The one with Chime CMO Vineet Mehra about commercial leadership, capital allocation, and a Biggie versus Tupac marketing metaphor.

Summary

The CEO’s Guide to Marketing: Episode Summary Featuring Chime CMO Vineet Mehra

Release Date: February 14, 2025

In this insightful episode of The CEO’s Guide to Marketing, hosted by Seth Matlins of Forbes, Vineet Mehra, Chief Marketing Officer (CMO) of Chime, delves deep into the multifaceted world of commercial leadership, capital allocation, and innovative marketing strategies. The conversation navigates through the evolving role of CMOs, the interplay between brand and product, and the critical metrics that drive sustainable growth. Below is a detailed summary capturing the essence of their candid dialogue.

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1. Introduction and Guest Background

Seth Matlins opens the episode with enthusiasm, introducing Vineet Mehra, highlighting his extensive background across various industries, including his tenure as the Global Chief Customer and Marketing Officer at Walgreens Boots Alliance and Chief Growth Officer at Ancestry. Seth emphasizes Vineet’s unique operational background, setting the stage for a rich discussion on marketing leadership.

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2. Defining Marketing

Vineet Mehra defines marketing as:

"the art and science of connecting your brand functionally and emotionally to your audience to drive efficient growth."
(00:55)

He underscores the dual nature of marketing, balancing both emotional and functional appeals to foster a strong connection with the target audience.

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3. The Collective Responsibility of Brand

Vineet asserts that brand ownership is an organizational-wide responsibility, not confined to the marketing department:

"The hardest part of owned by everyone in the organization and not just marketing."
(01:30)

He highlights the misconception among some C-suite executives that brand is solely the CMO’s domain, advocating for a more integrated approach.

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4. The Multifaceted Role of the CMO

Discussing the complexities of modern CMO roles, Vineet describes CMOs as:

"capital allocators, product innovators, technologists, data scientists, experienced architects, and creative agency owners."
(03:16)

He emphasizes the diverse skill set required to navigate the evolving landscape of marketing, especially with advancements in technologies like generative AI.

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5. The Divorce Between Brand and Product Marketing

Seth raises the issue of the growing separation between brand and product marketing, exacerbated by organizational specialization. Vineet responds by explaining how CMOs are addressing this divide:

"I started a product marketing function and those folks are deeply embedded into the product teams defining the strategy and the, you know, where to play, choices we're making from a product standpoint."
(04:56)

He illustrates this with his initiatives at Chime, integrating product marketing closely with product development teams to ensure cohesive strategy alignment.

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6. Marketing’s Operational Accountability and P&L Responsibilities

The discussion shifts to why marketing is often detached from operational responsibilities like Profit and Loss (P&L) oversight. Vineet challenges this separation:

"In CPG, the marketing role is very general management oriented and you literally run the full stack."
(07:35)

He contrasts this with tech companies where marketing dollars are tied to customer acquisition costs (CAC) and emphasizes the need for CMOs to engage in unit economic conversations with CFOs and CEOs to align marketing spend with business growth objectives.

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7. Unit Economics and Return on Marketing Investment

A significant portion of the conversation revolves around understanding and optimizing unit economics. Vineet explains his approach:

"Understand the lifetime value of your customer... agree on the payback period that you want... turn that into basically a Customer acquisition cost that matches that kind of lifetime value to acquisition ratio that you need."
(31:02)

He advocates for a collaborative framework where CMOs and CFOs co-create financial guardrails that balance short-term returns with long-term growth, moving beyond traditional metrics like marketing spend as a percentage of sales.

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8. Challenges Within the C-Suite: Aligning Marketing with Business Goals

Vineet identifies the biggest tension between CMOs and other C-suite members as:

"It is efficient, how to drive efficient growth... creating the return on investment from a payback period standpoint that the business needs."
(22:09)

He stresses the importance of CMOs taking the initiative to bridge communication gaps, translating marketing strategies into business terms that resonate with CEOs and CFOs to foster mutual understanding and support.

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9. The Role of Marketing in Category Disruption and Brand Relevance

Addressing the continuity of marketing fundamentals amidst evolving strategies, Vineet maintains:

"Know your audience, know the job to be done by your brand... be absolutely relentless on ensuring it's leak proof, you know, like, that you are delivering what you said."
(35:40)

He underscores the necessity of maintaining brand integrity and relevance even as companies innovate and disrupt their respective categories, using the Dove Real Beauty campaign as a benchmark for authentic brand promises.

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10. Measuring Brand Love and Its Commercial Impact

Vineet discusses methodologies for quantifying brand love and its direct impact on commercial success:

"There are a few trackers out there... it's got four dimensions of love... It measures the relevance and attention a brand holds across all categories."
(39:52)

He emphasizes that true brand love extends beyond category-specific recognition, capturing broad consumer attention in a fragmented media landscape, thereby driving sustained commercial performance.

