As a stronger customer focus defines modern businesses, CMOs find themselves with increased influence and function, writes Björn Dufwenberg - but making the most of it requires a shift in mindset and culture
A new analysis of FTSE 350 companies provides more evidence that customer-centricity and financial success are closely linked.
Conducted by STRAT7, the research used advanced AI to scrutinise hundreds of annual reports, revealing that more customer-centric businesses, as inferred from their language, experienced up to a 10% higher share price growth over three years compared to their less customer-focused counterparts. This highlights not just the value of understanding customer needs, but also the importance of genuine engagement rather than mere lip service.
The context for this study is rooted in the unprecedented disruptions we have experienced over the last five years, suggesting that adaptability and a swift response to change are likely key characteristics of organisations focused on customer needs. These insights are especially pertinent for marketers, emphasising the significance of incorporating a customer-focused approach into their strategies.
This shift also indicates that the role of the chief marketing officer is set to expand, becoming more dynamic and influential as organisations evolve to become more customer-centric. So how might the CMO role change within this context?
Sensing change
One of the first considerations in factoring in customer centricity and change adaptability should be the establishment of a ‘sensory system’ that can consistently detect and respond to market changes.
Here, powerful tools like machine learning and predictive analytics are used by the most responsive businesses to identify patterns that may elude human observation, and leverage vast troves of unstructured data (such as emails, call centre transcripts - or annual reports of course) to detect emerging trends. Together with direct observation through market research studies enable businesses to accurately forecast potential outcomes.
Although these insights can and should be leveraged by all parts of a business, they should be considered as essential to CMOs. By better integrating predictive analytics into strategic planning processes, marketers can capitalise on opportunities that may have previously remained hidden and ensure marketing strategies are not just about product, but are developed around tangible customer utility. This can help improve loyalty, retention and customer lifetime value, as well as deliver improved experiences and tailored marketing - all of which drive more impact for brands.
Driving organisational change
CMOs can leverage these sensory systems to not only better understand their customers’ needs, but also to help shift traditional marketing towards a holistic integration of customer understanding within all facets of a company’s operations.
This is extremely important. Initiating a culture of customer centricity requires systemic change and dedicated leadership commitment. Here, CMOs - in close partnership with their CEOs and CFOs - hold a pivotal role in steering this transformation.
The leadership triumvirate of the CEO, CFO and CMO is crucial for several reasons. First, CEOs embody a company's long term trajectory and strategies - and should therefore also personify and guide a customer-centric vision.
Meanwhile, the role of the CMO has evolved in recent years from being a cost centre into an engine for growth that needs to invest significant sums in large-scale systems infrastructure, necessitating close collaboration with the CFO. Uniting these three roles is therefore the most effective way to drive customer-centric change, ensuring it filters from the C-Suite into the most important functions of the wider business.
Indeed, the unification of CEOs, CFOs, and CMOs in steering customer-centric change echoes the complexity of this transformation and its far-reaching implications. It’s a perspective that underscores not just the significance of these leadership roles, but also the interconnectedness of their efforts in driving a fundamental shift in organisational culture.
Helping break down internal silos
Independent departments operating with separate objectives and different understandings of who the(ir) customer is hinders an organisation from acting in a joined-up way. Yet siloed structures - which instil siloed thinking and culture - still persist in modern businesses. However, breaking these down and making customer centricity something that all parts of the organisation focus on fosters collaboration, and enables a unified view of the customer and market
Again, the CMO has a key part to play here, using their department’s unique capabilities - selling and communicating ideas - to positively influence internal culture, aligning an organisation’s own structure, behaviours and unified understanding of the customer with an external customer-centric vision.
Furthermore, in more traditional organisational structures, marketing teams (alongside insights teams) have often lacked influence internally, despite usually knowing the customer best. However, breaking down silos and expanding the influence of the CMO empowers them to play a more strategic role in driving customer-centric growth.
Ultimately, the CMO needs to ensure customer centricity is not just present in marketing output, but that it genuinely runs through the DNA of an organisation; they must be empowered enough and given the right tools to ensure a business can walk the talk - and be the brand it tells the world it is.
