Lack of Focus on Critical Analytics and Strategies for Greater Value and Return Could Challenge Success, Reveals New CMO Council Study With Deloitte
Far from being just a brand custodian, many chief marketing officers (CMOs) believe corporate leaders now expect them to have primary responsibility for growth strategies and revenue generation. However, many are challenged by the task of finding new routes to revenue, according to global research by the Chief Marketing Officer (CMO) Council and Deloitte.
The new report released today explores "The CMO Shift to Gaining Business Lift" and the evolving role of the CMO as a growth driver, change agent and customer experience advocate. Nearly 70 percent of more than 200 participants in the international study say there is a clear mandate or high level of expectation among their senior management teams and board members for marketing to be the growth driver and business value creator in their organizations.
While they have high aspirations in this area, many CMOs surveyed appear to be struggling to embrace integrated data-driven analytics in order to embark on a relentless pursuit of revenue, better returns, and more profitable and enduring customer relationships. Respondents also noted that they are less involved in the development of new products, markets, customer experiences and business conversions. When asked where they spend their time or what methods they are using to drive revenue and improve margin, few senior marketers surveyed appear to be focusing on areas that a business might associate with driving growth.
Only 6 percent say they are defining routes to revenue across all facets of their business globally.
Just 8 percent say they are finding new ways to recover, reactivate and re-engage lost, languishing or dormant accounts.
Only 10 percent are embracing customer-direct eCommerce channels and new monetization programs that upsell and cross-sell based on intimacy and context.
Just 8 percent admit to auditing, assessing and continually improving the customer experience.
Only 7 percent say they are looking for strategic partnerships, alliances and acquisitions that drive growth.
When asked where CMOs played a key role in strategic planning and business development, about half of respondents felt their key role was to develop corporate vision and direction, as well as lead change management and digital business transformation. However, their desire to be involved in long-term, large-scale initiatives were in sharp contrast to their level of participation in more short-term, revenue-generating tasks, such as mapping cross-border geo-expansion, furthering distribution and channel development, and leading derivative product innovation.
"CMOs now have to show they are impacting business growth right from the outset, or they are likely to be short-lived on the job," noted Donovan Neale-May, Executive Director of the CMO Council. He believes they will need to embrace a new crop of revenue-centric analytics platforms (in an emerging RevTech category) to make this happen. He adds that a "grow, or you'll have to go" mindset certainly appears to be front and center with management, investors and boards in the retail sector.
Neale-May references a Russell Reynolds notation that almost half of the top US retail chains have changed marketing leaders (and some CEOs) over the past year, in some cases due to lagging business performance. According to Neale-May, in the last few months, CMOs have departed notable brands such as Target, Land's End, Pandora, The Fresh Market, Under Armour, Neiman Marcus, Extended Stay America, Home Depot, Kohl's, Macy's, Culver's Restaurants and Chico's, to name a few.
"Deloitte understands how the landscape of marketing is changing and the impact it's having on the CMO role," said Diana O'Brien, Chief Marketing Officer of Deloitte LLP. "I've experienced it directly as Deloitte's first CMO, and our CMO Program helps other CMOs adapt for the future, navigate the complexities of marketplace shifts, and become true customer champions and growth drivers.
According to the CMO Council/Deloitte research, marketers appear to be doing a poor job of quantifying and communicating the business value and financial impact of their campaigns and investments. Less than a quarter of respondents believe they are doing this extremely well or quite well. In contrast, nearly 30 percent are still putting measurement systems into place or have no solution for tracking business outcomes.
When it comes to quantifying the value of marketing spend, traditional brand-centric benchmarking—such as recognition, awareness, equity, affinity and advocacy levels—appear to be eclipsed by business measures and metrics. More than 73 percent of respondents now use revenue growth; 45 percent cite sales velocity, funnel strength and conversion rates; and 43 percent point to market share gains. By comparison, brand performance benchmarking was only referenced by fewer than a quarter of respondents as an indicator of marketing effectiveness.
Many CMOs see themselves as playing critical roles as transformation agents and cultural custodians. When asked how they were influencing their company's ability to adapt to technological disruption and be more agile and predictive, many respondents saw themselves as leaders in:
Keeping abreast of technology innovations, new contenders and cultural shifts (69 percent)
Motivating the organization to be more customer-centric and market-minded (54 percent)
Driving the development of next-generation products, services, business models and customer experiences (33 percent)
As CMOs head into 2017, the move to more closely align with strategies and actions that directly impact the bottom line and overall revenue optimization will be paramount to success. More than half of CMOs surveyed plan to rethink priorities and deliverables while 49 percent plan to delegate more authority to trusted marketing team leaders as key avenues to successfully adapting to the new role and demand of being a growth driver. These shifts likely mean that CMOs are ready to reinforce their critical position in the C-suite and, in the future, the profitability and success of the organization.