Marketers are resetting their strategies and adapting to new customer expectations but what does that look like at a time marked with so much uncertainty? Judith Aquino spoke with Donovan Neale-May, founder and executive director of the Chief Marketing Officer Council, about the biggest challenges—and opportunities—facing marketers today.
- A tremendous challenge for many marketing leaders is quickly acquiring digital skills and capabilities as well as fostering an organizational mindset around digital transformation.
- Marketing has become more intertwined with the customer experience than ever before; marketers are shifting into customer leadership roles.
- Companies are increasingly hiring fractional CMOs and outsourcing marketing functions to leverage new ideas and expertise.
Judith Aquino: Welcome to the CX Pod. I'm Judith Aquino. We're at that time of year when marketers turn their focus to planning for the fourth quarter, which includes the largest spending days of the year. However, with so much uncertainty, it's difficult to plan ahead.
Joining me to discuss the various ways that marketing has changed and what this could mean for future planning is Donovan Neale-May. Donovan is the founder and executive director of the Chief Marketing Officer Council. Welcome to the show, Donovan.
Donovan Neale-May: Great to be here.
JA: So what stands out to you in terms of how marketing strategies and future planning have changed since 2020?
DNM: Well, clearly the massive digital shift is the biggest change that's occurred and the digital transformation of markets, methods of delivery, channels of engagement, the way people consume goods and services, everything from how they order and locate products to how they get their medical services, how they consume content and entertainment, how they schedule their lives. So the whole shift to broadband usage in every area of life is the biggest shift and the requirement for marketers and retailers and service providers to adapt and modify and address the new dynamics of serving a global market more digitally, not so much more “mobile-ly” as it was before, but really virtually in the workplace, virtually at home. And most of the consumption of goods and services is from a location, a fixed location rather than a mobile location as it was before.
JA: In other words, it sounds like, for marketers, being able to understand how quickly things have changed for consumers has informed how quickly they've had to pivot and rejigger their own plans.
DNM: Well, they certainly had to redirect and rethink and scale, at unprecedented levels, the digital commerce. I mean, if you look at the numbers, I was just looking at an email that came in today for example, the numbers on consumer spend, they spent $861 billion online last year, right? And that's a 44% year over year increase, but retail sales only increased by 7%. So you see the delta between 7% and 44% you can see just correlate the actual dimension of the change of how people are purchasing and what their expectations are.
They expect to have same day delivery or near same day delivery. They expect to be able to resolve issues and problems through whatever channel, whether it's a chat channel or an electronic channel or a telephone channel. They expect resolution of issues and problems with great immediacy. They expect returns. They expect backend policy processes to be adapted to the virtual interaction, not the in-person. So instead of going into a store and returning a product, now it has to be done virtually, which means you've got to scale your customer service and support workforce on a massive level, in many cases, offshore or outsource it.
So the actual demands on marketers have shifted towards the customer and the customer interface has become the primary marketing focus. You've got to know how do we service our customer? How do we interact and support and add value to our customer? How do we offset the fact that we're now dealing direct with the customers, direct relationship marketing versus the older, more traditional way of working through channel partners and the point of pain being at the point of sale rather than now being absorbed and subsumed. It's almost like folks have become [inaudible 00:04:31] direct overnight, and having to scale operationally, logistically, supply chain wise, build to order wise, service to order wise. And it doesn't matter what professional service or category you're in, everything now is a virtual interaction and more and more so direct with the consumer.
JA: Right. I also wanted to discuss some of the findings in this C-Suite Scorecard report that the CMO Council worked on which rated the marketing effectiveness of enterprise businesses in 2020. So according to the report, which surveyed 120 senior corporate executives, nearly half of the respondents said marketing performed really well and only 7% were unhappy with the performance of their marketing team in 2020. And so I'm wondering, what would you say was key to a marketing team's ability to perform well in such a difficult environment, and how can it be applied to this year?
DNM: Well, I think depending on whether you're talking B2B or B2C, there's a whole set of different dynamics in both, and also whether you're talk about a big business or a small to medium-sized business.
So we did actually point out the variations between how senior management in big enterprises perceived marketing versus how the business leadership in medium to small businesses perceived marketing. So obviously marketing is much more visible, accessible, much more closer, more collaborative in a smaller company than it is in a bigger, larger, more distributed, more diverse enterprise. So large enterprises, particularly big holding companies or a house of brands, senior management tends not to be as engaged with their lines of business. Line of business leaders of course will. So line of business leaders who have P&L, they're very engaged with their marketing teams because today's deliverable from marketing is revenue, sales growth and market share. So that's really where senior management is looking to marketing.
