Accenture CMO Insights Report PDF

8/13/2019 Accenture CMO Insights Report PDF

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Accenture Interactive

Turbulence for the CMOCharting a path for the seamless customer experience


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Turbulence for the CMO: Charting a path for the seamless customer experience

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The price sensitivity ofclients is reducing marketingeffectiveness.CMO, UK transport and travel company


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Based on the 2012 Accenture Interactive

CMO Insights survey of more than 400 senior

marketers from 10 countries, CMOs need to:

Fundamentally change the marketing

operating model.

Build new skills internally.

Get the right set of partners.

Drive digital orientation throughoutthe enterprise.

Their ability to restructure the organization

and work horizontally to deliver seamless

and relevant customer experiences across

all touchpoints all day, every day, will be

essential to business survival.

Four Priorities fora Smoother RideTurbulence is the new normal for chief marketing officers(CMOs). In the face of increasing complexity in the marketsand customers they serve, CMOs are struggling to keep pacewith competing business demands, proliferating channels andpartners, and a disconnect between the talent they have and thecapabilities they need. But that doesnt mean senior marketerscant improve performance despite this challenging environment.


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Figure 1: More CMOs feel underprepared (%)

1-2 (not prepared) 3 4 5 (very well prepared)

2012

2011

2009

1348345

1749295

18393310

61%

66%

five-point decrease in preparedness

The Pressures on

As CMOs steer a course throughthe rough waters of todays globalmarketplace, one thing is certain:not enough feel prepared for the ride.

Nearly four in 10 CMOs say they donot have the right people, tools andresources to meet their marketingobjectives. Compared to responsesfrom Accentures 2011 study, thisis a five-percentage point drop inpreparedness (Figure 1).

Without a doubt, the pressures on. CMOs

face wave after wave of competing business

priorities, changing consumer behaviors

and higher customer expectations. All these

factors contribute to an environment made

more and more complex by:

1. Relentless demands.

In the three years since Accenture began

surveying CMOs in global companies

around the world,1none of the top business

priorities have declined in importance.

Profitable growth (87%) and operational

efficiency (85%) remain in the top positions,

followed closely by the need for organic

and inorganic growth and the agility to

capture opportunities quickly. So strong is the

pressure for growth and efficiency today that

marketers are being asked to support these

objectives considerably more than they are

being asked to cut marketing budgets (58%).

2. Higher stakes.

Customer issues maintain their dominance.For the third year in a row, requirements to

acquire and retain customers and increase

sales are the most important. As in previous

years, these customer challenges continue

to increase in difficultyby five to six

percentage points every year.

Across 15 enablers often used to support

customer centricity and sales, both

importance and difficulty increased in

2012. Among the new strategies on which

marketers were surveyed in 2012, seven outof 10 CMOs found these to be important:

Synchronize the end-to-end customer

experience, from marketing to sales

to service.

Enable agile, timely and relevant marketing.

Use data and technology for real-time

marketing impact.

Importance levels also increased for

efficiency-related factors, such as the need

to cut costs for the marketing workforce and

reduce non-payroll items. Six in 10 CMOs

found these areas important.

1CMO Insights, Accenture, 2010-2012.

(Marketing) has to changeto keep current customersand acquire more customers.

Marketing director, US bank

CMOs also found it much more difficult in

2012 to improve the efficiency of marketing

operations (up eight percentage points

over 2011) and improve their workforces

responsiveness to digital shifts and changing

consumers (up 10 percentage points over 2011)

3. Smaller share of wallet.

Although large majorities of CMOs saw

higher revenues (69%) and budgets (83%),

four out of 10 senior marketers also saw flat

or declining market share in 2012. This is

consistent with CMOs belief that it will be

harder to obtain and keep new customers

and sell more to existing ones.

