There are enough challenges to surmount when it comes to marketing in this digital age. And marketers seem to be struggling to keep pace, says this study by the Global Business Service division of IBM.
No conference on marketing today goes without a discussion dedicated to social media. But have these left the custodians of marketing any wiser? The chief marketing officers are still not too comfortable with the medium, says the Global Business Service division of IBM which recently concluded a study with 88 CMOs in India, who were among a total of 1,700 CMOs surveyed around the world. Shared exclusively with the strategist, the findings, one of IBM’s CxO studies, were based on hour-long, one-on-one interviews, unlike the usual emailed or phone correspondence in such studies.
The conversations revealed not just social media as their concern but also nailed others in their priority list. Katharyn M White, vice-president, marketing, Global Business Services, IBM, who oversaw the study globally, says, “The overall study showed that the market was changing faster than CMOs felt prepared for. The factors that they said were the most important ones were surprisingly the ones they felt least prepared for. The order of those changes from market to market. But the over-riding ones are making sense of the volume, variety and velocity of data which now comes in, social media, changing consumer demographics, and device and channel choices.”
When asked how prepared they were to manage the critical agents of change, 78 per cent of the Indian-South Asian CEOs said social media was critical but they were unprepared for it (globally, 68 per cent said so). Around 66 per cent of the Indian CMOs were wary of the data explosion (71 per cent globally). Shifting consumer demographics (new consumer segments that influenced strategy) and growth of device choices and distribution channels came next, similar to global CMOs’ concerns. We find out how they play out for the Indian CMO.(Figure 1)
As much as 52 per cent of the Indian CMOs considered the social media as a key engagement channel and 49 per cent wanted to monitor their brands through the medium, a function that marketers call social listening. Virginia Sharma, vice-president, marketing & communications, IBM India and South Asia, who conducted the study’s Indian and Sri Lankan phases, notes, “Despite the high regard for social media, my Indian counterparts feel more unprepared than CMOs anywhere else. This is unexpected because at any marketing forum, we talk about social media all the time.”
Tata Teleservices Senior Vice-President and National Business Marketing Head Abdul Khan feels, “The anxiety of most CMOs stem from the fear of retaliation on social media. While many use it personally, they can’t figure out how to apply it to their businesses. They just need to learn to converse with the audience.”
Marketers are finding their own ways to deal with the medium. Research In Motion Director Krishnadeep Baruah says, “Even a year ago, my feedback on social media would have been different. Social media itself had not come of age. A year and a half ago we formalised a way of approaching social media in Asia-Pacific because our user is primarily a data user and hence the internet was critical. We were not going to use the social networks for sporadic campaigns but for continuous interaction with the consumers. I have also found that giving the consumer on the internet a heads-up on our products a few days before an ATL campaign fosters a lot of loyalty. We have even roped in our consumers as advocates for the brand to pitch in troubleshooting on these networks.”
Customer relationship management (CRM) threw up another surprise. Sharma says, “Eighty seven per cent of the Indian-South Asian CMOs plan to increase the use of CRM technologies which is surprising, given that we tend to think that CRM has matured in its use of technology. But the CMOs are not satisfied.” White explains, “It is higher in the investment priority list than other global CMOs. That is because the idea of providing a single view of the customer is still very new in this region.”
Even the largest retailer in the country, Future Group, is rolling out its loyalty programme now in a sector which is supposed to put a high premium on CRM. Group Strategy and Consumer Director of Future Group, Vibha Rishi, who leads marketing and customer strategy there, says it will span seven of its formats. “It will open a direct line to the consumer to communicate. We could later collaborate with brands,” she adds.
The study revealed that marketers are becoming more curious about technology such as dashboards and analytics that will make their work easier; till now the IT transformations of other departments had put them off. But changes are in the offing. RIM’s Baruah points out, “The marketing and sales at RIM have a common software at the stores which shows what kind of customers bought which handsets, keyed in by our sales promoters.
There is also our telecom partners who let us reach audiences of specific handsets for promotions targeted at them. We don’t have to depend on mainstream ads for that.”
Essar Group President, Corporate Branding & Strategic Initiatives, Shivnath Thukral says, “We have software to track which programmes are popular on our internal TV network so we can re-engineer the laggards to be more effective. A dashboard tells us how we are perceived on the social media every week.”
In the use of technology, after CRM, the Indian and Sri Lankan CMOs (11 in number, the other voice in the study’s India-South Asia statistics) held customer analytics (86 per cent), mobile applications (83 per cent), social media technology (80 per cent) and predictive analytics (76 per cent) as important.
While technology for social media and data analytics has been top of the CMOs’ minds, they still held these skills less important than the traditional ones of leadership qualities, competitive trends insight and creative thinking. White says, “Their biggest concerns — social media, data analytics, financial skills — are the ones they think are least important for them to personally have versus more traditional marketing skills. But CMOs who will also embody these new trends would lead the transformation that is happening in the market.”
The intent to outsource more of their marketing portfolio could be a reason for such a trend. Sharma says, “This could be related to the tendency we saw of CMOs looking at outsourcing more of their marketing portfolio. So you see a huge amount of reliance on the agencies.” White adds, “Design, market research, analytics and even strategy work would likely be outsourced in the next three-five years according to CMOs.”
