THE “CMO” BECOMES CHIEF CUSTOMER OFFICER
Companies such as McDonalds, Uber and Johnson & Johnson are pulling out the red pencil in marketing and removing the CMO position. Chief Marketing Officers often find it difficult to provide holistic evidence of their contribution to revenue growth. Due to the performance-driven digital age and economic downturn, they must reposition themselves and expand their scope of responsibility. Rupert Schaefer says CMOs must become Chief Customer Officers.
Rupert, digital transformation is currently causing a major cataclysm in marketing. Are the times good or rather bad for CMOs right now?
Both! Good, because digital transformation opens a completely new scope and range for them. Bad, because they can often no longer score points solely with their classic skills. McDonald’s, Uber, Johnson & Johnson, Lyft show by way of example that the executive chair in marketing is increasingly being questioned.
Why is that?
Digitalization has increased the pressure of expectations. CEOs demand concrete growth impulses. CFOs demand measurable KPIs that can be clearly allocated to sales. CTOs demand joined forces to promote digital processes and consistent, comprehensive data management. Finally, CHROs are pushing for new, contemporary job profiles in marketing to attract high potentials.
What does it look like in practice? Do CMOs live up to expectations?
That’s the core of the matter! Often not. An example: 83 percent of all CEOs in globally operating companies are convinced that marketing can be an essential driver for growth, but only a minority (23 percent) believe that marketing actually delivers (read more here). Marketing is still largely focused on its previous core competencies: classic campaigns, social media as well as content marketing and influencer marketing – in short: branding and image. But the actual effect on sales is still difficult to measure. And this will be the downfall of CMOs, particularly in the economic downturn. Almost half of all CFOs (40 percent) question budgets. This threatens a fatal loss of significance: marketing – as the main creator of growth – becomes a victim of the economic cycle.
How can CMOs escape such a trap?
Marketing needs a new contemporary profile: new goals, new competencies, new KPIs, new processes and new reporting. In essence, this involves building a bridge to sales and clearly aligning products, processes and services with the customer. New digital touchpoints should be created and continuously measured. Furthermore they need to be optimized, new transaction-based business models need to be established and the recommendation rate of buyers needs to be increased. Ultimately it is also about developing products together with the customer – like in the software industry. This requires a paradigm shift, because the brand is no longer viewed and staged from the company’s perspective, but consistently from the user’s perspective. Marketing is thus transformed from being a top brand curator to being the one who understands the customer best..
What are the associated challenges?
The CMO will increasingly shift to the Chief Customer Officer in the future. In practice, this is a great leap forward. On the one hand, because such a profile requires a completely different mindset, on the other hand, because such a position, and consequently department, can quickly attract suspicion and displeasure throughout the entire organization, namely when it is wrongly interpreted as the sole interface to the customer. Particularly in decentralized organizations such as insurance companies and the automotive industry, it would be fatal if insurance agents and local car dealers didn’t view such a unit as complementary, but instead as serious competition and then block it. The hoped-for sales growth would quickly turn into the opposite.