By 2020, Millennials will account for a staggering one-third of total retail spending. With the rise of these digital-native shoppers, there is a greater need for analytically-grounded, customer-centric CMOs. This new breed of marketer is able to find novel ways to generate consumer insight that is more than a 360-degree view of the customer. And this greater understanding of the customer enables the CMO to have a greater enterprise-wide impact as they use insight to transform all aspects of the customer experience, even beyond those areas that marketers typically manage. To better understand this new breed of CMO, I talked with Martine Reardon, the CMO of Macy’s and Caren Fleit, Senior Client Partner and Leader of Korn Ferry’s Global Marketing Center of Expertise. What follows are excerpts from the interviews.
Kimberly Whitler: What is the difference between a traditional CMO and the new breed of CMO?
Caren Fleit: The old guard CMO used to focus on programs and activities. In the customer-centric world, the new type of CMO is put at the center of all decisions related to the consumer’s journey, including driving awareness, the shopping experience, the online experience, the purchase experience, and the post-purchase experience. As a result, the new CMO enables the organization to better tailor products and services to create a superior experience. This can include how the product is manufactured, how employees are hired and trained, and even how products are shipped. For example, if a retailer sends out eight boxes of separate items from a single order the customer made, this might or might not be ideal for the customer. In the new world, the CMO might, for example, have data-based insight that customers who place one order only want one delivery. As a result, decision-making related to typically a logistics question could be changed based on the insight of the new breed of CMO.
So what is different? This customer-centric approach to marketing that impacts all aspects of the enterprise has been around for almost a hundred years in CPG. However, most other industries have treated marketing as a stand-alone silo, largely independent of the enterprise. With the advent of digital, big data and technology, leading firms are starting to figure out that the failure to put marketing at the center has negative ramifications for the total customer experience.
Whitler: Caren, as an executive recruiter, how do you know whether you are talking to an old-school CMO or customer-centric CMO? Examples?
Fleit: I can usually tell by investigating a couple of areas. First, how deeply connected is the CMO to the strategy of the entire organization and second, what is the degree to which their conversation reflects an understanding of their end-customer. From an experience standpoint, the new breed of CMO tends to have varied and different experiences, demonstrating that they have experience driving strategy across the company (and not just marketing). From a measurement perspective, they tend to be tied to a customer measure that is designed to create a customer advantage.
Beyond this, we have found, through an analysis, that there are traits that separate customer-centric CMOs from traditional CMOs. The new CMO tends to be highly empathetic and more cognizant of social implications (interpersonal savvy). They tend to be highly learning agile, meaning that they have an ability to adapt and apply past experiences to new situations. They also have a high tolerance for ambiguity. They need to be able to operate in a world where there isn’t complete clarity and where the environment is fluid, both internally and externally. We have found, that beyond intelligence and education, these two attributes (learning agility and tolerance for ambiguity) are more important in identifying and predicting leadership success.
Whitler: Martine, can you tell us a little about your role at Macy’s... What you are responsible for, and how are you using data to influence firm-wide decision making?
Reardon: I have a broad area of responsibility, including customer strategy (acquisition, retention, loyalty), media strategy, events (fashion, flower shows, branded entertainment, original content, theater, etc.), social (UGC, activations), marketing analytics (designating best customers, analyzing media, consumer behavior, etc.), and creative (agency and in-house). I have a team that interfaces with buyers and share responsibility for e-com P&L results with IT and merchandising.
Because my group manages the analytics group, and it’s the one place where all consumer-based data comes together, we are responsible for creating insight that can help the entire executive committee make better functional level decisions regarding merchandising, logistics, the store experience, etc. I’m fortunate to have colleagues on the executive committee who all work together to make better decisions, regardless of where the data or insight come from. As an example, we combine and analyze consumer, digital and social data to provide insight on why customers like one dress over another, or to find out about trends that might be beneficial for the merchants, or how the web experience could be improved. As another example, we have the same data for store operations and produce monthly reports about what we could do better at a store level.
Marketing is essentially leveraging data to create insight that can deliver a better customer experience. The purpose is to feed this information to the right areas to help activate the insight.
Whitler: Caren, do you have any tips for CMOs seeking to lead a more customer-centric process within their firm?
- Identify where you and your firm are on the continuum: First, understand that there is a continuum from old-school to new-school CMO and you need to identify where you are and where your firm is. How customer-centric is your organization and how customer-centric are you? Is your firm’s IT vision connected to the customer? And how involved are you in impacting all customer touchpoints?
- The CMO can’t do it alone: If your firm treats marketing as a silo’d activity, you need to realize that you can’t do this without CEO support. You can help try to facilitate enterprise-wide decision making but without both CEO and board focus, it is unlikely to have the same impact. As an example, consider a bank. If the bill is unintelligible because it is prepared without insight and input from marketing, it doesn’t matter what your advertising says about you. And this is an example where the CEO hasn’t created a customer-centric culture.
- Cultivate great relationships across the organization: However, even without CEO leadership, you can still develop and use persuasion skills. Focus on developing great peer relationships so that others invite you into the discussion. An easy way to do this is to use to data-based insight to demonstrate to a peer how a shift in a specific area can both improve his/her division’s performance as well as the customer’s experience.
For more insight on the new breed of CMO, see: The Rise of the Transformational CMO, How the Best Marketers are Using Analytics, The CMO of Sports Authority on Building a Data-Centric Organization, and Target's CMO on The Evolving Influence of the CMO
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