4. Higher customer expectations.

Relevance is here to stay. According tosurvey respondents, consumers expectations

for relevant experiences are having the

longest-term impact on marketing strategy

(65%). However, as in 2011, consumers

still expect value, trust, quality and better

customer service, along with relevance

(Figure 2). Despite the apparent threat of

showrooming, a minority of CMOs (40%)

expect it to have a long-term impact.


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Highest to lowest

Long Term Impact

Accuracy

Trustable company

Becoming price-sensitive

Convenience to do business

Purchase via mobile device*

Accuracy of the following statementsin terms of customer expectations

Expect offers and interactions that are relevant*

Long term Impact onmarketing strategy

Better customer service

More innovative products or uniqueproduct features

Value for their money

7474

7274

6976

6967

41

32

69

7275

7070

7476

5661

6761

6762

67

6656

5960

47

40

6662

65

Visit our stores but purchase online*

Expectations for product quality

Long term Impact onmarketing strategy

56

61

6761

66

56

5960

47

40

65

6762

6761

6662

2012 Very important (4) & extremely important (5) 2011 Very important (4) & extremely important (5) * New item for 2012

Trustable company

Expectations for product quality

Becoming price-sensitive

Visit our stores but purchase online*

Expect offers and interactions that are relevant*

Better customer service

More innovative products or uniqueproduct features

Value for their money

74

74

7274

69

76

6967

41

32

69

7275

7070

7476

Accuracy of the following statementsin terms of customer expectations

Purchase via mobile device*

Convenience to do business

Figure 2:Relevance means the most to consumers (%)

62

61


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Customer EngagementMarketing OperationsDigital Orientation Offering Innovation

WeakestinIndustry/Un

important

Leadingedge/Essential

Customer Analytics

3.333.36

3.53

3.463.50

3.48

3.54

3.44

3.593.61

3.46

3.52

3.69

3.52

3.61

0.33

0.370.22

0.38

0.310.15

0.34

0.40

0.25

0.34

0.43

0.47

0.270.25

0.15

Importance 2009 Importance 2011 Importance 2012

Performance 2009 Performance 2011 Performance 2012Performance Gap

Figure 3: Digital orientation is weakest capability

The black hole of ROI

CMOs find it difficult to quantifymarketing return on investment (ROI).Nearly one in five score themselvesas below average in multichannel

attribution, correlating advertisingto sales, and measuring mediabuying effectiveness.

Despite these gaps, 26% of marketers

say they are best at building long-lasting

relationships with customers. How can CMOs

succeed with customers if they cant measure

the most effective strategies to use with

customers who are changing their behaviors

and interacting with brands differently?

The digital disconnect

In such a complex and unforgivingenvironment, CMOs capitalize onfive capabilities to improve theircompanys performance: offering

innovation, customer analytics, digitalorientation, customer engagementand marketing operations.

Of these five, digital orientation scores the

weakest performanceat the exact moment

when it needs to be the strongest. Digital

orientationwhich Accenture defines as

working across the organization to infuse

a digital focus in all business processes and

functionsis critical to achieving success

across virtually any marketing strategy.

However, digital orientation has the largestperformance gap (the spread between

performance and importance) among the

five marketing capabilities (Figure 3). CMOs

rate digitals importancein 2012 as the

lowest (3.76) of any capability over the

past three years, and they rate digitals

performanceeven lower (3.33).

Yet digital orientation can have a profound

impact on sales. The performance of digital

orientation in high-growth companies is

21% greater than in negative sales growth

companies (3.4 versus 2.8), even when

the degree of importance is fairly uniform(3.81 versus 3.57). CMOs in high-growth

companies have found a less turbulent

path by improving their digital focus.

Two-thirds of CMOs recognize the need to

work horizontally across the organization to

infuse a digital focus, but only 7% say their

efforts are leading edge. In fact, one in five

believes their companys digital focus is the

weakest in the industry due to inefficient

business processes, proliferating channels

and talent gaps.

Its a similar story when trying to engage

customers and create value through digital

channels. Two-thirds of senior marketers

feel it is an important capability to master.

