CMO in a Box continued -- page 2 Markets The next primary responsibility of the CMO is markets. After circulation and customer development, the CMO has responsibility for defining markets, specifically the next market to be conquered. Every multi-channel direct marketer is always in the market expansion phase; if not, the business is dead. If the current target market is not being nurtured and maintained—indeed—grown, the business is in trouble. But, if the next market has not been identified, researched and the multi-channel circulation planning developed, the business is going to stagnate. It is the province of the Chief Marketing Officer to identify and prepare new, profitable markets. Market development entails research. The CMO establishes the research objectives, criteria, deliverables and the timing and budget and either commissions the research on a consulting basis or directs the research internally. At any given time, no fewer than three new markets should be under research if the business is to have an adequate new market flow to produce minimally fifteen to twenty percent new growth annually, new growth being that in addition to incremental existing market growth, which should run in the ten to fifteen percent range. These are high benchmarks and point to the importance of a concentrated focus by the CMO on multi-channel circulation and new market development. Markets are the fuel for the new product machines operated by the product managers and Chief Merchandisers. Without new markets, they soon run out of products. The world, after all, is not a clockwork organization. There are only a certain number of products that can be profitably sold to an existing market, especially if that market is a relatively small niche. If one looks at the world history, all of the wars between nations have been about markets, with the exception of those about religion. Nations have not fought over individual products or even product groups; they have battled for control of markets. There must be markets in order for products to be successful. Therefore, the hierarchy of importance in multi-channel marketing is markets. And because markets consist of customers, CMOs have the primary responsibility of drilling for customers in profit-producing markets. It is no different from oil exploration. Oil companies drill for oil (customers) in areas of known oil deposits (markets). The point: Markets and customers are inextricably linked. Products are secondary to the markets and the customers. There. That should clear up that argument for the Ages. Market Managers are experts in one or more markets. There may be five Market Managers managing twelve different markets. But, the Chief Marketing Manager has the knowledge, experience, talent, understanding and wisdom to be able to manage all twelve individual markets and all five Marketing Managers collectively. And that is the all-important difference between a person who is a great market manager and one who is a great Chief Marketing Officer. Channels The third responsibility of the Chief Marketing Officer is channel management. If you think of everything you have to know about catalogs to manage the catalog channel alone—from paper buying to ink density; from layout to copy; from square-inch analysis to RFM; from list testing to list resting; from pagination to title-slugging; from . . . and on and on—you can begin to understand the enormity of amassing the same level of detailed experience and skill for all of the complex channels required by today’s competitive, multi-channel environment. The CMO is first and foremost a Catalog Master. Running a close second and gaining, however, is the Online Master. In fact, let’s just go ahead and broadcast heresy: The online channel is equally important to the catalog channel and the CMO must be a Master of both and more. Take everything you know about catalogs and double it for web-based marketing. Increase the speed by a factor of twelve. Rethink everything you ever knew about contact strategy and circulation. Recognize that there are anywhere from two to twelve middle-contractors for every click, sale, eyeball, relationship, affiliate, or opportunity and they all get a piece of the action. Understand that the analytics have just become fifteen times as complex and detailed and that the terminology hasn’t even been agreed upon and there are precious few proven benchmarks. And that will just barely get you into the CMOs responsibility in web-based marketing. Some of you are opening retail stores as fast as you possibly can. That’s a fairly new skill for most of our traditional Vice Presidents of Marketing. Some of you are building partnership models to incorporate other multi-channel or retail marketers to extend your reach into the broad marketplace or to enter new markets. Some of you are signing up online affiliates and attempting to force your businesses to the top of the search engine organic and paid food chain. Some of you are doing short-form and long-form infomercials and are toying with cable advertising. Some of you are buying billboard space. The point: Today’s CMO is a Master of Channels, not a Catalog Master. The Catalog Master who has not absorbed numerous channel masteries has simply and quietly become a Catalog Manager. Finance Oh boy, this is gonna leave a mark. Maybe CMOs should be CPAs. As critical as the numbers are to almost everything we do, my experience is that CPAs who are slightly off-kilter and who actually get moist when they are around marketers make pretty interesting CMOs. Look again at the definition of the CMOs responsibilities: The primary responsibility of the Chief Marketing Officer is the profitable management of new customer acquisition and existing customer retention and reactivation in all channels via all media. Now, let’s be honest. The active word here is ‘profitable.’ Understanding the nuances of profitability and financial forecasting is a talented skill that CMOs who have an accounting background are able to bring to the party. Multi-channel marketing, just like catalog marketing, is a formulaic business. It is numbers-driven. Numbers-driven businesses call for numbers-driven people. Regardless of the education, my fourth qualification for a top-notch Chief Marketing Officer after multi-channel circulation, markets and channels is financial ability. In my estimation, there may be no more valuable member of a multi-channel direct marketing organization than a CMO who has a strong financial background, either as a CPA, or an MBA-Finance with a specialty in direct marketing. These people’s pores exude analyses; they know how to read financial statements; they ‘get’ RFM; they can calculate the ROI of ten different kinds of click-throughs. The point: Financial acumen is essential in today’s multi-channel performance environment. Deal with it. Creative The fifth responsibility for the Chief Marketing Officer is creative. As with other responsibilities in recent years with multi-channel expansion, creative has broadened to include the creative knowledge and skills specific to the different channels employed by the company. Catalog creative is a given. The same breadth and depth of creative knowledge and skill used in producing catalogs is now expanded to each unique channel and its requirements. Creative understanding and oversight of the online channel encompasses total understanding of web-site creation, hosting and integration. Similarly, if DRTV is used, creative skills of the CMO must include the intricacies of infomercial development. Or, if the company has retail stores, the CMO must have understanding of retail creative elements, perhaps including visual marketing and point of sale elements. A number of creative nuances occur as the channels expand. Catalog copy, for instance, is different in many ways than web site copy. Pagination flow in catalogs and on web sites is very different. Layouts and product size relationships vary among channels. The point: CMOs must master the unique creative skills within all channels used by the company. There is no longer a ‘One Creative Fits All” philosophy. As well as mastering channel creative, the CMO must be accountable for market creativity. Each new market that the company embraces may require a completely different creative approach, whether it is layout, copy, language complexity, color palette, styling, typography, pricing display, or any of dozens of other mini-components of the creative protocols. Someone has to understand the subtleties of the overall creative process and their application to the customers, markets, channels, products and offers. That central point of responsibility is the CMO who carries the added burden of profit and loss responsibility for each customer, market, and channel. Among the creative sub-disciplines that the CMO is responsible for are the following:
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