Here is how a CMO from the digital era opens the door to the corner office
Through modern marketing, it is possible to more accurately cultivate the market. This creates demand and new services and attracts new segments, and also conducts customer dialogue where sales investments seem to be too large.
Digital technology is transforming organizations at a staggering pace, whether we like it or not. Marketing executives of companies have an interesting panoramic view. They are on the frontlines and tasked to sense and observe the changes both inside the organization and in their customers’ world. To get a better idea of the views of the digital revolution of the Nordic management, Tieto conducted a comprehensive study together with Kairos Future about the subject. A total of 500 business and IT decision makers from Finland, Sweden and Norway took part in our study between October 2013 and January 2014.
From my point of view, one of the most interesting aspects is related to how sales and marketing managers of organizations responded to this survey.
Era of Ecosystems
One of the biggest drivers for change in technology-based transformation is the development of new technologies and their fast transition from private use to corporate use. For example, Google's services were originally aimed at consumers. Yet today, many companies have now switched to using Google type standardised cloud services instead of customised solutions.
Expectations of the customer base are growing along with the pursuit of greater efficiency and automation: people want more for less. This new generation is accustomed to functioning digitally. It expects and even demands new models, times, and customs for service that differ from the traditional standards. Even the aging generation can be "taught" to become digital service users, if enough attention is paid to service design.
According to our study, 95 percent of the Nordic CMOs believe that in 2020 the typical project team will consist of members outside the primary organisation, such as customers, partners, and communities. As competition intensifies, the customer is truly placed in the centre of business development. An organisation will have to consider things from his or her point of view. The wheel will not be reinvented, though. Partners whose offerings and expertise complement the business’s own know-how can be sought. This is how the entry to markets can be accelerated and competitive advantage strengthened.
These changes require a whole new kind of speed from companies to respond, innovate, seize opportunities, and become more transparent. This can mean creating a whole new corporate culture from new starting points. In our organization, this is referred to as "startup mentality” and “open source culture.”
The Power of Social Media
In the future, all organisations will serve as marketers. In fact, we’ll talk about ambassadors, who may include the company's employees, partners, or satisfied customers. Ambassadors will be all those who participate in in the ecosystem of the organisation. Social media makes this possible in a whole new way. While a brand is created for an organisation, the brand is established for the experts of the company as well.
A message in social media is often communicated more easily through a person than the channels of the organisation. This, of course, is affected by how interesting and credible that person is. A widely used example is Steve Jobs from Apple, whose cult of personality guaranteed the sales of very fine products. Through him, both his own values as well as those of the company were passed on to other like-minded people.
Employees must be encouraged and guided. Instead of attempting to limit the writings and activities of staff members, one of the duties of the marketing and communications department is to create good opportunities for the experts to function in social media.
A few questions must be asked for the change to happen:
- Do Nordic public companies understand new ecosystems and the power of transparency?
- Does your company still talk about internal and external communications separately?
- What kind of ambassadors do you have?
- Do you follow instant feedback and online discussions associated with your services?
- Do you allow customers and end users to participate in innovation in social media?
The Challenges and Opportunities for Change
CMOs are kept awake at night because their organisations are losing their competitive advantage. 90 percent of consumers say that they will stop buying from companies that use outdated technology. 72 percent of CMOs responding are of the opinion that the gap is widening between market requirements and the ability of the IT department to deliver. 55 percent of CMOs responding see marketing as the department that new technology will be changing the most in the coming years. Almost half of those responding are of the opinion that the industries they represent will be radically different by 2020.
New technology provides a CMO with tools to better customer dialogue as well as customer understanding. Using technology, it is possible to collect valuable information, which elevates customer needs to the centre of business development to steer innovation in the right direction.
Data is already being collected using smart bracelets in areas such as health care. The level of alertness and other bodily functions of elderly people living at home are also being measured digitally. The information goes to a service provider, and help is automatically sent to the location when necessary.
More efficiency in marketing investments is also achieved using analytics. According to McKinsey, it is possible to achieve a 15 to 20 percent saving in marketing investments without compromising efficiency by using an integrated analytical approach.
With modern means of marketing, it is possible to cultivate the markets with improved precision, create demand and new services, approach new segments, and conduct customer dialogue where sales investments seem too large. Scenarios can be created using technology about future expectations and opportunities, and competitive advantage will be built by means of outlook and experiments.
This change makes it possible to build a role for the marketing function on a new foundation, particularly in B2B companies. It also opens the doors to the corner office. A change must be lead – but whose lap does this digital transformation and its management fall on?
As a marketing director, I face a big challenge of how to convince the rest of the corporate management team that, in the introduction of technology, it is necessary to ride the first wave in order to remain a viable player in a competitive market.
Technology is changing established models and conceptions. With it, new business logics are created. Companies in more traditional sectors may become technology companies through the digital revolution. It's the FAST that eat the SLOW!