Gartner: CMOs need to step up their company connection efforts
- 06 September, 2021 14:51
A picture of the difficulties faced by many CMOs was painted by Gartner’s team in the opening keynote to the analyst firm’s Marketing Symposium in September.
The first remarks were bleak: Marketing was losing its seat at the most important table at a time when companies are telling Gartner they are eager to accelerate digital plans.
“Marketing budgets are facing steep cuts, steeper than any in the past decade. We’re going to have to do more with less,” said Gartner VP research, Mike McGuire. Gartner’s graph showed marketing budgets as percentage of total revenue dropping from 12.1 per cent in 2016 to 6.4 per cent today and trending down.
That task is even more challenging thanks to harder-to-engage consumers, according to Gartner senior director, research and advisory, Carlos Guerrero.
“People are confused and fatigued. Social disruptions are making it harder than ever to protect brands, not just from the outside but from the inside, too,” he said.
Yet the way out of these troubles relies on existing marketing expertise, not a bigger budget. Gartner advised CMOs to step back and rethink the marketing and social landscape and to use their ‘superpower’ - the ability to establish vital connections - to assert their role as chief stewards of vital connections that will foster resilience and speed growth.
“Marketers need to re-establish and fortify relationships with employees, business partners and of course customers. Because these connections will make or break success,” said Gartner VP analyst, research and advisory, Dorian Cundick.
Connect meaningfully with employees
The first connection to work on is between an organisation and its employees. Marketers, Cundick said, have been neglecting their colleagues, spending all their time and energy on customers when an organisation’s vitality is grounded in its own people.
Employees have always been a potent source of brand advocacy and neglecting them is a missed opportunity. On the other hand, disaffected employees can be an “explosive threat” to an organisation. Cundick pointed to Gartner research showing 36 per cent of employees have spoken out against their employers in the past year as pandemic, uncertainty, recession, political polarisation and natural disasters have rained down.
“We know leaders are on the alert because they’ve given it a line item: 30 per cent of crisis communications budgets are earmarked for employee activism,” Cundick continued. “The degree to which we cultivate those employee connections can determine whether we should be investing our resources in nurturing a thriving brand or are staving off threats from within.
“We’ve been holding the line on simmering brushfires of extreme fatigue and surging social activism. But one gust of ill-wind can turn them into a fully-fledged wildfire that ravages a brand.”
Organisational changes averaging almost 40 each year add to a sense of employees being overwhelmed by things beyond their control. This compounds the ripple-effects of world events, Gartner said.
To alleviate problems caused by change fatigue and increase the likelihood that employee activism will manifest as support instead of sabotage, businesses and marketers need to build employee capability. The Gartner team said organisations usually do a good job getting employee commitment to change by sharing rationale and encouraging team players.
“That’s good for T-shirts but under-delivers on what we care about most – helping our people do a great job,” said Cundick.
Yet it’s building teams’ capabilities that triples the lift on performance. To ameliorate the disorientation caused by multiple changes, Cundick advised organisations to get very specific about how change affects an employee’s role and responsibilities and ensure they have access to tools and information needed to do their jobs.
Confidence is even more important, according to Cundick. That’s another opportunity for HR, communications and marketing to help teams acquire and master new skills to learn from colleagues, as well as access psychological and emotional support to be their best.
“When we do this well, it makes for engaged employees who are less likely to suffer the kind of fatigue-fuelled stress that can hinder productivity – or inspire backlash against their organisation,” Cundick said.
Turn employee activism to advocacy
Gartner research shows employees are watching organisations and are ready to act, even if action “bites the hand that feeds them”.
Before applying for a job, more than two in five people check if a company supports causes they care about. More than half are willing to boycott a firm that doesn’t do social good. More than one third are willing to advocate against a company that exploits public sentiment as well as to personally boycott it.
On the other hand, if meaningful connections can be made between employees and their organisation, a strong connection raises the likelihood of employee advocacy from 9 per cent to 46 per cent.
“Employees are feeling overwhelmed by big things that are hard to fix – it's making them volatile in a way we’ve not seen before. Instead, we should harness that energy for mutual benefit,” said Cundick. “If we can offer something of value to employees here, we can forge the kind of connections that directly feed and sustain the business. Seizing this moment of social impact can make connection stronger.”
