What Makes A Great CMO ?

October 25, 2010

I’ve often said that the best CMO is a CEO who believes in Marketing. But beyond this, what makes a great CMO? This is germane not only to CMO’s whose average tenure is about 2 years, but also to CEO’s who need Marketing to drive results.

What Makes A Great CMO?

CMO Competency Research

Egon-Zehnder International (EZI) has taken a close look at this and has some interesting insights. Over the past 5 years, EZI conducted 25,00o CMO appraisals across 300 companies to better understand what differentiates great CMO’s from average ones.

Assessed skills included: results orientation, team leadership, collaboration, strategic orientation, organizational development, change leadership, customer orientation, and market knowledge.

Markers of a Great CMO

EZI’s assessment shows that 2 factors stand out in differentiating great from average CMO’s:

1.  Results Orientation

“Results orientation means driving uncompromisingly for better outcomes, often achieving them through skilled use of robust analysis and benchmarking”

 

2.  Change Leadership

“Good CMO’s are adept at advocating change and communicating a clear and compelling new direction…they set clear targets that focus people on achieving the change and develop metrics that both monitor and motivate it”

You could easily summarize the above as “set a direction and then deliver on it.” And, this is entirely consistent with a previous post, “What Do CEO’s Really Want From Marketing?,” where I discussed Lou Gerstner’s definition of CMO success: great CMO’s build the brand and build the business.

Makers of a Great CMO

What Can CMO’s Do?

1.  Success Metrics — One thing that most CMO’s can do better is to develop clear Marketing success metrics and then use them to assess the performance of their Marketing efforts. I’ve written extensively about the need for Marketing to be more accountable, particularly with Advertising and Media.

  • Does your advertising build your brand equity ? Which creative or media choices contribute most to this growth?
  • Does driving your brand equity scores build your revenue and profitability ? Which equity attributes are most critical to better business outcomes ?
  • Does your advertising build volume, share and revenue ? And, what’s the short and long-term ROI impact ?

2.  Reward Metrics — The same metrics can be used to reward your organization. Whether you recognize and reward people on an ad hoc basis, or with more formal annual Marketing Awards events, every CMO has an opportunity to continuously recognize great performance by individuals and groups by emphasizing progress on the same metrics.

Success Metrics & Reward Metrics

 

Set a Direction and Then Deliver On It

Like most good insights, it sounds simple but is, of course, hard to execute in practice. Lou Gerstner was right. Great CMO’s just build great brands and drive better business results. And, the Egon-Zehnder research just proves it.

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Guest Post: Rude Awakening— Only 15% of Word of Mouth Marketing Campaigns Show Positive Results

October 18, 2010

This post is part of a continuing series of guest posts and was originally posted on MENG BLEND. Christopher S. Rollyson is founder of CSRA, Inc., Architect of The Social Network Roadmap(sm) & Managing Editor at the Global Human Capital Journal.

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Word of mouth marketing is seen by many marketers as the economic engine of social business (or media) because people recommend products and services to each other: all marketers have to do is give them the right information to share and make it easy for them to recommend things, right? Wrong.

Rude Awakening— Only 15% of Word of Mouth Marketing Campaigns Show Positive Results

Or, in popular parlance, “It’s complicated.”

Here, I’ll identify some of the flawed concepts that underlie word of mouth marketing (WOMM), so you can avoid being part of its 85% casualty rate. I’ll show in general how you can tweak the idea and succeed with social business initiatives more often.

Word of Mouth Marketing Is Flawed

At Alterian’s user conference, Don Peppers shared this arresting statistic in his keynote:  only 15% of WOMM initiatives show positive ROI. Shocking—at least until you start thinking about it. Loosely speaking, WOM (sans “marketing”) happens when a trusted and relatively unbiased “friend” shares her experience with a product/service with someone close to her. “Someone like me” who isn’t tainted by sales commissions or quarterly revenue targets.

Marketing, on the other hand, is generally about creating need or driving sales. Do you see the problem?

In this context, WOM and marketing are mutually exclusive: the latter’s purpose is to serve the company by moving product; the former serves the person first. It’s a conflict of interest, and it will rarely work. Ever.

93% of Word of Mouth Is Offline

In a second data point, Keller Fay Group’s latest TalkTrack study revealed that the overwhelming majority of WOM (as defined by them) takes place offline and face to face (via e-consultancy and @stefanw), not online through social business. This is not surprising when you stop to think about what traditional WOM is, largely a conversation between family or close friends. Tight ties. However, neither of these references dives into WOM or WOMM deeply enough to understand why and how they can work or not.

WOM among Loose Ties

Digital communications significantly reduce the cost of many kinds of interaction, so WOM among loose ties will continue to grow. However, marketers should recognize that loose ties and tight ties have important differences because the motivations and level of trust are different.

Loose ties are not just inferior tight ties; people form loose ties for many reasons, but the online many-to-many environment enables people to manage their reputations and influence by leveraging the network effect. Tight tie relationships are limited in number, multidimensional and high investment.

