After more than three years of uncertainty and volatility, companies are focused again on driving sustainable, profitable growth. The pressure to find growth in global and/or emerging markets has CEOs looking in all directions, including to an expanded agenda for the CMO. The stakes couldn't be higher. CMOs who deliver impressive outcomes become hot commodities and often leave their posts to pursue new opportunities. Those who fail to deliver are replaced more quickly than ever.
Accenture's survey of more than 400 top marketing decision-makers around the world, as well as its annual Global Consumer Survey, outlines the landscape CMOs are facing today. Three key findings stand out:
1. Customer switching has become the new reality. Switching has risen in seven of the last eight years, in both good and difficult economic times. "Partial switching" has become the norm, as customers straddle multiple providers in a constant search for the best value. Almost one-third of consumers reported a partial switch with their retail, consumer electronics, and travel and tourism providers.
2. Marketers are not executing the basics as well as they used to. In four key areas—customer analytics, offering innovation, customer engagement, and marketing operations—marketers see a growing gap between importance and performance, with perceived performance lower than last year in all four. Due to the increase in importance attributed to customer engagement—coupled with a slight drop in performance—the gap nearly tripled from 2010; in the other three areas, it doubled.
3. The impact of digital channels and social media is large and growing. Consumers continue to rate "word of mouth" as the source of information they use most frequently, according to Accenture research. While in-person channels are considered most important for influencing or interacting with customers, online channels are viewed as more important today than last year.
A Positive Outlook
CMOs are positive about their organizations' growth potential. Almost half (44 percent) have seen significant growth in sales revenue, with an average increase of eight percentage points over the last year. The same percentage also foresee similar growth this year. Despite this, just over half (51 percent) said their marketing budget stayed flat or increased only slightly this year, and even more (57 percent) think this will remain the case for the coming fiscal year.
How can successful CMOs close gaps and satisfy management demands for revenue growth? We see three key areas to focus on in 2012:
1. Shore up traditional capabilities. Marketing operations and customer analytics are getting a "fresh coat of paint" as CMOs renew their focus on the efficiency of these functions. Customer analytics shows the largest performance gap across all business models (B2C, B2B2C, B2B). CMOs also identified customer analytics as the top area for investment, with 41 percent saying they plan to spend more or significantly more on such initiatives as analyzing market and customer trends, developing new customer research methods, and improving customer segmentation and insight.
2. Capture the potential from new, disruptive capabilities. Social media is emerging as an important way for companies to interact with customers, with about one-third (30 percent) of marketers recognizing it as extremely important. Top CMOs are resisting the urge to execute social media strategies via stand-alone campaigns—instead using them as the catalyst to make their mobile applications and online channels more relevant and profitable.
3. Forge deeper relationships across functional areas. Top CMOs are collaborating more deeply with their counterparts in sales, customer service, and R&D. With the rise of agile marketing technologies, rapid changes in mobile and digital capabilities, the growing volume of customer data, and the short shelf life of social media technologies, the success of the CMO and CIO have become particularly intertwined.
By building core capabilities to support new initiatives in digital and social media—while working holistically within their companies to align such disparate elements as customer service and R&D with the drive for increased sales—CMOs can replace shifting sands with a solid foundation for future growth.
Robert Wollan is managing director of the Accenture Customer Relationship Management practice and coauthor of The Social Media Management Handbook. Visit www.socialmediamanagementhandbook.accenture.com for more information.