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Retail CMOs Must Invest In Total Brand Experience


To understand how Forrester’s predictions will unfold in the retail industry in 2020, my colleague Madeline Cyr and I interviewed experts within Forrester for our “Applying 2020 Predictions To Retail” series. We spoke with experts Keith Johnston and Nick Monroe to understand CMO predictions for this year.

Madeline Cyr: CMO positions at retailers and brands like Johnson & Johnson, Kellogg’s, McDonald’s, and Walmart were eliminated in the past year. Some CMO tenures are short (for example, the most recent CMO at Gap). How is the CMO role at retailers changing in 2020? What do CMOs need to deliver to be successful? 

Nick Monroe and Keith Johnston: Retail CMOs face a proliferation of direct-to-consumer competitors and digital disruption. This [situation] is exacerbated by consumers’ demand for rich meaningful experiences. All of this change questions what role marketing even plays.

CMO talent has stratified into two profiles: 1) data-focused and performance-driven marketers and 2) brand-building customer advocates. Those CMOs who have both (the top 10%) are considered business leaders who use insights and tech-driven experiences along with a systematic ability to consistently connect with current and new customers by creating differentiated experiences. Naturally, the challenge of meeting increasingly high individual expectations in a larger context that questions the role of marketing drives a high rate of CMO turnover.

Retail CMOs are not more likely to depart than those in other industries. Although CMOs Barbara Messing of Walmart and Alegra O’Hare of Gap didn’t last a year, others such as Avery Baker at Tommy Hilfiger and Eric Steinberger at Bed Bath & Beyond had tenures of eight and six years, respectively. While we haven’t found any variables that predict CMO departure, it’s noticeable that the arrival of a new CEO is often followed by the replacement of a CMO or the elimination of the role altogether.

One thing that is clear amid the disruption — whoever leads the marketing organization had better offer measurable business value.

Madeline: Birchbox and Mars now have CGOs (chief growth officers) instead of CMOs. What’s the difference, and what should other retailers and brands learn from these moves?

Nick and Keith: The truth is the title is less important than the leader behind it and how organizations perceive the discipline. Marketing, advertising, and especially brand work are not going anywhere, even if pure “marketers” aren’t at the helm. That said, retail brands should pay attention — chief growth officer and chief customer officer are rational titles for the expected outcomes. Growth is plain growth, and chief of customer means responsibility for all things surrounding the customer and prospects. Retailers should match their CMOs and their backgrounds to the context of their business, industry, and skills required. Twitter’s CMO Leslie Berland also oversees human resources, focusing her energy on providing a consistent and seamless brand experience for both employees and customers. What’s more, Michelle Peluso, CMO at IBM, draws on her extensive digital marketing experience and leadership skills as a former CEO to also lead digital sales at the company. Regardless of the title, leading CMOs are showing us that top marketers exercise power and influence beyond narrow definitions of “marketing.”

Madeline: You’ve noted that CMOs will become crucial to attracting other top talent in the organization. What should retailers know about the relation between values and employee loyalty and attrition?

Nick and Keith: Company values and employee loyalty most often align. Forrester Analytics’ Technographics® survey data reveals that 75% of people who are likely to stay at their job over the next year believe in the core mission of the company and 80% of employees who are likely to write an anonymous positive review believe that their manager lives the company’s values. Company values and strong employee experience don’t just make feel-good stories — they make good business sense: Our employee experience index (EXi) research reveals that 97% of employees at companies with high EXi scores are very productive compared with 36% of employees at low-EXi businesses.

Brand is the tie that binds the entire company — for retailers, this means investing in employee experience everywhere, especially frontline workers who interact with customers every single day and ensure that the brand delivers on its promises across every customer touchpoint.

Madeline: You also predict that CMOs will recalibrate tech spend by using existing technologies strategically and more creatively. What does this mean for retailers? Do you have any examples you could share?

Nick and Keith: The bottom line for retail CMOs is that customers are drowning in the sea of brand sameness driven by everyone using the same technology and largely the same partners. Almost nothing immediately distinguishes one brand from another. Look at airline, banking, or fast-food-chain apps; can you really distinguish the brands? All these applications solve similar problems, but do those experiences create an emotional connection to the brand? When we say that tech spend needs to be recalibrated, we are not telling companies to eliminate the investment. Brand differentiation is about a recalibration in creative thinking — how to meet customer needs and communicate those efforts in a differentiated way. For example, Nike is not only using its app NikePlus as a platform for its loyalty program; the company has also integrated it with the customer experience across channels with special perks like a members-only floor at the flagship store in NYC. Retail business leaders will have to think creatively about their total brand experience to determine how to use existing resources and plan for future investments.



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