In preparing for a recent client presentation and proposal, I re-read Deloitte’s January 2019 report, “Beyond Marketing”. I’ve found this report to be extremely accurate and insightful as it paints the ever-evolving picture of marketing’s evolution, obstacles and desired-state.
“THE new world of marketing is personalized, contextualized, and dynamic. Increasingly, this world is orchestrated not by outside parties but by chief marketing officers partnering with their technology organizations to bring control of the human experience back in-house. Together, CMOs and CIOs are building an arsenal of experience-focused marketing tools that are powered by emerging technology. Their goal is to transform marketing from a customer acquisition-focused activity to one that enables a superb human experience, grounded in data. In experiential marketing, companies treat each customer as an individual by understanding their preferences and behaviors. Analytics and cognitive capabilities illuminate the context of customers’ needs and desires, and determine the optimal way to engage with them. Experience-management tools tailor content and identify the best method of delivery across physical and digital touchpoints, bringing us closer to truly unique engagement with each and every human.”
While I am sure there are many companies who are fall along in this journey, I would image that most are not. In fact, most companies would be delighted to be proficient even in the basics of “customer acquisition-focused activity”. Where I personally struggle is wrestling with the “Market Journey Paradox”.
On one hand, we have Group “A”. These are CMOs who are primarily focused on basic lead and demand generation. After all, CMOs have the shortest tenure of all of the C-suite and we know that our livelihood is only as good as our ability to drive pipeline, profitable revenue and customer retention. I’ve heard first-hand from a number of these CMOs that “experiential marketing sounds great, but if I don’t hit my numbers, I’m out of a job”. In most cases, this is supported by a sales-driven (vs. customer-driven) culture where the emphasis is less about the customer experience and more about “the numbers”. These companies often share some of the same characteristics:
Marketing is either viewed as a cost or having minimal impact on the business.
Marketing is still viewed as creating collateral and running events, definitely not “owning the customer journey”
Compared to other functions, Marketing has the least sophisticated systems and least optimized processes.
On the other hand, we CMOs in “Group B”. These CMOs work in organizations that have mastered customer acquisition and are now investing in differentiating by delivering a superior customer experience. CMOs in this company have a very different charter. They are often seen as the “conductor” of the customer experience and intimately work across functions to instrument all of the customer engagement or “touch” points to monitor and optimize the customer journey. They are encouraged to look for new ways and technologies to help them monitor, measure and optimize the customer experience. As a result, they spend more time working cross-functionally and with their CIO counterparts than on the day-to-day marketing operations. In fact, an increasing number of these CMOs have implemented a Marketing Chief-of-Staff role to provide day-to-day overview, enabling the CMO to take a more strategic, longer-term view of marketing’s plan.
So, the hard part is how to get your company from Group A à Group B. Here are some thoughts:
Communication. Most executives love to focus on marketing activities such as what emails are going out or what events are happening. The CMO owns the responsibility to continually re-set the focus to be on the customer. Not Marketing, the customer. These are some of the conversations the CMO needs to drive at the executive level:
How well do we know the customer? How can we better understand what they need or expect? How are the various functions and touchpoints performing to acquire, retain and delight the customer?
What basic and advanced Marketing Technology (MarTech) stacks look like, how much they cost and the implications on the budget. For example, most CEOs have no idea that MarTech can consumer one-third (or more) of the marketing budget. That has a tremendous impact on avail
Do CIOs understand the complexity of the Marketing Technology (MarTech) stack and how many solutions needs to be integrated in order to effectively monitor and analyze marketing performance?
Is there sufficient funding in the Marketing and IT budgets to enable Marketing to continue to advance its journey and become more data-driven and adopt new technologies (e.g., AI/machine learning, predictive analytics, etc.)
Is there sufficient funding in the Marketing budget to fill analyst, operations and analytics roles that an essential part of today’s marketing organization. Is there budget for training and personal development to raise the technical and analytical acumen of existing marketing and sales operations staff?
Is the spirit of innovation embraced and funded within the Marketing organization? In a quest to continually improve marketing operations, deliver more personalized and targeted content and campaigns and deliver greater pipeline and revenue impact, Marketing functions need to continually examine the ever-changing MarTech landscape and pilot select technologies that enable more effective and efficient marketing. Without a supportive culture, this type of innovation will not thrive and the Marketing function will quickly become obsolete.
Digging into the Numbers. Rather than discuss how much should be spent on LinkedIn ads vs. creating a new 10x20 booth, the emphasis should be on understanding the customer acquisition cost (CAC) and Lifetime Value of a Customer (LTV). These numbers are the pillars behind shifting the discussion from tactical to strategic, all the while keeping the customer front-and-center.
Budgetary Transparency. The Deloitte report mentions that CMOs are now spending 30% or more of their budget on marketing technology. I’m certain that figure would “blow-away” most CEOs and CFOs! CMOs need to do a better job of detailing and communicating the “cost of marketing”. For example, do executives understand the full, burdened cost of the big trade show in Amsterdam or Las Vegas? All too often, marketing budgets are “black holes” and this never serves the CMO (or the organization!) well.
Benchmarking. Reports like the Deloitte study are incredibly helpful in terms of helping CMOs and their executive teammates understand what the “current state” of marketing is and how these leading-edge companies are making key tradeoffs and decisions to finance the evolution. Understanding targets or ranges for CAC, LTV, cost per lead (CPL), marketing mix expenditures and so-on are essential to aligning the leadership team around necessary tradeoffs.
Innovation Quota. One way to begin the shift to a more strategic and customer experience strategy is to set your own Innovation Quota. Set aside some small percentage of your program spend to pilot something that isn’t solely for the day-to-day operations but is more forward looking. Perhaps it is something relating to predictive analytics or AI/machine learning. The sheer fact that you are carving-out some spend for this sends a good message to your team and reinforces the importance of innovation to your executive colleagues.
Recruiting/Hiring. While it has a much longer-term payoff, another way to change the nature of your marketing culture is with the job description used to recruit new talent. Take another look at them and ask yourself “Is this the profile of the person we need going forward?”. Chance are the answer is “no”. Maybe now is the time to de-emphasize some of the traditional MarComm skills and add skills relating to analytics, data management and MarTech. Bringing in statistical skills (such as R) can be a tremendous asset to a marketing function and reduce the dependency on IT or Finance teams.
MarTech Alliance. Some organizations are perfectly comfortable letting the CMO invest and implement MarTech solutions. Other companies prefer that Marketing define the requirements but the selection, configuration and all other issues are owned by IT. Regardless, the fact remains that the CMO and CIO need to be joined-at-the-hip as it relates to the MarTech stack and investment strategy. Since other groups benefit from these investments (e.g, Finance, Sales Ops, etc.), this is a good time to set up an internal MarTech Committee or Alliance. This group can regularly review the progress against MarTech build-out, evaluate potential solutions and identify gaps and risks that must be addressed. MarTech has so many dependencies and integration points that trying to keep it entirely within the Marketing domain make not make much sense.
As a private equity operating partner once said to me, “CMOs have the hardest job in the C-Suite. You’ll never find a CRO who says he can do a better job than the CFO. You’ll never find a CFO who says he can write better code than a CTO. But when it comes to Marketing, everybody thinks they can do a better job than the CMO!” True or not, the fact remains that it has never been more exciting and challenging to be a CMO. It is up to the CMO to be assertive and proactive to educate the executive leadership team and evolve the organization to focus on the customer experience. Best of luck!