There’s so much choice available that customers can pick and choose who they buy from and where, when, and how it happens. They want to discover, research, evaluate, and purchase on their preferred channel. Give them that option, and they’re more likely to choose you. That’s the whole point behind the multi-channel approach.
The CMO has finally arrived, according to a new report from CMG Partners. It might have taken five years to get there and involved a radical transformation of marketing as a practical function and principle, but the CMO has officially become a cornerstone of the executive team and a leader of corporate strategy.
According to the marketing consultancy firm’s <i>Fifth Annual CMO’s Agenda</i> report, the global economic crash of 2007-2008 saw marketers facing increased pressure to justify budget and prove their worth through a combination of art and science, providing a major catalyst for the CMO’s evolution. The rise in digital marketing channels, along with cheaper, deeper marketing technology and wider adoption of metrics and dashboards, also played a significant role.
“All the while, the very nature of customer engagement itself has been changing to be online, real time, direct and measurable,” the report stated. “The result has been a radical transformation in many marketing organisations – where lead marketers have increased their ability to measure, drive change and tie it all with top- and bottom-line performance.”
These evolving rules of engagement are making the CMO’s role complex and critical. So where should you be focusing your energies for the best return? To find out, CMO World delved into the five areas of performance CMG and its survey respondents urge CMOs to concentrate on.
Art versus science
At the top of any CMO’s list is merging art with science. As Four Seasons Hotels and Resorts executive vice-president of marketing, Susan Helstab, put it: “The data won’t create the vision for the business; it can inform the business”.
CMG outlined two types of businesses: those that are science-led, and those who focus on art. Science-oriented companies generally have a lower-risk profile where a steady state return is required, have high transaction businesses and are rich in customer data, are usually more mature companies, and maintain established brands but want to disrupt their industry by taking a unique approach.
In contrast, art-led companies are led by intuition and implicit knowledge and have a higher-risk profile, are lifestyle brands where emotional links with the customer are crucial, are early growth companies or in fast-growing categories, and who benefit from brand-building and customer engagement activities. Yet they too could also be established brands looking to upset the status quo by taking a unique approach.
While the science is a must for today’s marketer, the key is not to forsake art for the numbers, CMOs told CMG. Yes, you need to make sense of the influx of data, metrics, analytics, dashboards and bring data scientists into the marketing mix, but creative and bold thinking still have their place.
As an example, The North Face’s CMO Aaron Carpenter uses science to see what is going on in the market, then employs instinct to tap into what is coming next. Unlike many in the clothing sector, the company brings science capabilities into play through a landscape assessment and global segmentation study to understand opportunities across its core outdoor, performance and action sports categories.
“Our gut instinct for our sports is just as important as the science. Once we look into a concept, then we start to go into more of the data-driven approach to how viable is this,” Carpenter said. The North Face claims its blend of art and science directly contributed to raising annual revenue from US$1.4bn to $2bn in four years.
The second area of accountability for CMOs involves investment in new tools and technologies to cope with the rapid rise in recording and interpreting data. Adobe CMO Ann Lewnes recommended informal service-level agreements with other business units that clearly articulate marketing’s role and what each party can expect.
CMOs also need to build their marketing analytics capabilities by determining and getting alignment on the decisions that data will enhance such as customer segmentation, the media mix and pricing. One way most of the larger organisations surveyed by CMG are achieving this is through centralised analytics teams. The report found several of these are wholly-owned by marketing, while others are shared with the finance team or even an entire organisation.
In Electronic Art’s case for instance, three groups oversee the analytics function: a marketing science/analytics group focused on the media mix, optimisation and ROI; an advanced analytics group focused on CRM and customer database marketing; and a traditional market research group primarily focused on marketing.
To help CMOs come to grips with it all, CMG identified six steps needed to taking a scientific approach to decision-making:
- Clearly identify the decision you need to make
- Define what you want to prove or disprove with data
Agree upon the metrics you will use to inform you decisions
- Identify gaps in your existing data
- Source and clean the data
- Evaluate the findings.