CMOs Feel Underprepared for Key Market Factors

I happened upon IBM’s Global Chief Marketing Officer Study (From Stretched to Strengthened) this week.  I thought it was worth sharing some highlights, especially regarding the key market factors Chief Marketing Officers (CMOs) face and their feeling of being underprepared to manage many of these challenges.   The study is based on more than 1,700 face-to-face interviews with CMOs around the world and was released in October 2011.

The interviews showed that the greatest challenges for CMOs, in descending order of importance, are:

  • Market factors
  • Technology factors
  • Regulatory concerns
  • Macroeconomic factors
  • People skills
  • Globalization
  • Socioeconomic factors
  • Environmental issues

IBM conducts a number of these studies in the C-suite and the top two concerns identified in the CEO study in 2010 were the same as the CMO study.  So, it is nice that the CEOs and CMOs are being kept awake by the same issues.

Another interesting finding: 71% of participants expect high to very high levels of complexity over the next five years, but only 48% feel prepared to cope with the high level of complexity.  These statistics also mirror results from the 2010 CEO study, according to IBM.

The study attempted to measure if CMOs feel they are equipped to manage 13 key market factors.  The market factors and the percentage of CMOs who feel they are underprepared to manage these factors are:

  • Data explosion – 71%
  • Social media – 68%
  • Growth of channel and device choices – 65%
  • Shifting consumer demographics – 63%
  • Financial constraints – 59%
  • Decreasing brand loyalty – 57%
  • Growth market opportunities – 56%
  • ROI accountability – 56%
  • Customer collaboration and influence – 56%
  • Privacy considerations – 55%
  • Global outsourcing – 54%
  • Regulatory considerations – 50%
  • Corporate transparency – 47%

A helpful feature of the study is that some of the findings are broken out by whether the respondent’s company is outperforming or underperforming.  The designations were determined based on participants’ answers to questions about their companies and were verified through corporate performance data.  As you would expect, a higher percentage of CMOs of underperforming companies felt underprepared to manage the top four market factors listed above than their peers in outperforming companies.

The study identified areas where the CMOs of outperforming companies are doing things differently than other CMOs:

Understanding individuals, as well as markets – Customer intimacy, as it is commonly called, is high on CEOs’ list of prerequisites for success and CMOs at successful companies are making it a priority.

Focusing on relationships, not just transactions – Using data to stimulate interest and form bonds with customers.

Developing a clear “corporate character” – Matching beliefs and behavior.

Most CMOs still struggle with demonstrating return on investment (ROI).  Nearly two-thirds of CMOs think return on marketing investment will be the primary measure of their effectiveness by 2015.  But even among the outperforming companies, half of all CMOs feel unprepared to provide hard ROI numbers.

What’s next for CMOs?  The study identified three key areas for improvement:

  • Understand and deliver value to empowered customers
  • Create lasting relationships with those customers
  • Measure marketing’s contribution to the business in relevant, quantifiable terms

The study contains many other interesting statistics about the use of data tools, technology and other resources, so I highly recommend you read it.  After I provided my contact information to access the study, I received an email with a link to complete a survey so I could compare my answers to the study.  I haven’t taken the survey yet, but it could be a valuable assessment to see where you stand versus the global survey results.

 

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