Analytics Is a CMO's Best Friend
Gareth Herschel, research director, Gartner
The role of the CMO is not only the most varied today, it's also the most at-risk. So says Gartner Research Director Gareth Herschel. On average, he said during a presentation at the Gartner Customer 360 Summit, CMOs have the shortest tenure in the C-suite, at about two to three years. Embracing analytics to improve marketing performance and innovation can help extend that tenure, Herschel said.
Where do CMOs get insight? “There's no shortage of people giving the CMO information and advice,” Herschel said, adding that, of course, different sources appeal to different CMOs. He pointed out that information could come from external sources such as an ad agency partner, consulting firm, or social network, or from internal sources such as the business intelligence (BI) team.
But the bigger question is what type of analysis will resonate most with a CMO?
Herschel cited three dimensions of analytics that will appeal to different CMOs based on their priorities: better measurement, higher performance, and business innovation. “These areas are about ‘what gets measured gets managed,' continuous improvement, and working smarter,” he said.
How can analytics improve the measurement of performance?
“Great headlines make bad metrics,” Herschel said, adding that 90% retention is interesting, but lacks context. “But great headlines capture attention.” CMOs can use that data to start the conversation with their CEO; similarly, other marketing leaders can use it to lead off a discussion with their CMO.
Analytics can improve the measurement of performance by helping to identify causality, he said. This includes analysis of lagging indicators (e.g., revenue and profit performance, purchase processes) and leading indicators (e.g., lead capture processes, consumer confidence, customer sentiment, brand awareness). Additionally, marketers can use analytics to measure the business cycle, and then use that information to calibrate to business realities.
How can analytics improve performance?
“Branding isn't enough,” Herschel said, noting that ever-increasing customer expectations are forcing marketers' hands. “Companies need awesome customer experiences and mostly the CMO is in charge of that.” Process management is the key to customer experience, but companies need adaptability and flexibility, he said. Herschel compared process management to having agility to take Lego blocks to build a plane and then reshape them to a spaceship.
Analytics, he said, is only part of the solution for improving performance. CMOs need the insight from analytics plus process flexibility. Then they need to find the businessperson who wants to help them drive change and show them how analytics can support them in doing so—versus finding an analytics enthusiast who might not be focused on action.
“Analytics helps at all stages of the customer relationship,” Herschel said, adding the caveat that BI should never lead customer strategy. Marketers should do so, using analytics to help not just with table stakes like segmentation and audience targeting, but also by using insight as a competitive differentiator. That is, by using it to deliver value to customers. He cited Amazon's recommendations engine as an example that provides a benefit to customers and credibility to Amazon.
How can analytics enable innovation?
Driving innovation is about getting a home run, Herschel said. CMOs need to lead marketing innovation. Herschel recommended going beyond adopting and adapting winning ideas from other companies and industries. As an approach to generating big ideas, he suggested “determining what's important to us” (business drivers), “considering what can we adapt from what others have done” (examples), and using analytics to “learn what can the data tell us” (information assets). In terms of the latter, Herschel warned against CMOs getting too caught up in their own data. “Instead, think of what data you have access to versus just your own data,” he said, going so far as to recommending using the Scientific Method to look at the possibilities and determine which to pursue.
When asked in a Gartner research study last year, “What's your priority for big data?” just over a third of respondents said marketing and sales growth; not far behind was product and service innovation, Herschel said. CMOs also can monetize their company's data, he said, adding that Tesco's cost of analytics is zero because it sells its data.
So, ultimately, analytics isn't just about thinking strategically; it's also about thinking differently. CMOs who use it to do both are the ones who will gain an edge for their company and themselves.