Only 13% believe their performance

is leading edge, and 16% think its weak.

3.803.83

3.76

3.63

3.753.80

3.84 3.843.88

3.67

3.77

3.99

3.83 3.89

4.02

6


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Inefficient business practices togetherwith lack of funding and otherresources negatively affect all fivemarketing capabilities (Figure 4).

Inefficient business practices hit digital

orientation the hardest, cited by 22% of

CMOs. Working across the organization to

infuse digital awareness requires efficiency

in the business, so it is not a surprise that

CMOs face challenges in this area. Nor is it

surprising that 19% of CMOs say that digital

orientation suffers from a lack of integration

across the business.

The biggest barriers: inefficiency and lack of funding

Providing consumers with relevant

experiences will take an investment of

resourcesperhaps not incremental, just

a realignment and marshaling of resources.

While access to customer data is the lowest

barrier, it is possible that CMOs do not haveprocesses in place to identify the right data

needed to drive customer engagement.

Digital

Orientation

22

9

12

1819

5

15

Customer

Analytics

6

9

17

13

20

16

Offering

Innovation

78

14 13

18 18

Customer

Engagement

44

10

15 15

6

17

Marketing

Operations

5

10

16

13

7

Access to customer dataLack the required skills

Lack of critical technology/tools

Inefficient business practicesLack of funding/other resources

Lack of integration withother business functions

Dont know/not sure

Figure 4: The top two performance barriers (%)

Biggest barriers


7

8

19 1917


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As channels multiply, CMOs say they

are unsure how to maximize ROIacross channels. With a multitude ofchannels in playfrom face-to-facecustomer contact to paid searchCMOs find it increasingly complexto get the channel mix right. Forexample, two-thirds of marketersrealize that social media is animportant channel, but less thanhalf think they are using it effectively.

Online and offline channels are mixedtogether in importance, reinforcing the

complexity of charting a seamless customer

experience in the multichannel environment.

In addition to reviewing channel and

investment effectiveness, CMOs need to use

customer analytics to develop segmentation

strategies so they can identify the channel mix

most relevant for customers and prospects.

Analytics are especially useful as the demand

for multichannel marketing continues to

increase. While the importance of the top fivemarketing channels has risen by at least 10

points over 2011, effective usage has nearly

plateaued, indicating a need to find better

ways to use these channels.

(The most fundamental changeover the next five years will be)

channel proliferation and themove away from traditionaldirect marketing to moreeffective ways of leveragingcustomer stories and referralsvia interactive media.

CMO, Financial Services, USA

The channel explosion:importance up,effectiveness down


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Figure 5a: A proliferation of partners (%)How is capability resourced?

19 40 41

11 50 39

14 49 37

7 57 37

11 52 37

16 48 37

12 53 36

12 55 34

12 58 30

5 65 30

21 49 30

6 64 29

7 64 28

15 56 29

14 58 28

7 66 28

5 70 26

5 71 23

10 67 23

4 64 31

13 54 33

10 58 32

Dont currently resource/fund Manage internally Manage externally with an agency

Paid search

Search engine optimization

Media mix optimization

Creative concept development

Social media monitoring

Media audits

Multichannel campaign management

Marketing analytics

Conversion and optimization

Customer insights/analytics

User experience

Attribution management/modeling

Marketing automation

Content management

Website management

Managing customer data

Managing ROI

Media/advertising optimization

Direct mail/marketing

Brand strategy development

eMail marketing

Web analytics

The partner proliferation

With the explosion of channels,CMOs have turned to a large mixof agencies and alliance partnersand created a highly fragmented

environment (Figure 5).Between 45% and 75% of marketing activities

are managed by digital agencies, specialized

agencies and marketing service providers.

Also in the picture are traditional advertising

agencies, management consultants, systems

integrators and public relations firms.