Organise personal fulfilment
Marketers’ control over corporate image and content enables their influence here. Gartner suggested one way to create strong connections is by using an organisation’s resources to meaningfully tackle big things individual employees can’t.
CMOs, or what Gartner likes to call ‘chief connection officers’, can help organisations offer employees valuable empowerment. This entails marketers shifting their emphasis from trumpeting their brand’s authentic commitment to the world to organising personal fulfilment, enabling audiences including employees to be part of the good being done together and tell their own stories of making the world a little better.
McGuire illustrated the point with ‘Operation Possible’ at Trane Technologies, a firm which brands itself as a climate and sustainability leader. Through ‘Operation Possible’, Trane invites employees to share big economic social or environmental challenges it calls ‘absurdities’ that really should be solved or stopped. Employees are asked to submit absurdities and/or solutions that draw on Trane’s operational expertise.
One absurdity was food waste. Following employee suggestions, Trane is considering using its technologies to dry fruit and veg to extend viability and slash waste.
Collaborate to create connections
But not all connections can be forged by CMOs alone. According to one Gartner survey, 90 per cent of board directors agreed Covid increased the need for cross-functional collaborations.
Gartner’s view is marketers are ideally positioned to organise such collaborations because they are the voice of the customer, have the digital expertise to gather and interpret data and can see how work done across the organisation contributes to customer experience or detracts from it.
However, cross-functional collaboration is hard work for marketers: More than one third have said it’s their most challenging activity. Gartner reminded the audience collaborations don’t cost money and advised building valuable connections over service-level and transactional relationships marketers have often had in the past.
“Investing in marketing expertise and efficiencies makes us better marketers but hasn’t built better connections. We’re focused on showcasing our value and contributions to the bottom line but that’s an inherently one-sided relationship. We need to shift our focus from us as marketers to us and our partners,” said McGuire.
He gave the example of a healthcare company whose marketing team consults and gathers information from colleagues across the business, then identifies opportunities. They applied marketing knowledge such as the optimal balance between volume and margin, and which tactics would best change customer behaviours.
“This consultative process created a new insight into the incremental value of customer actions to overall business,” McGuire said.
“Marketing leaders know how customer behaviour should be leveraged to improve sales. This approach elevated marketing from being a fulfilment engine for business partner requests to being an organisational maestro. The VP marketing of this company has seen a significant difference in the types of conversations throughout the business, particularly with product and finance.”
Building connections beyond your organisation
Collaboration that goes beyond simple co-branding to include marketing, product designers and influencers can also create a unique product. McGuire illustrated his point on external partnerships with Sony Playstation’s many collaborations, including one with Nike and NBA star, Paul George. This resulted in multiple co-branded shoes inspired by Playstation’s aesthetics.
More unusual is Sony’s partnership with Mercedes Benz to release Dreams and Mercedes, a platform that inspires gamers to imagine a vision of the future.
“This isn’t an approach that’s only available to big brands,” McGuire said. “Despite shrinking budgets, marketers can move to a two-way flow of information with internal partners and find like-minded external partners to create an ecosystem of brands that can grow and become stronger together.
“We know building these vital connections requires a fundamental shift in mindset from ‘What can I achieve?’ to ‘What can we achieve together?’. The shift to ‘we’ is also relevant to your customers.”
As for customers, Gartner’s data shows brand loyalty and affinity in a long decline. Guerrero asked whether gathering data has seen marketers focus too much on who and what, losing sight of why a customer chooses to connect or disconnect with a brand.
“Customers expect that you know their names, shopping habits and to get them right but it doesn’t create a real, organic connection. To do that you need to use the data to find meaningful motivators that help you build strong connections with customers,” he said.
“A big part of doing this right is listening. Although you’ve heard that before, marketers continue to focus on delivering a message rather than engaging in a dialogue. Delivering a message is one-way, whereas dialogue involves both parties listening to each other. That can build meaningful interaction, but it also has potential to build more robust brands.”
In a recent Gartner survey of CMO priorities, 95 per cent said their brands should take a position on issues their customer cares about. Doing so means more than building messages about pride month or social media posts about equality, said Guerrero.
“It means using your understanding of the whole customer and your influence in the enterprise to ensure that meaningful action is taken,” he said.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.