How the Digital Revolution Changed the Role of the CMO

Marketing News
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Key Takeaways

What? Brand messaging has been placed in the hands of customers and employees.

So what? Marketing organizations  need to evolve their structure and capabilities accordingly.

Now what? CMOs must emphasize owning the customer experience across all platforms, empower others to live their brands and become more prominent figures in the C-suite.

June 14, 2017

In today’s fast-paced digital world, marketing has become a critical growth driver, requiring CMOs to transform the structure and capabilities of their marketing organizations as well as play a more prominent role in the C-suite

Marketing News sat down with Diana O’Brien, CMO at Deloitte LLP, and Christine Moorman, professor at Duke University’s Fuqua School of Business and director of The CMO Survey, to take stock of what is happening in marketing and the role of the CMO in companies.

Q: What changes are you seeing in the market?

O’Brien: Attention has become the scarcest resource, and there’s more competition than ever for that attention. The digital age has created a world where customers and employees are “always on,” and with that unprecedented access to information, customers make decisions faster, turn off more quickly and listen to sources they don’t even know. The mobile, social, digital transformation gives every organization a unique opportunity to rethink its relationships with the customer.

Moorman: And yet CMO Survey results indicate that only 11.8% of company sales are occurring through the internet, and 51% of growth investments are dedicated to market penetration—targeting existing customers with existing offerings. Companies need to wake up to the opportunity that digital represents and grab more of that attention Diana mentions.

Q: What’s the impact for CMOs and marketing departments?

Moorman: Marketing organizations weren’t built to meet the demands of today’s fast-paced digital world, so they need to evolve their structure and capabilities. The CMO Survey shows that CMOs are ready to change the game. They are planning to dramatically increase their marketing spend in the next three to five years in social (90%), mobile (127%) and analytics (375%). They also are willing to rethink their marketing organizations as evidenced by a doubling in the amount spent on developing new marketing capabilities—presumably to fill gaps in digital marketing, customer development/management, marketing innovation and omni-channel execution identified as weaknesses in The CMO Survey. Finally, marketers are planning to build customer experience and data capabilities in-house while outsourcing less-frequent, specialized activities.

O’Brien: The control CMOs and marketers once had over their brands and messaging has moved into the hands of customers and employees. The focus is less on creating messages and more about empowering others to live your brand and to tell your story across every channel. We’re also seeing greater pressure on the customer experience. Expectations are much higher because customers and employees aren’t just comparing you against your competitors—they are interacting with you across multiple channels and comparing you against the best brands in the world. As owners of the customer experience, CMOs and marketers need to make sure that every interaction is consistently world-class across all platforms, including digital and social.

Q: How will CMOs need to evolve the way they work in the future?

Moorman: Digital is changing marketing, and marketers must rise to the occasion by directing those changes to profitable ends for companies. As the vanguard of the customer, marketing needs to perform an integrative role in how the company approaches the marketplace. This has not yet happened in integrating the firm’s social and more traditional marketing activities—which still tend to operate in silos. Second, marketing analytics will increasingly be the driver for marketing decisions. However, this won’t happen on its own. Marketing leaders need to ensure that data is not only collected but embedded into how the company makes decisions. At the same time, marketers need to balance these quantitative drivers with deep human insight into the customers and the marketplace. Without both, growth will be limited to better decisions for current strategies and not the evolution of strategies in the future.

O’Brien: No longer a cost center, marketing is a growth driver. As a result CMOs are becoming much more prominent figures in the C-suite. CMOs need to represent the voice of the customer and integrate work across functions to ensure everything their organizations do is in service of the customer and their needs. This includes everything from empowering employees with the right capabilities to live the brand and pushing the boundaries of innovation. So much is changing; keep pace with the latest trends and technologies, but don’t get distracted. The importance of creating moments that matter for your customers and employees will never change. Invest in people first and use everything in your toolkit to enable that investment.

Q: What are the biggest challenges CMOs face in helping their companies grow?

Moorman: Too often growth is driven by engineering or production advantages that are not adequately connected to customer benefits. If you look in most tech companies, the marketing department often plays a role only after the product has been developed. It’s important to begin and end with the customer.

Second, market penetration (selling current offerings to current customers) dominates too much of firm growth budgets. Companies should also think about new offerings, new markets, new channels and even new business models that could improve growth in more dramatic ways.

Third, most companies are still growing using solo strategies (73%) instead of using partners, acquisitions or licensing activities. In fast-moving digital markets, using strategies that tap the expertise of outside firms will allow firms to make quick inroads into new markets or enter new categories—activities that would take much longer if they came to market alone.

Finally, at only 15.6% of sales, international markets remain a small part of most companies’ revenues. Across industries, the international markets that companies are not currently in that were reported to be the biggest opportunity for the future are China, Western Europe, Brazil and Canada. A first big step in pursuing international markets may be a hard look at marketing budgets spent on international markets, which is currently only 10.2% on average.

O’Brien: One challenge that we hear our clients mention a lot is that while the multitude of customer data available today gives us the ability to create deeper insights into and connections with our customers, it can also have the opposite effect by overwhelming business leaders. The same can be said for the myriad of new technologies that appear every day; we become distracted by the shiny new things and forget to focus on the important questions: What am I trying to solve? Who am I trying to reach? What I am trying to tell them? Once you focus on those, everything else follows.

A second issue is that CMOs and marketers are facing an internal perception challenge. Our C-suite colleagues often operate under the belief that marketers focus too much on the latest trends that don’t necessarily demonstrate a strong return on investment. However, the CMO and marketing role has changed immensely. Historically, marketing was a cost center, responsible for creating and broadcasting messages to customers, but it is now a growth driver that owns the customer experience and activates employees as brand ambassadors.

All of this has created a new CMO mandate and challenge—to drive growth by creating deep customer engagement, empowering all employees (not just marketers) to be their best and represent the brand, creating compelling stories and constantly innovating. 

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