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11. Final Advice: Enhancing Collaboration Between Marketing and the C-Suite

Concluding the conversation, Vineet offers strategic advice for boards and C-suite leaders to empower their marketing functions:

"Engage with your CMO on sort of the rules, the financial rules of engagement... have a commercial conversation, not a marketing only conversation."
(43:35)

He advocates for establishing clear economic guardrails in collaboration with CMOs, ensuring that marketing strategies are aligned with overarching business objectives and that CMOs are held accountable for delivering agreed-upon outcomes.

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Notable Quotes with Attribution and Timestamps

• Vineet Mehra on the multifaceted CMO role:
  "We are capital allocators, product innovators, technologists..."
  (03:16)

• Vineet Mehra on the collective responsibility of brand:
  "The hardest part of owned by everyone in the organization and not just marketing."
  (01:30)

• Vineet Mehra on measuring brand love:
  "There are a few trackers out there... it's got four dimensions of love..."
  (39:52)

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Conclusion

This episode provides a comprehensive exploration of the evolving role of CMOs in today’s complex business environment. Vineet Mehra articulates the necessity for CMOs to adopt a holistic, data-driven approach while maintaining the emotional and functional essence of branding. He advocates for stronger collaboration between marketing and the broader C-suite, emphasizing the importance of aligning marketing investments with clear unit economics to drive sustainable growth. The dialogue offers invaluable insights for CEOs, CMOs, and marketing professionals aiming to enhance their strategic impact within their organizations.

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Key Takeaways:

1. Integrated Brand Ownership: Brand responsibility should be a collective organizational effort, not isolated within the marketing department.
2. Diverse CMO Responsibilities: Modern CMOs must juggle multiple roles, including capital allocation, product innovation, and technological integration.
3. Bridging the Brand-Product Divide: Embedding product marketing within product teams ensures cohesive strategy and execution.
4. Unit Economics Focus: Aligning marketing spend with customer lifetime value and desired payback periods is crucial for sustainable growth.
5. Collaboration with C-Suite: Effective communication and co-creation of financial guardrails between CMOs and other executives enhance marketing’s strategic alignment.
6. Measuring Brand Love: Utilizing comprehensive metrics to gauge brand love across categories can drive broader consumer attention and commercial success.

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This episode serves as a masterclass for elevating marketing IQ at the C-suite level, offering actionable strategies and profound insights from a seasoned marketing leader.

Transcript

[A]

Foreign.

[B]

Hey, everybody, what's up? Welcome to this episode of the CEOs Guide to Marketing. Today, I'm super happy to be sitting with Vineet Mehra, who's the CMO of Chime and Vineete I'm going to dispense with. And we'll get back to the traditional bio read. Because you like to keep it spicy. I like it when you keep it spicy. So let's just get into it. First of all, though, welcome.

[A]

Thanks, Seth. Congrats on all the success you're having with this. I'm hearing people are listening to this all over the place, so glad to be.

[B]

Well, you know, let that be a reminder to our listeners to smash that subscribe button and give us five stars on multiple platforms. Right. Just keep hitting that five star button. All right, look, let's go right into it. Here are the seven questions we start every episode with. From your perspective, fill in the blanks. Marketing is.

[A]

Marketing is the art and science of connecting your brand functionally and emotionally to your audience to drive efficient growth.

[B]

I like, I like both. I like the couplings, the art and science, of course, but I love kind of the emotional and functional appeal. And let's remember as we go on to talk about whether the functional piece is a brand role or a product slash service role, because that could be interesting. All right, with that said, and maybe actually we'll get there right now, fill in the blank here, my guy.

[A]

A brand is the intentional promise you've chosen to make to your customer or target audience.

[B]

Okay.

[A]

The hardest part of owned by everyone in the organization and not just marketing.

[B]

Yes. You know, I talked to Kofi a couple of weeks ago and he made the same point and I think more and more, and I think it's a real lesson for the rest of the C suite who think that brand is divorced from their role. And the singular province of the CMO is if the CMO had singular control and influence over it. I'm sure we'll talk about that. So actually, it's not a bad segue into the next question. What's the hardest part of being a CMO from your perspective?

[A]

You know, you probably heard me talk about slot. We've shared some of this before, but to me the hardest part is the number of roles we play. Right. I think the modern kind of growth oriented cmo, I always say we're capital allocators. We are product innovators, we are technologists like you. Look at the whole ad tech revolution and the market cap growth of Facebook and Google. We were the tech technology buyers of that, if you think about that, really honestly, we're data scientists where experienced architects and more and more with the advent of all these creative generative AI tools, I mean, more and more of us are in housing and we're now creative agency owners. And it's really a very complex job where we play a lot of roles. And I think the hardest part is being able to be dangerous enough across all of those to be successful.

