Digital is Changing the CMO Role Forever

The CMOs mandate has changed.

In the past, CMOs just concerned themselves with the customer acquisition. They spent on ads and new initiatives to attract new customers.

Today, CMOs are responsible for much more. "Previously, they were not focused on the full growth of the customers. But now with the expanding CMO mandate, they need to understand their new roles in retention and enrichment," Victor Milligan, CMO, Forrester said.

The banking industry offers an important example of the shift in mandates. "The banking model is not being eroded because of a lack of acquisitions, but because of a lack of enrichment. So CMOs need to understand what role they play in the consumers' digital experiences," Milligan noted.

Re-imagining Experiences

Taking on an expanded mandate requires a rethinking of digital experiences. “CMOs need to reimagine how they engage with customers. And I think that is the primary role of the CMO when it comes to digital,” Milligan said.

Easier said than done. One of the biggest hurdles that CMOs will face is owning the customer experience or journey. While Milligan agreed that this is a constant struggle for many, the question is less about ownership and more about orchestration.

"I do not think any CMO can own the full journey of the customer. Most organizations are far too complex for single-person ownership. But orchestration is a different question. So we need to ask what role does the CMO play in orchestrating to serve those journeys," Milligan said.

He noted that ownership of the customer journey is a "toughie" as it "brings you right into the politics of the organization." "Most CMOs I speak to agree to collective ownership, but are much more focused on orchestrating the journey," he added.

Rewiring Traditional Thought

While digitalization is changing the role of CMOs, they need to eliminate traditional notions of marketing. For example, marketers often segment their customer base to maximize their efforts. While digital tools allow them to do this on a granular scale, segmentation can be a roadblock for better customer experience.

"But the development of personas and segments is a way for me not to know who you are as a human being. It creates a structure that is easy for me as a CMO to work with but may obscure who the customer is as a human being. That gets in the way of knowing who is their real customer," Milligan said.

Customers, in the meantime, are asking for better personalization and the ability to engage them at an emotional level. “For CMOs, the next big step is to understand customers on customers’ terms and emotional context,” Milligan added.

The Evolution of Agency Relationship

One hot-button item for CMOs is the evolving relationship with their agencies. In the past, they used to outsource their acquisition needs to advertising agencies.

As CMOs expand their mandate to orchestrating the customer experience, there is a natural shift in funding. “Initially, the CMOs did not own the customer experience. Now they do. So you will see a natural shift of funding on a natural basis,” Milligan said, pointing to the shifting budgets on advertising.

Part of the reason for this shift in funding is because of how the advertising world worked. "The advertising world has always been typically opaque. The economics and value were not clear as it could be. So a growth-oriented CMO is going to look at advertising and wonder how much value I am getting from the money being put into it," Milligan added.

However, the changing role of agencies is more complex than shrinking ad spend. First, agencies themselves are evolving from within, with an emphasis on innovation and design thinking.

Meanwhile, CMOs, who understand the importance of customer experience, are looking to recruit the same talents within. 

“CMOs are going to make insourcing and outsourcing decisions differently, especially when some of the advertising agency skills are now required for in-house customer experience projects. So, CMOs will not be looking to outsource everything like before,” Milligan said. 

Victor Milligan, CMO, Forrester
Victor Milligan, CMO, Forrester sees the CMO mandate expanding to the entire customer experience.