A new study out by Spencer Stuart shows an insane number of chief marketing officers who’ve been fired during 2018. But frankly, it’s not a surprise. I served as CMO for Deloitte Consulting and then Starwood Hotels & Resorts, and when I have coached executive teams through transformations, I’ve seen many teams at an impasse with their CMO.
There are lessons we can learn by exploring why so many CMOs get fired—and they can be useful to any executive working to navigate the radically interdependent world of business today.
Although the role of a CMO has been evolving and expanding, people on executive teams still seem to think the CMO must have expertise in every element of her role. In most cases that is a prescription for failure. Success comes, rather, by embracing a role as the facilitator of growth for the business and the four most
“Don’t believe everything you hear” is good advice — especially in an era of fake news and alternative facts. The same goes for managers who often rely on social-sentiment analysis to get a handle on what consumers think of their brands.
Social-sentiment analysis is the process of algorithmically analyzing social posts, comments, and behaviors and categorizing them into positive, negative, or neutral. Many companies use it to understand how their customers are feeling about their brands.
We recently conducted an extensive social-sentiment analysis with a team of researchers at Boston University’s Emerging Media Studies program as part of our Experience Brand Index research this past spring. In that research, we asked 4,000 consumers in the United States and United Kingdom about their actions and interactions with a wide range of brands over the last six months. These experiences were rated across more than a dozen dimensions, and we
When she first saw the email, she thought she was about to be fired. About 30 minutes prior to her weekly one-on-one with the CEO, the chief marketing officer at a multibillion global financial services firm received a cryptic email from him with the subject line “The Trouble with CMOs.” The email contained a link to a 2017 article one of us wrote for HBR, and suggested the CMO read it before their meeting. Uh-oh. She went into the meeting prepared for the worst. As she sat across from the CEO, he asked her whether she thought she had the right role to maximize marketing’s impact. With trepidation, she answered honestly and indicated that she didn’t.
What came next was a pleasant surprise. The CEO, grinning, agreed with her. He said he didn’t want to be the type of CEO who failed to design the CMO
Blockchain has important implications for marketing and advertising. But according to The CMO Survey, only 8% of firms rate the use of blockchain in marketing as moderately or very important.
Blockchain technology is not well understood and subject to a lot of hype. This combination creates a natural barrier to entry and has likely caused marketers to take a “wait and see” approach. However, there are many reasons to invest the time now to understand the technology and begin exploring specific marketing applications for your industry. Like digital platforms, social media, martech, fintech, and numerous other innovations, the spoils of blockchain may go to early adopters who commit to ruthless innovation.
Most professionals use email every day for business — in fact, it’d be hard not to, with 281 billion messages sent and received on a daily basis. But when it comes to marketing, much of the attention gets focused on social media, which — while popular and highly visible — has a conversion rate less than half that of email marketing (4.29% vs. 1.81%), according to a recent analysis. Indeed, one 2015 study revealed that email marketing had an average ROI of £38 (about $50 USD) for every dollar invested.
With returns like that, the question is clear: How can we build our email lists? I’ll share three strategies I’ve learned in the past four years, as I’ve worked to build my mailing list to nearly 50,000 people. But first, an important note: You should always let subscribers opt in. It’s both a violation of anti-spamming
These days, it seems, every brand wants to be a “lifestyle brand.”
Peddling burritos? “Our ultimate marketing mission is to make Chipotle not just a food brand but a purpose-driven lifestyle brand,” the company’s new head of marketing said. Selling sweets? Godiva wants “to be seen as a lifestyle brand by leveraging [our] culinary experience to expand beyond chocolates,” a statement read. Shipping meal-preparation kits to families? Blue Apron, its new CEO argued, sees itself as “a strong consumer lifestyle brand that [plays]…a more meaningful role in our customers’ lives.”
All three examples appeared in a recent article in the New York Times, which both chronicled and raised a skeptical eyebrow about the commitment of so many brands, in some pretty prosaic industries, to becoming lifestyle brands. What the Times (and, I fear, many of the brands themselves) could not quite identity were how
Businesses are constantly vying to capture the attention of potential customers. It’s not easy to do. People are inundated with different brands as they stroll through the streets, scan through their social media newsfeeds, and binge television. The average American is exposed to more than 4,000 ads every day.
A simple concept can help businesses cut through the noise. It’s called psychological ownership. That’s when consumers feel so invested in a product that it becomes an extension of themselves.
