Three Emerging Trends Every CMO Will Face
As recently as five years ago, sales was in charge of the customer relationship. Marketers were the folks chiefly responsible for a company’s creative and brand-based ad campaigns. They didn’t touch the customer.
But the digital era has scrambled that old equation, thrusting the CMO into a new position of prominence and responsibility. A dramatic transition is under way that’s recast the role of marketing chiefs from the era when they were simply supposed to stir the pot and generate attention for the brand.
The shift was apparent in recent research I commissioned with Marketo that paints a picture of newly empowered marketing executives taking charge of managing customer relationships at a crucial point of change in the marketing world.
The research makes clear that it’s both an exciting time to be a CMO, as well as a challenging one. Indeed, CMOs are faced with the duality of managing a breakneck pace of change within their markets while at the same time educating their management on the real value that marketing brings to the table.
Here are the emerging trends that will significantly impact the future success of CMOs.
The Shift to Customer Co-created Marketing
The conventional wisdom is that brands influence customer buying decisions by divining what the customer does, where they go, and what content they seek. With those insights in hand, the assumption has been that marketers will be able to interact with customers at pivotal moments and shape preference or intent.
But success has been scattershot with emails and phone calls often routinely getting ignored. Increasingly, it is not the company that controls and communicates brand message, but customers and trusted influencers.
In the digital era, customers are looking to other channels, such as social media, for information to help guide their buying decisions. They put great stock in the opinions of what their peers say on social media and in information they find on certain websites than in brands.
The extent of the customer’s impact on marketing strategy is substantial. Indeed, customers now dictate how vendor digital properties should function as well as their expectations of content, products, marketing programs, sales methodology, and customer-facing processes. We see the seeds of this trend in the rise of storytelling and how customers engage with brands.
CMOs recognize that the shift puts buyers in control of vendor relationships and the change is accelerating a turn to what’s called customer co-created marketing as a way for brands to meet buyers on their terms. The goal is to align strategy, programs, processes, and people outward and around what customers’ value in achieving their target outcome.
Engaging with customers in this way takes different forms. Among the steps CMOs said they were taking were the following:
- Routinely invite in high-value target market buyers to collaborate and validate market strategy.
- Engage high-value customers in defining distinctive and valued lifecycle experiences.
- Test marketing campaigns and messaging with high-value customers.
- Routinely share company results, good and bad, with customer collaborators.
The payoff comes to the brands that listen and open their four walls to customers. They consistently have higher loyalty, retention, and repeat purchase rates. If customers value it, keep it. Otherwise, drop it.
With More Power Comes More Responsibility
The shift in marketing’s profile is also raising the profile of the CMO, who – for the first time – has a direct pipeline into the boardroom.
But the CMO’s broader organizational role also puts new demands on marketing and its contribution to the organization’s larger business goals.
For CMOs, it means learning to speak in a language that the boardroom can grasp easily. That’s especially important when it comes to explaining the value of marketing and return on investment, some of which may not be directly tied to revenue. C-suite executives, with their bottom-line focus, now expect CMOs to report sales forecasts based on current and alternative marketing spend scenarios, conversion rates, target industries, and customer segments.
To be sure, CMOs are staffing up their organizations to handle myriad new challenges posed by the world’s embrace of digital. Some of the new positions they are adding include the addition of the following:
- Social engagement, community managers
- Chief content officer, evangelists, editors, chief listener, chief storyteller
- Data scientist, marketing operations, business analyst, Center of Excellence managers
- Chief customer officers, customer experience analysts, customer marketing specialist, employee engagement strategist
- Digital/growth acquisition, digital experience marketers, lifecycle marketers, marketing technologist
Although none of these new roles may account for immediate returns, there’s a long-term net impact on the bottom line. But putting that in dollars and cents terms remains for many to be a work in progress.
“I have lots of analytics and detailed metrics on conversion and performance but consistently accurate predictability of marketing-generated revenue? We’re not there yet,” recalled Rod Lehman, the former CMO of HP Software.
Still, CMOs have seen an unprecedented level of alignment occur across the organization, according to the survey data. With sales, for instance, the conversation is not just about leads but pipeline, customer engagement, conversion, and close rates.
The Right Hires Make all the Difference
At the same time, CMOs find themselves pulled and tugged in more directions than ever before. Velocity and volatility coupled with 24/7 global business cycles make it virtually impossible for any leader to stay on top of their game. Time is in short supply, and keeping up with the daily deluge of posts and articles that come their way poses its own unique challenges.
“I have internal goals to meet and pressures to address that are not based on best practices or what is happening in the marketing discipline,” said Andy Burtis, who runs corporate marketing for McKesson. “Seventy-percent of my time is spent on internal constituents.”
So how do CMOs stay on top of their game? The CMOs that were interviewed employed four strategies:
- Routinely visit customers to understand market shifts and new expectations.
- Network with a handful of trusted peers by scheduling periodic calls or meet-ups.
- Stay in touch with trusted consultants and influencers.
- Hire right.
That last bullet point looms especially large for CMOs as they navigate this fast-evolving marketing terrain.
“I’m constantly blasted with ideas from my team and they educate me,” said Katy Keim, CMO of Lithium. “I’m very focused on hiring a good team and giving them room to grow and experiment.”
Executing on that ambition presents its own challenges finding the right applicant who can fit into the corporate culture and possesses the needed expertise.
This is a scenario in which size works against a company. Bigger companies have to fight the tag that they are not “hot” enough compared with smaller, sexier startups. This reduces the pool of candidates CMOs seek to vet for key positions in analytics, data science, modeling, and digital marketing.
CMOs with smaller startups suffer from the reverse problem. Retention is a persistent problem with their employees constantly being recruited by rivals offering lucrative offers to jump ship. These CMOs retain their top talent by constantly moving people between roles and increasingly offering high performers more latitude, responsibility, and opportunities to do new things.
At the same time, any headcount discussion raises the age-old conundrum how to justify new marketing positions where the business case is based on revenue ROI. Unfortunately many of the new competencies required to build awareness, reach, engagement, credibility, and loyalty in the ‘age of the customer’ are either indirectly linked or are too new for anyone to understand the impact on quantifiable revenue.
Nobody said digital transformation is easy. While these are all challenges that can easily turn into headaches, it goes with the territory. After all, the job CMOs have signed up for is nothing less than the reinvention of business models and the creation of new go-to-market strategies.