[B]

Well, that's what I was going to ask you, which is, is while all of those areas and more are now within the cmos world, there's also been a divorce, right? Which is to say oftentimes, I think led by, however unintentionally, those same tech companies, the divorce of brand and product right or marketing and product right. As, as, as organization, as the world's gotten more complicated, as organ become more specialized, there has been both more things put more expectations and areas of understanding required of CMOs, but also a divorce from responsibility or influence over them in some respects. And I'm wondering if you think any CMO can be proficient in all those things and how you as a CMO defer to the expertise of those who are more expert in it than you are.

[A]

Well, on the brand and product divide, I think you're actually seeing CMOs responding in a couple of ways. One is this role of product marketing, especially in tech companies, is becoming, I think, more and more integral to most organizational structures in the technology space. And what I mean by that, one of the first things I did when I came to Chime is I started a product marketing function and those folks are deeply embedded into the product teams defining the strategy and the, you know, where to play, choices we're making from a product standpoint. So can I ask you, can I ask.

[B]

I'm sorry, excuse me, I'm sorry to interrupt, but I actually want to hit pause because, for a second because what you just said is when you got to Chime, you started that and let me actually use that as a segue to talk about where you, before you became the CMO at Chime, right? Because you've got a really diverse and a much more operational background than a lot of traditional CMOs. So before becoming the CMO of Chime In June of 2022, Vineet was the global Chief Customer and Marketing Officer at Walgreens Boots Alliance. You'd been the chief Growth Officer at Ancestry, and even before you moved into tech and retail, you led some of the world's largest and according to your bio. But I Think reasonably easily agreed with most revered brands at companies like PMP and JJ, where you were in fact global president of JJ's bazillion dollar baby care division. Right. As well as president of the global marketing function. And having interrupted you, and now for a change, gone off the script of these first seven questions, I'm wondering why you think marketing is, typically speaking broadly divorced from operational responsibility. Right. If the marketer's job is to drive sustainable, profitable growth, and it is, why do so few CMOs have line of sight, let alone responsibility and accountability for a P and L from your perspective?

[A]

I mean, I guess it depends on how you define operational focus for a cmo. I might challenge that. Right, because you look at a huge world in our industry, which is cpg, which I can talk to, as you said, for my first 10 years of my career. And there you grow up as a P and L owner of your brand right there. The marketing role in CPG is very, I would say general management oriented and you literally run the full stack. And frankly, even in tech, a lot of times in direct to consumer tech at least you're running direct response media. And your marketing dollars are very attached to the customer acquisition goals of your company and that customer acquisition cost is one of the most focused in operational metrics of your company. But there are definitely areas, maybe like in B2B and some other areas where it might be a little bit different. But I'd say in general we may not be owning the full P and L in all kinds of businesses, but that operational muscle I think is actually very strong in many CMOs.

[B]

Look, I think it's a completely fair pushback and CPG tends to remain an exception, I think broadly, especially as we've become a tech driven world. And what company isn't a tech company today? In many respects. And to your earlier point, it's interesting because I see a lot of spec sheets from recruiters who are looking for CMOs for X, Y or Z. Almost none of them like, almost none of them talk about pnl, responsibility, cac, of course. Right. You know, everybody's measuring whatever the fuck they're measuring, quite frankly. But I'm not seeing that accountability to growth the way I think it in fact should be to ensure that the enterprise is optimizing its chances for growth.

[A]

Right. I think you might be right from a P and L standpoint. And to be honest, maybe this is a different take than other guests, but I think that could be the nature.

[B]

I'm counting on you for a different take than other Guests.

[A]

I think that could be the nature of some of these tech kind of platform or marketplace oriented businesses. Right. To hold the P and L in any one function beyond like the CEO role is actually a really difficult thing to do when you're a multi product platform, two sided or three sided marketplace that is operating. So I think part of it could be, frankly the changing nature of business models that tech has enabled that actually spreads the P and L across most functions and kind of holds it in that CMOS hands. The only other thing I'll share with you, Seth, is like more and more CMOs are entering boards, right? Public boards as well. And I think that's a good sign. It's not represented the way it needs to be. But you know, for instance, I'm on like the audit committee of a public board, which is really strange for a cmo. Right.

[B]

And by the way, I think it's.

[A]

Having more and more confidence in boards with CMOs.