Companies that encourage psychological ownership can entice customers to buy more products, at higher prices, and even to willingly promote those products among their friends. But if businesses disrespect this feeling, sales can suffer.
To build psychological ownership, companies must use at least one of three factors: control, investment of self, and intimate knowledge.
Enhancing customer control
One way is to allow customers a hand in forming the
Online reviews can play a big role in influencing people’s purchase decisions, but what makes a review most persuasive one way or the other? Certainly bad reviews can dissuade customers, but it turns out that some good reviews can too. Our research on persuasion and marketing is the first to find that a moderately positive review can be more persuasive than an extremely positive review. In research to be published by the Journal of Consumer Research in October 2018, we found that a moderately positive review is even more persuasive when the default review selection is extremely positive. This is because reviews that deviate from a default review selection are perceived to be more thoughtful—and thus more accurate—than reviews that conform to the default.
We first tested this phenomenon by showing participants a consumer review for a particular brand of granola bar. The review platform
Consumers almost always tell researchers that they prefer to have many versions of a product from which to choose. But, in fact, consumers’ perceptions of how many choices they prefer change depending on whether they intend to use an item for pleasure or to meet a functional need. (Think of a swimsuit desired for beachwear versus swimming laps.) For retailers, that difference has big implications for the problem of assortment — how many variations of a single product to offer.
Consumers motivated by pleasure believe that what pleases them differs greatly from what pleases most other people. They will therefore prefer a large assortment. But when seeking to meet a utilitarian need with the same product, they are less inclined to see their preferences as being greatly different from those of other people. They will then be satisfied by a smaller assortment from which to choose.
After the school shooting in Parkland, Florida, in February 2018, Dick’s Sporting Goods announced that it would no longer sell semiautomatic rifles in its hunting and fishing stores (it had already stopped selling them at its main stores after the December 2012 Sandy Hook School shooting). The company has gone on to destroy the guns it pulled from its shelves, rather than selling them back to the manufacturers. CEO Ed Stack told The New York Times, “We’re going to take a stand and step up and tell people our view and, hopefully, bring people along into the conversation.” While some consumers threatened to boycott the retailer, the company’s stock is up, and public perception of the brand is more positive overall.
Dick’s is not alone. The charged political atmosphere is increasingly influencing the marketplace, and retailers are having to figure out where they stand. Consumers are putting
It takes time for a big idea to make its way into business practice. Six years ago, Harvard’s Michael Porter and FSG’s Mark Kramer made the bold statement that shared value — the idea that the purpose of a company is to achieve both shareholder profit and social purpose — would “reinvent capitalism.” They encouraged companies to go beyond CSR (corporate social responsibility) and integrate social impact into companies’ competitive strategy. And in 2011, Nathaniel Foote and Russ Eisenstat proposed a “better way to manage in the 21st century.” They found “higher-ambition” leaders achieved superior performance by doing well and doing good.
For the last six years, we have worked with a group of top marketing executives and business leaders in Silicon Valley and the Bay Area from companies large and small. Each year we assess the issues that are most top-of-mind. From
Over the last decade, e-commerce has imposed a painful profit squeeze on big-box retailers, resulting in layoffs, store closings, mall reconfigurations, and even bankruptcies. With no reprieve in sight for retailers, the online world is poised to do the same to brand-name consumer products companies.
One of the core reasons that this is happening is that in addition to providing always-on, on-demand convenience, online retailers know so much more about their customers than their offline counterparts do. In fact, they have mastered the art of creating a direct connection to their customers, which in turn allows them to collect massive amounts of data about them. Then, by applying tools like artificial intelligence, the online retailers are able to create more-personalized customer experiences, fostering levels of satisfaction, connection, and customer loyalty that traditional retailers just can’t compete with.
And when it comes to consumer goods companies, that same artificial
It’s a good time to be a consumer. New digital business models have flipped the customer-brand relationship on its head. No longer do consumers need to do their own background research on a product or company to find what they are looking for. Instead, brands come to us. There are more options and more channels to get what you want than ever before.
That said, there is always a downside. This seemingly limitless digital economy has brought with it feelings of overexposure. No one likes to feel as if they’re being watched, yet with technology continuing to mature, we have found ourselves entrenched in a marketing machine that has become far too intimate for anyone’s liking.
The power of digital is so great that brands have started to abuse it. And with this abuse of power has come the erosion of the trust that once existed between businesses
When brothers Shep and Ian Murray cut their ties with Corporate America to start a little company on Martha’s Vineyard in 1998, their motivation was clear: “We’re making neck ties so we don’t have to wear them.”
