Indy AMA Luncheon: IBM CMO Study


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IBM staff member and marketer Kevin M. Scully presented the highlights of IBM's Global CMO Study to the Indy AMA Marketer Luncheon (Sept 2012).

The study, subtitled From Stretched to Strengthend, encompasses 19 different industries and feedback from over 1,700 CMOs. IBM conducted face-to-face interviews with 1,734 CMOs across 64 countries to look at how they are addressing the transformational changes in our business landscape and the world in which we work.

The presentation includes:
The changing role of marketing and new expectations
The value of becoming a social business
Challenges of delivering a consistent customer experience

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Indy AMA Luncheon: IBM CMO Study

  1. 1. Insights from the IBM Chief Marketing Officer From Study Stretched toAMA Indianapolis, INSeptember 11, 2012 Strengthened
  2. 2. IBM CMO StudyWe spoke with more than 1,700 CMOs, 300 in NA, thelargest global sample of face-to-face CMO interviews. The study represents organizations in 64 countries and 19 industries Sectors 3% Regions Public 16% 17% Communications North America 21% Industrial 44% Growth markets 36% 24% Distribution 35% Financial Services Europe 4% JapanGrowth Markets include Latin America, Central and Eastern Europe, Middle East and Africa and Asia Pacific (excluding Japan); n=1734North America sample size n = 300, Rest of World n = 13332 © 2012 IBM Corporation
  3. 3. IBM CMO StudySentiment Analysis was performed on 10,000 quotes“None of the changes in Marketing today are evolutionary, they are all revolutionary and transformational.” Insurance SVP of Marketing, USA “I think the biggest marketing challenge will be the analysis and diffusion of data. I firmly believe CMOs and marketers need to become ‘analytic athletes’ to do their jobs.” Maureen Schumacher, Southeast Regional Director, Google “Traditionally, corporate culture and character have been managed by HR, but it cant remain there in a digital environment. The world of separate internal and external messages is gone, and internal actions, memos and decisions can impact your brand just as much as an advertising campaign.” Financial Markets EVP, Head of Global Marketing, USA3 © 2012 IBM Corporation
  4. 4. IBM CMO StudyCMOs: swimming, treading water or drowning? In this digital era... CMOs have to...  Globalization has brought the world to  Do more than ever, inside and outside everyone’s backyard the organization  Everyone is a broadcaster, publisher  Be more accountable for return on and a critic: there is nowhere to hide investment (ROI)  Transparency is the new price of entry  Use tools and technologies that their children understand better than they do And... And... more data, more sources, CMOs have just three to four years more devices, less clarity to make their mark “The role went from marketing, to marketing and client experience, to marketing and client experience and channel. And now I am also doing technology prioritization and all of our service model structure. It really has turned into a revenue officer role, versus a marketing officer role.” Banking EVP & CMO USA4 © 2012 IBM Corporation
  5. 5. IBM CMO StudyKey areas of under preparedness are also ones CMOsidentify as most critical to enabling the marketing agenda Marketing Priority Matrix 1 Data explosion Under preparedness Percent of CMOs reporting 2 Social media under preparedness 1 3 Growth of channel and device choices 70 2 4 Shifting consumer demographics 3 5 Financial constraints 4 6 Decreasing brand loyalty 60 5 Growth market opportunities 7 6 10 7 9 8 ROI accountability 8 11 Customer collaboration and influence 9 50 12 10 Privacy considerations 13 11 Global outsourcing Factors impacting marketing Regulatory considerations 12 40 Percent of CMOs selecting as “Top five factors” 13 Corporate transparency 0 20 40 60 Mean Source: Q7 Which of the following market factors will have the most impact on your marketing organization over the next 3 to 5 years? Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?5 © 2012 IBM Corporation
  6. 6. IBM CMO StudyNA CMOs are underprepared for the growth in channeland device choices and emerging market opportunities North America CMO Under preparedness Percent of CMOs reporting under preparedness Delta with Global 50% 77% Data explosion 69% Social media Growth of channel and device choices 78% +13 Shifting consumer demographics 71% Financial constraints 59% Decreasing brand loyalty 67% +10 Emerging market opportunities 75% +21 ROI accountability 67% +11 Customer collaboration and influence 62% Privacy considerations 57% Global outsourcing 57% Regulatory considerations 51% Corporate transparency 67% +20Source: Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years? © 2012 IBM Corporation
