How the CMO can get the board on the customer’s side

Jeff Cooper

  • CMO and board, Business Excellence Australia
Jeff is a board member of Business Excellence Australia, the not-for-profit peak body for excellence in Australia, and world-leading CultureTech startup, Appellon. His interest in culture comes from running businesses where he admits he didn’t always get it right, and the scars from 15 years of consulting in the corporate world. Using customer-centricity principles, Jeff has a passion for transforming established businesses across financial services, aged care, healthcare, property, FMCG, professional services across B2B and B2C.

For some CMOs, it’s easy to feel alone in the undying quest to better serve the customer. At times, it feels like the marketing department and the boards are speaking a different language, with one side trying to serve the customer, and the other side more focused on the shareholders and financials. After all, serving a customer to the fullest is one half of the value creation question, but the other half is doing it profitably.  

It shouldn’t and must not be this way. In the age of customer centricity, it’s no longer the marketer’s role alone to care about the customer. The entire c-suite, the board and everyone in-between must have the customer on their agenda, no matter what their individual targets are.  

As Commissioner Hayne said during the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry: “There must be a convergence of shareholder and customer interests". Similar findings have followed in the Royal Commission into Aged Care.  

Customer centricity needs to be at the heart of the business, from the board level down, which then ripples right through every department – from operations to marketing, sales, management, legal and compliance. In fact, the Corporations Act (Australia, 2001) differs significantly from its US equivalent in one way; it mentions explicitly customers’ and employees’ interests in addition to shareholders’. In Australia, that means companies have a tangible, written-in-ink responsibility to consider customers’ interests, not just the shareholders’.  

This fact is accentuated by recent moves by governing bodies and regulators, most notably financial services and aged care, to regulate and enforce this legislation. Our regulating bodies are growing more adept at assessing a company’s level of customer centricity, and it’s no longer the marketing chief’s job alone.  

What is part of the CMO’s shifting role, however, is to educate the board on the business benefit of customer centricity. A heavy focus on the customer at the board level can, and usually does, end up being in the best interest of the business and its shareholders.  

A recent study by Deloitte found customer-centric organisations are on average 60 per cent more profitable than those who don’t have the customer at their core.  

It’s time to upskill  

So, with customer centricity becoming an increasing concern on board and executive agendas, we’re left asking a slightly awkward question: How many boards and executive teams actually have the right level of experience when it comes to customer-centricity?  

My own research into this question reveals the true number to be less than five per cent. This presents a huge challenge to the CMO, who will have trouble communicating the importance of customer centricity. Put plainly, customer centricity can drastically increase profitability, and it’s high time leading organisations upskill their expertise in this area.  

Thankfully, there are a few things we can do to bridge the gap without the need for completely reshuffling the board itself.  

It helps to work to an existing framework (we have the Australian Business Excellence Framework), which helps organisations benchmark where they are now, where they want to be, and how they perform against relevant businesses to get an ‘outside view’, giving the board and executives a roadmap to use as a common language. 

When the CMO and board meet, it’s important everyone is on the same page regarding current performance, constraints that might be hindering the business from a great performance, and any risks and opportunities around customer centricity.  

Countering miscommunication  

Despite best intentions, miscommunication among CMOs and board members remains rife. Board members might say growth is among their top strategic priorities, but in the same breath, admit it's someone else's job.  

What the board must remember, however, is that if it’s core to the business’s prosperity, then it is the board’s job. If board members are to maintain the prosperity of an organisation, and if they are to believe marketing is the key to that, then they must also learn to speak the CMO’s language and start playing their game.  

Some questions board members might like to ask the marketing team could include: What major shifts have we seen in consumers? What shifts in positioning and behaviours have we observed from competitors? What are we doing to increase the efficiency of our marketing and sales spends? How is marketing tracking versus budget and previous period (MOM, QOQ, YOY)? What capabilities and skills do we need to deliver on our strategy? What's missing?  

At the board level, we talk P&Ls, balance sheets, historical metrics, risk, and business strategy.

Marketers talk about customer lifetime value, cost of acquisition and metrics that are important but don’t always have a clear link to the P&L. Somewhere in the middle here is the key to growth.  

Both parties are at fault: The board members for not learning the new language, marketers for not bridging the gap required to get there. If CMOs can learn to effectively bridge that gap and teach the board to speak the language of the customer they’ll be well on their way to overall business success.  

After all, both parties have the same ultimate goal, they just have different ways of achieving it. By improving the relationship between the CMO and the board, both sides will finally see that they’ve been playing for the same team all along.

Tags: boards, leadership, marketing leadership

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