Tag Archives: CMO
The other day I ran across an article on CMO.com from a few months ago entitled “Total Customer Value Trumps Simple Loyalty in Digital World”. It’s a great article, so I encourage you to go take a look, but the basic premise is that loyalty does not necessarily equal value in today’s complicated consumer environment.
Customers can be loyal for a variety of reasons as the author Samuel Greengard points out. One of which may be that they are stuck with a certain product or service because they believe there is no better alternative available. I know I can relate to this after a recent series of less-than-pleasant experiences with my bank. I’d like to change banks, but frankly they’re all about the same and it just isn’t worth the hassle. Therefore, I’m loyal to my unnamed bank, but definitely not an advocate.
The proverbial big fish in today’s digital world, according to the author, are customers who truly identify with the brand and who will buy the company’s products eagerly, even when viable alternatives exist. These are the customers who sing the brand’s praises to their friends and family online and in person. These are the customers who write reviews on Amazon and give your product 5 stars. These are the customers who will pay markedly more just because it sports your logo. And these are the customers whose voices hold weight with their peers because they are knowledgeable and passionate about the product. I’m sure we all have a brand or two that we’re truly passionate about.
Total Customer Value in the Pool
My 13 year old son is a competitive swimmer and will only use Speedo goggles – ever – hands down – no matter what. He wears Speedo t-shirts to show his support. He talks about how great his goggles are and encourages his teammates to try on his personal pair to show them how much better they are. He is a leader on his team, so when newbies come in and see him wearing these goggles and singing their praises, and finishing first, his advocacy holds weight. I’m sure we have owned well over 30 pair of Speedo goggles over the past 4 years at $20 a pop – and add in the T-Shirts and of course swimsuits – we probably have a historical value of over $1000 and a potential lifetime value of tens of thousands (ridiculous I know!). But if you add in the influence he’s had over others, his value is tremendously more – at least 5X.
This is why data is king!
I couldn’t agree more that total customer value, or even total partner or total supplier value, is absolutely the right approach, and is a much better indicator of value. But in this digital world of incredible data volumes and disparate data sources & systems, how can you really know what a customer’s value is?
The marketing applications you probably already use are great – there are so many great automation, web analytics, and CRM systems around. But what fuels these applications? Your data.
Most marketers think that data is the stuff that applications generate or consume. As if all data is pretty much the same. In truth, data is a raw ingredient. Data-driven marketers don’t just manage their marketing applications, they actively manage their data as a strategic asset.
How are you using data to analyze and identify your influential customers? Can you tell that a customer bought their fourth product from your website, and then promptly tweeted about the great deal they got on it? Even more interesting, can you tell that that five of their friends followed the link, 1 bought the same item, 1 looked at it but ended up buying a similar item, and 1 put it in their cart but didn’t buy it because it was cheaper on another website? And more importantly, how can you keep this person engaged so they continue their brand preference – so somebody else with a similar brand and product doesn’t swoop in and do it first? And the ultimate question… how can you scale this so that you’re doing this automatically within your marketing processes, with confidence, every time?
All marketers need to understand their data – what exists in your information ecosystem , whether it be internally or externally. Can you even get to the systems that hold the richest data? Do you leverage your internal customer support/call center records? Is your billing /financial system utilized as a key location for customer data? And the elephant in the room… can you incorporate the invaluable social media data that is ripe for marketers to leverage as an automated component of their marketing campaigns?
This is why marketers need to care about data integration…
Even if you do have access to all of the rich customer data that exists within and outside of your firewalls, how can you make sense of it? How can you pull it together to truly understand your customers… what they really buy, who they associate with, and who they influence. If you don’t, then you’re leaving dollars, and more importantly, potential advocacy and true customer value, on the table.