With no clear strategic leader among the

outside resources, many CMOs default to

ineffective internal processes to create

the cross-agency view. However, high-

growth companies use marketing service

providers and specialized agencies (both19%) to a greater extent than other types

of companies, indicating that selective

types of outside partners may help chart

a course to improved performance.


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Management Consultant

(e.g. McKinsey)

Ad Agency

(e.g. Ogilvy, Y&R)

Systems Integrator

(e.g. Infosys, IBM))

PR Firm

(e.g. Burson-Marsteller, Ketchum

Digital Agency (e.g. Digitas, R/GA)

Specialized Agency (e.g. Exact Target, iCrossing)

Marketing Service Providers

(e.g. SapientNitro, Accenture Interactive)

If managed externally, what type of agency?

10 18 27 20 427Paid search

7 15 28 24 18 4Search engine optimization7 26 17 26 22 7Media mix optimization

7 39 22 19 16 9Creative concept development

29 19 77 13 28Social media monitoring

12 25 17 23 23 5Media audits

5 31 21 29 21 5Multichannel campaign management

9 22 29 724 25Marketing analytics

7 11 23 29 24 6Conversion and optimization

14 14 18 31 21 3Customer insights/analytics

13 19 21 28 25 3User experience

12 22 25 27 319Attribution management/modeling

12 23 19 25 21 4

7 22 27 16 629

13 15 23 24 25 5

14 15 25 32 18 6

817 14 27 25 24

Media/advertising optimization 8 29 22 20 20 5

8 26 21 22 26 7Direct mail/marketing

18 23 17 22 20 8Brand strategy development

78 24 26 30 19eMail marketing

7 16 31 20 19

11

2011

11

11

9

15

11

16

13

17

13

20

13

16

16

12

11

10

12

10

18 5Web analytics

Marketing automation

Content management

Website management

Managing customer data

Managing ROI

Between 45% and 75% of marketing activities

are managed by digital agencies, specialized

agencies and marketing service providers

The partner proliferation

Figure 5b: A proliferation of partners (%)


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CMOs are generally more satisfiedwith marketing areas managed byexternal resources than with theirown people. In only six areas do

internal resources show highersatisfaction scores than those forexternal partners: brand strategydevelopment, direct mail andmarketing, marketing automation,web analytics, social mediamonitoring and paid search.

However, theres lots of room to improve

CMO satisfaction across the board, especially

in the areas of execution and delivery, where

partners are seen as weakest by 64% of

senior marketers (Figure 6).

While one-third of CMOs say their partners

have improved on execution, a like number

have not seen any change in their partner

relationships. Worse, CMOs say their partners

are not doing a good job helping them

transform the marketing organization.

The satisfaction shortage

(1&2)Not at all satisfied 3 4 5 Extremely satisfied

Executes flawlessly

Collaborate with our agencies/partners

Understand my business

Can talk both technology and creative

Support my marketing programs globally

Support multi-channel marketing programs

Are innovative and push great ideas

Can help transform my marketing organization

Bring the right talent

13423511

Understand my brand 11403911

13373812

12373913

10364212

8374312

113341

15

8364214

8354512

11324313

Efficiently manage my budget, maximizing ROI 8324317

8294518Lack of business processes, briefs, decision-making, etc.

Figure 6: Partners weakest at execution and delivery (%)

Provide an integrated view of marketing effectiveness

Not able to deliver what they promise/sell 8284420

9285014

Partners are seen as weakest by 64%

of senior marketers


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While marketing budgets are expectedto show some growth next year, theallocation towards digital marketing isexpected to jump significantly (Figure

7)a sign that CMOs understand theirsituation and believe digital is criticalto their future.

Some 28% of marketersan increase

of five points over 2011believe there will

be significant growth in marketing budgets,

but more than half the respondents expect

flat or little growth.

