In an age of marketing disruption, CMOs are expected to be the guiding light that navigates uncharted territories and leads their departments to victory. But a new study from the IBM Institute for Business Value suggests that some CMOs are more equipped for this endeavor than others.
Based on the findings of the “Redefining Markets” study—a survey of 723 global CMOs—there are three types of CMOs today: Torchbearers, Market Followers, and the mass majority.
Kevin Bishop, VP of customer engagement solutions for IBM Commerce, characterizes Torchbearers as marketing leaders who have strong brand reputations and know how to generate business outcomes and engagement. He says these C-level marketers view everything through the eyes of the customer. They also use data to drive decision-making and connect physical and digital experiences across the organization, as well as across the entire customer journey. Market Followers, contrastingly, focus on pushing product and generating mass engagement, Bishop notes; as a result, they’re often less financially successful. The mass majority of CMOs fall somewhere in the middle.
“It’s the contrast between not using data to get inside at an individual level, not looking across your organization to engage across the customer’s journey, and not doing things…from the point of view of a customer…that leave the Followers where they are,” Bishop says.
Although Torchbearers possess the most desirable skill set, few CMOs actually reach this level of proficiency. In fact, just 6% of CMOs surveyed are considered Torchbearers, according to the study, versus 33% of respondents who are considered Market Followers and 61% who fall somewhere in between. But those who reach the proficiency level of a Torchbearers are often best equipped to take on today’s most prevalent marketing challenges.
Here are four examples of how Torchbearers are doing just that and what other CMOs can learn from them.
1. Industry Convergence
Companies are expanding their core competencies and overlapping with various sectors. In fact, 67% of CMOs expect this industry convergence to impact their business in the next three to five years, and 60% expect to see more competition from industries outside of their own.
Instead of backing down to this new competition, Torchbearers embrace it through “creative destruction.” Their ability to consider the entire customer journey, as opposed to a single company interaction, allows them to expand their business model and collaborate with companies to deliver value that serves an underlying customer need.
Bishop cites moving as an example. When a customer moves into a new house, the realtor finds the house, the mortgage provider helps fund the house, and the furniture supplier helps fill the house. In other words, everyone does their own role. But by taking a holistic view of the customer’s journey, CMOs can detect how these different companies can work together to provide a more seamless and valuable experience.
“Once you start thinking about a whole journey, it makes you really question what’s your goal, what’s your role, and who do you partner with to help people with other people’s roles?” he says.
These CMOs also explore completely new business opportunities. In fact, two thirds of Torchbearers are experimenting with new revenue models, compared to half of Market Followers, and 79% of them are determined to reach the market first with their new ideas, versus 46% of Market Followers who share the same attitude.
However, Bishop discourages CMOs from expanding their business to the point that they lose sight of their core competency and end up competing against (and losing business to) organizations with more experience in a particular domain. Instead, he encourages CMOs to clearly identify what their core value proposition is, how they can deliver it, and who they can partner with to build on that proposition.
2. Marketing silos
Disruption shouldn’t just be customer-facing; it should occur internally, as well. Torchbearers are ahead on this front. According to the study, 92% of these CMOs are focusing on integrating marketing, sales, and customer support, compared to 70% of Market Followers who are doing the same.
To create a more unified front, Bishop encourages CMOs and their team members to walk in their customers’ shoes. By performing activities like calling the call center, visiting a store, or testing a digital experience, marketers will be able to detect where they fall short, whether it be through inconsistent pricing, confusing messaging, or slow response times, Bishop says.
“Unless you actually walk in your customers’ footsteps, you’re not going to see that,” he says.
3. Data explosion
As marketing and technology evolve, big data just keeps getting bigger. But marketers don’t seem deterred by this overflow of information. Sixty percent of CMOs surveyed say they want to use data-driven insights to fuel their marketing campaigns within the next three to five years. What’s more, the percentage of C-level marketers who feel prepared to manage this “data explosion” doubled from 18% in 2013 to 36% in 2015.
Once again, Torchbearers seem to be leading the charge. Forty-seven percent say they’re confident in their ability to deal with data explosion, versus 27% of Market Followers who claim the same. Similarly, 69% of Torchbearers report feeling sure about their ability to cope with more complex marketing mandates; yet just 49% share that sentiment.
Bishop’s advice to marketers looking to get the most from their data is to develop identity recognition methods to connect data back to the right customers. He also suggests leveraging analytics to interpret this information. In addition, he urges marketers to clearly distinguish various data use cases. For instance, marketers can use customer insights to drive decision-making or to get customers to perform particular behaviors.
4. Richer customer experiences
Developing deeper customer experiences is a top priority for two thirds of CMO respondents, and many Torchbearers are on the right path for achieving this objective. According to the report, 82% of Torchbearers are focusing on customer journey mapping, compared to 65% of Market Followers. Similarly, 84% of Torchbearers are focusing on experiential marketing, versus 48% of Market Followers who are doing the same.
One approach that many CMOs use to better understand their customers is simply to gather feedback. Sixty-one percent of Torchbearers say they leverage customer feedback to explore new trends, versus 51% of Market Followers who do the same; 66% of Torchbearers are working on customer collaboration and co-creation, compared to 50% of Market Followers who are doing the same.
For CMOs to deliver truly rich experiences, Bishop says, they need to put the customer first throughout the entire journey and identify the true purpose of their interactions. Only then can CMOs succeed and achieve Torchbearer status.
“Understand your customer, understand that purpose,” he reiterates. “If you center [your marketing] around that, you can make a difference.”
Update 2/24/16: An earlier version of this article said 67% of CMOs consider industry convergence one of their greatest challenges; however, it now correctly states that 67% of CMOs expect industry convergence to impact their business in the next three to five years.