[B]

To be honest, I'd like to think you're right and you very well may be, by the way. I don't mean to suggest you aren't, but anecdotally I would not have the same perspective that more and more CMOs are coming onto these boards. I think our, your community maybe, but I think more broadly. Broadly. And I was just having a conversation with John Evans on his uncensored CMO podcast the other day about exactly this and, and it, you know, is part of why we started this podcast. But you bring up something that I, I think is also worth talking about. I was actually listening to. I, I believe his name is Mark Abraham from BCG Uncensored. Oh, great. Okay. So, so John was on, I mean, Mark was on John's podcast and he talked about a client. He was talking about personalization, Right. And personalization at scale, where he's an author and true expert. And he was referring to a client that had something like, if I remember correctly, 55 different PNLs. Right. Which, which strikes me as a suboptimal approach to running a singular enterprise. Could be wrong. Right. I don't know what the company was, I don't know what the reason was, but what it, what it reminds me of in this moment is that marketers exist in a world where, and it goes back to what you were saying about the enterprise. Everybody in the company owns, owns the brand or at least contributes to or detracts from it. But marketers market in a world where everything connects, but not everything is connected. And I'm wondering what counsel you have given all the time you spend advising CEOs and C suites and boards on how to ensure that more is connected and the role of marketing, not just the chief marketer, in serving as that kind of connective device and tissue.

[A]

Yeah, look, I think the role of marketing to be that connect device has a couple of areas. One is, like you said, we don't own the brand, but I think market brand is a great connector across functions. And I always talk about my role as the caretaker or the curator of the brand. Right. I may not give all the contributions. I do give some of them and my team does. But one is I think you have to be the voice of the consistency of the brand in every decision that's being made across the company. And I think CEOs have to rely on their CMOs to play that role because I think they're uniquely positioned to do that. I think the second thing is embedding. What I say to CEOs is embedding the marketing function into much more cross functional sort of squads across the company. Right. So as opposed, I think the days of just teams working in functional silos in organizational designs are over. I think more and more CEOs are starting to create much more, be much more intentional about multiple functions. Finance, product marketing, data science, engineering are starting to come together to solve the biggest, hairiest problems in the company. So I think the mindset I would suggest, and I know this is about the CEO's guide to working with marketing has got to be think about your org as an ecosystem and wherever possible, don't try to solve problems in functional silos. Bring functions together against the biggest problems and priorities in your company and I think you're going to get much better results. And I think marketing is a huge part of that equation.

[B]

Yeah. Is that what Brian Chesky has kind of called founders Mode recently? I was listening to him speak about it somewhere and he mentioned that he had back to 55, something like 55 direct reports. Jensen Wang, I think has, or maybe that was Jensen Wang, but an extraordinary number of direct reports. And the perspective is as I recall. And I found it absolutely on point and it was a change of opinion on my part, which is everybody needs to be on the same page, everybody needs to be focused against the same things. And 55 PNLs, to go back to Mark's point, has everybody operating in P and L. If assuming everybody's accountable and they are to the individual P and L, everybody's operating against one thing as opposed to the totality which is the enterprise. And it Just seems to me that the whole winds up being equal to less than the sum of its parts more often than not. There.

[A]

I think you're right. Optimizing to 55 local maximas is going to not optimize for the whole.

[B]

And it's so fucked up.

[A]

This is kind of what I said about why PNLs are getting more distributed. It's not all the way there yet, Seth, but I do think the advice or the way I would think about marketing the context of a modern enterprise is integrate it all, pull it to the top, and recognize the roles of different functions in driving the business together, not separately.

[B]

So it's a good segue to the next question, which is what's the hardest part of being a CEO?

[A]

I always say to people that the hardest part of being the C suite in general is loneliness. It seems from the outset, outside that you're in all the action, you're in all the meetings, you know you're in all those things. But I think the CEO role is the ultimate, most lonely role there is.

[B]

As they say, it's lonely at the top.

[A]

It really is. You know, you hear everyone's opinions. You sometimes have to make can't win decisions where, you know, I always say every decision I make, and I think a CEO's even more. 30% of people love it. 30% of people don't care. 30% of people will like 30, you know, 40% of people will hate it, you know, And I think the CEO is in this position every single day. And that's got to be the hardest part about being a CEO and why I have a lot of empathy for, for the people that I've worked with.

[B]

You know, you talked earlier about the role of the cmo. Your role as being, just looking at my notes, a capital allocator. Right. If we think about capital not just as finances, but as time and human. Right. Time, dedicated, allocated, given, and human resources. Seems that's the same job as the CEOs, ultimately, right?

[A]

Yeah, I mean, ultimately, the job of a cmo first and foremost is to be a commercial leader. And brand, to me is focusing or choosing to focus on brand as a strategic mode for your business. To me, as a strategy, it's a.

[B]

Choice, you know, couldn't agree more.

[A]

And then you allocate capital accordingly across channels to drive commercial outcomes.

[B]

So when I interviewed or had a conversation, I don't like to think of these as interviews with Chris Davis from New Balance on, On the pod. Chris talked about the difference between a brand leader and a commercial Leader, what you just talked about is something that is so near and dear to my heart, which is that it seem seems so many marketers, let alone the rest of the C suite, think brand is an objective, when in fact, exactly to your point, it's just a strategy. It's an influencer, it's a differentiator. It's. And, and I, I just, I don't understand why that is less understood than it appears to me to be in my conversations with the hundreds of CMOs I talked to over a period of time. Do you have a point of view on that? Like how did brand get divorced from commerce? Because it has been. And I'm not just talking about brand versus performance. I would imagine that's an ingredient in the answer to this. But, but brand has been the greatest driver of commerce, certainly margin ever.