The bigger, better digital budget

Meanwhile, CMOs are aggressively

increasing their budget allocation

towards digital marketing, with 66%

assigning more than one-quarter of their

budget to digital next year. The heaviest

investments are in customer experienceand data and analytics. These investments

align with the priorities to acquire and

retain customers and increase sales.

Figure 7: Big jump in digital budgets (%)

285518

235719

235226

2012

2009

2011

Negative growth Flat / Little growth Significant growth

Expected change

Marketing budget

Next year This year

Marketing budget towards digital marketing

66% of CMOs allocating

over one quarter of their

marketing budget

to digital


13

More than 50%11

23

25-49%36

43

Less than 25%53

34


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2012

2009

2011

30 70

25 75

38 62

More than 70% of marketers

in B2B2C and significant

growth companies feel that

the marketing function will

fundamentally change over

the next 5 years.

Overall

2012

2012

2012

2011

2011

2011

APAC

EALA

North America

Region

20 80

15 85

29 71

42 58

24 76

24 76

Marketers in APAC are

more aggressive about

this change (85%) with

marketers in EALA (58%)

and B2B marketers (62%)

not feeling as strongly

about such transformation.

2012

2012

2012

2011

2011

2011

B to B to C

B to C

B to B

Company type

25

25

26

75

75

74

26

29

38

74

71

62

2012

2012

2012

2011

2011

2011

Significant

Flat/little

Negative

Sales growth

25

28

23

75

72

77

29

30

34

71

70

66

No Yes

Figure 8: Fundamental changes in next 5 years (%)


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organizational transformation to meet

their marketing objectives. The new

marketing organization, powered by

analytics and technology and focused

on business outcomes, will play a critical

integration role across channels andbusiness units.

Build new skills internally.Marketers

will need to hire, reskill and redeploy

people to improve efficiency, agility and

responsiveness. Marketers need talent

that can create consistent, multichannel

experiences that meet customers needs,

expectations and demands for relevance.

Innovative employees are high on the CMO

agenda. An emerging priority for marketing

executives is to hire and grow talent that isdigitally experienced and can integrate well

with the IT department.

CMOs plan to have more employees

focused on analytics and digital marketing

in the year ahead (Figure 10). About one-

quarter of senior marketers are dedicating

41-60% of their employees to these areas.

They recognize the importance of analytics

in understanding how consumers desires

for relevance drive marketing decisions.

With the shift in budgets to digital, thenumber of employees focused on that area

is expected to increase. In fact, employee

headcount in digital marketing shows

the biggest jump (eight points) across

customer analytics, digital marketing,

and marketing and media analytics.

More traditional areas of marketing will

see a smaller increaseor even a decrease

in employees in some cases.

Get aligned with the right set of

partners. Agencies and alliance partners

must help CMOs make sense of complexity

in the marketplace by improving their levels

of execution and delivery and by providing

a broader set of capabilities and deeperintegration across the agency ecosystem.

As CMOs consider whether to invest

internally or externally, they may prioritize

their decisions based on capabilities and

satisfaction. For example, external providers

receive satisfaction scores nine to 12

points higher than internal resources in the

areas of customer insights and analytics,

multichannel campaign management,

content management, media mix

optimization and media audits.

Drive digital orientation throughout

the enterprise.To improve marketing

performance, prepare for the future and

reduce complexity, digital orientation

can no longer remain only a province of

marketing. The entire organization needs

to understand how digital is transforming

the customer experience.

While CMOs recognize the need to

increase digital capabilities and budgetsto meet consumer expectations and

support profitable business growth,

inefficient business practices hinder the

development of a digital DNA across the

organization. Some 16% of CMOs encounter

performance barriers when trying to work

horizontally. The C-suite needs to give

digital orientation greater importance

by embracing horizontal collaboration.

(The marketing organization)has to change to stay up withcurrent technology. Toomuch is the old way andnot getting results.

VP Marketing, Fortune 100 bank, USA


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Digital is the marketing game changer.In an information-overloaded world,the traditional brand-centric marketingapproach has long lost the appeal it

once had for attracting consumers andassuring a healthy rate of return frommarketing investments.

