Answering The Pivotal Question Facing All CMOs: Why Should I Care?

ImageAnswering “why should I care?” for the CMO immediately changes the strategy of the approach and the interaction with them. CMOs are drowning in a myriad of media channels from direct to social, with platitudes of business models, ecommerce processes and a quarter to deliver – along with a connected public that can slam out opinions about their brand at any time. The CMOs charge is to build revenue and relevance, but this new normal in marketing brings with it distracting challenges:

  • The explosion of touch points is resulting in a lack of controlEnglish: Creating lifelong customer value with...
  • Standing out is harder as consumers take more charge and push back
  • New, rapid global competition
  • Grappling with social media globally with localized interaction
  • Clarity on roles and responsibilities with the internal focus on business issues
  • Demonstrating the value of procurement, brands and current marketing

CMOs buy ideas to make a gain or avoid a loss. To stand out a business needs to deliver its best case and the winning face that will solve a huge problem for the CMO by answering, “Why should I care?” The key is to make the CMO relevant by piloting the proposed solution with their funded initiatives and demonstrably reveal more value to their business faster. By connecting the CMO to revenue, convincingly showing her what problem you solve and how the investment will move the needle north, an invitation to answer their tough questions will be forthcoming:

  • How will you help me demonstrate a strong ROI on integrated marketing?
  • Does our ‘story’ and content strategy enhance the customer experience?
  • When can we better optimize the purchase pathway and our customer data?
  • Where can we get the biggest bang with our social and earned media?
  • Are you able to help me balance creative with analytics?
  • Can I trust you with my business and marketing strategies?

The old ‘sales funnel’ model where we (consumers) hold a large number of brand options and narrow our choices to an eventual decision aided by advertising has been deracinated. Repetition of old marketing strategies has caused the ouster of many a CMO as has throwing up new brand campaigns bereft of any notion of what the empirical measurement is for effective.

Illustration of Porters 5 Forces. Illustrates ...

Therefore, what makes the offer different that can deliver ROI? CMOs admire it when there is adherence to their current strategy and how the proposition moves it forward. Ideas might be the currency of marketing, but to spray them without tying them to organizational goals will lose the CMO no matter if its technology or marketing. Pitching tons of ideas that are disconnected to their strategy is akin to saying one has no ideas at all: strategy is more about what you’re not going to do and how that connects to the business goals of their organization.

To get inside the CMO’s head, think like an investor and investors have one thing on their minds: ROI. For CMOs, their investment is the time, energy and resources they place in the hands of their ‘partner’ firms and their ideas. To win over the CMO, the idea needs to generate and show a return, provide data and enable you to ask how you can help them? Rarely are CMOs actually offered! How can the solution make the CMO’s life easier? Demonstrate it contributes to her inventory of alternatives and already her job has been made easier.

Anecdotal success measurement, however, can quickly turn off a CMO – marketing is not all about telling a great story – it’s about


telling a story that moves the needle: if you don’t know how to measure it quantifiably, resist the temptation. CMOs pilot new ideas constantly, but they need a valid and relevant way to measure the success of those ideas. CMOs generally do not desire to replicate the competition they demand you to know their customer. It’s easy searching what other people are up to, but the secret sauce is knowing the right questions, the ones that lead to unearthing the pain points and needs of their organization and customers, and then tailoring targeted solutions.

More than ever CMOs are vested in making the quarter and are primarily interested in the business outcomes of using services. Consequently sales discussions must focus on business drivers. For example, a true innovation needs a business model – preferably one that’s able to link to their business model i.e., know how they make their money! Products, services, and solutions must be linked to business benefits using the metrics the CMO cares about: footfall, ARPU, retention, online conversion, customer acquisition cost, lead generation efficiency, etc. To accomplish “Why should I care?” it’s critical to connect the offer directly to revenue and specifically show the CMO how the product will further aid her to prove marketing’s value – demonstrably and empirically – to the CEO.

Recognizing the CMOs role when it comes to crisis

Crises are particle accelerators for brands that reveal their fragility and catastrophe reveals four cardinal rules CMOs can help deploy with PR.

Recognizing the CMOs role when it comes to crisis

Dean Crutchfield, Article, September 14th, 2009, Advertising Age

Crises are particle accelerators for brands that reveal their fragility as we’ve just witnessed with bankrupt banks, tampered-with pizzas, poisoned pistachios, dodgy cookie dough and lethal drugs. In light of the innumerable gaffes “brands” make when dealing with crisis, catastrophe reveals four cardinal rules CMOs can help deploy with PR.

1: Expect the best, Plan for the worst

“I don’t think anybody anticipated the breach of the levees.” George W. Bush, September 1, 2005.

When crisis strikes, news and social media burst and formal statements are rendered useless. Stocks don’t have a memory recall button, but the public do. The problem isn’t resources; it’s about managing the crisis with a can-do culture and strong values of trust. Many claim it, but few deliver: J&J’s $100M rapid response to the contaminated Tylenol crisis in ’82 prepared J&J for the acetaminophen overdosing debacle in ‘09, but (what) did we learn?

