From Mad Man to Superwoman: The Inevitable Rise of the CMO in the Era of the Empowered Customer
Deloitte Insights video
While technology has enabled buyers to take some of the power away from sellers in today’s postdigital marketplace, it has also enabled businesses to learn more about their customers than ever before. And chief marketing officers (CMOs) are leading the way when it comes to turning big data into big opportunities. Watch this episode of Deloitte Insights to learn more.
The latest episode of Deloitte Insights features Greg Banks, leader of the Marketing Return on Investment practice for Deloitte Consulting LLP, and Suketu Gandhi, a principal with Deloitte Consulting LLP. Tune in to learn more about the rise of the CMO.
Suketu Gandhi, Principal, Deloitte Consulting LLP
Greg Banks, Director, Deloitte Consulting LLP
Sean O’Grady (Sean): Hello and welcome to Insights where today we will be discussing the role of Chief Marketing Officers (CMOs) in corporate America and how customer empowerment may be raising their status and increasing their tenure. This conversation stems from a recent article from Deloitte Review titled, “From Mad Man to Superwoman — The Inevitable Rise of the Chief Marketing Officer in the Age of the Empowered Customer.” Now who better to talk about this with us than two of the article’s authors. The first is Greg Banks, leader of the Marketing Return on Investment practice for Deloitte Consulting LLP and beside Greg is Suketu Gandhi, also a principal at Deloitte Consulting LLP. So Greg, we are talking about the CMO here, the proverbial revolving door in the C-suite, but in your article, you are saying that tenure may be changing.
Greg Banks (Greg): That’s correct.
Sean: What’s causing that?
Greg: Well, you know, Sean for a long time, the buyer has been taking more and more power from the seller. In the digital age, this accelerated and in the new social, mobile, what we call Postdigital™ age, this is accelerating even more. You remember Henry Ford’s famous quote, “I will sell them any color car they want as long as it is black.” Well, today, the customer can go online and customize his or her car to any color he or she wants and negotiate the price as well. As companies have learned to deal with this transformation, the marketing function, the CMO, has been often the most best equipped to ascend in a company to the leadership position. Now it’s true that in recent years, roughly 2000 to 2008, there was a lot of news about CMO revolving door, CMO tenure. Spencer Stuart, a well-known recruiting firm, publishes a survey every two years and they pointed out that the CMO had the lowest average tenure of any executive in the executive suite of 28 months. But this was more of a temporary phenomenon and anyone who was studying the longer trends knew that it would change and in fact in the last Spencer Stuart Study 2010, the CMO’s tenure has leapt 50% and is now at 42 months. So, we think the revolving door topic is going to fade into history and the CMO is going to continue to rise as an important figure in the American corporation.
Sean: Fade into history. You mentioned postdigital in the opening part of your remark, the future. We have Suketu here, the leader of Deloitte’s Postdigital Enterprise practice. Welcome back of course to the program. What trends are you seeing that may be contributing to this CMO ascent?
Suketu Gandhi (Suketu): As Greg pointed out, it is the power shift. How did the customer become so powerful? For the longest time, it used to be that you will buy what we sell to you. Now, that is not the case anymore. I am going to buy what my friends tell me is good, what the experts I trust tell me that is valuable, and I am going to buy it at the price that the folks who bought before me tell me is the right price. So, it is the shift of power. So, that is one thing. Because people are much more technically and socially connected. The second part of it is a lot of the analog data is now digital. What does that mean? We use words like big data, which says what people are doing online, what exhaust they are leaving on the digital world is being captured in a much more easier way. So, now people can understand what the comparative sources for information are and how do you react to that. The third trend that is really fascinating is the consumer used to be talked to by companies in a room such as this where you have glasses on all sides and people would look at you, throw popcorn, and see how you reacted. No more, right. Now, I have many ways to talk to the customer. I can talk to you while you are sitting in your house, watching TV and see what you like. I can talk to you while you are in the store, while you are having fun with friends, and actually I can talk to you even without talking to you. So, I can gather that information in a much more easier way. Who better equipped than the CMO who truly understands consumer behavior? The final thing is people have realized that people are not rational. I understand that it is a paradox of sorts, which says irrational people are trying to understand irrational people, but now we have a lot of data to back that up. So, all of these trends coming together are kind of really giving rise to the CMO who within the C-suite has a lot more insight on people than others did.
Sean: Human are behaving like humans.
Suketu: Human are behaving like humans. That is exactly right.
Sean: Let’s come back a little bit to your first point and that is exactly how customers are feeling the CMO ascent.
Greg: Yes. Imagine a period of time in the history of marketing when the main job was to communicate from one to many, the mass marketing era, not too distant past. That era is shrinking and what is rising to take its place is what we might call the influence marketing era or the network marketing era where the idea is now many to many. So, a company cannot send out a single message and hope to influence 75% of its prospects. A company has to engage and let those 75% of the prospects sometimes find and influence each other.
Sean: So the networked individual can be more powerful than the formal organization, the old model. That’s a paradigm shift, no big deal. How do you see that trend continuing over the next five years?
Suketu: I would be a really rich man if I could figure that out. This is one of those questions I would say not smart enough to answer, but we know what the tea leaves look like, which is companies used to run themselves on a very plan-based model. They would say, I can make 5,000 widgets; hence, I shall make 5,000. Then they slowly moved to what we call the scan-based model. That said, last year I sold 5,020, next year we hope we will sell more, so I will make 5,030. Now we are moving to what we are calling an intention-based model, which is right to the heart of what Greg talked about, which is one on one, right. So, truly understanding the intention of millions of customers and then responding to that with the appropriate products is where the game is. One of the side effects of this is a relatively new trend, which is called informationalization of products. That said, the product by itself has to be linked with the information and what does the information contain. It contains insight from the head of the CMO, from the head of the product designers — all embedded into the product. So, an example would be a washer and a dryer that actually understands, which day of the week you are going to use it on the basis of past patterns, or a washer and dryer realizes that you have a lot more soiled clothes with grass stains versus mud stains, and how should it change the way it washes, and that information is sent back to the company that manufactures it and plays it forward. So, those are kind of some of the things that are going to come down the pike. What it tells us is that companies need to be a lot more agile in the platforms they build that are ready to respond to customers versus expect that the future is well known and you are going to march to it. So, the future is being defined as we see, but that does not mean that you don’t start planning and the mantra that Greg came up with this was “think big, start small and scale appropriately” is what we are all going towards.
Sean: Gentlemen, thank you both for joining us. Good seeing you again Suketu.
Suketu: Thank you Sean.
Sean: Alright, we have been discussing the rise of the chief marketing officer with Greg Banks and Suketu Gandhi of Deloitte Consulting LLP. If you would like to learn more about Greg, Suketu, or any of the topics discussed on today’s broadcast, you can find that information on our website, it’s Deloitte.com/insightsus. For all the good folks here at Insights, I am Sean O’Grady. We will see you next time.