The marketing industry has experienced several years of rapid-fire, fundamental changes. From the growing importance of social media and customer centricity, to the emergence of real-time analytics and marketing, to the influx of more customer data than they might know what to do with, few stones remain unturned.
Now, as 2014 approaches, CMOs can leverage early lessons learned and start to make some key organizational adjustments.
CMO.com spoke to corporate marketing leaders and experts about the most important ways CMOs can get their houses in order for the upcoming year. Ten themes emerged.
1. Tear Down Marketing Silos
If there’s one thing CMOs should do to prepare for 2014, said David Cooperstein, vice president and marketing practice leader at Forrester Research, it’s to get rid of marketing silos altogether. “Eliminate the word ‘channel’ as the definer of a person’s job,” he told CMO.com. “If someone said I’m a mobile marketer, they’re fired.”
Instead, reorganize around customer segment. “You can have one group that targets Millennials, that understands what the Millennial customer wants, and then figures out what channels to use to meet those needs,” Cooperstein said. CMOs will also need to seek out agencies and third parties with a similar approach.
At Mindtree, an IT service provider, the distinction between digital marketing and traditional marketing is going away. “For 2014, it is crucial that every marketing person be both ‘old school’ and ‘new school,’” said Paul Gottsegen, chief marketing and strategy officer at Mindtree, in an interview with CMO.com. “The trap that marketing people in our industry have generally fallen into is the concept of overspecialization. Content and digital are now completely pervasive. Everyone on my marketing team will be pushed hard to be rock-solid in both skill sets.”
Integration will be the name of the game in 2014 for ADT Security Services CMO Tony Wells. “It’s critical that all of our disciplines—digital, PR, social media—all work with a singular focus,” Wells told CMO.com. “A lot of people talk about that, but it’s very, very difficult to do.” As CMO, Wells said his job will be to make sure that everyone—inside and outside of ADT—knows of his expectation for an integrated approach, from start to finish, and to check in at key points in time with all disciplines to make sure that’s happening.
2. Get Strategic About Sourcing
Most marketing organizations are long overdue for a strategic assessment of what should be done in-house and what should be outsourced. Often CMOs simply carry on the sourcing decisions they inherited. “A lot of times those decisions were not based on what would be most effective, but rather on ego,” said Kimberly Whitler, marketing instructor at Indiana University's Kelley School of Business.
For example, at David’s Bridal, where Whitler was previously CMO, all creative was kept in-house because that’s the way it had always been done. At another company, Whitler said, the decision was made to create an internal analytics staff in marketing. The team was quickly staffed, but none of its projects was proceeding as quickly as promised. “We never stepped back and said, ‘Is this company—a top retailer—really good at analytics? Is this our company’s core competency?” Whitler told CMO.com. “At the end of the day, we would have been better served by outsourcing to someone who knew what they were doing and learning for them. But we committed all-in. And it cost us years.”
ADT’s Wells just signed deals with three new agencies that will better support his organization’s goals for next year and beyond. “The key takeaway for me has been the importance of getting greater alignment with agency partners to make sure you’re headed in the same direction,” he said.
This time around, those partners will receive performance-based incentives for helping the marketing groups achieve stated business goals in areas such as sales, demand generation, and brand awareness. “The marketing function is certainly under more pressure to produce ROI and explain where our investments are going, and agency partners are beginning to feel some of that same pressure,” Wells said.
3. Hire For Attitude, Not Aptitude
Forrester’s Cooperstein noted a new trend in hiring practices. “We’re seeing marketers start to hire for not just an explicit skill set, but be willing to invest in people who can approach or apply things in a different way,” he said.
Instead of seeking an e-mail marketer, for example, a CMO will look for someone who gets customer experience or attribution. If they need data skills, they may not hire a data scientist per se, but someone with an appreciation for data and the ability to engage data analysts.
In some cases, they may be willing to take a chance on those who don’t have 10 years of experience in an area, but clearly have a willingness to collaborate or work across boundaries. “Attitude is an important piece of it,” Cooperstein said. “A CMO may seek out marketers willing to be entrepreneurial, for example—those that are willing to make changes rather than live in the world of the past.”
In order to do that, marketing and HR leaders must collaborate to come up with new questions and criteria for the hiring process.
