Digital Transformation is evolving the role of the CMO as we know it
A CMO’s primary focus used to be to help manage a team’s ability to build effective strategies across multiple traditional and non-traditional marketing channels. The goal was to help guide the consumer through a static and highly-structured path-to-purchase; until the customer took over and ushered in the digital transformation age.
In the wake of this revolution, we’re seeing more time and resources spent on digital engagement— to the tune of over $2 trillion invested globally. Yet, only 18% of organizations are seeing a significant return on these investments.
It’s an exciting but constantly changing landscape, and as new platforms emerge, the CMO’s role has become increasingly important.
They’re tasked with finding new and better ways to engage with customers to meet their growing, ever-evolving demands— and that’s true across all industries and across all brands. Today, if you don’t know your customer’s name and purchase history, you’re already behind the curve.
Adapt or be left behind
Today’s CMOs face significant pressure from presidents and CEOs to realign existing strategies to accommodate a consumer-driven marketplace. But often, there is an unrealistic expectation that they do so under the old “brand first” strategies.
The truth is, unless companies adapt to the new consumer-first reality, they’re just planning for obsolescence. And increasingly, it’s the CMO’s job to lean in and lead forward towards the digital transformation that will keep the company’s economic, brand, culture, and growth strategies alive and thriving.
So as their role evolves and adapts, CMOs must also redefine marketing and sales approaches internally, reframing them in light of real-time marketing, dynamic content, and one view of the strategic customer models.
It’s not enough to illustrate the digital transformation example from within their own team. CMOs must generate company-wide buy-in from finance to IT and HR functions. Because CMOs already have the right mindset and know-how to leverage up-to-the-minute trends, customer feedback, and AI-driven customer models, they’re best positioned to earn that crucial buy-in.
And if they don’t spark a company-wide digital transformation? Almost guaranteed, the market share they’re after won’t materialize. Eventually, they’re likely to find their job and everyone else’s on the chopping block.
Research from Accenture shows that 75% of consumers are more likely to make a purchase from a company that knows their name and purchase history and recommends products based on their preferences.
What you’re up against as a modern CMO
#1 What’s in a name?
A lot, as it turns out.
Successful organizations add job titles like Chief Digital Officer, VP of Digital Experiences, and Chief Digital Strategy Officer to spark and advance the internal digital transformation that informs and supports an effective marketing strategy.
And though the titles themselves are ever-evolving and changing, they nonetheless clearly delineate an organization’s intent to put people in charge who can drive digital transformation.
And it’s the CMO’s job to work with these people effectively and to connect them in ways that cultivate a healthy ecosystem for transformation. The CMO tends to be the lynchpin of just about every significant area in the organization.
So once again, they’re best positioned to work with these relatively new roles to advance digital transformation and allow it to seep into all other areas of the organization.
#2 Communicating the message
If the CMO is the keystone for digital transformation, it’s incumbent upon them to communicate the need for a positive transformation in digital strategy to the entire organization. And this isn’t easy to do either.
Only 10% of CMOs currently believe they’re seeing successful digital transformation across all other critical areas in the organization, and research indicates fewer than 25% of successful transformations in strategy and culture bleed into other areas like economics and processes.
But the reward for such cross-pollination is extraordinary. Statistics prove that only a small number of organizations are succeeding digitally (about 18%). They are reaping the lion’s share of return on their investment (about 60%) across 26 key metrics.
This kind of ROI year-over-year translates into enormous gains and leaves the remaining 72% of siloed organizations who haven’t been successful in digitally transforming a distant blip in their rearview mirror.
McKinsey reports that top-performing marketers met more frequently with other parts of the business to create and deliver customer experience journeys.
The three truths about the future of the CMO
Truth #1: The customer is changing, is driving change, and is as demanding as ever
Customers want to be seen and heard and, perhaps more importantly, understood. More than ever before, successful companies must have a deep-level understanding of their customer’s consumption patterns and communication styles.