So certain sectors of industry have performed admirably given the COVID dynamic and the shift in goods and services into different categories, spaces, particularly older, more traditional commodity-based categories, where people are buying up products they didn't necessarily have much interest in before. Now, they may not necessarily be consuming those products, they're storing most products and holding those products, but the point is there has been disruption in different categories. There has been obviously fall-off in other categories, travel, notably, restaurant, hospitality, lodging.
All of them have seen drop-offs, but the providers of commodities have done well in many sectors, and particularly, interestingly enough, areas like pet care, for example, pets and people feeding birds and things like that, all of the things they're doing at home to occupy themselves. The areas, I talk about three areas really, nature, nesting, nurturing. So nature, nesting, and nurturing are our big areas of spend, which they weren't before. So people are also becoming more nomadic and it's more the folks who have impacted the RV market and rented or purchased mobile conveyances, mobile homes to go out and get away from civilization, so to speak.
You've seen big shifts, of course, in where people are living and the exodus from major metros into suburban and rural settings. All of these is impacting markets and categories. Folks who are in the moving, trucking, transportation business are doing well.
There's a tremendous demand for products and services. Distribution channels are thriving. Same day delivery and how that's being contracted and outsourced to third parties. Again, all of these areas are impacting markets.
But the bottom line for management is how they evaluate the performance of marketing, which means how good the marketer is at predicting, anticipating, reacting to these transformational shifts that are going on within their businesses. And I think marketing has done a good job of hunkering down and saying who are our most valued customers? How do we handle those customers? How do we create tighter, closer, more intimate relationships with those customers? How do we look at ways to actually monetize those customers by providing additional value and look at revenue opportunities by cross sell, upsell and aligning with third parties?
So I think what management is reflecting, the fact that marketing has become much more of the customer authority, the customer knowledge broker, the customer custodians, the customer relationship architect. And today, in this type of marketplace that's very unpredictable, knowing and staying tight and close to your customers and giving any existing or new customer the ultimate digital experience is going to be critical.
So I think marketing has been force-fed into embracing automation faster than it normally would, working collaboratively across C-suite areas like technology, security, supply chain, sales revenue areas, e-commerce of course in particular, and aftermarket service and support. These are all areas where marketers today have to be incredibly connected across their enterprise if CMOs are going to live up to the expectation of being customer experience champions. And that's what management is looking for. They're looking to marketing folks to lead, to be the customer experience officer, and they're looking to marketing to lead in that sector.
JA: Yeah, I thought that was really interesting in the report, how 62% of survey respondents considered the role of the CMO to be really the customer experience advocate and champion. But underlying that though, to me, that would mean that also, the CMO also needs a really good system for customer insights. So is this the beginning of a new role where the CMO, the chief customer officer and maybe a chief data officer, would all of those roles be merged into one?
DNM: Well, we always advocate the fact that the CMO is the chief data officer, the chief digital officer, the chief customer experience officer, the chief relationship and revenue officer and so on. So we see the fragmentation and proliferation of chief titles and roles. And in some respects, that's needed and necessary depending on size and shape and configuration of the company and its markets and how it does business.
And certainly security is a big issue, information security, cybersecurity, brand protection, brand safety, all of those things are related and it's impossible for one CMO to handle all of that, but they have to be much more engaged and involved in that area. It's not about highfalutin branding and brand promise and brand qualities and brand attributes. It's not the brand role as much as it's the way they touch and interact and engage with customers and how they use the data real-time, not just historical data, immediate data.
How do you provide your frontline sales and customer service and support with sales intelligence, with customer intelligence so that you don't have a customer not getting recognized and treated because the sales interface or the service interface doesn't know the value of the customer and the importance of the customer and doesn't know how critical it is to handle that customer effectively.
So data in terms of the path to purchase, the customer journey, how do you get better conversion, how do you get greater yield, particularly within your e-commerce environment, how do you become more suggestive in how you present products and services online, how do you analyze and predict buyer intent and how do you use the insight into buyer intent to present your solutions more effectively in a B2B environment? So all of these technologies that are driven through data, artificial intelligence, machine learning, they take vast volumes of data, both internally generated transactional data, customer service and support data, but also third party social media data to enrich the profile of what you know about your customer and how you can predict and suggest, as many big e-commerce platforms do, and to try to increase the return on time for a customer, return on value of a customer during that transactional process.
