Five Challenges that Keep CMOs Awake at Night

Elana Andersen has always been one of my favourite analysts. Her recent blog post on What Will Campaign Management Be Like In 2020? presents an interesting perspective of where she thinks the CMS software industry would like to take CMOs in the next decade. But having worked with many CMOs over the past 20 years on operational marketing projects and having been a CMO for a while recently, I think we must take an even more visionary perspective of both what CMOs need to be thinking about today and what support they should expect from the CMS software industry tomorrow.

This will be challenging for both CMOs and the CMS software industry alike.

Elana is quite right that one of the biggest challenges faced by CMOs today is reliably measuring the results of marketing activities. As a recent report by the CMO Council shows, CMOs are under great pressure to prove that they add value and to justify their place at the top-table. That they have one of the shortest C-suite tenures shows that they aren’t there yet.

But there are other pressing operational challenges that keep CMOs awake at night. And where the CMS software industry is providing scant support for CMOs today. There are five key operational issues CMOs need to master and to be frank, where the CMS software industry needs to get its act together:

1. An Explosion in Marketing Touchpoints – Marketing is inexorably becoming more decentralised. That means more channels in the mix, more partners and many more customer managed touchpoints. In fact, the relatively recent arrival of CEM into the business mainstream means an explosion in the number of marketing touchpoints, irrespective of whether they are managed by marketers or not. CMOs and the CMS software industry will have to rethink how they deliver all the marketing touchoints in the end-to-end customer experience, not just the traditional outbound marketing ones. CMOs struggle with the customer experience. That is partly because they do not control all of the touchponts with customers and partly because of their historical reluctance to support the increased involvement of customers during the delivery process. The CMS software industry is really struggling with the decentralised complexity of managing the customer experience. None of the CMS solutions I have seen to-date have a coherent offering to support CMOs in mastering their CEM challenges.
2. Centralised Rules but Decentralised Decisioning – Pretty much all of the large volume data owners, e.g. banks, telcos and utilities, and the CMS software industry are pushing the centralised decisioning model. What they don’t relise is that this is only a half-way house towards a more customer-responsive model. A model that biological systems have perfected billions of years ago. In this model, broad rules are developed centrally for universal use at touchpoints with customers, which are then interpreted locally in real-time using all the contextual information available. The touchpoint, the local context, how the rules were adapted and the results are then fed back to the centre for sense-making and rule evolution. The whole model continuously evolves as the environment in which it operates changes. This is the basis upon which DNA both encodes how we are and yet allows us to respond to the local environment immediately with appropriate fine-tuning. This sounds complex but in reality it isn’t. A small team sucessfully trialled the Customer DNA approach at Toyota a few years ago. It is now buit into its operational Customer Lifecycle Management programme. But this is a huge change of mindset for CMOs comfortable with their illusion of control and an enormous leap in complexity for the CMS software industry. Mobile CMOs (the mobile phone is fast becoming the perfect local fine-tuning device) will likely make the leap of understanding first. It remains to be seen whether other CMOs and the CMS software industry have the vision to follow.
3. Customer Co-creation of Social Media – Just as CRM has already evolved to CEM, CEM is inexorably evolving to the next big thing, Customer Co-creation. In customer co-creation, organisations work together with customers to co-create mutual value. This is as close as you are likely to get to a modern definition of customer-centricity. The current stage of customer co-creation relevant to marketers is social media. As many CMOs are starting to recognise, social media is rapidly becoming more influential than their own variety of push-marketing. And for the Milllennials born in the 1980s and 1990s, there is no real doubt that they consult with and believe their peers much more than they do marketers. Customer co-created social media is a huge challenge for the CMO. Not only is it outside their immediate control, it almost completely ignores what they have to say. CMOs have responded by creating various branded-communities, but it desn’t take long to realise that the most successful communities either are by-customers-for-customers, or like P&G’s Tremor programme, works very closely together with customers to create mutual value. To-date, the CMS software industry has largely been bypassed by niche community providers, who provide CMOs with a complete community solution, not just outbound marketing tools.
4. Customer Control of Marketing – Despite the US$ Billions thrown at marketing communications by CMOs, it is generally agreed that marketing is becoming less and less effective. This is partly a function of the increase in customer touchpoints and partly of the proliferation of media channels, but it is also a response to the carpet bombing by fire-and-forget marketers that customers are subjected to. One estimate puts the number of marketing messages a typical US consumer sees per day at 3-5,000! As a result, customers are tuning marketing communications out unless they obviously add value. Worse still, customers are starting to demand control over who can market to them. In its simplest form, customer self-service tools – common in mobile telecoms – are an early example of this thinking. But as marketing continues to decrease in relevance to customers, they are likely to demand further control over their data, over which marketers are allowed to see it and to be paid by those marketers allowed to use it. John Hagel wrote about a 90s version of this – infomediaries – in his earlier book Net Gain. Today, Doc Searls’ VRM Project and Alan Mitchell’s Buyer-Centric Commerce project are already taking steps along the route towards customer control of marketing. This is even more frightening to CMOs wedded to push-marketing and probably, in all probability, couldn’t be developed by the current CMS software industry. The understanding-doing gap is probably just too large.
5. Disruptive CMS Software Innovation – As CMS’ have grown larger, more integrated, more unwieldy and more expensive, some organisations have responded by going for simpler, leaner, right-sized CMS tools. Marketing on demand, SaaS and open-source marketing tools have proliferated in recent years. What the CMS softwae industry seems not to have realised is that their overweight products are ripe for disruptve innovation, as nimbler vendors provide all of the really useful functionality used by most CMOs, without any of the expensive (and not always best-in-class) add-ons, at only half of the price. As Harvard professor Clayton Christensen describes in his extensive work on disruptive innovation, many of these new CMS-light vendors probably won’t even be in the CMS software industry today. They will either be internal venture spinouts from power-marketing organisations, new CMS startups, or maybe even, a giant that really understands customers and their data like Google. Schumpeterian creative destruction in action.

It will be interesting to see how the CMS software market pans out in the future. One thing is for certain, it will likely be very very different from how it looks today. And I dare say from Elana’s predictions. And from mine too. Eleven years is several lifetimes in the future CMS software industry.

What do you think? Are CMOs and the CMS software industry going to struggle to master tomorrow’s marketing? Or will they take it all in their stride?

Post a comment or email me at graham(dot)hill(at)web(dot)de to get the conversation going.

Graham Hill
Customer-driven Innovator
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Further Reading:

Elana Andersen, What Will Campaign Management Be Like In 2020?

CMO Council, Define & Align the CMO

David Aaker, Spanning Silos: The New CMO Imperative

New York Times, Letting Consumers Control Marketing: Priceless

Graham Hill, Customer Lifecycle Management—Past, Present, Future

Graham Hill, How Customer-Centricity Drives Profits

WOMMA, Millenials Spread WOM About Stuff They Like

P&G, P&G Tremor…the leader in Word of Mouth Marketing

John Hagel, Edge Perspectives Blog

Doc Searls, VRM Project Wiki

Alan Mitchell, Right Side Up Blog

Clayton Christensen, Disruptive Technologies: Catching the Wave