Failing to prepare is preparing to fail. Captain Sully’s preparedness for the “Miracle on the Hudson” was a far cry from the sludge bank of stoic corporate puff supplied in the (delayed) response of US Airways’ CEO, Doug Parker. The same rang true for Merck’s smoking gun with Vioxx that demonstrated how much the company’s leadership was in disarray. Merck communicated greater interest in maintaining their $2.5B brand than their vision “To preserve and improve human life.” Their disdain for the facts took them 4 weeks to withdraw Vioxx!

Consumers may be forgiving, but a crisis can cost a brand’s reputation in a single battering: “The court of public opinion can put you out of business even faster than a court of law.”

2: Decentralized decision-making

Crises are too quick for lengthy procedures; you can’t hide in bureaucracy, you can’t be pusillanimous and trust is vital. Mississippi Power’s success restoring power in 12 days during Katrina was twenty “Storm Directors” with crystal clear assignments and a phone directory of people who could get things done. As the Storm Director, Robert Powell said, “If you don’t know what you’re supposed to do, the manual is not going to help you now.”

Mattel had experienced 28 product recalls prior to the lead paint scare in ’07. When the news broke a team of sixteen opened all lines of communication with 300 media channels and its CEO, Robert Eckert, made 14 TV appearances and 20 calls to journalists in one day, a model for decentralized decision-making. A similarly integrated, multi-platform response strategy resulted in favorable customer opinion to Nestlé’s immediate action to withdraw its Toll House cookie dough brand this summer.

The Fortune 100 favor Twitter as a key communication tool according to a study by Burson Marstellar. As social media becomes ubiquitous and customers participate more, the role of the CMO is crucial in crisis as they’re able to inculcate social media to empower customers to play a key role: South West Airlines this summer, immediately posted updates on Twitter as the damaged plane landed, which illustrates the ability to handle the urgency of crisis communication.

3: Disaster begs a bold response

Marshalling a crisis team and a response plan are critical, including weighing the need for autonomy over the preferred unified leadership approach. Citi was the largest US bank prior to the meltdown and its fall from grace was accelerated by Robert Rubin’s “probabilistic” approach to decision-making that clearly misrepresented the severity of Citi’s exposure to the crisis that broke the brand and the bank.

Rest assured, when you need an ambitious, audacious and imaginative response, being forced on ineffective policies by some species of corporate bureaucrat creates a morass. During Katrina, with the cash economy broken, Mississippi Power’s head of marketing helped instigate a bartering system: electricity for fuel supplies with Chevron; consequently supplying the Eastern US and Gulf coast with fuel! Evidently, the more you want to achieve the more you achieve.

4: Check, Test, Check, Test

Brand integrity is compromised through fear. Studies show that companies who handled a catastrophe well have recovered and even exceeded pre-catastrophe stock price.

In a crisis fear is often the company’s first reaction that culminates in either a lack of compassion and/or stubborn refusal of the facts. Firestone tire treads were causing fatal crashes on the Ford Explorer, but customers were blamed first for over inflating the tires, then both brands publicly defenestrated each other for faulty designs and concomitantly fell into silence until dragged before Congress. Propitiously, Ford employees are currently being trained on how to better present the company via the use of Twitter to interact with customers.

Post adhoc ergo propter hoc (after this, therefore because of this)

Decontaminating a brand doesn’t need a weatherman to know which way the wind blows. Bad news is good news to the prepared. When you need to be big, strong, fast and mobilize a massive, sweeping redistribution of information to the public: Hide Nothing, Tell All. With that mantra in hand, there’s a phrase popular in the Whitehouse: “Never waste a good crisis.”

Now’s the Time for CMOs to Adopt the 7-S Framework

Misconduct by big brand names and shifting consumer behavior has changed the perceived value exchange between brands and consumers. This has created many opportunities for brands to hold entirely different conversations with the consumer.

Now’s the Time for CMOs to Adopt the 7-S Framework

Dean Crutchfield article, June 1st 2009, Advertising Age

By Dean Crutchfield

The stretching of marketing boundaries is propelling brands to seek new and innovative approaches. We need what the Economist describes as “calibrated boldness”. Breakthrough marketing and innovation are borne when there’s a tension and pursuit of opportunity without regard to limited resources. When this happens, marketers are more open to rethinking the fundamental way we do marketing. It’s a gamble and in that poker game you need a stacked hand in your favor: a royal flush powered by McKinsey.

