HBR :Jake Sorofman | 10:00 AM July 28, 2014
If you’re a mid- or late-career marketer, chances are your job today is mostly unrecognizable from what you signed on for. Perhaps no other business function has changed as dramatically over the past decade.
Why? Following a silent coup, the coronation is complete: the customer is king. With an abundance of information and choice, customers now guide their own self-directed decision journey as they traverse connected experiences that blur the lines between physical and virtual and scramble marketers’ signals for targeting.
Many marketers are left behind, simply tuned in to the wrong frequencies. In response, capturing the right data has become the key capability in finding and engaging audiences. But data, alone, isn’t enough; search and social marketing, for example, are content hungry disciplines. Marketers must also become publishers.
For marketing leaders, this has forced some serious soul searching on how to meet these challenges. Last April, I wrote “The Rise of the Digital CMO” to lend some perspective to this exercise. Subsequently, Gartner turned this into an ongoing research series designed to identify the patterns and exemplars behind the chief marketing officer (CMO) transformation — in effect, what digital CMOs do differently and what they look like incarnate. We found that digital CMOs do the following things better than their peers.
1. Shift from finding customers to getting found
The best digital CMOs don’t just shout from the hilltops, demanding attention on their terms. They orchestrate content marketing tactics that situate their brands at the moments that matter to their audiences. They do this by publishing brand-aligned, but audience-centric content that inspires, delights and, most importantly, engages customers on a self-directed decision journey where earnedand owned often trump paid.
Hubspot CMO Mike Volpe is an exemplar of this pattern. He and his team publish a daily diet of blog posts, ebooks, infographics, videos and other content that lend insight to the digital marketing discipline. In doing so, Hubspot has become a go-to destination for insight on this topic. American Express does this, too, with its Open Forum site, which publishes editorial-style content for managers and operators of small and mid-sized businesses. Both of these are examples of brands that look and act like publishers, not carnival barkers.
But, as Hubspot’s Volpe says, it’s rarely just one thing alone that works well — it’s the right blend of activities. Inbound is about grassroots experimentation. Without proper measurement, these varied activities can turn into a fragmented mess.
Today, customers are inundated by pleas for their attention. As a marketer, the onus is on you to meet these customers on their terms with something of extraordinary value. That’s how your brand gets found.
2. Shelve the commercial pitch in favor of authentic storytelling
Digital CMOs have moved well beyond better-faster-cheaper; problem-solution-impact; features, feeds and speeds; and other self-referential brand-forward conceits, which are now rejected by audiences like a foreign body in the bloodstream. Instead, they tell stories — and, most importantly, they find others to tell stories for them.
These stories often follow the traditional narrative arc of exposition, rising action, climax, falling action and resolution. These stories are told with images, video and data. They inspire. They enlighten. They amuse.
Tami Cannizzaro is a brand storyteller. As IBM’s VP of marketing for social business, Tami leads a team that uses IBM’s celebrated “Smarter Planet” theme as the baseline for selling software. She says, “We’re not selling software, we’re building a smarter planet.” Nike marketing doesn’t sell footwear so much as it sells an aspirational point of view. Nike tells stories that ask audiences to reach for their personal best. National Football League franchise Atlanta Falcons’ CMO Jim Smith asks fans to “Rise Up”—and they do. To sell carbonated beverages, Coca-Cola tells stories designed to inspire nostalgia and happiness. More importantly, they ask consumers to tell their story on their behalf by cultivating user-generated content.
According to IBM’s Cannizzaro, today, people’s perceptions of the IBM brand are more likely to be formed by their community, not the message coming from IBM. The best digital CMOs now get this intuitively.
3. Break through silos to erase seams between channels and experiences
Digital CMOs recognize that customers are channel-blind. Channels, after all, are an artificial construct designed, first, to support corporate goals and organizational structures; and, second, to support the needs of customers. Today, customers expect the inverse: brand interactions that hide the seams between channels, where stories, experiences and services serve their needs first and the brand’s second.
Sharon Osen, SVP of global marketing at Swiss luxury beauty brand La Prairie starts with the customer, developing customer archetypes and personas that guide the design of multichannel experience that deliver on real customer needs. This begins with a deep understanding of customer habits and preferences, and how La Prairie can add value in their daily lives. Beauty retailer Sephora blends in-store and mobile channels to create ensemble experiences that make shopping easier and more engaging.
But La Prairie’s Osen makes it clear that the goal isn’t transformation for its own sake. She says it’s about enhancing brand experiences customers have come to expect with new digital extensions.
4. Use data to target precisely and measure relentlessly
Digital CMOs have learned to “close the loop,” turning their marketing efforts into a data-centric, performance-driven discipline. Here, the goal is to trace the thread from investments to outcomes, directly attributing marketing dollars with business outcomes. These CMOs use first- and third-party data to target contextually relevant offers and experiences guided by predictive analytics and algorithms that learn and adapt as customers traverse a meandering purchase path. These marketers then close the loop by combining this data-driven targeting with a process for continuous measurement. The result is a performance-driven discipline where marketing investments can be optimized to highest yield.
eBay’s CMO Richelle Parham is an example of a performance marketer. Her company collects more than 50 petabytes of data a day that it can use to target offers and experiences. For example, products that were browsed but not purchased become an opportunity for remarketing and the insight for collaborative filters in the form of recommendations that aid — and guide — customers’ decision making.
But, Parham warns, if this sort of personalization is handled clumsily, it can be intrusive. She’s right. Personalization can cross the line to creepy. Her advice is to balance head and heart: “In the end, we’re selling to human beings. To drive behavior change, we need to understand who the customers are and what they care about.”
5. Experiment aggressively, and challenge business model assumptions
Digital CMOs are agile marketers who embrace the mantra “test and fail to learn and scale.” Gartner finds that, today, 83% of enterprise marketing organizations have an innovation budget that reflects, on average, 9.4% of marketing spend. What do they use this for? Exploration. Experimentation. Learning by doing in recognition of the fact that sustainable competitive advantage is a quaint vestige of another time. These CMOs seek to create pipelines of innovations that they test and validate in rapid succession.
Delta Airlines, for example, has applied this technique to its websites, kiosks, in-flight Wi-Fi and entertainment, resulting in what it describes as a holistic set of touchpoints that inform the customers’ opinion about the brand. Here, a series of continuous experiments guide innovations that improve customer experience. The results? A 20-second reduction in kiosk check-in times, a substantial increase in check-ins via digital channels and improvements in overall customer satisfaction and brand sentiment.
But digital CMOs can’t go it alone. Digital CMOs need to hire the right people to lead and execute. As my colleague Laura McLellan and Scott Brinker wrote in their July-August 2014 Harvard Business Review article “The Rise of the Chief Marketing Technologist,” Gartner finds that 81% of enterprises have a chief marketing officer in place today, up from 70% last year. Seventy-seven percent have a chief customer officer as the primary advocate for the customer and final arbiter on customer experience. Forty-eight percent of the time, this role reports into the CMO, which supports yet another finding: the CMO is on the rise in strategic importance.
Other roles to watch: data architects, corporate journalists, data storytellers and chief content officers. They are all emerging to fill the gaps that stand between marketing from a decade ago and marketing for today.
A year later, digital CMOs are still on the rise. Only now, their secrets are coming into focus.
JAKE SOROFMAN
Jake Sorofman is a research director with Gartner for Marketing Leaders, from Gartner, Inc.
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