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The Future CMO – what is on the CEO’s mind with regard to marketing?

Marketing executives and management, referred to in the following as “Chief Marketing Officers” (or “CMOs”), face increasing pressure to take action: growing customer demands, the trend towards individualization, Web 2.0, and social media create a complex situation that makes the orchestration of all customer interactions in terms of a “total customer experience management” absolutely necessary. While how to attain the best possible efficiency potential in the customer relationship has already been intensively discussed under the heading of “CRM” in the field of sales and service for the last 15 years, this development is also now increasing in the area of marketing. In particular, the contribution of marketing to a company’s success and the associated costs are being questioned increasingly. In part, fundamental omissions are being cited as the reasons for the perceived failure of many CMOs, for example, minimally accurate and hardly transparent marketing planning, and above all, the contribution of all of the CMO’s activities to a company’s success. What appears to be an inevitable evil is in fact avoidable and can be converted into a sustainable process for success. Instead of wailing and lamenting, modern CMOs should instead answer the question as to how they are judged from the point of view of the Chairperson of the Board or Managing Directors (the “Chief Executive Officer,” or “CEO”) as their superiors, which actions are acutely required, and which measures and steps will improve the current situation sustainably. A survey we conducted during Summer and Fall of 2009 of 21 CEOs from large and midsize companies showed that CMOs should underline their contribution to the company’s success effectively, transparently, and traceably by pursuing activities in eight spheres of action – in parallel to generating attention-grabbing campaigns.

The interviews have identified the following overarching guiding principles and success factors for the work of the CMO and his or her key areas:

  • A. Marketing management skills (interdisciplinarity)

For the CMO, the efficient use of every potential primarily requires a high level of interdisciplinarity across campaigns and projects. Increasingly, functional boundaries and silos between the traditional marketing area, the dialog marketing area, and a separate online marketing area are proving to be counterproductive. The goal must be to use interdisciplinary projects to orchestrate teamwork both horizontally (advertiser – agency – production) and vertically (traditional marketing – dialog marketing – online marketing). Increasingly, not only the employees involved but also the relevant CMO requires a combination of marketing and management competencies.

  • B. Value creation and profit orientation

“Hard” financial key figures, which are part and parcel of a company’s success, and are aligned with longer-term business planning, are always central to all medium-term tasks performed by marketing managers. For this reason, marketing must add real, measurable value and make a transparent contribution to the overall business value.

  • C. Value chain integration and interlinking

Successful CMOs focus on implementing an integrated marketing approach across different functional areas. However, integration across the entire value chain is not just restricted to internal processes. It also connects, as much as possible, external business partners (for example, agencies and trading partners) via a network. Consistent implementation and thinking along the lines of Marketing 2.0 concepts abstract from suboptimal departmental and traditional functional responsibilities, the old “silo thinking.” Moreover, practically all business areas involve customer interactions – right up to the financial level, for example, when creating invoices that should also contribute in terms of quality, timeliness, content, and design to the brand values.

  • D. Combination of core competencies with innovative applications and channels

Long-term success largely comes down to combining core competencies in traditional business areas with innovative applications or business models by using Web 2.0 and social media. Most companies surveyed have already succeeded in establishing structures, expertise, markets, and customers in their offline operations. For these companies, it is often a rash and unacceptable recommendation to move predominantly into virtual spheres, possibly while neglecting established core competencies. As expressed by one CEO: “It’s all in the mix.”

The interviews and discussions within the CMO community, along with case studies and the authors’ own project experiences, repeatedly show that these guiding principles can be operationalized further by means of a two-level modular concept. The content of this concept, its key areas, and the modules are described below as “Marketing 2.0.” CMOs can use this concept to free themselves of the need to provide evidence and to gear their own organizations towards incorporating Web 2.0 and social media into their marketing strategies. The operational modules within this concept represent possible key areas, initiatives, and projects that can be handled alongside day-to-day activities. They can ultimately help CMOs to gradually make the transformation to “marketing of the future”:

  1. Building Block: Marketing tasks and competency model
  2. Building Block: Marketing planning and marketing mix optimization
  3. Building Block: Innovation management
  4. Building Block: Process management 
  5. Building Block: Total customer experience management and loyalty management
  6. Building Block: Performance tracking (KPIs) 
  7. Building Block: IT applications: Interviews and project examples show that the CMO should have, at the very least, a basic under-standing of the concepts and possibilities associated with modern marketing application systems.
  8. Building Block: Web 2.0 and community management

The modules presented here overlap many times. Their full potential is frequently realized by combining them with other modules and building blocks. For example, a systematic analysis and improvement of all processes is essential for total customer experience management, which in turn requires systematic customer data management in IT applications. Don Peppers, one of the best-known thought leaders in CRM and marketing, gives the following advice to all CMOs: “Turn your organization and processes upside down. Hire pierced and tattooed 20-year-olds who do not seem to be the best fit for your organization. Furthermore, whenever you plan, always remember the following: The future is already here. It just hasn’t been evenly distributed yet.” Today more than ever, the success of a CMO is measured by his or her ability to discover the future for his or her company and area of responsibility.

Further interesting readings:
– Strauss, R.E.: Marketing Planning by Design. Systematic Planning for Successful Marketing Strategy, London: Wiley & Sons, 2008.
– Strauss, R.E.; Schuricht, U. S.: The Future CMO – 8 Building Blocks for Success, Thought Leadership Paper, CMO Community, March 2010.

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