A CMO's Most Important Task

The CMO Council’s report Renovate to Innovate: Building Performance-Driven Marketing Organizations (1) suggests that the most important task for CMOs is to drive their organizations to execute strategic, cross-functional campaigns:

“Most importantly, chief marketing executives have to revitalize marketing group cultures and mindsets. Narrowly focused, risk-averse managers in isolated silos of tactical execution (research, PR, advertising, events, marketing services and Web) must be integrated into cohesive, cross-functional campaign teams.”

Prior to integration of this sort, organizations must first understand the lifetime value of each customer regardless of how the customer chooses to interact with the organization. Only then can cross-functional teams can be organized around a common goal: maximizing lifetime customer value.

In the past I worked with a major retailer who failed to understand the drivers of lifetime customer value. A tension quickly emerged between the brand team, who viewed value creation on a long-term horizon, and the e-commerce team, who wanted to maximize in-session purchases. The question became: What metric should we optimize for?

Without an understanding of lifetime customer value, there is a significant risk in failure of cross-functional team alignment as each team clings to the metrics its used to. More importantly, there’s a real risk of creating teams that optimize the wrong metrics.

Understanding lifetime customer value requires organizations to:

1. Connect the data: Connect data from different channels organized around the customer.
2. Understand the data: Understand the key drivers of lifetime customer value. It’s just as crucial to understand how this changes over time.
3. Act on the data: Leverage all the data in any channel, ideally in real-time.

A common understanding of lifetime customer value will provide a solid foundation for these cross-functional marketing teams. Enterprises risk misalignment and suboptimal performance without it.
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1. http://www.cmocouncil.org/resources/forms/download-report/index.php?id=204