[A]

Yeah, it's, it's an interesting one, I think. You know, I'm going to go into old school business strategy here where fundamentally businesses have a choice. They can be a kind of commodity and they can be a high volume, low margin, low price sort of player, or they can choose to be great brand as a strategic moat and make a choice to invest there and create, to your point, pricing power, differentiation and value that is hard to replicate by any single competitor. And I think that's always been the case. I think to your point, what happened? And we go into a little bit of history of marketing here. You know, you go through the last 40 years of marketing and for 30 years it was kind of the same. And about 10 or 15 years ago it does go back to brand. And I hate the term performance marketing. I call it direct response because it all performs. Divorced.

[B]

It all should perform.

[A]

Yeah. And it should perform and it be. And you know, I'm sure we'll get into this. There's more and more ways to assess that. And essentially there was this east coast, west coast, you know, Tupac, Biggie thing going on in our industry. And I just think, you know, the rise of venture capital, the rise of all the money into direct to consumer companies. They were raising series ABC rounds every eight months. You know, venture capital money then went to direct response where you could hit milestones in certain days very short term.

[B]

And brand necessarily sustaining growth.

[A]

Right. And brand gump unsight. The world is littered right now with DTC brands that entered what I call the CAC valley of death, right? Where you kind of spent a ton in direct response and you essentially ran out of future customers to keep filling that barrel to bid on. And now there's less fish on the barrel and CACs go up and your brand doesn't have the unit economic sustainability to keep growing. You know, and I do think we are entering a world where the convergence of these two is starting to be understood. The best CMOs can talk to their boards about that in a very literate way, in a very unit economic way with their CFOs. And, you know, you've heard, probably heard me say, I call this performance storytelling is the job of converging brand and direct response.

[B]

I want to make sure that I understand and also that our listeners do. When you talk about unit economics, are you talking about cogs? What's your definition there? How are you using that phrase?

[A]

I'm talking about return on marketing from a payback standpoint, right? So I spend X dollars. I get returned on that investment in this many weeks, months or years, you know, and sounds like a Friends episode. Different guardrails for that depending on their business model. But that's specifically what I'm talking about. The love language of my CFO is the unit economics or the payback periods of my marketing dollars.

[B]

All right, I want to stick a pin in that because I absolutely want to get to that and to kind of, you know, marketing's time lag. Because one of the things that I don't think I've done a particularly good job in these first 10 episodes of the pod is really talking about how the rest of the C suite, how CEOs and CFOs in particular ought to be understanding and considering the payback period, or I should say the payback periods. Right. At least situationally. But before we get there, two things. Okay. If you think about the biggest tensions between a cmo, speaking broadly. Right. And their C Suite colleagues, what do you think they are? And if you could wave a magic wand to address just one of them, which one would it be?

[A]

You know, it actually goes back to what we were talking. And let me caveat by saying the onus is on the cmo. I'm a big yes. Believer in agency versus victim mindset. And so it is all on the CMO to figure this out, in my personal opinion. But I think the biggest tension is actually what we were talking about. It is efficient, how to drive efficient growth. Right. Is the dollars that the, the investing investors and the C suite are empowering you with, are they creating the return on investment from a payback period standpoint that the business needs? That's.

[B]

Doesn't that. I'm sorry to interrupt, but doesn't that immediately Then beg the question of. Of what over what period of time. Right. Because their orientation I'm going to stereotype or generalize more than stereotype is to, you know, back to the Friends theme song this today, this week, this month, this quarter, certainly. And that kind of short term focus, which is by the way very, you know, from an empathetic standpoint, completely understandable. They've got the capital markets putting pressure on them and evaluating them based on that, not what might happen, you know, a year hence. Doesn't that kind of just actually run the risk of punching sustainable, profitable, long term growth, lifetime value of the enterprise, the accretive value of brand and the face.

[A]

It could and this is where if done poorly, which happens a lot to your point, Steph, it, it definitely could. Again, I'm taking your, your, your bait on this is a podcast for CEOs and CFOs. What I would strongly suggest is that again the CMO should take the agency here, but I would strongly suggest is that the CF CEO and CFO work with the CMO to determine the both short term and long term unit economic guardrails within which they operate. Too often either a CMO just accepts the CFO says here this is how you're allowed to spend your money or it's, or it's sort of the wrong model of assessing marketing performance. And so I think there's no way around it other than co creating a language with, between the CEO, the cfo, the CEO and your investors around the short term and long term return on marketing and we can geek out on what that is. I'm happy to get into that with you, but there are models here that can do that. But I think too often the conversation gets left on, not done and then everyone's guessing each other's love language and essentially shifts diverge and that starts to break things down.

