The new role of the CMO
The CMO needs to change, since marketing has changed profoundly.
So marketing is best suited to drive the digital transformation, at least in theory. But what about the CMO? How can he turn into the Chief Digital Transformator or Chief Innovation Officer role? This transformation isn’t going to happen overnight. Today, the CMO role has different characteristics: it is about brand, growth, digital, or community. But it should be about value(s). The CMO should be the Chief Value Creator, or Chief Value Officer. In fact, the role of the CMO has seen the most tinkering in recent past.
More important than what’s on the business card is what the role is about in daily business. All too often, the CMO is still thinking in campaigns and classic marketing plans. While there’s nothing wrong with that, it’s not sufficient. Promotion is an important part of marketing, but what about the other Ps – place, price and product? The digital transformation has changed all of them profoundly. And there is a bunch of CMOs who got the memo and started changing themselves.
Digital marketing is still dominated by what I would call a copy-and-paste approach from classic marketing of the past. Soon after the first online banner was invented, there was the original promise that everything could be tracked way better than ever before. The rise of Google came with the second promise: that everything could be targeted way better than before. And to a certain amount, these promises held true. But tracking and targeting, especially in combination, really annoyed a lot of consumers.
CMOs need to throw away almost all of their conventional wisdom
Tracking and targeting made digital marketing very efficient, and thus the share of online marketing spendings rose and still rises today. The CMO has a new toy, not as glamorous as the other toys, but still. However, from the early days of online marketing till today, most CMOs missed the second boat: e-commerce, or place in marketing lingo. While online marketing was adopted as just another channel (also questionable), electronic commerce went to the sales department, or even IT, but not to the CMO.
Thus, many companies treated e-commerce as just another distribution channel, and created the multichannel or omnichannel ideology, with mixed results. The Parallelwelten of the legacy business and the digital business drifted apart, creating all sorts of problems, ranging from surging capital needs to a fragmented customer experience. And now the third boat, which is called product, makes things even worse for the incumbents and the old-school CMO. The digital product world is a far cry from the old marketing world.
For CMOs to thrive in this new world, they need to throw away almost all of their conventional wisdom. Digital products start with the customer experience – something traditional marketing never really cared about. Quite the contrary, most online marketing sucks most of the time. It is applied at the end of the product pipeline, when everything is already set in stone. That’s not how things work in the digital world. Marketing must be tried and tested early on, even before there is something called a minimum viable product (MVP). Marketing is inseparable from innovation.
The CMO must own customer data, front and center
What the CMO really needs to do, besides the mind shift, is a budget shift – take budget away from the end of the pipeline and invest it in new products, in innovation, in new value. Granted, that’s easier said than done. In fact, it requires increased efficiency of the current marketing spendings. The amount of waste must be reduced, to free a significant part of the budget. The most promising way to do this is through the better use of data. Now that’s where we are back at tracking and targeting.
The CMO must own customer data, front and center. Customer data equals customer access. Marketing can no longer afford renting customer data and customer access from Google and Facebook. It’s getting too expensive, since the auction model puts margins under pressure. But how to come to grips with the data play? This requires services (or products) your customers subscribe to, i.e. relevant services with a free tier that people sign up for and log in to. In a way, the CMO faces a chicken-or-egg problem.
But the path is clear: Take a cut from your marketing spendings, invest it in products with great user experience and high relevance to your actual and potential customers, let them subscribe and sign in to your own platform and gather the data you need to improve the efficiency of your marketing. The more efficient it gets, the more budget can be shifted towards new experiences, products and services that generate value and thus revenue over time. And the CMO owns the whole machine.
How does that sound?