How to Get the Most Out of Your CMO

Soon after becoming CEO of U.S. Cellular in June 2010, Mary N. Dillon brought in David Kimbell—her marketing head when she was president of Quaker Foods five years previously—to be chief marketing officer at the $4 billion, Chicago-based wireless phone company. Acknowledging that it’s unusual for a tech company to reach out to the consumer-products field for marketing savvy, Dillon explains, “It’s a new model. We’re focusing on marketing as a demand driver, using consumer insight.”

Eighteen months later and some 700 miles to the east, in a suburb of New York City, the Leukemia and Lymphoma Society was crafting a new strategic plan. With total American charitable giving flat or falling ever since the recession, CEO John Walter decided that a high-level marketing executive was needed to rebrand the $300 million organization and expand its donor base. The Society established the job of senior vice-president of marketing and communications—later upgraded to CMO—and hired Lisa Stockmon, a 20-year marketing veteran from Time Warner and Limited Brands.

CEOs like Dillon and Walter are relying more and more on their chief marketing officers today, largely because these executives are the keys to two crucial developments: customer data and social media. In order to use these tools most effectively, marketing chiefs are collaborating in new ways with the rest of the C-suite.

“I consider my CMO the chief revenue officer of the company,” reports Michael MacDonald, CEO of Medifast, a $360 million diet-products company based in Maryland.

A major impetus for this change has been the growth of electronic communication over the past five to 10 years. Indeed, Gregory S. Carpenter, a former chair of the marketing department at Northwestern University’s Kellogg School of Management, specifically traces the trend to 2007, when both the iPhone and the Amazon Kindle were launched. Before then, he says, “technology was seen by the majority of people as something frustrating that always crashed.” But the new gadgets, he adds, “had a big impact on how people thought about technology. These became invaluable devices, which people can’t live without.”

The more that consumers use their e-gizmos, the more usage data they produce. Marketing departments can now analyze and massage vast streams of information about customer demographics, location, tastes and frequency of use. Moreover, consumers have started talking back—directly to official outlets, such as corporate blogs, and indirectly to each other via Twitter, Facebook, Yelp and other social media.

Digging Into Data

Of course, savvy CEOs have been surveying their customers for years. “The newer part,” Dillon of U.S. Cellular says, “is that there’s a lot of data that’s been available through technology, and more being captured through social media, wireless and the Internet. At an aggregate level, we know about what types of activities for which people use their smart phones, the peak hours, locations—questions like that.”

At the Leukemia Society, Stockmon is boring into details about the current donor base, such as “where they come from and what their interests are,” reports CEO Walter. These are the kinds of intimate facts that old-fashioned surveys never captured. Stockmon and other CMOs then take all that information one e-step further, using that data—along with the same online tools that provided it—to reach straight back out to the public.

The details that Stockmon has learned about current donors, for instance, become clues to help the Leukemia Society “explore how we can find more of these kinds of donors,” according to Walter. With the aid of three new hires and an outside agency, Stockmon is also upgrading the Society’s web site and crafting You Tube videos.

At Hyatt Hotels, John Wallis, the global head of marketing and brand strategy, has employed You Tube plus a special web site to test-market new ads targeted to female travelers. Medifast—which spends 60 percent of its $34 million marketing budget on Web-based media—launched a new, multi-channel online survey this year and—at the same time—added promotions to its web site.

Working with the C-Suite

Even the most tech-empowered marketing chiefs can’t do the job alone, which is why they now work more closely than ever with the rest of the C-suite. In light of all the new technology involved, cooperation with the chief technology (or chief information) officer is obviously vital. “The CMO needs to have the CTO as a friend and close ally [and] to work hand-in-hand with the CTO,” says Antonella Mei-Pochtler, a senior partner at Boston Consulting Group, who doubles as the consulting firm’s chief marketing officer. In her case, she meets at least once per quarter with Boston Consulting’s CIO, Tom Dionisio, and their midlevel managers confer weekly or monthly, depending on the projects that are underway.

Another key relationship is with the COO. Before becoming Hyatt’s marketing head, Wallis had spent three years managing more than 40 hotels across the globe. He says that operational background has come in handy as he works with the company’s U.S. and international COOs to determine which results from his department’s 18-month survey of female travelers can be realistically implemented. (Among the changes instituted so far: fresh juices and smoothies added to the menu and personal cards from the housekeeping staff in the rooms.)

“The CMO has to have good operational credibility and empathy with operational managers and good communication, so he’s [or she’s] not just implementing programs that don’t have strong relationships,” agrees MacDonald of Medifast. His CMO, Brian Kagen, presents a detailed report on customer usage data at the senior management team’s monthly strategy meeting.

The chief financial officer is also being cultivated. “With the crash of 2008,” Mei-Pochtler says, “the pressure for CMOs to have the right return on marketing investments has increased. The CMO needs to have a strong counterpart in the finance department.” Where she and her CFO used to hold a planning meeting just once a year, perhaps supplemented by a midyear review, they now meet quarterly.

How CEOs Can Help

Can CEOs help foster such cooperation? They shouldn’t have to send their senior managers iCal reminders, of course. Nor is it necessary to physically relocate the marketing chief’s office closer to the CIO or CFO. However, there are other ways chief that executives can nudge matters along.

Christine Cutten principal, marketing practice leader at Deloitte Consulting, cites one large retail client that hired a new marketing head last December, as part of an effort to improve customer outreach. “The CEO drove it, working with the CMO and head of sales to better manage their annual plan,” she says. The chief executive prodded the two managers to discuss questions, such as how often to send messages to customers and which themes would work in which seasons.

In the short run, jests Walter of the Leukemia Society, hiring an empowered CMO “is not really making my life easier because this is a lot of organizational change and a cultural shift.” However, he adds, “ultimately, it will make my life easier because we’ll be raising a lot more money. A lot of what we’re talking about probably wouldn’t get done without a CMO because I wouldn’t have the time to do it, and I don’t have the expertise.”

Executive Education

Northwestern University’s Kellogg School of Management has just launched a new program targeted to CMOs:

Kellogg School of Management | The Kellogg Chief Marketing Officer Program

Target: New CMOs or senior executives with the potential to move into that position. Participants must be nominated by their organizations.

When: Four days total: two in late May and two in late July.

Location: James L. Allen Center on the Northwester University campus in Evanston, IL.

Cost: To be determined case-by-case.

Contact: Executive director, Eric Leininger, 630-400-0420 e-leininger@kellogg.northwestern.edu