Report Finds CMOs (and CSOs) Need to Accelerate Change

It's no revelation that empowered, and often fickle, customers are calling the shots today.

To thrive amid this consumer revolution, "companies must integrate all of their operations, including sales and marketing, to deliver a truly differentiated and positive" experience, from marketing through after-sale customer service, sums up Woody Driggs, global customer leader for Ernst & Young's EY advisory practice, which based its new report on a survey of 800 sales and marketing leaders and C-suite executives, and 20 in-depth interviews.

However, the report concludes that "a significant portion" of chief marketing officers/CMOs and chief sales officers/CSOs are not adapting quickly enough, either in terms of their own skills and roles, or in how they're interacting with one another and other top executives.



While stressing that there are certainly examples of excellent practices, the researchers report that many CMOs focus too little on understanding the customer or enhancing their experience, while many CSOs emphasize short-term targets to the exclusion of strategy, innovation and longer-term connections.

For example, only 58% of CMOs, and 68% of CSOs, say that they believe strongly that they add significant value by using customer feedback to develop their businesses. 

In the survey, CMOs cited "the ability to implement innovative ways of marketing” as the skill they most need to improve. But just 44% agreed strongly that "the CMO cannot thrive without exploiting big data." And despite its crucial value, CMOs ranked “technical experience in using marketing analytical systems and tools” the least important among seven factors in doing a good job.

Many CSOs are similarly ambivalent about Big Data and embracing new technology. "They are still focusing on the moment of sale, rather than on building the lifelong customer relationships that prove most effective," sum up the analysts.

Insufficient CMO/CSO Collaboration

The study finds a need for improvement in CMO/CSO relationships, noting contradictions between their beliefs and actions. 

On the one hand, 63% of CMOs say that the two functions are "in regular contact about innovative ideas and strategies," and 72% say that they have a good rapport with their sales counterparts. Also, 70% of CSOs say that "companies are most successful if sales and marketing are jointly responsible for the multichannel market approach."

But in practice, despite their mutual dependence, the CMO/CSO relationship is still "more marked by competition or passive coexistence than collaboration," say the researchers. Just 17% of CSOs are convinced that they must develop essential marketing skills. Among CMOs, only 59% are convinced that the two functions share the same corporate vision, and just 54% believe strongly that they “work well together in tasks and initiatives."

Which is not to say that the disconnect is universal. "Visionary CMOs and CSOs have already broken down the silo walls that divide them," stress the researchers.  

The report also notes that both CMOs and CSOs tend to focus on their relationships with CEOs, rather than trying to extend their influence with other critical leaders. 

In fact, in what the researchers term the "most startling" evidence that marketing and sales executives are developing their skills and outlook too slowly, just 47% of CMOs and 58% of CSOs report that they have good relationships with their companies' chief information officers/CIOs. 

This is despite the fact that "IT is the only way to achieve efficient internal systems and the analytical technology and understanding that enable companies to engage with, and delight, customers" and that partnerships with IT are "essential if CSOs and CMOs are to have the means to deliver the insights they need to do their jobs." 

Another eye-opener: CMOs rate the chief financial officer as the second least important executive board member, and only 53% say they have strong relationships with their CFOs. Yet just 34% of CMOs say they are satisfied with their budget allocations. "A cool relationship with the holder of the purse strings will not help," observe the researchers. 

C-Level Execs Report Poor View of Marketing 

Furthermore, CMOs appear to be overestimating the strength of their relationships with their CEOs. Three out of four CMOs think they have excellent relationships with their CEOs, but less than two-thirds of the C-suite agrees. 

In fact, generally speaking, C-suite executives still take the attitude that "the CSO makes money, and the CMO spends money," says the report. As a result, "the C-suite is uniformly positive about the CSO, and universally negative about the CMO."

Only a third of those on the executive board think that marketing adds value, and only 35% feel strongly that the company would fail without marketing. Just 30% think that CMOs' marketing methods are innovative; and just 38% are confident that CMOs ensure that the company uses new communication channels effectively. Even the traditional strengths of marketing are in question: Just 53% of C-suite executives are sure that CMOs add value in building and protecting the brand.

The report stresses that the board and C-suite need to educate themselves about what both marketing and sales leaders do, and what they are capable of. They also need to support both functions with internal structures and technology (particularly CRM systems) that enable a culture of customer centricity, sharing essential data, and collaborating closely for the common good.

New, Customer-Centric Marketing/Sales Oversight Roles

The report also points out that a growing number of companies are creating new executive positions dedicated to ensuring that all customer-facing functions, including marketing and sales, are generating consistently positive customer experiences. 

The role is often called chief commercial officer/CCO, and may also include oversight of innovation, R&D, analytics strategy and customer service. In other cases, the role is called chief customer officer or chief customer experience officer.

"Combining responsibility for all customer touch points under one C-suite leader might benefit the business and the customer, as well as aspiring sales and marketing leaders," say the analysts. This "creates a customer experience champion, charged with driving a consistent, company-wide approach, that is likely to reduce the chance of customers 'falling through the cracks' between different parts of the organization." CMOs and CSOs can aspire to the CCO position, and 34% of C-suite executives already assumes that the CCO will become CEO within five years, according to the report.

Recommended CMO Strategy Checklist

In addition to more in-depth advice, the EY report offers a checklist of the thinking and focuses of CMOs that are positioned for continuing success.

The researchers say that smart CMOs are responding to the empowered customer by using customer insights and feedback to improve the customer experience; encouraging relevant and personal communication with customers; and ensuring that interaction is consistent across all channels.

In terms of essential skills, the keys are developing analytical skills to turn marketing analysis into effective action; exploiting new technologies and innovative ways of working; and attaining fundamental sales capabilities.

Regarding relationships, the report advises that CMOs align marketing with sales and "the broader value chain"; develop more productive relationships with the C-suite; and raise their profiles with the C-suite by demonstrating their worth and making a "real strategic impact" on the board and its direction.

Recommended CSO Strategy Checklist

For their part, the best-positioned CSOs are responding to the empowered customer by "abandoning the traditional playbook and becoming problem solvers"; creating a customer-centric role based on meeting clients' changing needs; and creating a positive customer experience, sums up the report.

Skills-wise, CSOs need to look beyond immediate goals and take a more strategic view; leverage Big Data to build relationships and plan ahead; exploit innovation and automation to increase effectiveness; and borrow techniques from marketing to differentiate their portfolios.

In the relationships arena, CSOs should be working on developing more constructive relationships with all key C-suite executives, and particularly with the CIO, as well as with their marketing counterparts and other departments. And like CMOs, they should be focused on building long-term relationships with customers.

The 20-page report (or executive summary), "Competition, co-existence or symbiosis? The DNA of C-Suite Sales and Marketing Leaders," can be downloaded free or read in postings on EY Advisory's site.

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