Baruah says, “Outsourcing is necessary once you reach a certain scale for effective management.” Sandeep Singh Arora, executive vice-president, PepsiCo India, says, “Marketing trends change every three-four months. Outsourcing is needed for the right capability.” Adds Rishi of Future Group, “If we had not outsourced our loyalty programme to Payback, we would have had to reinvent the wheel. This will also allow us to access insights from other customer bases as offered by Payback since modern trade reach is still limited.”
There are pitfalls in outsourcing. Sharma points out, “Take social media. Some agencies can’t bring the broader business context for an integrated plan and treat social media as a standalone engine, distorting the relevance of such a medium.” That is why most marketers have tight in-house teams for new tools like social media to oversee agencies. “With advocacy involved in the medium, it is risky to outsource it completely,” points out White.
CMOs realise the use of digital technology as ways of increasing customer advocacy or loyalty. But White says they should not forget the customer within the company. “Defining the corporate character is what brings out loyalty among customers. But it is not just for the CMO to define it. The CMO has to ensure that the employees are living it as well. The social spheres of the employees will further increase the reach of such branding. Above the line and digital branding are no more enough.”
Sharma sheds light on the CMOs’ mindset, “A lot of our community comes from the agency background; as a result outbound communication takes precedence over making brand advocates out of employees.” Some CMOs ensure that their employees get to try the products they launch while others build attention-grabbing mediums to communicate. While Garnier and RIM for example, give out their products to employees (Garnier even to dealers), Essar built a TV channel called e-view for employees. Plans are on to take it on its website for outsiders to watch as well.
However, when dealing with employees, the CMO would have no choice but to work with the chief human resource officer. And they seem to be doing just that, apart from working more closely with the CxOs within the company. Max Bupa Marketing Director Shefali Chhachhi says, “CMOs should also be chief motivating officers. We run the internal communication with our HRO.” Arora of PepsiCo has worked with the CIO on data warehousing for his retail audits. Thukral says, “In corporate branding, I have to work with our many company CEOs and the product CMOs for understanding the products because I understand corporate branding and they, products.”
Collaborating with the other chiefs is a result of not only corporate branding efforts. It is a result of what the study shows as the CMO’s growing share of voice in the 4Ps of traditional marketing. While ‘promotion’ is what had been her traditional role, the influence on ‘product’ development and supply chain, ‘place’ or distribution channels and ‘pricing’ is on the rise. Nearly 50 per cent of the India-South Asia CMOs cite influence over all the 4 Ps. While aligning internal and external communication is paramount in promotion (86 per cent say so), product service portfolio is second-most important for them in ‘product’ (59 per cent), after researching consumer needs (69 per cent).
In ‘place’, managing the customer experience at multiple touch-points (62 per cent) and selecting channels (51 per cent) were areas of influence. ‘Pricing’ saw 52 per cent of the CMOs assert they had a say in competitive pricing assessment and 41 per cent even understood cross-company pricing policy. Customer servicing after sales is another area on which CMOs have begun to keep tabs. Sharma says, “Marketing is no more only about awareness. It is about managing the full lifecycle of the customer experience.”
Return on investments (RoI) for the CMO is still being measured in traditional metrics such as GRPs (gross rating points) for a television campaign. Sixty-nine per cent of the India-South Asia CMOs feel marketing RoI will be the most important measuring tool for success by 2015. However, like their global counterparts, proving its value in numbers is a challenge. In India, customer experience and customer acquisitions are being viewed as equally important metrics to define the CMO’s success. The agencies that aid the CMO in her work are also feeling some of the brunt in this drive for clear RoIs. The tussle between traditional retainer fees and outcome-based payment goes on. Khan of Tata Tele says, “The shift from awareness metrics to financial measures in marketing is still some time away.”
Boardroom discussions on marketing RoI at RIM are around traditional pre- and post-campaign metrics. But Baruah notes that there is a new acceptance in other functions such as sales to understand these awareness metrics. He is not worried because media metrics are the same for everyone in the market. “The cross-function collaboration has helped. So, if we find that awareness after a campaign was high but it did not translate into sales, we go back the brand funnel and see what hampered the purchase decision. It could be product features or place of purchase, for example.”
Arora of PepsiCo says, “RoI metrics have not changed for marketing. But the ability to get data on those has improved significantly. Awareness and trials generated, repeat purchases, amount of social media conversations can all be calculated.” At times, the company culture also modifies the metrics. Richa Singh, general manager, Matrix (the salon brand of L’Oreal), who was earlier chief marketing officer of Garnier, says, “As a company (Garnier), we balance the qualitative with the quantitative in our marketing RoI. We would even look at the kind of programmes that media planners put our ads into rather than just a certain number of GRPs.”
White says, “In the debriefs that we give to the CMOs who have participated, cross CxO collaboration is finding a lot of favour. It also ranks high in the personal skills that they want to hone.”
The IBM duo suggests setting up small action teams comprising top young talent to work on the biggest concern of the CMO in their debriefing sessions. Else, book that meeting with the other CxO — discuss key measures for marketing with the CFO (chief financial officer), the corporate character with the CHRO and data analytics with the CIO (chief information officer). That should, feel the duo, keep the CMO’s worries at bay for now.