The IBM CMO Study: Change, Measured Objectively
Wes Simonds 120000EFD6 email@example.com | | Tags:  study capabilities behavior data return brand on chief cmo simonds smarter wes understand netflix ibm stewardship marketing customer heller analytics investment values officer roi carolyn software capability baird
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Customers of the world, unite! Recently I was discussing high tech with my mother, who continues to hold out hope that computers are only a fad. I can't blame her. First impressions are powerful, and her first impressions of high tech came from statistical analyses on a university mainframe using an interface of…punch cards.
Even so, I continue to tell her that modern tech has its selling points.
Recently, for instance, I've pointed out how, because of the Web, consumers like her are way more powerful than they used to be. In the past, consumer feedback was, at best, a faint melody, heard dimly by business leaders. Today, thanks to the Web, that melody is routed through a 100-watt Marshall guitar amplifier, and it is loud enough to blow down the doors of companies that get things wrong.
Want an example? Ponder the case of Netflix.
In 2010, this company was a darling of the movie-watching public. But in 2011, thanks to a string of PR and pricing mistakes that were echoed instantly all over Twitter, Facebook and the Web generally, Netflix has lost close to a million subscribers. Its stock is sinking, down about 75 percent just since July.
But for Mom, it's great news -- it means that if she complains, companies are a whole lot more likely to sit up and pay attention.
CMO: Does the C stand for Chief these days? Or Customers?
It was with this context in mind that I recently had a chat with Carolyn Heller Baird, the CRM Global Research Lead at the IBM Institute for Business Value. Baird is the global director for a recent IBM study that tackled a lot of the most important points in this area -- how things are changing for CMOs, what kinds of problems they're facing that they never used to face before and how the smarter ones are coping and even thriving.
More than 1,700 CMOs were queried about this stuff on a sit-down, face-to-face basis, each for an hour. And there was, in addition to that impressively large data set, a lot of diversity among the CMOs; the organizations for which they were CMOing spanned 19 different industries and 64 countries.
So given such a broad spectrum of info, I expected the study's conclusions to be both powerful and far-reaching. They were. I was not alone; check out other reactions at the CMO site.
‘Clearly, the role of the CMO is evolving beyond just being the go-to person for brand stewardship and relationship with ad agencies,’ said Baird. ‘In this digital age, CMOs need to play a far more strategic role across the whole enterprise. They need to be more tech-savvy, and more dynamic in the way they use the insights they get from that tech.’
So, for instance, there is the question of data analytics. What I was expecting to hear from Baird on this subject was something like this: ‘organizations need to do a better job analyzing their information to create user value.’
But the story I actually heard was much larger than that. It turns out that CMOs need to acquire more kinds of information, from more sources -- including Web 2.0 sources. And they need to leverage it much more extensively than I would have imagined.
‘Anything that comes out of advanced analytics that allows CMOs to not just capture traditional customer data like sales figures, but also understand what people are saying through social media would be a major step in the right direction,’ said Baird. ‘This way, they can get their arms around what's going on in the blogosphere -- in real time -- and actually turn that data into meaningful insights they can act on.’
Baird also pointed out that these customer insights can be directed internally. To wit, they can inform not just obvious marketing platforms like online ads, and not just obvious business policies like what to charge for different kinds of services…but also subtler-but-still-important internal things. Like how their company’s unique values are understood by the outer world, and how this impacts the brand. .
‘Values, like everything else these days, are very transparent,’ Baird told me. ‘So it's critical that an organization’s policies and practices – how it behaves – demonstrate its value system and that these jive with the values customers think are important. Those values are propagated throughout the organization in all kinds of ways - everything from how retirees are treated to a company’s environmental policy is now a matter for the CMO because of the impact it has on brand perception. Most CMOs recognize this is an area where there is major opportunity for improvement.’
Value propagation? Wow. That is certainly way, way outside the scope of what I would normally have considered a CMO's job description. But I really like the sound of it. I bet my mother would, too.
Track and improve your ROI -- and not just in the ways you'd think
Another major aspect of the way life-as-CMO is rapidly evolving lies in ROI. Not ROI in the way you'd imagine by default -- not ROI of this campaign or that ad agency -- but ROI of a much more personal type to a CMO and related investments.
This is a critical question: How much return is the organization actually getting from its investment in what the Chief Marketing Officer spends?
It turns out that this is another major strength of advanced analytics capabilities. Beyond helping the CMO understand and connect with customers, develop new strategies, verify that the right internal values are in place and propagate those values in many ways, they can also help quantify the value of the CMO’s marketing investments.
And that's a major issue for today's CMOs, who according to the IBM study, are more financially accountable for their decisions, and the success of their strategies at every level of abstraction, than they've ever been before. Some 63 percent of the study respondents said they think marketing ROI will be the most important measure of success over the next three to five years. Sixty-three percent! That's almost two-thirds -- a number that, in a political election, would be considered an historical landslide.
Obviously, those CMOs are going to need some help not just in tracking ROI, but also in improving it rapidly when it's not what it should be. And that means new analytics solutions specifically aimed at enterprise marketing.
In fact, software solutions of this type can go beyond even that. They can actually perform the same function -- ROI evaluation -- for themselves. This struck me as particularly cool: software capabilities that not only do new things that help the organization, but also prove they've helped, in concrete terms. Imagine if every other asset you had did that!
So given this perspective, it seems to me that IBM's acquisition of Unica -- positioned by Gartner in the Leaders Quadrant for CRM Multichannel Campaign Management -- was not just a good idea, but also rather far-sighted. That acquisition in 2010 directly addressed the life of the CMO today, a full year later, as revealed by this study.
And it also seems to me that if you're a CMO and the challenges I've been describing sound familiar to you -- possibly even intimidating -- you might want to give IBM Unica solutions a close look.
Either way, I pose this question: What kinds of marketing challenges are you facing these days, and what are you doing about them?
(Seriously, let me know. Because customer feedback is important to me.)
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