But marketers have a tremendous challenge today to shift into that customer leadership role, but at their disposal is more insight, more data, more analytics that they could use to justify and support investments in marketing spend, particularly in different areas of engagement and individualization.
JA: And so speaking of the challenges that marketers are facing today, what are you hearing from CMOs in terms of what they're prioritizing about CX as they gear up for the fourth quarter and we're facing all of these rapid changes, where it almost feels like we're almost going back into the earlier stages of COVID?
DNM: Well, I mean, the biggest challenge facing all marketing leaders today is digital skills and digital capabilities and competencies, and having a receptive organizational mindset to digital transformation, and to have functional leaders embrace and integrate and unify in how they build and map and model their go to market strategy.
So the problem we have in many cases is isolation, silos, functional silos, data kept in functional areas, not shared, not unified, campaigns being functionally driven rather than being fully integrated multi-level, multi-channel programs where experts and specialists in different fields collaborate intensely together to build campaigns that can be tracked and measured and monitored and you can have a common set of KPIs that everybody is gearing towards, and that's really going to be business centric KPIs, not soft functional KPIs.
So the whole shift organizationally and structurally in marketing organizations is the biggest, and not just in the internal marketing team, also the marketing supply chain, which has become very fragmented, very diverse, very best of breed point solution centric, and the same applies to applications. There're over 8,000 marketing solutions out there, and understanding which ones are right for you, how to spec, how to configure, how to buy, how to procure, how to integrate, how to inter-operate, how to utilize the data from these new applications, because all these new applications spawn more data and you have to then integrate that data, unify that data, analyze that data and have a holistic view of how to use it.
So more applications, more functional automation, more need for smarter, more digitally adept, digitally minded marketers, marketing leaders in particular, and what we found in our study is that people are outsourcing now, moving more towards fractional CMOs or fractional marketing functional leaders. And there are many of those of course in transition and there's a real benefit to doing fractional contractual use of marketing assets and resources, because in many cases, you can plug and play. You can hire somebody who has really top notch experience, has direct experience in the industry sector, in the domain area, in the marketing or geography that you're targeting.
So there's a shift towards outsourcing more, outsourcing notable experts, and really, it's becoming more of a shared resource economy for marketers. Certainly the marketer supply chains have become very different in terms of who people are using, how they're using, how they're compensating them, how they're measuring their performance and so on.
JA: Right. Yeah, I thought that part was fascinating, about this idea of outsourcing even members of the C-suite. And it's almost like you could have a CMO on demand. And I'm wondering what would that mean in the long-term in terms of building a culture within the company if you know that your leader is someone who's just here for the short term?
DNM: Well, I think it's the value you get from the outset. The trouble with recruiting, it takes six to 12 months to recruit and onboard a new executive, and then there's all the politics and positioning and all that kind of stuff. You hire a third party guru or somebody who's done it before repeatedly, they're like a Pac-Man game. They gobble up all these points of reference. They come to your company with a lot more credibility, a lot more clout. They're not necessarily caught up in the internal politics that's more focused on personality, interaction and chemistry, rather than on clarity and purpose of assignment and goal.
And they bring new ideas, they bring new thinking. They're more likely to question and challenge. They're tall blades of grass. They're not just going to be subservient to the powers that be. So what you have is you have somebody who's typically more experienced, more thoughtful, has many reference points, has also many contacts, has resources they've worked with that are trusted, comes as a team, so to speak. So it's not just an individual, it's the network of relationships and contexts and resources that they bring to the table as well.
So there's a good argument to say that these folks can bring in fresh thinking, new ideas, and they can energize dormant organizations, and they're more likely to be change agents than somebody who's not, right?
JA: Right. And so it really sounds like you're optimistic about at least the future of marketing.
DNM: Well, I think marketing has got massive challenges ahead. Complexities for marketing leaders are gargantuan. What they have to get their hands around, what they have to manage, budget for, mapping and modeling, routes to market, being strategic thinkers as to where is the future business opportunities? How do we enter new markets? How do we develop the right products for the right customers? How do we manage and service and support those customers in a very challenging changed environment?
We have a completely different way of doing business these days. We have different ways of servicing and supporting customers. There's been massive embrace of digital, and that's changed the expectations and it's changed what consumers want and desire in how they buy and how they get service and support and how they experience their products.
JA: Right. Well, Donovan, thank you so much for sharing all of your insights with me. I really appreciate it.
DNM: You're welcome. Thanks very much for the chat.