[B]

Yeah, no, I mean I agree completely. Marketers need to do chief marketers in particular a much better job marketing internally and speaking the language of business, not the language of marketing which even for marketers I think is oftentimes kind of silly, even if shorthand. But I want to, I want to pick up something you just dropped and you talked about looking at my notes. You know, a CFO coming to a CMO and telling them what they're allowed to spend. Can you think of a time in your own career and it could I suppose be a story you've heard from one of your peers where a CFO has told them what they can spend and that dictate is completely divorced from the plan and strategy that was agreed to or the results that are also.

[A]

Agreed to a hundred percent. In a world where you truly understand the customer acquisition costs and the LTV to cac sort of paybacks of your marketing spend. And again, we can be down on that. The biggest mistake I've seen made is when we measure marketing as a percent of sales and you're essentially guardrail to that. Again, it's a good notion.

[B]

Why is that a mistake?

[A]

Because in the world of at least the direct response side of the house, it is possible that you could be spending a lot more dollars with a very high incremental return on that investment. And in a world where you guardrail it to a certain marketing to revenue ratio, you don't always allow for those conversations. It's not that you shouldn't be having an awareness of your marketing to revenue sort of marketing as a percent of sales, it is a very important indicator and comparison benchmark to other companies as you're sort of driving sort of, you know, commercial value in your business. It's a very important indicator. But that can't be the only thing. And that's why you hear me focusing so much on paybacks. Because if the payback is good, just like you would in any other investment in a business, you should invest in it. And you know, let me give an example. Today you have companies like Microsoft and others investing the highest levels ever in R and D to build out the GPUs for an AI revolution. Right? Right. The spend on R and D in these companies is reaching unprecedented levels.

[B]

And that's intentionally a billion.

[A]

Right? That's a payback conversation. So marketing should be able to have that exact same conversation.

[B]

Look, I love that you brought that up, so I will say yes, marketing should. But why do you think so many Chief executives and CFOs again, don't in fact look at marketing and understand marketing to be exactly the same type of investment that has returns not just over the long term, but in the short term and the long term. Because. Right. This is, and it's, it's so trite. I hate that I'm bringing it up, but it's the, you know, is marketing an expense versus an investment perspective? And there is no other investment that any of these C suite folks make that they expect a certainty of return in an absolute certain period. And yet marketing seems to, to, to be the exception to that lived experience. And again, I talk a lot about it. It punches growth in the face.

[A]

You know, it's a blessing And a curse to be a cmo. I'll use the Spider man quote since you're a quote fan. Right? What is this?

[B]

I know where you're going.

[A]

With great power comes great responsibility. Right. And I take it as a compliment, honestly. It's because we, you know, many of us are spending one of the biggest line items in a company's P and L every single year and you've got to generate some level of cash on cash return and some portion of that investment has to be immediate. But some of it, I think you have to have that conversation with your CEO and CFO that some of it also you have to invest so that next year is okay and the year after that is okay. And I think candidly, Seth, if I'm just real about, I think you have so many our industry in marketing or as CMOs has evolved so, so much in the last 15 years. I just think you have different flavors of CMOs. And what has happened is these flavors are like all talking to different C suites in different ways. And so we have not created a consistent language for this conversation. And so in many ways I think we've unintentionally divided ourselves from within and this is created a a translation problem with CEOs and CFOs from CMOs. And so I think we kind of did it to ourselves, to be honest.

[B]

I wrote about this when I first got to Forbes a couple a few years ago now, which is actually the role of executive search in this conundrum. Because I think most Chief executives and CFOs don't understand that there are very different types of CMOs as. Right. Like if you're a CFO, there aren't that many different types. There are different levels of competency and brilliance, of course, capability, but there aren't really. At least, I don't know, maybe I'm completely wrong, I'm no cfo. But I don't believe that to be the case and that they don't understand that there are different types of CMOs oftentimes puts them in the position of hiring the wrong type for the right job. But we'll leave that to another day. I want to ask you just to, I want to kind of bring an end to the payback conversation by asking you so that we can move on. Asking you if there are any kind of, for lack of a better word playbook or frameworks that you can offer to our audience, all of the folks in our audience, CEOs, CMOs, aspiring CMOs and CEOs on how they Might consider about institutionalizing, codifying a methodology for considering how they want to evaluate return on invested capital.

[A]

Yeah. So you know, every business will be a little bit different. But generally speaking, what, what I think I'm about to share is probably true for most businesses. And frankly, one of the first things I do when I'm in a new role is I'll sit down with the CFO and we will whiteboard these guardrails against what I'm about to share together. Right. And just agree that hey, if we do this, I want freedom within my framework. Right. And then I will bring you the return you need. So, so let me just lay this out. I would say every business and some more than others, right. There are better business models and worse business models. But most businesses have a customer value that accrues over one year, two years. So every business has like, you know what, the average value of a customer that uses our product is $100 a year or $500 a year. Some businesses are, you know, not as good business models. Businesses where they're one and done businesses where you have a one time acquisition cost and a one time transaction, well then your payback has to or much longer life cycles.

