By Tom French, Laura LaBerge, and Paul Magill
For more than a decade, marketing organizations have struggled to cope with the deeper relationship consumers now crave with products and brands. Customers need to be engaged through an expanding array of touch points, yet chief marketing officers are working with the same or fewer resources. They’ve tacked on social media staff to engage with customers online, and built internal publishing units to create and deliver content. They’ve conducted new types of research to achieve deeper insight into customers, and adopted marketing management software to automate and integrate processes. They’ve rethought approaches to strategy development and internal collaboration, altered reporting structures, and overhauled governance systems to ensure accountability. And yet the demands keep rising.
That’s only likely to continue. “Push” marketing has been subsumed by a complicated two-way relationship that begins well before a product is ever purchased and then continues indefinitely. A consumer’s ongoing experience with a company—which directly influences whether they choose to buy a product or service and determines their subsequent loyalty—today results from every single interaction they have, planned or unplanned, whether or not it’s within the marketing organization’s control. That’s why we believe that in the era of engagement, marketing must become pervasive: the marketing function needs to renegotiate its role and the role of other functions in driving customer engagement through every touch point. Everyone, everywhere within a company needs to recognize their unique role and responsibility in attracting, satisfying, and retaining customers. We’re all marketers now.
Don't try to do it all yourself
Against this backdrop, it’s no wonder that keeping pace has proved difficult for most CMOs. Our advice? Don’t even try to do everything yourself. The era of customer engagement demands many capabilities that the vast majority of marketing organizations not only can’t but shouldn’t own. CMOs instead should focus on building an engagement ecosystem. Think of it as having three concentric rings: in the first are capabilities owned and operated by the marketing function; in the middle ring are capabilities inside the company but outside of the marketing function itself; and in the outer ring are capabilities provided by a network of external partners.
Of course, marketers have a lot of experience working with external partners for communications touch points—that’s the classic advertising agency and PR firm model. But that traditional external ecosystem is no longer nearly enough in the era of engagement. In this era, marketers require digital content production for websites and social networks. Advice on brand strategy and innovation. Help in building deeper relationships with interested stakeholders such as governments and social-interest groups. Collaboration with information and analytics companies to translate petabytes of customer data into usable information such as sales leads. Usability testing on web landing pages. Social sentiment analysis to provide near real-time feedback on brand performance. Design firms to optimize the customer experience with the product and with the retail or service experience. In short, you today need help from a lot of parties to design and deliver on your customer engagement strategy.
Think about the three rings of your ecosystem
To reshape the core of your engagement ecosystem—the first ring—you probably need to stop doing some legacy marketing activities. Do you really need to be producing printed collateral for every product when your company is moving to more of a cross-product solutions focus, and customers are increasingly using digital media or are too busy to look at it anyway? You also probably need to add or expand the capability to design a cross-touch-point customer engagement strategy, going well beyond just marketing’s traditional communications role.
For the second ring, think about how you can empower other functions or units to operate some of the needed engagement capabilities. Got an employee branding program? Maybe design it jointly with HR and then let that department run it, freeing up your time and resources. Or think about other creative solutions to meeting your engagement needs. Procter & Gamble, for example, created its own marketing firm, Tremor, to design and implement customized word-of-mouth marketing programs for its brands and external clients. But they built it outside the traditional marketing organization in order to allow it to serve, and gain knowledge from, other marketers. There’s a lesson in that: CMOs need to be far-sighted and creative not just in terms of which capabilities they build, but in deciding where those capabilities should best be positioned in their companies.
The third ring—the use of external partners—is where many marketing organizations must catch up. While the agency model has given CMOs extensive experience in working with external partners, a much broader, more complex ecosystem is now required that demands much more than a basic client-vendor relationship. For most companies, new capabilities will need to be sourced externally in five main areas—data analytics and insights, product and service innovation, content and communications, customer experience design and delivery, and brand, reputation and citizenship. Existing internal capabilities should be evaluated to see if they can be better handled externally. Increasingly, that will be the case: for example, in data analytics, the fragmented, specialized, and scarce talent required will generally be available only in external firms—you probably won’t be able to hire enough top talent into your marketing organization.
More partnerships
By building external partnerships , marketers will be able to extend the reach of their customer engagement strategies. Consider American Express. When the company recognized that its cardholders wanted a relationship encompassing services well beyond credit cards, it immediately looked externally. Its Membership Rewards program is today affiliated with thousands of retailers, has partnerships with sporting and music events for preferred seats, and American Express is a principal sponsor of the Tribeca Film Festival in New York City. Far from being just a provider of credit card services to customers, the company has created broader and deeper engagement with its cardholders’ lifestyles through an ecosystem of external partners. Similarly, when Ford Motor Co. wanted to reach and engage its important future customers, it forged an alliance with ZipCar to place up to 1,000 Ford vehicles on 250 US college campuses, amplifying the impact it could have on its own.
Approaches such as these are emblematic of the marketing model required in the era of engagement—where companies understand the depth and breadth of operations required to engage their customers (or, in Ford’s case, students who may not be customers for several years), then find partners with strategies and interests that complement their own. That’s what’s required today to deliver on the marketing mission.
Tom French in a director in McKinsey & Company’s Boston office, while Laura LaBerge is a senior expert in its Stamford office, where Paul Magill is a principal. You can also follow @Paul_Magill on Twitter and read more about the organization of future at the Chief Marketing & Sales Officer Forum.