They must know when customers visit their website, the location of the customer, and which digital device they’re using when they engage. They must be able to communicate with consumers instantly, piggybacking on breaking news and hot trends.
Because customers know they can get whatever they want, whenever they want, so you’d better be prepared to give it when they ask for it— in a highly personalized way.
Digital transformation strategies allow organizations to create the highly-personalized customer experiences that consumers now view as an expectation, not a luxury. And those organizations that aren’t currently leveraging customer data and feedback to deliver one-view-customer-driven experiences are making a very costly mistake.
In 2022, CMOs will be as responsible for culture change as Chief HR Officers.
Truth #2: Technology will disrupt
AI has (literally) superhuman capabilities marketers use to foster personal relationships with customers and grow their customer audience. No human brain could possibly process the amount of big data that AI-driven systems can, and marketers rely on this technology to deliver the laser insights they need to gain and retain customers.
Today’s marketers are using AI and machine learning to “listen” in on conversations their customers are having on social media, tapping into keywords, brand mentions, and specific phrases.
They’re using AI and machine learning to optimize promotions and create and deploy content. And they’re even leveraging technology to track conversations around gaps in their competitors’ product pledges to lure customers away from them.
And now customers expect AI to power customer service interactions, with some customers even preferring it to human interaction for simple things. Machine learning apps like chatbots and virtual assistants have made self-service common and can simulate human customer service interactions with relative fidelity.
With the advent of AI, machine learning, and big data, customers can get the precise help they need whenever they need it.
If digital transformation is nearly synonymous with personalized customer experience, companies must take advantage of AI, machine learning, and big data to compete and stay relevant in the marketplace.
According to Accenture’s data, 33% of consumers who ended their relationship with a company last year did so because the experience wasn’t personalized enough.
Truth #3: Everyone needs to believe
Optimism that runs through a company’s culture and DNA is a massive driver of future results. And that’s no less true as it applies to the CMO function. If the goal is company-wide adoption of digital transformation, it’s the CMO who must drive the vision, and that means leading with optimism to breakthrough inevitable resistance and deadlock outside the marketing function.
As we’ve said before, this is no easy feat. It requires effective communication across all business units. The CMO must be willing to evangelize digital transformation and why it’s crucial to the company’s future. If people don’t believe it’s necessary, they won’t buy in, and companies have to get buy-in if a transformation has a chance to succeed.
According to Gartner, all customer service interactions will be handled solely by AI in 2021, and Forrester reports 63% of consumers are satisfied getting service from a chatbot, providing they can move the conversation to a human interaction for more complicated solutions.
How the modern CMO can start now
Contrary to western culture’s attitudes towards failure, CMOs at digitally thriving corporations encourage a culture of experimentation and adjustment, focusing on the learning process rather than calling out mistakes and lecturing on how to avoid them.
CMOs must be willing to view mistakes as important data generators with the ability to provide unique insights about how things can be done better.
Reaching out to customers and partners in regular monthly or quarterly calls can shed light on their experience and perspectives, which often provides participants with valuable data on which experiments might be most fruitful going forward.
Again, the idea is to focus on what’s been learned, not necessarily on the results. This is because digital transformation requires a culture of co-creation and enthusiasm for experimentation.
Be the change agent
Co-creation and collaboration are strongly correlated with digital leadership, but they need fuel, and often that means celebrating wins across all functions.
Digital leaders are reporting on key initiatives, new products and services, and evolving customer needs across all company units to foster deeper digital connections both internally and externally. So, when a win happens, everyone celebrates.
It’s the CMO’s job to model what it means to thrive digitally through collaboration, to dig for wins, and encourage their celebration.
Provide the most value
We can’t emphasize enough how vital and central is the role of the CMO in digital transformation. To be a compelling evangelist, a CMO has to be the primary subject matter expert, and everyone else in the company must view them that way.
One effective way to accomplish this is to produce content for colleagues to educate and share the insights that are gained weekly. The material shouldn’t necessarily be focused on marketing results but on the crucial lessons learned and new ideas generated as a result of sharing ideas across seemingly unrelated functions.