Little did they know that the business they founded, Vineyard Vines, would become a darling of the fashion industry and a household brand name around the country.
Today, the company best known for its smiling pink whale logo offers much more than their signature neckwear. They manufacturer a full line of “exclusive, yet attainable” clothing and accessories for men, women, and children. That “little” privately-held business has grown tremendously since its launch and currently has more than 90 physical retail locations and a highly successful eCommerce business.
I met the team at Vineyard Vines while doing research about data-driven marketing technologies for my book, Marketing, Interrupted, and
Retail has been constantly reinventing itself, and participants race to keep up with what feels like a series of epic shifts in consumer preferences. Apparel brands are investing especially heavily in online shopping capabilities and introducing interactive features that complement apps and websites. Retailers and manufacturers are rushing out new products to keep pace with the leaders of fast fashion such as Zara, H&M, and Forever 21, which launch new fashions every week or so.
But do consumers actually crave all of these changes? And which approaches can generate growth in this changing environment? Many manufacturers try to answer these questions using point-of-sale data, which often comes filtered by the retailers that gather the information; media coverage, which tends to focus on the new; and previous sales of their products, which reflect the past.
“Almost everything we do is a recommendation.” That’s the essential design philosophy articulated by then-Netflix engineering director Xavier Amatriain five years ago, where personalizing and customizing choice is the coin of the realm. “I was at eBay last week,” he said at the time, “and they told me that 90% of what people buy there comes from search. We’re the opposite. Recommendation is huge, and our search feature is what people do when we’re not able to show them what to watch.”
Unlike search, recommendation systems seek to predict the “rating” or “preference” a user would give to an item, action, or opportunity. Thoughtfully managed, recommendations can prove far more valuable to marketers than for the customers they ostensibly serve. Recommendation engines not only generate useful data for analyzing customer desires; they can be harnessed to make tactical and strategic recommendations
A non-negligible percentage of customers who buy a new smartphone return it within the “free return” window. Many of these returners claim that the phone does not work correctly. However, the data clearly indicates that this is often not the real issue. The reality is that these customers simply don’t know how to use the smartphone well enough, and either do not realize it, or are not willing to admit it. So they return it — which makes a major profit difference for both the smartphone manufacturer and the service provider. For the latter, it could be on the order of thousands of dollars in lifetime value per customer (CLV).
We see a paradox in two important analytics trends. The most recent results from The CMO Survey conducted by Duke University’s Fuqua School of Business and sponsored by Deloitte LLP and the American Marketing Association reports that the percentage of marketing budgets companies plan to allocate to analytics over the next three years will increase from 5.8% to 17.3%—a whopping 198% increase. These increases are expected despite the fact that top marketers report that the effect of analytics on company-wide performance remains modest, with an average performance score of 4.1 on a seven-point scale, where 1=not at all effective and 7=highly effective. More importantly, this performance impact has shown little increase over the last five years, when it was rated 3.8 on the same scale.
How can it be that firms have not seen any increase in how analytics contribute to company performance, but
According to Constellation Research, businesses across all sectors will spend more than $100 billion per year on Artificial Intelligence (AI) technologies by 2025, up from a mere $2 billion in 2015. The marketing industry will be no exception.
AI holds great promise for making marketing more intelligent, efficient, consumer-friendly, and, ultimately, more effective. Perhaps more pointedly, though, AI will soon move from being a “nice-to-have” capability to a “have-to-have.” AI is simply a requirement for making sense of the vast arrays of data — both structured and unstructured — being generated from an explosion of digital touchpoints to extract actionable insights at speeds no human could ever replicate in order to deliver the personalized service consumers now demand.
When Naomi Simson founded RedBalloon, an online gift retailer that sells personal experiences, she was pioneering the category in Australia. With a $25,000 personal investment and a small office in her home, she began aggregating sales leads and aggressively acquiring customers through very traditional marketing means — like yellow page advertisements. It was 2001, and online advertising was at its nascent stage. Internet Explorer was the leading Internet browser and Google AdWords had only just recently launched. With a cost of customer acquisition of just 5 cents, Simson’s traditional approach to advertising was generating an impressive return on investment. RedBalloon was setting the pace for gifting experiences like outdoor adventures, wine tastings, concert tickets, and spa treatments.
By 2015, RedBalloon was delivering more than four million customers to businesses across Australia and New Zealand that offered “experiences.” Simson wasn’t overconfident, but at this point, she felt