How Marketers Can Succeed with Word of Mouth

Having led marketing for several firms, I can appreciate why marketers would love the concept of word of mouth marketing. Given that they are in conflict, it’s important to focus on WOM while avoiding WOMM. I’ll wager that the majority of the 85% of failures result from not understanding and honoring their differences. The good news is, WOM drives sales—when companies honor and nurture it. Here’s how:

  • First—and this is a leap of faith—accept that WOM serves the customer, not you. Trust that, if you don’t interfere, positive results will often result. There is no halfway here, intent and honesty are WOM’s key differentiators. Don Peppers shared Staples’ “Speak Easy” fiasco as a warning (“sponsored” tweets and bloggers are other traps). All companies say that they put the customer first, but many aren’t being honest with themselves or their customers.
  • Second, the company must put itself first to be congruent with itself as a business. It shouldn’t try to do WOM. But the company, acting in its self-interest, can support WOM. Marketers must safeguard these boundaries if they want to succeed because they form the foundation of trust among the three principal actors: company, friend and customer.
  • Third, accept that your products and services are not a great fit for most people. In a pervasive transparent network, the market will figure out what works and what doesn’t. Don’t try to “make markets” by convincing people to buy unless you have a valid value proposition for them. Focus on serving people for whom you have a superior value proposition. This is the key to thriving in a transparent environment.
  • Fourth, trust customers’ friends to engage with WOM—for their own motivations. Remember, they are there to serve their friend, not to move your product. WOM is their role, not yours. Campaigns like Staples’ fail because marketers don’t understand their role and unknowingly turn WOM into shilling. Sorry.

Remember Miracle on 34th Street? It was breakthrough to send customers to other stores when they had a better value proposition for the customer. It increased WOM because it surprised people and exceeded expectations. But it was Kris Kringle (a “friend”) who started it based on his personal integrity. Later Macy’s turned it into a tactic, but Kris never did.

Accepting WOM transparency is difficult because it requires significant culture change. Firms that don’t accept this new reality will fight and lose. The market will expose them in the end.

On the other hand, those that take this road will be more successful because they will be aligned with customers and their friends. Moreover, focusing on valid value propositions and customers will tend to lead the company to innovate more successfully.

Do you agree? Disagree? Please share your thoughts and insights in the comments…

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Christopher S. Rollyson has been a marketing and technology pioneer for over twenty years. As a consultant and marketing executive, he has had a leading role in launching such game-changers as: Java with Sun Microsystems, e-business strategy with PricewaterhouseCoopers Management Consulting Services, and SOA, Web services and architecture solutions with nVISIA and IBM. He can be found on Twitter as @CSRollyson.

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Guest Post: Is a Mobile App in Your Company’s Future?

October 4, 2010

This post is part of a continuing series of guest posts and was originally posted on MENG BLEND. Drew McLellan is founder of McLellan Marketing Group.  

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All the indicators and trends suggest that smart phones will be our primary access point to the Internet by 2020.  Even today, you have to go out of your way to buy a mobile phone that does not have Internet access. 

Is a Mobile App in Your Company's Future?

 

We’ve watched mobile apps leapfrog onto the main stage as the proliferation of smart phones marches on. 

Like it or not, mobile connectivity in all its possible forms is where we’re headed.  Today, there are nearly 2 billion people actively using apps. Within a year or two, these are going to be as common as personalized ring tones or taking pictures with your phone. 

Add to that the fact that “mobile apps” is actually a much wider description than just our phones.  There’s also the iPad, netbooks, television set-top boxes, car electronics and browser-based apps.  Your customers are probably interacting with this technology more often than you might think. 

Which begs the question – does your company need a mobile app? 

Granted, there are plenty of silly ones like the bubble popping game but there are also thousands of practical, business-oriented apps that are yet another way of connecting to customers. 

The Walgreens app lets you refill prescriptions on the go, print photos you just took on your phone and find their closest store when you need some Zanfel for your vacation induced poison ivy! 

Walgreen's Company App

 

Think mobile apps are only for the big box stores or companies with multi-million dollar budgets?  Think again.  

Small companies are also grabbing hold of the technology… 

A local microbrewery in St. Louis, the Schlafly Tap Room, and Schlafly Beer realized that their customers liked to stop by and grab a growler of beer on their way home.  But they were hesitant to do so because they never knew what was on tap.  Enter the SchlAPP – a free iPhone app that gives patrons detailed descriptions of the available brews, Schlafly’s tweets and Facebook updates, locations and their monthly newsletter. 

New Local Mobile App: Schalfly Beer

 

And, check out how the Austin’s Avant Salon Spa is using their app.  They show off their award-winning hairstyles, keep their community plugged in to the area’s hottest charity events and their own promotions. 

Remember that we’re in the infancy of the mobile app explosion.  Which means that there’s value in being one of the first in your category to introduce an app.  But like all good marketing decisions, it’s important not to let the tool drive your strategy. 

Perhaps it’s time for a shift in perspective.  Rather than thinking why you wouldn’t ever create an app, you might want to start thinking about why you would. 

If you can make a compelling case for how an app would add value to your customers or prospects, then the opportunity is right now. 

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Drew McLellan is Top Dog at McLellan Marketing Group and the author of AdAge’s Top 150 blog, Drew’s Marketing Minute. Wall Street Journal called it “one of the ten blogs all entrepreneurs should read.” Drew wrote 99.3 Random Acts of Marketing and is co-creator/editor of the ground-breaking Age of Conversation book series. He is also a Marketing Profs Daily Fix blogger and can be followed at @drewmclellan on Twitter. 

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