4. Rethink ROI
According to Chris Hewitt, vice president of marketing and communications at Abrazo Health Care, marketers tend to “fixate on finding causal relationships between our efforts and true organizational KPIs, such as revenue, profitability, and growth.” The reality, he said, is “that our efforts play across a broader spectrum of attributable success. Rather than debate with our CFOs about the nuances of ROMI, we need to embrace the realities of our markets, our work, and how that relates to bottom-line success.”
Getting to that point will be tricky, but Hewitt told CMO.com he plans to start by asking some simple questions of his team during budgeting, forecasting, and modeling sessions: When we say something was successful, what are we measuring? If we spent one more dollar in that “successful program,” would you guarantee we’d get back the stated return? When, relative to the investment, would we see that return? “It’s just a start, but it begins the conversation to determine the attributable mix of your efforts,” Hewitt said. “This dialogue will, over time, focus your team on investing on what you control and influence and not chasing what was decided by outside forces.”
5. Embrace Data
Much of marketing, even its creative aspects, is driven by data, said David Edelman, principal in McKinsey’s marketing and sales organization. “Now is the time for CMOs to be more thoughtful and get ahead of their data needs instead of shooting from the hip,” he told CMO.com.
Figuring that out in the abstract is hard to do. But marketing leaders can, say, simulate a new product launch, figure out how data would fit into it, and use that knowledge to drive new investments and strategies.
At growing ski resort operator Vail Resorts, for ecample, data is increasingly critical to marketing. That’s evidenced in the organization’s recent guest persona-mapping project that categorizes customers not based on what they do, but who they are—whether they’re luxury-driven, family-oriented, or passionate skiers. CMO Kirsten Lynch told CMO.com she relies on the expertise of marketing’s small analytics and CRM team, but looking ahead she wants everyone in her 500-person sales, marketing, and PR team to be data-literate. “It’s something that that the whole organization has to understand in order to leverage it,” she said. “They don’t have to be specialists, but they do have to know what to do with it.”
At technology company Citrix, senior vice president and CMO Steve Daheb is evaluating emerging big data tools, an area that’s already reaping rewards for the company. This year, the company saw a 30 percent jump in lead conversion as a result of big data analysis to personalize customer communications.
“In the last two to three years, the pendulum has swung from brand marketing to an overt focus on analytical marketing to acquire, convert, and retain new customers,” said Deborah Op den Kamp, CMO and executive director of digital consumer practices at executive recruiting firm Russell Reynolds Associates. That means hiring more Ph.D. number crunchers and fewer brand marketers.
“In the coming year, successful CMOs will figure out how to reintegrate great brand storytelling—a priority of old—with innovative, analytical marketing to engage and provide an emotional connection that resonates with consumers who are becoming increasingly immune to the sharper-edged analytical marketing tactics, like retargeting and couponing,” she told CMO.com.
At Abrazo Health Care, Hewitt is creating a critical new role that is part marketer, part architect: the “marketect.” “One of most consistent and pervasive impacts to marketing effectiveness is the friction between concept, plan, and technology. With all the tools and media we’re working with, marketing can become a nasty, knotted tangle of extension cords,” he said.
Hiring a marketing leader with a multidisciplinary understanding of technology, data, analytics, process, and marketing knowledge can help to unravel the mess. “This is an innovator who builds efficiency through automation, increases effectiveness through optimization, and finds opportunities in our data,” Hewitt said. “Critically, this person is a marketing diplomat that can speak fluently with our colleagues in IT.”
6. Get Cross-Functionally Fit
To prepare for the challenges of 2014, marketing leaders are forging and strengthening their cross-functional ties—from sales to IT.
Mindtree’s Gottsegen is rededicating his team to nurturing promising leads for the sales team all the way to fruition. “That sounds obvious, but sometimes marketing needs reminding that driving the sales pipeline is the only job we have,” Gottsegen said. “Whether someone on my team is directly embedded in a business unit or a few steps removed—for instance, doing employee branding—it all ladders up to that singular goal.
“What is becoming clear is that the wall between sales and marketing has come down,” agreed Nick Halsey, CMO of technology company Keynote Systems. He told CMO.com that he is also gearing up to introduce new marketing automation software to be able to do more without increasing headcount and integrate that with the rest of marketing’s IT infrastructure.