Todays consumer is more in control than

everand causing more turbulence for todays

marketers. As consumers go digital and

interact across multiple devices and channels

(encouraged by their millennial offspring), they

expect brands to fit their needs of the moment

with relevant experiences. If the brand doesnt

measure up, consumers move on.

In the face of such a shift, the marketing

function needs to undergo a fundamental

change over the next five years to stay on

top of changing consumer behavior and

channel proliferation. Marketers will need to

hire, reskill and redeploy people to improve

efficiency, agility and responsiveness. They

will need to stay relevant and engage with

customers through the most convenient

channel and the most relevant offer.

Facing increasing complexity, CMOs who want

their companies to achieve high performance

are transforming their operating model,

tuning up their business practices, carefully

selecting their agencies and partners, and

upskilling their talent.

Their ability to restructure the organization

and work horizontally to deliver seamless

and relevant customer experiences across all

touchpoints all day, every day, will be essential

to survival in the global marketplace.

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The marketing game changer


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About the research

The 2012 CMO Insights survey is the third in

a series of studies sponsored by Accenture

and aimed at understanding the opinions,

challenges and points of view of senior

marketing executives from around the world.

Results are based on online surveys across

10 countries with 405 senior executives

who are key marketing decision makers

in their companies.

Most companies have at least US$1 billion

in annual revenues. Corporations in France,

Australia, Singapore and Brazil have annual

revenues of at least US$500 million.

Nearly half (48%) the companies experienced

flat or little growth in 2012. Another 36%

showed significant growth, while the

remainder (16%) had negative growth.

Business-to-consumer (B2C) and business-to-

business-to-consumer (B2B2C) corporations

represented the most prevalent business model

(37% each). Business-to-business companies

made up the remaining 26%. Financial services

represented the biggest sector (34%), with

products companies close behind at 30%.

Communications, high-technology and media

companies represented 16%. Resources

companies made up 7%, while a variety of

other companies represented 11%.

Some 45% of respondents were based in

Europe, Africa and Latin America (EALA).

Another 40% were located in North America,

while 15% were headquartered in Asia-

Pacific (APAC).

Authors

Brian Whipple

Brian Whipple is Managing Director of

Accenture Interactive, a business of Accenture

that helps companies develop industry-

leading digital marketing capabilities,

including the development and managementof websites and interactive marketing, as

well as the optimization of online and offline

marketing and merchandising investments.

Brian leads all of Accenture Interactives

global consulting domains including Digital,

Marketing Analytics, Media Management,

Marketing Data Management and Marketing

Transformation. Prior to Accenture, Brian

was Chief Operating Officer of Hill Holliday,

an advertising and marketing services firm

headquartered in Boston.

[email protected]

Baiju Shah

Baiju Shah is Managing Director for Strategy

& Innovation in Accenture Interactive. In

this role, he oversees Accenture Interactives

business strategy and manages a portfolio of

emerging business services. He is responsible

for identifying and catalyzing new waves of

growth by creating new business services

that address unmet needs in the ever-

evolving marketing landscape. He hasworked closely with clients across industries

including Verizon, Chrysler and P&G on

strategies that take advantage of emerging

technology and analytics as a competitive

advantage in Digital. Baijus expertise

lies in digital marketing, advanced analytics,

and technology market adoption.

[email protected]


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Follow @AccentureSocial or visit accenture.com/interactive.

About AccentureAccenture is a global management consulting, technology services and outsourcing

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year ended Aug. 31, 2012. Its home page is www.accenture.com.

The views and opinions in this article should not be viewed as professional advice with respect to your business.

Disclaimer: Accentures CMO Insights survey uses the generic term partner to refer to entities such as digital agencies, specialized agencies, marketing service providers,advertising agencies management consultants systems integrators and public relations firms The use of the term partner in the survey the survey results and in this

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