The role of marketing and the CMO in the 21st centuryby
You can also download this report in PDF format. Download now!
By Jeremy Cox, CMC Editor
Is it a bird or a meal?
A few years ago we held an absurd debate along the lines of ‘Marketing is Dead’.
Richard Forsyth and Alan Mitchell supported the motion, and Jennifer Kirkby and I were against it. A show of hands was held at the start and at the end. Not surprisingly, no one changed sides. Everyone it seems has an entrenched view of marketing one way or another.
In the end we were really in agreement. Not that marketing was dead exactly, but that the pathetic vestigial excuse for marketing, practiced by indiscriminate product pushers, was surely reaching the end of its life.
Amazingly though, this dodo of an indiscipline has spawned a class of software all on its own – MRM Marketing Resource Management. A quick flick through Google on MRM and you soon realise that this is nothing more or less than managing marketing campaigns and budgets or Marcoms as I knew it at IBM. I've had some experience of this myself. When I worked for KPMG Consulting, I helped HP design its closed loop marketing system. What always amazed me was the starting point. Most of these marketers did little more than take a product target and figure out roughly who help them meet it. They get excited when they could pull off lists, and consider this to be 'segmentation'. Where is the thinking about which markets or customer segments to serve? Where are the insights into the ‘rules of the game’? What on earth is the marketing director doing amongst all this product provocation of customers?
It reminded me of the days in IBM when we would blast multiple products through multiple campaigns at customers, irritating them intensely.
Maybe you have to suffer first
This same one-eyed or myopic approach to marketing was only reduced, when the company nearly went bust. This was our burning platform which led us into taking a wide-angled view of marketing, as our product-driven-sales-driven-finance-driven approach to business had failed us. Before this the barnstorming growth in the 1980s masked the truth that we had lost touch with our customers and plainly didn’t understand how needs had evolved and changed. We had become lazy in our thinking. Fat, happy and blissfully arrogant despite allegedly having some of the finest scientists and minds in the world.
So what is the traditional role of marketing?
- The Chartered Institute of Marketing has for years defined it as "the management process for identifying, anticipating and satisfying customer requirements profitably."
- The American Marketing Association changed its definition recently to: "Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."
- And the World Marketing Association says of it; "Marketing is the core business philosophy which directs the processes of identifying and fulfilling the needs of individuals and organizations through exchanges which create superior value for all parties."
None of it trips off the tongue, but whichever definition you prefer, it is clearly considerably more complex than dreaming up the next wonder-campaign. However, each of these worthy bodies has been around for some time, so why is it that with the exception of Unilever and Proctor & Gamble and a few others, the rest of us don’t get it? Why are we seemingly too lazy to wrestle with real issues around customer loyalty and providing a superior experience and value, when at the same time we can build beautiful and complex structures like Norman Foster’s Millau Bridge or incredibly clever cars, or planes or other weird and wonderful technologies?
21st century schizoid man
Having discussed this to some extent with Professor Adrian Payne and Peter Simpson of First Direct and based on my own experience and desk research, there is definitely a certain schizophrenia within large organisations. As Prof. Payne said, most CEOs will claim their organisations are customer or market driven. They will employ marketing directors and brand advertising agencies to create a veneer of customer centricity, but underneath, there is little change. Or as Peter Simpson said, only a 'bolt-on' to existing systems, practices and processes - mere lipstick on the pig.
Where does marketing sit with CRM?
I think another issue with marketing is that even amongst leading practitioners in the past most notably in the FMCG , Retail and Pharmaceuticals sectors, the whole approach has been product and not customer driven. There is a whole science of analysis supported by evermore sophisticated tools to help product managers, merchandisers and analysts develop and manage their brand portfolios.
The old favourites like the BCG or Ansoff matrices, still have their place, especially in helping management allocate precious resources, but I often wonder if a more customer connected organisation wouldn’t replace its former value propositions, its dogs and cash cows, based on a far deeper understanding of their customers. And wouldn’t this be quicker, further improving speed to market?
I’d call this a customer portfolio view allied to a 1:1 understanding (or if impractical some form of creative needs-based segmentation) rather than the old product portfolio approach where change is only recognised by the shadow it casts on profit margins.
If this is beginning to sound a little arcane for the CEO, then I strongly recommend that everyone reads the book – Creating a Company for Customers* by Profs: Malcolm McDonald, Martin Christopher, Simon Knox and Adrian Payne.
This really does tackle the purpose and issues around marketing head on, and its written for normal people rather than academics It states right at the outset: "In a market-driven company, everyone from the CEO to the telephone salesperson, is preoccupied with that the customers need and delivering it to them."
In order to achieve this for real, marketing must develop insights to inform the overall business strategy. This expectation must be set by the CEO and where necessary cut across organisational barriers and silos. This doesn’t give marketing a superior role within the business, but it does provide the right business context for it to do its job effectively.
As Peter Simpson said, marketing directors have to get involved in the whole e-commerce thing and as the 'Cranfield team' as I call them, recommends integrating the entire demand chain. You can see why – just take a look at the recent change in fortunes at M&S. Like Peter suggested, they have taken a 'root and branch' redesign of their business, and its starting to pay dividends for everyone.
The blueprint for success
The right philosophy and vision are vital to the business. The former creates the culture of customer centricity needed to ensure the business is increasingly relevant to its portfolio of customers. In this book, the Cranfield team provides a blueprint based on a company that makes and sells products.
If you are in a different kind of business, then just change the boxes at the top.
Irrespective of the type of company, it provides an integrated business context within which each discipline can contribute what it does best. Marketing's role is to provide the eyes and ears of the organisation and help the firm create and deliver real and superior value to customers. A huge challenge of coordination and adaptation. By doing this effectively, the value of the customer portfolio will increase, generating superior shareholder returns. Now that is what I call marketing and you can see why the executive board of Marks & Spencer now includes a director of marketing whose remit also covers e-commerce. That is the role of the 21st century CMO.
By Jeremy Cox CMC Editor Business & Strategy
If you would like to contact me and share your own experience or opinion please contact me at [email protected]
Please login or register to join the discussion.
I sympathise with your sentiments. Companies uniformly pay lip-service to customer-orientation whilst bombarding said customers with irrelevant mails, not delivering on their expensively-communicated promises and treating them like dirt when they phone the call centre.
But no number of similar-sounding definitions by worthy marketing bodies will make a jot of difference if the way marketing targets are set in the majority of marketing departments are not changed. (And if you want an example of irritating, product-oriented, direct marketing, look no further than the American Marketing Association's own membership mailings. I speak from personal experience!)
And they won't change until product-focussed marketing in said marketing departments stops working. And there is the rub. Although pretty much everybody agrees that marketing isn't what it used to be, it still is perceived to work better than the largely untried, unproven and uncosted alternatives.
It takes a big marketing man to decide to leap into the icy waters of customer-orientation (or even market-orientation) whilst the product-oriented marketing bridge they are standing on isn't already in flames.
Perhaps all we can hope for in these marketing isn't yet really broken times are customer-oriented experiments on the periphery of marketing. Fortunately, I see plenty of these happening all around me. There is more than one way to achieve lasting change.
Independent CRM Consultant
And I agree with your icy water view. Fortunately I think there is a sea-change afoot.
I also think that as firms work out what it really means to be customer centric, marketing will get a big kick up the backside to play its rightful role. You can already sense this change at M&S - a shift from product merchandisers to a greater customer orientation, including a deeper understanding of the technological reins that can be held to support a better customer experience and to make sure the right products are delivered at the right time and place. The promise of quick response triggered by a deeper understanding of what customers really want.
Let me know if you come across any heroes!
all the best