Meet the New Chief Collaboration Officer: The CMO

For 25 years, CarMax has blended the virtual with the physical. Car shoppers research the models they’re interested in on the website or app, then come into the nearest dealership, take the car for a spin, sign the papers and drive away. This hybrid business model has helped CarMax become the top used car dealer in the country, selling more than 720,000 vehicles and generating $17.2 billion in revenue last year. This smooth-running click-and-mortar machine wouldn’t be possible without a strong partnership between marketing and technology, says CarMax CMO Jim Lyski. As a result, Lyski and CIO Shamim Mohammad have become the Click and Clack of corporate collaboration. [kickout id="1"] “If you’re going to do digital transformation, you have to be technically native,” says Lyski, who joined CarMax in 2014 after stints in the healthcare, insurance and fertilizer industries. “Being joined at the hip with our CIO allows both of us to understand technically what’s going to be required, from the database architecture through the marketing stack.” This collaboration goes beyond simply attending the same meetings or jointly plotting product road maps. CarMax’s technology and marketing product teams share the same office space; since 2014, the company has created some two dozen cross-functional agile teams featuring software developers, user experience designers, data scientists and product managers. Among the results: A product that allows car buyers to get pre-approval for loans, which went from testing to completion in less than six months, and the ability to view 360-degree photos of car interiors, a feature added earlier this year. This level of collaboration—not just with technology but across the organization—is imperative for modern CMOs, says Jennifer Veenstra, a managing director with Deloitte Consulting. “It’s extremely important for CMOs to create a partnership with other C-suite members, whether it’s the CFO, head of sales, business units or HR,” she says. “They need to be on the same page, working together.” ‘CMOs on steroids’ This is not an easy time to be a chief marketing officer. Expectations have never been higher, and your remit is broader than ever. You need to be both analytical and creative, tech savvy and people oriented. You must have your ears attuned to the voice of the customer and your eyes fixed on the bottom line. “The CMO role is a lot more challenging than it was 15 years ago,” says John Abele, managing partner for the CMO practice at executive search firm Heidrick & Struggles. “We’re asking CMOs to be general managers and to lead a broader array of people within their portfolio. To think not just about what their ad or marketing spend is, but also about ROI and transformation within the organization.” For example, marketing leaders are increasingly held responsible for the entire customer experience. But most control only a fraction of customer touch points, with little influence over things like sales, customer support, delivery, service or the actions of any channel partners. As a result, we’ve seen a spurt of job titles like chief growth officer, chief customer officer, chief experience officer or chief brand officer—roles that Abele calls “CMOs on steroids.” It’s an acknowledgment of the increased portfolio the job entails, as well as an effort to make the position more appealing to higher level management candidates, says Abele. But it’s also a warning to existing CMOs that they’d better up their game and think more broadly about their role in the organization, says Michael Barnes, vp at Forrester Research. “Either step up and take on more responsibility to drive growth, or you will absolutely be replaced or marginalized,” he says. Buckets of data REI’s Ben Steele knows the drill. Last month, he was promoted from chief creative officer, the specialty outdoor retailer’s equivalent of a CMO, to the newly created position of chief customer officer. At the same time, the 17-million-member co-op also hired its first chief digital officer, Curtis Kopf, who reports directly to Steele. A key reason for the promotion was to enable more seamless control over the entire brand experience, especially digital, Steele says. “We didn’t want to create a role that was about the marketing channel, but one that was about advocating for the customer across touch points,” he says. “Our chief digital officer, our CIO and I spend a lot of time thinking about how we bring the specialness of the co-op to people who are meeting us for the first time on their phone instead of inside one of our stores. “The big question for us is, how can technology enable people to spend more time outdoors, instead of being a barrier? If that’s what we need to deliver, then let’s put people in proximity together to collaborate around that outcome.” For marketing heads without that expanded authority, influence and collaboration become even more important, says Jamie Gilpin, CMO for Sprout Social, a social media management and analytics platform. “In the past, my go-to partner was always the head of sales,” she says. “Today I meet regularly with our product, customer support, finance, design, product and people teams. CMOs have to be master collaborators as well as master communicators.” In a previous marketing job, Gilpin says one employee would be assigned to wear the “customer hat”—literally, a denim bucket hat—to play the role of the customer during meetings. Now the CMO is the torchbearer for customers, and instead of a bucket hat she’s carrying buckets of information. “The modern version of that hat is the data we have,” she says. “Marketing has to be the clear mirror for the organization that says, ‘This is where we are succeeding and failing across the entire customer journey.’ The role of the CMO is to provide the insight that ultimately fuels decisions the entire organization is making.” [kickout id="2"] The C-suite smell of success As marketing evolves and the role of CMO becomes more strategic, how organizations measure their success has also changed. In the past, CMOs might be assessed by vanity metrics like aided and unaided awareness, impressions, followers, retweets or shares, says Gilpin. Now many marketing leaders must meet the same P&L targets as other business managers. “I have a revenue goal,” she says. “I have customer acquisition and retention goals. And while many of those are influenced by sales and other parts of the organization, these are very specific metrics that support the broader goals marketing is responsible for.” Over the last 10 years, the pendulum for marketers swung from brand awareness to customer acquisition, says Kristi Knight, CMO for InMoment, a customer experience optimization company. Now, as digital acquisition produces diminishing returns, marketers are increasingly measured by their ability to sustain and expand longer-term relationships. “It’s not only how well we bring new dollars in the door, but how we bring in dollars from people who will continue to spend with us,” Knight says. “CMOs have to work with the heads of customer experience and CIOs to make sure the data is well integrated and relevant, so marketing interactions are more tailored and less salesy. They have an opportunity to influence how customers experience the business throughout their life cycle.” These heightened expectations put even more pressure on marketing leaders to step up and deliver if they want to earn respect inside the C-suite, adds Barnes. “Collaboration is important, but the key challenge for most CMOs is to establish credibility,” he says. “To truly collaborate as a peer at the executive board level, they need to have far more insight, awareness and responsibility over operational metrics, including revenue.” Master of none? Modern marketers need to understand the requirements of the business. They need to know how to speak the language of finance, technology, sales and HR. They need to listen to the customer. They need mad data analytics skills. And they need to still maintain mastery over their traditional remit—advertising, communications, public relations and social media. It’s a tall order, and no one is likely to master it all, notes Deloitte’s Veenstra. “What’s important is for CMOs to understand their strengths and weaknesses, and to know how to fill their team with the skill sets they’re missing,” she says. “If they’re more analytical, they need to bring in more creative, right-brain people. If they’re more creative, bring in the data analysts.” Ultimately, the job of CMO still comes down to understanding the customer better than anyone else in the organization, and communicating those insights to the top decision maker. “We’re seeing a lot of CEOs declare that their number one priority is the customer experience, but very few of them can actually articulate what that means,” says Knight. “The CMO has an opportunity to help the business by defining what that experience is.” Marketing leaders who work to build up their skills and hone their collaboration chops will find themselves rewarded with power and influence. Those who stand still will be muscled out by more agile, tech-savvy peers. “This is actually one of the best times to be a CMO,” argues Veenstra. “They get to take their place at the table and be someone people turn to in C-suite strategic discussions, communicating what they need to do to drive growth through the customer experience.”

Digital Transformation

Meet the New Chief Collaboration Officer: The CMO

Creating partnerships with other C-suite members

Dan Tynan

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Dan Tynan