That will require a much closer relationship with the company’s business systems group. “They have a basic knowledge of marketing, but that’s the partnership we have to build,” said Halsey, who set up workshops this fall for sales, marketing, operations, and business systems to map out their joint business processes and strategies. “We want to make sure all members of the cross-functional team are there and sharing.”
CMOs should forge similar bonds with other critical functions, such as the call center or branch operations. “Marketing doesn’t need to own the call center or branch operations,” Forrester’s Cooperstein said. “But they do need to engage with those executives because the brand experience is so exposed there.”
7. Cultivate Risk Takers
Lynch of Vail Resorts is looking for new and innovative ways to wow the company’s guests. But to do that, the marketing organization needs to take more risks. “We’ve always felt the need to be out front in reimagining the guest experience. But I’m really pushing the idea of test and learn now,” she said. “We need to be willing to take risks and learn from our failures to push the envelope and forge into new territories.”
To institutionalize that risk-taking attitude, Lynch and her senior leaders talk about the topic as much as possible, offering examples of both successes that drove the business and failures that were great learning experiences. “We want to instill a culture of openness and acceptance, encourage people to come forward with ideas, offer them guidance about piloting projects, and celebrate and highlight what is accomplished. Something doesn’t have to be a huge success to make a difference.”
Similarly, ADT’s Wells wants to push decision making down to its lowest possible level in the organization by empowering everyone to make decisions. “You have to let people know you trust them and give them the right parameters,” Wells said. “In 99 percent of cases, they’ll make the right decisions.”
8. Elevate Social Media
Even as CMOs have invested in analytics skills and promoted big data to a strategic priority, the poor social media team has continued to toil away in relative obscurity. Now is a good time to create a high-functioning social media team and strategy, said McKinsey’s Edelman. “Not just a few junior people, but people with clout thinking broadly about the social enterprise. Elevate it to a position of importance,” he said.
Social media marketing is rising in importance at Citrix, which recently launched a “Work Better” campaign that generated nearly 2 million views of three customer videos via Twitter, Facebook, and the Web. “They have humanized our brand while helping customers feel a connection to us and our vision of improving how people work,” CMO Daheb said.
While new technologies will continue to enable such marketing efforts, the best brands will ultimately be the ones who tell the best stories, Daheb said. “We are on a journey with them that involves identifying their needs, addressing those needs in our products, and demonstrating how our solutions can benefit their businesses,” he added. “Building these customers’ stories is not just a marketing function, but also a cross-functional one.”
9. Reskill Your Staff—And Yourself
Much of marketing is out of the CMO’s hands. But marketing executives do have power over is skills development. “That you can control,” Indiana University’s Whitler said. “You can do a skills gap analysis—what is my team is good at, what aren’t they good at, what do I need them to be good at, and how do I create a training program around that?”
The marketing function is changing so rapidly that skills development will be crucial for 2014, particularly in the areas of technology and data expertise. Savvy CMOs can find innovative ways to create IT-related learning experiences for themselves and their teams, Whitler noted, such as spending time in CIO meetings, taking a programming class, and spending time with systems vendors and suppliers. CMOs also should make such professional development part of performance evaluations, she added.
Wells at ADT, for example, makes sure everyone has access to training, memberships in professional associations, and budgets for conferences and seminars—and he encourages his professionals to share the best practices they’ve learned. “We’re letting everyone know that it’s important to make time for it,” Wells said.
Reskilling existing staff is especially important because many CMOs have found it difficult to fill open positions. “It’s an opportunity to train the people you already have—and it’s somewhat cheaper,” Forrester’s Cooperstein said. “Reinterview the staff and rehire them based on their ability to be more flexible. Take an email marketer and teach them a new skill or approach.”
10. Save Some For A Rainy Day
Finally, too many marketing organizations remain rigorous in mapping out their budgets for the new year. Traditionally, organizations would plan their marketing budgets to the penny so they could lock in with their desired agencies and media partners.
That won’t work in 2014. “You have to incorporate a degree of flexibility,” McKinsey’s Edelman said. “Some things may turn out to be bigger or smaller; the market may move. Give yourself room to move budgets around as need be.”
Indeed, McKinsey’s own surveys have shown that one of the key factors that correlates with marketing success is budget flexibility. CMOs should decide now how much of their budget is locked in and how much can be moved around as strategies shift. Forward thinkers will be comfortable leaving as much as half of their funds up in the air. The new age of agile marketing will require agile budgeting.