[B]

When we look at the or categories like automotive, manufacturing equipment, this is why.

[A]

You'Re seeing recurring revenue businesses, subscriptions growing over time. Like every business is becoming a SaaS business or a recurring revenue business. And so I know I'm like geeking out with you a little bit on business models here, but it's all relevant. You have to understand the model, the business model, your revenue model, your commercial model, your monetization model for your business. And so I would say to make it simple, understand the lifetime value of your customer. Sometimes that'll be a one time purchase, sometimes that'll be a five year like revenue retention stays very strong for five years because you have a subscription business.

[B]

Where it's very predictable.

[A]

You take that lifetime value which let's say is a hundred dollars, and you work with your CFO and you say like okay, well when do you want the payback? So if I if a 500 one year value and I'm spending $1,000 to acquire them, now I have a two year payback on that. Right? Right. And so you just need to kind of create first understand your lifetime value, agree on the payback period that you want. Some, some companies need it in five months, some are okay with two years depending on that company's kind of P and L situation and then turn that into basically back that into a Customer acquisition cost that matches that kind of lifetime value to acquisition ratio that you need. Right. So I could go way deeper on it, but a lot of times this is an LTV to CAC ratio that I use and I load brand into because that's sort of a longer term idea and then I pull cac. And that's essentially just the direct response side of my business. And that's the part that I want to turn immediately. So sometimes my doctor, my direct response paybacks are much shorter than my LTV to CAC payback. But as long as I go to my CFO and I say, put these all together, if I return this LTV to CAC to you, which captures brand ndr, is that okay? They generally, it's a really good discussion and they, you know, that works out really well.

[B]

What you're just saying reminds me of something that Joe Marchese said on the show, which is he talked if, if I always like to caveat because my memory is spotty as fuck, but I think I'm getting it right. What Joe talked about. Brand is kind of, you know, one of levers for bringing CAC down over time, for sure. Yeah, yeah, yeah, yeah. So, you know, a moment ago we were talking about the fact that there are different types of CMOs. There are of course different types of, of challenges facing CMOs and enterprises. And, and as we look across the body of your career, kind of three things emerged to me. Right? You have from a category perspective, been the lead marketer when, when it was you were disrupting a category, creating a category, and reinvigorating a brand within a category, if not the category itself, which is, I think a pretty unusual breadth for somebody who hasn't been on the agency side. And I'm wondering, as, as you look at kind of those three very different challenges, what do you see in common across them in terms of the role of marketing? And by the way, if there's nothing, share that. And what do you think that your C suite colleagues need to understand about those different challenges and the role of marketing within same.

[A]

Look, truthfully, I think marketing is marketing is marketing regardless of those challenges. I think the fund, you know, as much as change their industry, the fundamentals have remained pretty stable. And you know, what I would say is, you know, talking. I'm going to bring old school language back here in the context of all this new school we're talking about, which is ultimately know your audience, know the job to be done by your brand. Why is your brand being hired and ensure your brand's Kind of purpose or its reason for being as valuable. You know, sometimes the job to be done and the purpose get way too stretching, you know, like, it's like really, like that brand is gonna, like, change the world. That may not be the mission of that brand, you know, and so make sure those are aligned and then be absolutely relentless on ensuring it's leak proof, you know, like, that you are delivering what you said. It's do what you said. A brand is a promise. And from product to message to purpose, to, like, the job you're doing, every day it's the same. I have an interesting. Like an anecdote I use a lot. I know you're an anecdote guy, and anecdote I use a lot. Twenty years ago, when the Dove Real Beauty campaign started, right? I use this a lot. The same team, right? It was all part of the personal care department, right. Of a big CPG company. The same team was running the Axe Effect campaign. Like, literally people were sitting next to each other. And so you had a real beauty campaign going on, which is the. The idea of like, you know, being real to yourself and not having these fake beauty standards. Meanwhile, the Axe Effect campaign was going on the same company, literally. You put on AX and women will, like, fall all over you without any kind of.

[B]

Yeah. So I think. I think it's worth setting that context because I know both these campaigns really well from. From previous life. The Axe campaign, which has evolved culturally not just from a messaging standpoint, was, I think it's fair to say, fairly misogynist and certainly objectifying at that time. It worked brilliantly, which says something about my point.

[A]

If you tried that today and there was any light in between, right, like what your brand says and what your company does or how its monetization model works today, you can't do it anymore. You know, marketers used to be able to put lipstick on a pig anymore. There is no chance of that. And I think that remains core no matter what situation you're in.