This is why marketers need to care about achieving a total view of their customers and prospects…
And none of this matters if the data you are leveraging is plain incorrect or incomplete. How often have you seen some analysis on an important topic, had that gut feeling that something must be wrong, and questioned the data that was used to pull the report? The obvious data quality errors are really only the tip of the iceberg. Most of the data quality issues that marketers face are either not glaringly obvious enough to catch and correct on the spot, or are baked into an automated process that nobody has the opportunity to catch. Making decisions based upon flawed data inevitably leads to poor decisions.
This is why marketers need to care about data quality.
So, as the article points out, don’t just look at loyalty, look at total customer value. But realize, that this is easier said than done without a focusing in on your data and ensuring you have all of the right data, at the right place, in the right format, right away.
Now… Brand advocates, step up! Share with us your favorite story. What brands do you love? Why? What makes you so loyal?
I recently had the opportunity to have a very interesting discussion with Glenn Gow, the CEO of Crimson Marketing. I was impressed at what an interesting and smart guy he was, and with the tremendous insight he has into the marketing discipline. He consults with over 150 CMOs every year, and has a pretty solid understanding about the pains they are facing, the opportunities in front of them, and the approaches that the best-of-the-best are taking that are leading them towards new levels of success.
I asked Glenn if he would be willing to do a Q&A in order to share some of his insight. I hope you find his perspective as interesting as I did!
Q: What do you believe is the single biggest advantage that marketers have today?
A: Being able to use data in marketing is absolutely your single biggest competitive advantage as a marketer. And therefore your biggest challenge is capturing, leveraging and rationalizing that data. The marketers we speak with tend to fall into two buckets.
- Those who understand that the way they manage data is critical to their marketing success. These marketers use data to inform their decisions, and then rely on it to measure their effectiveness.
- Those who haven’t yet discovered that data is the key to their success. Often these people start with systems in mind – marketing automation, CRM, etc. But after implementing and beginning to use these systems, they almost always come to the realization that they have a data problem.
Q: How has this world of unprecedented data sources and volumes changed the marketing discipline?
A: In short… dramatically. The shift has really happened in the last two years. The big impetus for this change has really been the availability of data. You’ve probably heard this figure, but Google’s Eric Schmidt likes to say that every two days now, we create as much information as we did from the dawn of civilization until 2003.
We believe this is a massive opportunity for marketers. The question is, how do we leverage this data. How do we pull the golden nuggets out that will help us do our jobs better. Marketers now have access to information they’ve never had access to or even contemplated before. This gives them the ability to become a more effective marketer. And by the way… they have to! Customers expect them to!
For example, ad re-targeting. Customers expect to be shown ads that are relevant to them, and if marketers don’t successfully do this, they can actually damage their brand.
In addition, competitors are taking full advantage of data, and are getting better every day at winning the hearts and minds of their customers – so marketers need to act before their competitors do.
Marketers have a tremendous opportunity – rich data is available and the technology is available to harness it is now, so that they can win a war that they could never before.
Q: Where are the barriers they are up against in harnessing this data?
A: I’d say that barriers can really be broken down into 4 main buckets: existing architecture, skill sets, relationships, and governance.
- Existing Architecture: The way that data has historically been collected and stored doesn’t have the CMO’s needs in mind. The CMO has an abundance of data theoretically at their fingertips, but they cannot do what they want with it. The CMO needs to insist on, and work together with the CIO to build an overarching data strategy that meets their needs – both today and tomorrow because the marketing profession and tool sets are rapidly changing. That means the CMO and their team need to step into a conversation they’ve never had before with the CIO and his/her team. And it’s not about systems integration but it’s about data integration.
- Existing Skill Sets: The average marketer today is a right-brained individual. They entered the profession because they are naturally gifted at branding, communications, and outbound perspectives. And that requirement doesn’t go away – it’s still important. But today’s marketer now needs to grow their left-brained skills, so they can take advantage of inbound information, marketing technologies, data, etc. It’s hard to ask a right-brained person to suddenly be effective at managing this data. The CMO needs to fill this skillset gap primarily by bringing in people that understand it, but they cannot ignore it themselves. The CMO needs to understand how to manage a team of data scientists and operations people to dig through and analyze this data. Some CMOs have actually learned to love data analysis themselves (in fact your CMO at Informatica Marge Breya is one of them).
