The True Cost of CMO Turnover

By Chris Boland and Maurya Overall

Short CMO tenures and increased turnover have captured the attention of many in the business world. However, while studies have quantified just how short these tenures are getting, there’s been little discussion of the real costs that come with turnover.

There’s the cost of the CMO search itself, of course—the time of the management team, headhunters fees, and more. But there’s much more to CMO turnover costs than these P&L expenses.

To fully account for the risks associated with the rapid change affecting today’s boardrooms, we dove into the past dynamics of CMO churn and analyzed what’s at stake today.

Healthy Churn Is a Thing of the Past

Up through the early days of digital, the CMO’s primary objectives were closely tied to the campaigns they were to lead. In this campaign-driven world and operating model, there were some benefits that came along with regular CMO turnover, even though tenures may have been shortened. 

At many businesses, the prevailing dynamic could lead to a sort of “healthy churn.” A changing of the guard in the marketing department meant that fresh approaches were on the way, and the business might expect to see a bump in performance given this inflow of new ideas.

Plus, regardless of whether or not success was actually realized, the focus on campaigns came with a clear picture of what success looked like. Once another few years had passed and the dust had settled on campaigns, a brand would be able to make a relatively straightforward assessment on whether the reinvigoration led by the CMO was successful. The business might judge itself ready for a new marketing leader, or the CMO might have been ready for a new challenge. In other words, turnover didn’t present any sort of dire challenge—it wasn’t necessarily a bad thing.   

Of course, this model of marketing is a thing of the past, and so are the days of the healthy churn that might have come with it.  

A New CMO Means a New System

Now, CMOs are expected to lead so much more than repositioning. We’ve moved from a focus on campaigns to a focus on systems, and just as the role of CMO has become more complex, so has the task of replacing them. CMOs no longer merely lead campaigns; they sit atop a brand’s complex platforms and technology stacks whose reach extends well beyond marketing, throughout the whole of the operation.

That’s why hiring a CMO today typically means investing in a whole new marketing system, greatly increasing the potential cost and stakes of turnover, as a positive ROI has to be calculated against a larger and larger “I.” To make matters worse, these new investments often aren’t new at all: they’re purchases and expenses that were made only a short time ago, when the last CMO was brought in. 

The Invisible Opportunity Costs 

Still, the concrete dollar cost of these marketing systems is just one dimension of what turnover truly costs a brand. 

What’s more costly to businesses experiencing churn in the C-suite is all the time spent on retooling and tinkering instead of moving their organization forward. After all, the competition doesn’t hit pause while your new CMO gets their CRM upgrade up and running. 

These opportunity costs might not be seen on the balance sheet, but they’re certainly felt within a marketplace: When you don’t have a proper message, or you aren’t growing awareness and engaging with customers to the fullest, someone else is. 

And in today’s system-driven world of digital marketing, that lag time between hiring a CMO—even the very best one for the job—and fully operationalizing a system in their vision can take quite some time. It’s not as simple as developing a new message and taking it to market. Driving profitable outcomes in digital requires learning from initial outputs through measurement and analysis. Like implementing a new system, it requires time. And time is money.

Yet, as complex as that is, it doesn’t capture all that’s involved in onboarding a CMO. While much of the marketing world today is hardwired, marketing leaders still need a deep set of soft skills to be successful. They need, for example, to be effective and active listeners. They need to be able to understand the needs of multiple constituencies and translate that into action. And they need to be able to create a productive relationship and rapport with their CEO. Putting skills like these into play for the good of the business also takes time. After all, even an experienced executive will have to install efficient structures and navigate new relationships.

Combating the Costs of CMO Turnover

Faced with all these potential costs, what’s a business to do? 

For one, enlisting outside help can be invaluable. A trusted agency partner can help provide that same system-level perspective that’s required of today’s CMOs and help smooth over transitions between CMOs. In doing so, agencies can also directly mitigate the costs outlined above, providing continuity for marketing systems, shortening the onboarding time of a new CMO, and even helping to refer potential candidates. Ultimately, even if issues of tenure can’t be fully alleviated for reasons outside a business’s control, the right agency partner can help them successfully navigate them.  

Beyond that, though, to fully prepare for and address issues of CMO tenure, decision makers need to understand what’s driving them. Our recent CMO Insights report digs into the root causes of CMO turnover issues. It also includes a guide to building back trust in the boardroom.