  7. 7. IBM CMO Study Academic & Press Reactions “It’s only the largest and most current of an increasing number of reports and studies that show that marketing management, in too many major organizations, is sadly ill-prepared to deal with the increasingly complex world in which they operate.” Don E Schultz Professor of integrated marketing communications Northwestern University 12.30.11 marketing power Your Opportunity “Marketing must become more adept at managing the magnitude of change now taking place. Otherwise, it will be like going into battle with a Swiss Army knife.” Financial Services Vice President, Marketing, USA7 © 2012 IBM Corporation
  8. 8. IBM CMO StudySocial media: a key engagement channel for CMOs North America Priorities for managing the shift toward digital technologies Enhance customer loyalty/advocacy Design experiences for tablet/mobile apps Use social media as a key engagement channel Use integrated software suites to manage customers Monitor the brand via social media Measure ROI of digital technologies Analyze online/offline transaction analysis Develop social interaction governance/policies Monetize social media Gain comprehensive visibility of supply chain “Our customers value what others say about us more than what we say about ourselves. We can quantify this shift. It is real and happening today. This is why social media matters.” CMO, Travel & Transportation8 Source: Q12 What are your priorities for managing the shift toward emerging digital technologies? (Select top five) © 2012 IBM Corporation
  9. 9. IBM CMO StudyMany CMOs are still using data for transactions ratherthan for deepening relationships with the customer North America Extensive use of customer data Percent of CMOs using data captured within customer lifecycle phases Segmentation/targeting Awareness/education Interest/desire Missed Action/buy opportunity Transaction focused Relationship focused Use/enjoy Bond/advocate “You want to make sure you are keeping the clients and growing them. That is where the higher net income impact is.” CMO, Banking industry Source: Q21 To what extent does your marketing organization capture, analyze and act on customer data generated during the following customer lifecycle phases?9 © 2012 IBM Corporation
  10. 10. IBM CMO StudyAnalyst Reaction “CMOs, Make The Chief Business Technology Officer (née CIO) Your New Best Friend” Forresters CMO practice partnered with the chief business technology officer, formerly known as the chief information officer (CIO), to publish a report called " CMOs Must Merge Marketing With IT To Win In The Digital Decade “…... The conclusion? Only companies with well-aligned marketing and IT departments will see success in what Forrester calls the age of the customer.10 © 2012 IBM Corporation
  11. 11. IBM CMO Study CMOs need to have significant influence across all four Ps, not just promotion, to deliver marketing ROI North America Percent of CMOs citing significant influence Integrated advertising and promotionPromotion Aligned internal and external communications Innovative social and other emerging media Deeply researching customer needs Products Product service portfolio Comprehensive research and development cycle Customer experience involving multiple touch points Place Channel selection and management End-to-end supply chain process Full competitive pricing assessment Price Understanding of total ownership costs/benefits Integrated, cross-company pricing processSource: Q14 How much influence do you and your organization have over the “Four Ps” and their related sub-factors? 11 © 2012 IBM Corporation
  12. 12. IBM CMO StudyCMOs can expand their influence by shifting to newcapabilities that focus on technology, social media and ROI North America Capabilities for personal success over next 3-5 years Percent of CMOs selecting capabilities Leadership abilities Voice of the customer insights Creative thinking Cross-CxO collaboration Competitive trends insights Analytics aptitude Management capabilities Demand creation capabilities Understanding products/services value chain Technology Savviness Social media expertise Finance skills12 Source: Q17 What capabilities do you need to be personally successful over the next 3 to 5 years? © 2012 IBM Corporation
  13. 13. IBM CMO StudySupporting Press “Marketing is going through an identity crisis. Brand love and consumer intimacy are both still crucial. Yet today, quantitative analysis, econometric modeling, real-time message monitoring and adaptation are all elements of the marketer’s tool set.” From Mark de Swaan Arons Co-founder Effective Brands Marketing Power Fall 2011 Your Opportunity Expand your horizons by enhancing your personal financial, technical and digital savviness. Personally invest to broaden your capabilities.13 © 2012 IBM Corporation
  14. 14. IBM CMO StudyNA CMOs face a challenge in getting external andinternal audiences to grasp their corporate character North America Is your corporate character understood in the marketplace? 32% 41% say no or limited say understood and understanding of (strong) contributor to corporate character brand success Not understood Strong contributor to the brand’s success Is more work needed to get employees on board? 29% 41% say no or very say significant or limited work much work needed needed Significant work needed No work neededSource: Q10 Is your corporate character understood in the marketplace? Q11 How much work is needed to have employees embrace and live the corporate character?14 © 2012 IBM Corporation