- Existing Relationships: In a data-driven marketing world, relationships with the CIO become paramount. They have historically determined what data is collected, where it is stored, what it is connected to, and how it is managed. Today’s CMO isn’t just going to the CIO with a simple task, as in asking them to build a new dashboard. They have to collectively work together to build a data strategy that will work for the organization as a whole. And marketing is the “new kid on the block” in this discussion – the CIO has been working with finance, manufacturing, etc. for years, so it takes some time (and great data points!) to build that kind of cohesive relationship. But most CIOs understand that it’s important, if for no other reason that they see budgets increasingly shifting to marketing and the rest of the Lines of Business.
- Governance: Who is ultimately responsible for the data that lives within an organization? It’s not an easy question to answer. And since marketing is a relatively new entrant into the data discussion, there are often a lot of questions left to answer. If marketing wants access to the customer data, what are we going to let them do with it? Read it? Append to it? How quickly does this happen? Who needs to author or approve changes to a data flow? Who manages opt ins/outs and regulatory black lists? And how does that impact our responsibility as an organization? This is a new set of conversations for the CMO – but they’re absolutely critical.
Q: Are the CMOs you speak with concerned with measuring marketing success?
A: Absolutely. CMOs are feeling tremendous pressure from the CEO to quantify their results. There was a recent Duke University study of CMOs that asked if they were feeling pressure from the CEO or board to justify what they’re doing. 64% of the respondents said that they do feel this pressure, and 63% say this pressure is increasing.
CMOs cannot ignore this. They need to have access to the right data that they can trust to track the effectiveness of their organizations. They need to quantitatively demonstrate the impact that their activities have had on corporate revenue – not just ROI or Marketing Qualified Leads. They need to track data points all the way through the sales cycle to close and revenue, and to show their actual impact on what the CEO really cares about.
Q: Do you think marketers who undertake marketing automation products without a solid handle on their data first are getting solid results?
A: That is a tricky one. Ideally, yes, they’d have their data in great shape before undertaking a marketing automation process. The vast majority of companies who have implemented the various marketing technology tools have encountered dramatic data quality issues, often coming to light during the process of implementing their systems. So data quality and data integration is the ideal first step.
But the truth is, solving a company’s data problem isn’t a simple, straight-forward challenge. It takes time and it’s not always obvious how to solve the problem. Marketers need to be part of this conversation. They need to drive how they’re going to be managing data moving forward. And they need to involve people who understand data well, whether they be internal (typically in IT), or external (consulting companies like Crimson, and technology providers like Informatica).
So the reality for a CMO, is that it has to be a parallel path. CMOs need to get involved in ensuring that data is managed in a way they can use effectively as a marketer, but in the meantime, they cannot stop doing their day-to-day job. So, sure, they may not be getting the most out of their investment in marketing automation, but it’s the beginning of a process that will see tremendous returns over the long term.
Q: Is anybody really getting it “right” yet?
A: This is the best part… yes! We are starting to see more and more forward-thinking organizations really harnessing their data for competitive advantage, and using technology in very smart ways to tie it all together and make sense of it. In fact, we are in the process of writing a book entitled “Moneyball for Marketing” that features eleven different companies who have marketing strategies and execution plans that we feel are leading their industries.
So readers, what do you think? Who do you think is getting it “right” by leveraging their data with smart technology and truly getting meaningful an impactful results?
I have been in marketing for over two decades. As I meet people in social situations, on airplanes, and on the sidelines at children’s soccer games, and they ask what it is I do, I get responses that constantly amuse me and lead me to the conclusion that the general public has absolutely no idea what a marketer does. I am often asked things like “have you created any commercials that I might have seen?” and peppered with questions that evoke visions of Mad Men-esque 1960’s style agency work and late night creative martini-filled pitch sessions.
