Sheryl Pattek, Executive Partner for Forrester, with Bob Domenz, CEO, Avenue
How is a changing B2B world changing the strategic planning process? And what role should marketers play in developing strategy?
Recently, B2B Brand Council member Sheryl Pattek, Executive Partner at Forrester Research, spoke at length on the topic with our Executive Director (and CEO of Avenue) Bob Domenz.
Bob Domenz: In Forrester’s report, “Revamp Strategic Planning from the Outside In,” you conclude (to paraphrase) that it’s time for CMOs to lead strategic planning because this is now a customer-controlled world. Can you elaborate on that — particularly how it applies in a business-to-business environment?
Sheryl Pattek: We believe that we’ve entered what we call “The Age of the Customer,” in which the organizations that prosper are those that realize customer behavior has shifted. The balance of power has moved from inside companies, away from how marketers want to engage with their customers or prospects, to outside of companies, so that the power now rests with customers and prospects, and the way they choose to engage with the organizations they buy from.
In this new mode, where customers are in control, if you’re doing traditional strategic planning — the once-a-year exercise, done from the inside out, looking at how you perceive the market and the company – then you’re at a disadvantage. That’s because you’re not thinking of the customer’s perspective as the starting point for how you build the value that you have. It’s no longer about building that value around the product, or the company, or even the engagement channel – it’s now about building that value around the customer, and the customer’s wants and needs.
“If you’re doing traditional strategic planning — the once-a-year exercise, done from the inside out – then you’re at a disadvantage.”
When you make that transition from inside out thinking to outside in thinking, the executive that’s best positioned within the C-Suite to lead the strategic planning process is the Chief Marketing Officer. The CMO represents the voice of the customer in the at the C-Suite, and as such is the executive that best understands customer behavior, and can shine a light on where customers are going and how the company can best win, serve, and retain those customers.
Bob: It’s pretty easy to observe that dynamic in the B2C space, where individual customers are making decisions, often quickly and even impulsively – but do you see the same sort of urgency and opportunity for CMOs in B2B, given its more complex set of influencers, customers and overall customer journey?
Sheryl: I actually do, in many different ways.
If we look at the B2B environment, customers are making 60 to 70% of the buying decisions on their own, in digital channels, before they’re willing to engage with that direct sales rep. That means that the load for the B2B CMO really shifts from just being responsible for customer acquisition and thinking about how to engage that customer throughout the purchase process, to now also including responsibility after purchase.
The complexity comes in the buying decision process, and all the different roles that people have in that process, requiring the CMO to be on top of understanding customer needs, the buying journey, and how to ensure that their content is aligned the right way all along the way. They need to really understand how to create the value that the customer is looking for, rather than just pitching products and services.
From a B2B perspective, I will say that there are marketers we speak to in our research that have made this transition and understand that, as an executive in the C- Suite, one needs to move from being the chief marketer to really being on the “O” side of “CMO”. It means stepping up to be a full corporate officer in the organization and taking responsibility for helping drive company strategy — with the customer always in view.
However, there are many, many B2B CMOs who are still much too comfortable being simply the chief marketer and focusing only on leads and acquisitions. But we see the CMO role evolving, and two different directions that B2B organizations are moving. Some are moving towards a higher level functionality. where the CMO owns marketing and customer experience, and others that are still relegating the CMO to just being a functional marketing expert, but not as being as involved in the overall company strategy.
“Many B2B CMOs are still much too comfortable being simply the chief marketer and focusing only on leads and acquisitions.”
Bob: Elsewhere you’ve talked about the need for CMOs to collaborate with their peers. Are you seeing that same need then to collaborate more thoroughly with sales counterparts, if they don’t already control sales?
Sheryl: Yes, totally. To drive results, this has to be a fluid process between marketing-driven and sales-driven customer engagement. In B2B, marketing’s role is now to get their company on their prospects’ shortlists as a resource that B2B customer is willing to have dialogue with face-to-face. That means there has to be a partnership between marketing and sales, and fluidity between the go to market strategies and the sales enablement strategy.
Historically, customer experience in B2B organizations has been more about customer service than it’s been about anything else. Maybe customer satisfaction, but mostly about customer service and responsiveness. But today your brand is defined by every single engagement that customer has with you – across their lifetime of their relationship, [and not solely when service is required.]
Consequently, when we talk about customer experience it’s really about making sure that every interaction and every customer engagement touch point is defined in way that always reinforces the brand. It doesn’t mean that the CMO has to own the delivery of every customer experience, but they need to be the one defining those touch points, and how you bring them to life.
Bob: So are CMOs currently equipped to deliver against this need to be the voice of the customer, to open up that “outside in” view, and to make key contributions to overall company strategy?
“CMOs needing to have more visioning and strategic planning skills than they have had in the past.”
Sheryl: The work that I’m doing right now is about how the role of the CMO is evolving, and we see CMOs needing to have more visioning and strategic planning skills than they have had in the past. They need to be savvy relationship builders – not necessarily the best functional leaders, but savvy relationship builders across the organization.
And, of course, they need the skill sets you’ve heard talked about for a number of years: understanding data and having a passion for being data driven; going deep in technology, not quite to the widget level, but to being technology aware and savvy rather than simply chasing the latest shiny objects; and having a strategic approach to using technology to effectively engage customers and understand the customer experience. Those are the biggest changes and skillsets that we see going forward.
Some of these comments appeared originally in Branding Magazine.