  15. 15. IBM CMO StudySupporting Press “Transparency is here. Wikileaks is a window to the future of business. Everyone will know about everything you do. Whether it’s your carbon footprint or your fee structure, there will be no secrets. It’s best to out yourself and engage your community on how to improve your business…..” From Customers Have the Power by John Winsor Your Opportunity - Champion your organization’s corporate character Help the enterprise define and activate the traits that make it unique. Work across the different functions to meld the internal and external faces of the enterprise - for all touch points and experiences.15 © 2012 IBM Corporation
  16. 16. IBM CMO StudyNA CMOs will define success by combining financialmeasures with the ability to manage customer experience North America Global Seven most important measures to gauge marketing success Percent of CMOs selecting success measurements Marketing ROI 63% Customer experience 58% Overall sales 45% Conversion rate/new customers 48% Marketing-influenced sales 42% Operating Profit Not in top 7 Revenue per customer 42% “Ultimately, this is what we need to understand – customer and brand analytics: How will a $1 spend in marketing bring the most results?” Neal Campbell, SVP & CMO CDW, USA Source: Q19 What are the 5 most important measurements you (will) use to gauge marketing success by 2015?16 © 2012 IBM Corporation
  17. 17. IBM CMO Study The changing profession © 2012 IBM Corporation
  18. 18. IBM CMO Study © 2012 IBM Corporation
  19. 19. IBM CMO StudyThe timeless responsibilities of our marketing professionMarketers have always been responsiblefor knowing the customer.Marketers have always been responsiblefor defining what to market, and how to market.Marketers have always protected thebrand promise. © 2012 IBM Corporation
  20. 20. IBM CMO StudyThe three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one. © 2012 IBM Corporation
  21. 21. IBM CMO Study © 2012 IBM Corporation
  22. 22. IBM CMO StudyUnderstanding each customeras an individual Transacti Attribute ons s Orders Transaction data Demographic Demo- Payment data graphics history Characte Usage r-istics historyThe great leap is into allthe data that liesoutside our enterprise Needs Purchase stageand into the newinsights that data offers. Email / Desires Chat Behavioral Prefer- Call center data ences notes Web Opinions click- In-person streams dialogs Interaction data Armed with new analytics, we are able to enter the world of predicting the next best offer, action or need. © 2012 IBM Corporation
  23. 23. IBM CMO StudyThe three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one. © 2012 IBM Corporation
  24. 24. IBM CMO Study © 2012 IBM Corporation
  25. 25. IBM CMO StudyCreating a system of engagement that maximizes valuecreation at every touchCompanies that thinksystemically are able toprovide the right offeringat the right touchpoint andto motivate greaterengagement with a brand. Attribution modeling Customer Digital analytics segmentation Business Customer predictive intelligence analytics Future portfolio of products, services, knowledge and experiences © 2012 IBM Corporation
  26. 26. IBM CMO StudyThe three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one. © 2012 IBM Corporation
  27. 27. IBM CMO StudyIn the past, when someone hada bad experience with a company,only the individual wouldexperience it.Now, the world canknow instantly. © 2012 IBM Corporation
  28. 28. IBM CMO Study © 2012 IBM Corporation
  29. 29. IBM CMO StudyDesigning your culture and brandso they are authentically one. An influential blogger has a bad customer experience An internal memo is leaked to the media Every day, millions of actions driven by our culture influence what others think of our brand.Through engagement and sociallistening, the new profession ofmarketing closes the gapsbetween the brand promise andhow it’s experienced in reality. Advocacy groups reveal an unethical practice in the supply chain © 2012 IBM Corporation
  30. 30. IBM CMO StudyThe three imperatives of a new professionUnderstanding each customer asan individual.Creating a system of engagement thatmaximizes value creation at every touch.Designing your culture and brand sothey are authentically one. © 2012 IBM Corporation
  31. 31. IBM CMO StudyVisit for more insights31 © 2012 IBM Corporation
  32. 32. IBM CMO StudyIBM provides a proven and comprehensive set ofmarketing software and services Marketing Strategy and Transformation Customer Analytics IBM Smarter Marketing Customer Experience Solutions and Engagement Social Marketing and Collaboration Marketing Performance Optimization © 2012 IBM Corporation
  33. 33. IBM CMO StudyClosing Thoughts…Be ready for a career of perpetual learning and change – no matter your role in the marketing ecosystemPick one of the imperatives to explore for your business: – Understand each customer as an individual – Create a system of engagement that creates value – Align your brand and corporate character as one33 © 2012 IBM Corporation
  34. 34. IBM CMO Study Thank You! © 2012 IBM Corporation