I admit I do love to catch the occasional Mad Men episode, and a few weeks ago, I stumbled upon one that had me chuckling. You may remember the one that Don Draper is pitching a lipstick advertisement and after persuading the executive to see things his way, he says something along the lines of, “We’ll never know, will we? It’s not a science.”
How the times have changed. I would argue that in today’s data-driven world, marketing is no longer an art and is now squarely a science.
Sure, great marketers still understand their buyers at a gut level, but their hunches are no longer the impetus of a marketing campaign. Their hunches are now the impetus for a data-driven, fact-finding mission, and only after the analysis has been completed and confirms or contradicts this hunch, is the campaign designed and launched.
This is only possible because today, marketers have access to enormous amounts of data – not just the basic demographics of years past. Most marketers realize that there is great promise in all of that data, but it’s just too complicated, time-consuming, and costly to truly harness it. How can you really ever make sense of the hundreds of data sources and tens of thousands of variables within these sources? Social media, web analytics, geo-targeting, internal customer and financial systems, in house marketing automation systems, third party data augmentation in the cloud… the list goes on and on!
How can marketers harness the right data, in the right way, right away? The answer starts with making the commitment that your marketing team – and hopefully your organization as a whole – will think “data first”. In the coming weeks, I will focus on what exactly thinking data first means, and how it will pay dividends to marketers.
In the mean time, I will make the personal commitment to be more patient about answering the silly questions and comments about marketers.
Now, it’s your turn to comment…
What are some of the most amusing misconceptions about marketers that you’ve encountered?
- and -
Do you agree? Is marketing an art? A science? Or somewhere in between?
Recently, we posted an initial discussion between Informatica’s CMO Marge Breya and CIO Eric Johnson, explaining how CIOs and CMOs can align and thrive. In the dialog below, Breya and Johnson provide additional detail on how their departments partner effectively.
Q: Pretty much everyone agrees that marketing has changed from an art to a science. How does that shift translate into how you work together day to day?
Eric: The different ways that marketers now have to get to the prospects and customers to grow their marketshare has exploded. It used to be a single marketing solution that was an after-thought, and bolted on to the CRM solution. Now, there are just so many ways that marketers have to consider how they market to people. It’s driven by things going on in the market, like how people interact with companies and the lifestyle changes people have made around mobile devices.
Marge: Just look at the sheer number of systems and sources of data we care about. If you want to understand upsell and cross-sell for customers you have to look at what’s happening in the ERP system, what’s happened from a bookings standpoint, whether the customer is a parent or child of another customer, how you think about data by region, by industry by job title. And there’s how you think about successful conversion of leads. Is it the way you’d predicted? What’s your most valuable content? Who’s your most valuable outlet or event? What’s your ROI? You can’t get that from any one single system. More and more, it’s all about conversion rates, about forecasting and theories about how the business is working from a model standpoint. And I haven’t even talked about social.
Q: With so many emerging technologies to look at, how do CMOs reconcile the need to quickly add new products, while CIOs reconcile the need for everything to work securely and well together?
Eric: There’s this yin and yang that’s starting to build between the CIO and the CMO as we both understand each other and the world we each live in, and therefore collaborate and partner more. But at the same time, there’s a tension between a CMO’s need to bring in solutions very quickly, and the CIO’s need to do some basic vetting of that technology. It’s a tension between speed vs. scale and liability to the company. It’s on a case-by-case basis, but as a CIO you don’t say “no.” You give options. You show CMOs the tradeoffs they’re going to make.
There are also risks that are easy to take and worth taking. They won’t cause any problems with the enterprise on a security or integration perspective, so let’s just try it. It may not work — and that’s OK.
Marge: There’s temptation across departments for the shiny new object. You’ll hear about a new technology, and you think this might solve our problems, or move the business faster. The tension even within the marketing department is: do we understand how and if it will impact the business process? And do we understand how that business process will have to change if the shiny new object comes on board?