[B]

So I love the. I love the reference. And, you know, regular listeners of the show have heard me reference in turn, Morgan Housel's book, same as ever, over and over again. I talk a lot about how Stephen King's 1974 JWT planning guide is as relevant today as it was in 1974. And, you know, we talk a lot about the relentless pace of change. You brought it up at the top of the show. That marketers are confronted by, that business is confronted by. And we don't talk a lot about the unchanging fundamentals. Right. And that marketing remains, no matter everything that's changed the job of influencing attitudes and behaviors such that you can drive commercial return over the long term profitably and sustainably. And I think it's a point worth hitting. And it's actually, you know, the Dove example is a good segue to this question. One of the things I said, actually, I don't remember if I read this in your bio, but Chime has become the most loved brand in the financial services category. And I'm wondering two things as we get towards the end of this conversation. How you measure love and how you know what the commercial efficacy and value of being a loved brand is.

[A]

Yeah. So we. Look, there's, there's, there's a few trackers out there, companies that have tried to answer this question. If you remember back in the day, what was it? It was that, Remember Lovemarks, Love marks.

[B]

Yeah, yeah.

[A]

Love marks thing as a tool. More recently, you know, I've been using this other tool that. I don't think I'll say the name, but I've been using this other tool that has been really helpful for me. And the reason I use.

[B]

Are you not saying the name so as not to give away a competitive advantage or.

[A]

Well, I know how picky you are about selling things when we're together, but.

[B]

No, no, no, use, use a tool if it can be useful to our. I mean, shout it out.

[A]

Bara Brand management. And it's like it's one tool that I use a lot in companies, but the, and it's got four dimensions of love. Right. And it's got sort of dynamism, sort of the, the benefits that it's delivering to you. It's, it's got four different dimensions.

[B]

So when you say dimensions, you mean kind of proxies for love.

[A]

Yeah, that ladder up to the score that studied very deeply. But the reason I'm bringing this up and why love is important is actually the nature of our industry. Now. It used to be enough to be one of the most loved brands in a category. And yes, we track that. But actually what I'm tracking is am I one of the most loved brands in the mind of my consumer across all categories in general. And the reason that's so important is attention fragmentation. Right. Like to actually win and create something new and disruptive.

[B]

Yeah.

[A]

A new brand or something that's trying to usurp incumbents or provide a new alternative to incumbents needs to be able to capture attention at scale well outside of the categories in which it Competes. That's right.

[B]

Because you're competing for that mind share and attention with every other brand, business thing, trying to reach your audience, but their communication at a given time, 100%.

[A]

So that love, that relevance has to extend far beyond your category. If you are truly trying to create disruption at a scale that is well beyond your category. I think this is what happens. A lot of marketers or businesses will be like, I'm winning in my category and that's a great start, let's do that. And are you winning the mind share of your consumer? Because the battle for attention is real and that's actually the ultimate currency is, are you capturing the attention of your audience?

[B]

It's, you know, when I, when I got to Live Nation, which is now 15 years ago as CMO, one of the things I, I said was we're not just competing with aeg, who you know, was another big promoter. We're competing with dinner at home, we're competing with dinner out with friends. We're competing with going to the movies. Right. Which is where are you going to spend your time and money for quote unquote entries? Entertainment. Right. And I put it in quotes because it's, I think, much broader than the traditional context. And I, I think, I think you're absolutely right. And I, I don't think that the C suite understands that the competitive set is far bigger than the category. And so with that, one final question for you, which is if you could offer any piece of advice or two to boards and C suite leaders who are not the CMO about how to be better allies to marketing such that it is better positioned to drive the growth everybody's after, what would it be?

[A]

I think it would go back to maybe something I referenced earlier. It would be engage with your CMO on sort of the rules, the financial rules of engagement. Right. Have a commercial conversation, not a marketing only conversation. Start with what are the outcomes and the commercial outcomes you're looking for. What are the sort of economic guardrails that you can that allow you to invest strategically in, in, in marketing and you know, from there allow your CMO to operate with freedom within those guardrails, you know, and by the way, then hold that person accountable if they are not delivering what they said we probably shouldn't be in that job.

[B]

And if we, on the terms that you agreed to, which is we agreed.

[A]

Together, not we're handed. And if we are, then you know, take care of that CMO because it's hard to find a great one. So that's probably my advice would be do it together, not apart.

[B]

With that as the last word. Vineet, thank you so much for being with us. This was really great. Appreciate you.

[A]

Thanks, Seth. And thanks for everything you do for our community, man. We would not be where we are without you. So we appreciate it.

[B]

Well, I feel confident we you would be maybe even in a better place, but I'll take the compliment. Appreciate you.

[A]

Thanks man.

[B]

Thanks for listening to the CEO's guide to marketing. As I said up front, smash that subscribe button and give it five stars if you liked it it. But if you didn't like it, you don't have to leave a rating. Thanks everybody. See you next time.