. Whether it’s education on the trends, the latest products and promotions, building out creative, or running partner communities, partnership leaders must feed the enabling assets to help drive a flourishing partnership ecosystem. That requires a major mindset shift for marketers.
Finally, while high-level KPIs for the CGO and CPO are similar, the diagnostic metrics that support them are very different. In growth marketing, when things aren’t going well, you may focus your diagnosis on metrics like activation rates, abandonment rates, time-to-activation rates, retargeting conversion rates, and so forth, which are aligned with traditional digital marketing investments. In the partnership channel, you may look at completely different diagnostic metrics in order to optimize the health of your program — anything from partner engagement rate, partner lifetime value, incremental value each partner and partnership type delivers, or conversions from new customer traffic driven by partners.
Titles aside, partnerships must be a priority
The trajectories of both the CGO and the CPO come down to business value. For partnerships, that value has proven to be enormous, and we’ve barely scratched the surface. Whether it is a CGO, CMO, or CPO harnessing the power of partnerships matters less than the willingness to seize the opportunity and invest in proper management of the channel.
Our research with Forrester proved also that the companies who are seeing the most revenue growth from partnerships are leveraging partnership automation technology. Partnership automation standardizes contracts, simplifies tracking, and streamlines the complexities of payments, allowing organizations to scale their programs with impunity. It allows partnership managers to minimize their time spent on cumbersome, low-value tasks and refocus their energies on high-value activities that can grow the partnership channel, such as:
- Researching ways to fill in gaps in their partnership strategies, discovering new partners (of all sizes) to fill those gaps, and running a recruitment campaign
- Hammering out innovative new business development deals with adjacent and complementary industries
- Expanding into new partnership types, broadening the ways they reach consumers all along their customer journey
- Continuously communicating with their partner audience with segment-specific messaging, making them aware of new products, creative, or promotions, and enabling partners to be as productive as possible
- Working closely with existing partners to brainstorm and implement new strategies to drive high quality traffic
- Troubleshooting issues with once high-performing partners whose productivity has dropped, with the goal of bringing back to growth mode
Incorporating a partnership program into existing growth marketing strategies means that a growth marketer can diversify the range of possible channels they use to acquire and retain customers. A well-run partnership program can contribute more revenue than even their most effective “traditional” digital marketing channel: Paid search.
The most successful CGOs will prioritize partnerships, partner-focused skill sets, and partnership automation in their growth strategies. Regardless of who is making the decisions, there are few better paths to growth.