Q: CMOs are getting data from potentially hundreds of sources, including partners, third parties, LinkedIn and Google. How do the two of you work together to determine a trustworthy data source? Do you talk about it?
Eric: The issue of trusting your data and making sure you’re doing your due diligence on it is incredibly important. Without doing that, you are running the risk of finding yourself in a very tricky situation from a legal perspective, and potentially a liability perspective. To do that, we have a lot of technology that helps us manage a lot data sources coming into a single source of truth.
On top of that, we are working with marketers who are much more savvy about technology and data. And that makes IT’s job easier — and our partnership better — because we are now talking the same language. Sometimes it’s even hard to tell where the line between the two groups actually sits. Some of the marketing people are as technical as the IT people, and some of the IT people are becoming pretty well-versed in marketing.
Q: How do you decide what technologies to buy?
Marge: A couple of weeks ago we went on a shopping trip, and spent the day at a venture capital firm looking at new companies. It was fun. He and I were brainstorming and questioning each other to see if each technology would be useful, and could we imagine how everything would go together. We first explored possibilities, and then we considered whether it was practical.
Eric: Ultimately, Marge owns the budget. But before the budgeting cycle we sit down to discuss what things she wants to work on, and whether she wants to swap technology out. I make sure Marge is getting what she needs from the technologies. There’s a reliance on the IT team to do some due diligence on the technical aspects of this technology: Does it work. Do we want to do business with these people? Is it going to scale? So each party has a role to play in evaluating whether it’s a good solution for the company. As a CIO you don’t say “no” unless there’s something really bad, and you hope you have a relationship with the CMO where you can say here are the tradeoffs you’re making. You say no one has an agenda here, but here are the risks you have to be ok taking. It’s not a “no.” It’s options.
Research firm Gartner, Inc., sent shockwaves across the technology landscape when it forecast CMOs will spend more on IT than CIOs by 2017[i]. The rationale? “We frequently hear our technology and service provider clients tell us they are dealing with business buyers more, and need to “speak the language.” Gartner itself has fueled this inferno with assertions such as, “By 2017 the CMO will spend more on IT than the CIO” (see “Webinar: By 2017 the CMO Will Spend More on IT Than the CIO”).”[ii] In the two years since Gartner first made that prediction, analysts and pundits have talked about a CIO/CMO battle for data supremacy — describing the two roles as “foes” inhabiting “separate worlds[iii]” that don’t even speak the same language.
But when CIOs are from Mars and CMOs are from Venus, their companies can end up with disjointed technologies that don’t play well together. The result? Security flaws, no single version of “truth,” and regulatory violations that can damage the business. The trick, then, is aligning the CIO and CMO planets.
Informatica’s CMO Marge Breya and CIO Eric Johnson show how they do it.
Q: There’s been a lot of talk lately about how CMOs are now the biggest users of data. That represents a shift in how CMOs and CIOs traditionally have worked together. How do you think the roles of the CMO and CIO need to mesh?
Eric: As I look across the lines of business, and evaluate the level of complexity, the volume of data and the systems we’re supporting, marketing is now by far the most complex part of the business we support. The systems that they have, the data that they have, has grown exponentially over the last four or five years. Now more than ever, [CMOs and CIOs are] very much attached at the hip. We have to be working in conjunction with one another.
Marge: Just to add to that I’d say over the last five years, we’ve been attached to things like CRM systems, or partner relationship systems. From a marketing standpoint, it has really been about management: How do you have visibility into what’s happening with the business. But over the last couple of years it’s become increasingly more important to focus on the “R” word — the relationship: How do you look at a customer name and understand how it relates to their past buying behavior. As a result, you need to understand how information lives from system to system, all across a time series, in order to make really great decisions. The “relate’ word is probably most important, at least in my team right now, and it’s not possible for me to relate data across the organization without having a great relationship with IT.
Q: So how often do you find yourselves talking together?
