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What Does [Should] A CMO Do? December 18, 2007

Posted by Elana Anderson in Integrated Marketing, Marketing, Marketing Measurement, Marketing Strategy, Marketing Technology.
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1 comment so far

In its quarterly SEC filing, Orbitz announced that it has (also see related AdAge article):

…decided to eliminate the global Chief Marketing Officer position and continue managing the Company’s marketing efforts on a regional basis. In connection with that decision, Randy Wagner, Chief Marketing Officer of the Company, is expected to leave the Company in mid-February 2008.

That’s unfortunate. I’ve met Randy — she was a keynote speaker at the Forrester Marketing Forum last year which I hosted. She’s a bright, strong leader and I’m sorry to see her go. But, I’m more concerned about Orbitz and all of the other companies out there that are cutting CMO positions and/or clearly struggling to define the role.

I think Orbitz is missing the point. I don’t disagree at all with the idea that defining and managing campaigns on a regional level can be a more effective way to drive to growth goals. I just don’t think that the job of the CMO is to define and manage campaigns.

So, what SHOULD a CMO do?

Well, we’ve been talking for years about integrated marketing, customer centricity, customer relationship management, customer experience management, 1:1 marketing, etc… I’ve been intimately focused in this arena myself for a over a dozen years and I feel like we (the broad and royal “we”) have made little progress towards these goals. To be sure, a lot has also changed in the last 12 years but if we EVER want to get there (or even close) then we need a strong leader. And, from my perspective, that leader is the CMO. The role of the CMO should be to:

define and lead a customer-focused marketing strategy that crosses product, channel, geographic, and even functional boundaries.

I realize that this is much easier said than done. It starts with a CEO who believes in the business benefit of being customer-focused and a CMO with the vision, leadership capabilities, and charter to make it happen. It will also require:

  • A complete overhaul of the marketing organization. I’m talking structure and reporting hierarchies, metrics, culture, and process — all of it. What’s the right answer here? Well, as all good consultants say, “it depends”;-) I haven’t found a perfect organization yet. The key is understanding where the organizational weaknesses are and then putting tools or processes in place to help bridge the gaps. First and foremost, however, I believe it starts with the metrics. The CEO, CMO, and CFO need to sit down and figure out how to measure marketing impact in ways that don’t result in marketing teams competing with one another for customer mindshare or quibbling over which team gets credit for customer conversion.
  • Acquiring and nurturing new skills. What skills am I referring to? Left-brained skills: business acumen, process orientation, quantitative analysis, and technical knowhow. We’ve been talking about this one for a while and it is slowly happening. But, marketing leaders often complain that it’s hard to find these skills along with a love of the customer and a passion for marketing all in the same body. I suggest looking for consultants (Accenture, Bain, etc.) who want to get off the road, pillaging your internal IT organization for the systems analysts or project managers that always ask the business questions, or plucking young marketing analysts for whom there is no technical barrier and putting them all in an aggressive mentorship and cross-team training program. 
  • Significant investment in technology and infrastructure. How boring is this one? My POV on this is that rather than going goo-goo gaga over the next trend and treating it as a antidote to all of marketing’s woes, it’s high time for marketing organizations to recognize that technology — and integrated technology at that — is a crucial enabler. To achieve our goals of customer-centric and integrated marketing, we need to manage the marketing process on top of a framework that is, itself, integrated. Again, no easy answers here — there’s no vendor or application out there that will take care of this for you. And, I’m not saying that the CMO has to be a techie. But, a good leader recognizes his/her strengths and weaknesses and surrounds him/herself with a team that can fill the gaps. The bottom line here is that marketing organizations need to have a technology strategy. Those that don’t will NEVER achieve the customer-centric vision or be able to effectively integrate their activities.   

Who is responsible for driving this agenda — on a global level? The CMO.

Now, I also want to be clear here that I was not implying above that the CMO doesn’t have responsibility for the global brand(s)…  She does! Today’s consumers are really good at sniffing out and publicizing inconsistencies between what corporations and their brands say and how they act (think the recent Unilever Dove/Axe controversy). So, today’s CMOs must own aligning every brand under the corporate umbrella with the core values of the corporate entity and reconciling the brands with one another. Companies that fail to do this are at the mercy of the consumer.

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Net Promoter Score is not a customer metric October 31, 2007

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Marketing, Marketing Strategy, Marketing Technology.
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2 comments

Did the title attract your attention? Good! I’ve heard a lot of people talking about Net Promoter (NPS) as the “one metric” – the “killer metric” – that marketing needs to worry about. This concerns me!  I’m not here to bash NPS, there are others who are taking that on. As for me, I think Net Promoter is indeed a useful metric – primarily because it is so simple. And that simplicity is what has the marketing community falling head over heels over it. Well folks, let’s not go too gaga.

Why do I say NPS is not a customer metric? At an aggregate level, according to the research led by Fred Reichheld, a high NPS score correlates to business growth. But, aside from a segmentation of promoters, passives, and detractors, it doesn’t tell you much at an individual customer level. Most importantly, it doesn’t give you any insight into your customers’ needs, desires, and motivations or help you determine what to do or how to treat individual customers. Sure, you might think, “we need to turn the passives into promoters,” but how are you actually going to do that when what motivates one passive is completely different from what motivates another?

There is no killer metric

Sorry to say it, but there is no killer marketing metric. Yep, you need to take a balanced approach. You need value metrics to help evaluate the value and impact of marketing investment. You need operational metrics to help run the operation, diagnose issues, and improve efficiency. The way I’ve heard some executives talking lately, I fear they are focusing their marketing team solely on NPS and turning their businesses upside down to turn every customer into a “promoter.” My response? Pull back the throttle and apply a measure of basic business logic – you don’t want to end up with a lot of happy customers and an unprofitable business. If you review the details of what they have to say, this is certainly not what Reichheld and the folks at Satmetrix intended.

NPS, among others, can be a very useful gauge of the satisfaction and general well being of your customer base. But, it must be combined with other customer metrics (like retention, profitability, etc.) and insight (like life stage, attitudes, etc.) in order to effectively inform customer interactions. The bottom line? Business and marketing executives out there need to recognize that building an effective marketing measurement and customer analysis capability requires resources, focus, new skills (analytic and technical), and a lot of elbow grease.