In the early 80’s the 7-S Framework was formed by authors Tom Peters, Robert Waterman, Richard Pascale and Anthony Athos and was later adopted by McKinsey as one of its core tools. The premise of the framework was aimed at corporations and can be adopted by marketing operations. The framework describes 7 factors that holistically determine how a corporation operates; if you change one, it affects the other six:

Shared values are what the organization stands for
Strategy is the allocation of resources across the enterprise
Structure is how the organization’s units relate to each other
Systems are procedures, processes and routines
Staff relates to the numbers and types of personnel
Style is about the culture of the organization
Skills are about personnel and the organization overall

This interdependent framework is a powerful tool for the CMO:

Shared values with the customer

What is the brand’s value transfer to the customer? Today’s consumer admires brands that enable them to become involved; it’s much more of a reciprocal relationship. The changing relationship between producer and consumer has become blurred and we must shape brands that engage and enable people to participate.

Brands need to embrace more freedom and relinquish some power and control to the consumer by adopting narrative based brand and marketing strategies that can impact multiple platforms to engage consumers: creating brands that are more magnanimous, malleable and functional.

Strategy for customer acquisition

What makes a brand great fades with age and the credit strapped, over extended, saving short US shopper has retrenched requiring an entirely different marketing approach.

The language of the new consumer is changing. It’s all about precision (of message), flexibility (of relationship) and reciprocity (of value). In this new paradigm, media is shifting online from the $23.4B spent in ’08 to what some industry pundits believe could be up to $43.4B by 2013. It’s not that people are watching less television; according to Nielson the last quarter of 2008 was an all time record high! It’s just a question of how and where we’re consuming content.

Structure of the agency relationships

The invidious combination of marketing challenges, plethora of marketing personnel and the multitude of channels often create an unwieldy concoction of brand managers and agencies. Consolidation is King as is evidenced by Dell’s worthy attempt to reduce 800 agencies into Enfactico and PepsiCo attempting to consolidate into TBWA/ChiatDay and Arnell Group. While it’s critical to consolidate cost you cannot consolidate creativity.

Who should be the CMO’s lead agency partner? All too often we assume it’s the advertising agency, but in a recent survey by Verse Group and Jupiter research over 60% of the CMO’s and marketing managers surveyed said that traditional advertising and brand positioning are not as effective as they used to be for attracting customers. The problem defines the solution and the CMO needs a media agnostic partner.

Systems for ROI

Without non-financial goals your ship is rudderless: never has it been more important to improve the dialogue with finance. We know brands are businesses greatest assets by the rampant rise in the value of intangible assets. In 1982 the net tangible assets on the Balance Sheets of the companies comprising the S&P 500 accounted for nearly 90% of their value; by 2005 it was just over 20%. Therefore, to enhance the CFO’s cogitation about marketing’s value, we need tools and measurements that are more robust. Current methods of ROI using marketing-mix models that rely on econometric analysis have their drawbacks: working closer with the CFO will yield a better result, including how to incentivize and reward agency partners.

Style of marketing communications

The full force of marketing: advertising, branding, digital, direct marketing, innovation, media, mobile, public relations and retail are awesomely powerful. Which ones should be used by your brand depends on the brand ambition and what approach will deliver it in a compelling and engaging way that provides consumers a reason to participate.

Misconduct by big brand names and shifting consumer behavior has changed the perceived value exchange between brands and consumers. This has created many opportunities for brands to hold entirely different conversations with the consumer with new methods of approach that enable customers to better connect with the brand. It used to be the 4P’s (price, product, place, promotion) now it’s the 4C’s: content, community, commerce and consumers.

Staffing the marketing operation

Today, your people are understandably scared. Building trust that has clear meaning to your teams and agency partners requires delivering short-term actions that can take the CMO’s attitude deeper into the relationships.

To reduce headcount and retain the best people, the CMO needs to focus internally on the human aspects of the business. There are many sources of internal motivation. Brand experiences are personal, so organizations can’t dictate them, but they can optimize their control and flexibility. The CMO is the key to a successful staffing strategy as they set the example on how they’re going to build the business going forward and concomitantly build the culture? Probably the best tool for retaining stars and reducing head count is “The Vitality Curve” as it prioritizes the top 20% for special treatment, 70% for training and the bottom 10% for firing.

Skills required for brand next

CMO’s are demanding the same marketing performance for 60% of the dollar investment and finding the resources for growth is extremely arduous. Recent studies suggest that as marketers seek to generate more “earned media” from marketing budgets, brand narratives, non-traditional media and innovation will play a central role, but there’s a skill gap between need and capability.

The majority of CMO’s have difficulty managing their brand across multiple platforms. Having the wrong skills in the team is like having a loose fitting part flailing around in a machine: not only will the engine not run well, it could eat itself up. Ultimately, new skills are required both within the marketing operation and with agency partners as ever more complex marketing programs are designed that integrate traditional and non-traditional media.

Hard facts are stubborn, but what ought to be can be with the means to make it so. The success of contrarian marketing strategies requires CMO’s to vitiate prevailing marketing theories and the experts we respect and embrace experimentation. Finding the winning hand in this 7-S Framework makes a royal flush. There are very few things in business that pay off by waiting and the CMO needs to separate appetites from real requirements. This begs the question: what’s your growth strategy? As Mr. AG Lafley, P&G’s CEO would tell you, “When times are tough, you build share.”

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