Eric: We talk to each other probably weekly, and I think our teams work together daily. There’s a constant collaboration and making sure that we’re in sync. You hear about the CIO/CMO relationship. I think it should be an easy relationship because there’s so much going on technology-wise and data-wise that the CMOs are becoming much more technically knowledgeable, and CIOs are starting to understand more and more what’s going on in their business that the line between them should be all about how you work together.
Marge: Of all the business partners in the company, Eric … helps us in marketing reimagine how marketing can be done. If the two of us can go back and forth, understand what’s working and what’s not working, and reimagine how we can be far more effective, or productive or know new things — to me that’s the judge of a healthy relationship between a CIO and a CMO. And luckily, we have that.
Q: It seems as if 2013 was the year of “big data.” But a Gartner survey[iv] said “The adoption is still at the early stages with fewer than 8% of all respondents indicating their organization has deployed big data solutions.” What do you think are the issues that are making it so difficult for companies?
Eric: The concept of big data is something companies want to get involved in. They want to understand how they can leverage this fast-growing volume of data from various sources. But the challenge is being able to understand what you’re looking for, and to know what kind of questions you have.
Marge: There’s a big focus on big data, almost for the sake of it in some cases. People get confused about whether it’s about the haystack, or the needle. Having a haystack for the heck of it isn’t usually what’s done. It’s for a purpose. It’s important to understand what part of that haystack is important for what part of your business. How up-to-date is it? How much can you trust the data. How much can you make real decisions from it. And frankly, who should have access to it. So much of the data we have today is sensitive, affected by privacy laws and other kinds of regulations. I think big data is appropriately a great term right now, but more importantly, it’s not just about big data, it’s about great data. How are you going to use it? And how it’s going to affect your business process.
Eric: You could go down into a rat hole if you’re chasing something and you’re not really sure what you’re going to do with it.
Marge: On the other hand, you can explore years of behavior and maybe come up with a great predictive model for what a new buying signal scoring engine could look like.
Q: One promise of big data is the ability to pull in data from so many sources. That would suggest a real need for you two to work together to ensure the quality and the integrity of the data. How do you collaborate on those issues?
Eric: There’s definitely a lot of work that has to be done working with the CMO and the marketing organization: To sit down and understand where’s this data coming from, what’s it going to be used for, and making sure you have the people and processing components. Especially with the level of complexity we have, with all the data coming in from so many sources, making sure that we really map that out, understand the data and what it looks like and what some of the challenges could be. So it’s partnering very closely with marketing to understand those processes, understand what they want to do with the data, and then putting the people, the processes and the technology in place so you can trust the data and have a single source of truth.
Marge: You hit the nail on the head with “people, process and technology.” Often, folks think of database quality or accuracy as being an IT problem. It’s a business problem. Most people know their business, they know what their data should look like. They know what revenue shapes should look like. What’s norm for the business. If the business people aren’t there from a governance standpoint, from a stewardship standpoint — literally saying “does this data make sense?” — without that partnership, forget it.
Gartner does a nice job of describing the digital landscape that marketers are facing today in its infographic below. In order to use technology as a differentiator, organizations need to get the most value from their data. The relationships between these technology is going to make the difference between organizations that gain a competitive advantage from their operations and the laggards.
[i] Gartner Research, December 20, 2013, “Market Trends: The Rising Importance of the Business Buyer – Fact of Fiction?” Derry N. Finkeldey
[ii] Gartner Research, December 20, 2013, “Market Trends: The Rising Importance of the Business Buyer – Fact of Fiction?” Derry N. Finkeldey
[iii] Gartner blog, January 25, 2013, “CMOs: Are You Cheating on Your CIO?”, Jennifer Beck, Vice President & Gartner Fellow
[iv] Gartner Research, September 12, 2013, “Survey Analysis: Big Data Adoption in 2013 Shows Substance Behind the Hype,” Lisa Kart, Nick Heudecker, Frank Buytendijk