In most modern-day organisations, value-creation activities can be broadly classified into three distinct categories:
~~ Product/service innovation
~~ Translating the idea into a deliverable state
~~ Creating and maintaining customers
Rarely do organisations excel on all three fronts, which is completely understandable. That said, successful organisations that have transformed their businesses into brands over time, and delivered value consistently, have focused on, and decided to specialise in, any one of these three value-creation segments; indeed, it is imperative that they did so.
For B2C (business to consumer) businesses, the focus is usually on the third category: Creating and maintaining customers, as they directly engage with customers on a day-to-day basis. And here is where the marketing functionality and the role of a CMO (Chief Marketing Officer) comes into the picture!
Talking about CMOs, truth be told, they have lived a pretty secluded and somewhat powerless life over the last couple of decades. CMOs gradually lost their relative importance in the eyes of the CEO or board members and other CXOs. Thus, the degree of autonomy associated with their roles became minimal. A widely cited study in 2008, for example, concluded that a CMO has no effect on a firm’s performance. Then came a 2012 Forbes article that proclaimed: “The CMO is dead”.
Product-focused
In fact, the role of a CMO was such that they would be called in only during the challenging times — when something went particularly south, during a blowback or a crises.
One of the main reasons most CMOs lost ground in terms of power and responsibility was that the company mindset was very ‘product-focused’. Organisations were under the assumption that the product or service that the R&D team has come up with could directly solve a major customer pain-point.
They had no clear knowledge on what the exact customer pain-point was in the first place. Why? Because companies were never in the habit of collecting feedback from customers and, even if they did, it wasn’t put to effective use. In other words, customers’ opinions were hardly taken into account while developing a product or a service. The thinking from the company’s side used to be: ‘We know what our customers want’. Lucky for them, they were able to get away with it!
More demanding
Shift to the present, and the marketplace has changed, or should I say evolved, big time. There room for error is virtually non-existent and if your business processes aren’t in sync with customer needs or expectations, then you’ll be soon forgotten by customers, replaced quickly by competition.
Customers have become more aware, choosier and naturally more demanding. Therefore, companies that want to survive this drastic metamorphosis have had to go from being product-focused to being customer-focused. This has brought about a paradigm shift internally, within the business, wherein CMOs have a golden opportunity to become the cornerstone of the organisation.
So, how can the CMO exploit the current trends, become an undisputed business driver and confidently push wide-scale growth? In the next column, we will see how the CMO can be empowered to achieve all this and more.
(To be concluded)
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