The Executive Angle features commentary from industry leaders as they discuss what’s working and what’s not in their efforts to improve their organizations’ performance and prepare for the future. In this piece, we focus on Marketing and how it can best contribute to a “digital first” transformation. We pick up a dialogue between David Clifton, CMO Emeritus at Huntington and Neil Hall, former Head of the Retail Bank at PNC at Novantas’s recent CMO Executive Series Forum.
How would you describe the role Marketing plays at your organization today? What will the role of Marketing need to be in the near future?
Clifton: It begins at the top for Huntington. Our CEO is a huge proponent and believer of our brand and Marketing, and that is important as it ensures the entire organization remains focused to rally around, and realize, our Welcoming brand promise. And Marketing is central to our organization — at the intersection of brand, segment, customer experience, distribution, digital, data & analytics and communications. The essence of innovating, aligning and choreographing these responsibilities is very much the charge for Marketing at Huntington through direct report or dotted line reporting.
Hall: Marketing has always played a key role aligning the Retail organization around brand creation and choreographing product messaging, campaigns and programs. Marketing’s success has often been judged by the efficiency of the “ Marketing Funnel “ (from building market awareness to creating loyal customers). While the top of the Funnel can be controlled by programs and campaigns (and is often what Marketing would prefer to be measured on), creating and sustaining results at the bottom of the Funnel is hard, and more about client experience, which transcends the typical Marketing organization.
In today’s world of Big Data, rapidly evolving technology and heightened regulation, it is essential that Marketing see itself as the guardian of the bank’s business reputation in the marketplace. This will require Marketing leadership to lay the Marketing Funnel over the entire Retail business, putting programs and campaigns in service of a client experience.
We have been advocating for the CMO to play the role of “Chief Alignment Officer”. In your opinion, what are the ingredients of success for CMOs?
Hall: While I see the CEO or Business Head as ultimately accountable for business alignment, the CMO should put themselves in a position to be a catalyst for alignment. To accomplish this in today’s environment, a successful CMO must see themselves as not only responsible for the effectiveness of their function, but for the business’s bottom line as well. For a Retail CMO, that means participating in the creation of business strategy, having a voice in the business’s (not just Marketing’s) priorities, and offering opinions about the business’s ability to execute.
Clifton: First, I agree with the “Chief Alignment” appointment. Any CMO worth their salt must obviously first be a highly-skilled marketer — that is, truly great at the marketing basics, knowing the 4 P’s (product, place, promotion, price), using data, tests and research, demonstrating great instinct about the customer, clarifying overt benefits and reasons to believe, and knowing how to nurture, inspire and harness creativity in people and in messaging.
But to be a great CMO (and begin to align), a CMO must also show clear VISION to identify the brand’s True North; be TENACIOUS and have thick skin in influencing, corralling, and inspiring everyone to gather around that True North; and be HUMBLE in making it everyone else’s idea.
To be truly extraordinary, they may also need to show a touch of MAGIC — that is, a hint of mystery and inspiration that makes others want to gather around, imagine and believe.
How did you, Neil, consider the right level of investment for marketing in the context of all the other things needing funding?
Hall: Given today’s margin pressure on the Retail business, marketing investment decisions require a conscious, careful balancing of both long and short term priorities. The filters I applied to these decisions included:
- Was the investment directly in service of a clearly developed business strategy?
- Were we clear about what success looked like?
- What were the interdependencies required for success (technology, prepared sales force, etc.)?
- Did the investment have qualified, committed sponsors?
David how did you make the case for the funding you believed was needed and get the support from stakeholders?
Clifton: Again, it begins at the top. The CMO must gain and hold the trust of their revenue segments, the CEO and especially the CFO … and test and learn and data-driven marketing in partnership with the segments and finance is the paramount path to build that trust. With so many investment options for the next available dollar, the leadership team must be absolutely convinced of the definitive impact of the marketing investment. And Marketing must be held accountable to deliver the promised results. In tough years, a CMO should, in partnership, offer to dial down the marketing investment … while making it clear what the resultant impact will be on revenues and profits. And in the good years, always promote the ROMI (return on marketing investment), have additional ideas lined up, and clearly demonstrate the payback to prove and attract more investment. As I said, it is a partnership.
How accountable should marketing be to prove ROI of everything it does? What is the right mix of judgment and science in marketing — and banking for that matter — going forward?
Clifton: Recall that I was an Engineer and agency CFO before becoming a brand architect and marketer —so I am adamant Marketing should absolutely be accountable to demonstrate contribution in brand, growth, retention, revenue and profitability metrics. To do so, the organization must also be willing to invest and commit to a very robust marketing data & analytics structure for modeling, prediction and measurement.
On programs that have clear measurement, make sure there is a constant test and learn and constantly evaluate and optimize. Where the returns are not as clear or cannot be measured, make sure that fact is well known, and the program should be challenged and often cut. For those select programs that cannot be measured (for new tests or where the sample size is too small to garner significant testing levels or time series too protracted), make it clear WHY it is still worth investing in the program.
This discipline of transparency and measurement is imperative in maintaining credibility of expected incremental ROMI.
Hall: First off, as marketing incorporates elements of both art and science, I think there is a danger that innovation can be suppressed if all investment decisions are held to strict ROI measures. Nevertheless, an effective marketing organization does need to operate inside a rigorous Test and Learn culture, and a disciplined use of the Marketing Funnel, to continuously refine and improve its investments and programs. Obviously the larger the investment, the more important the analytical rigor. Fortunately, today’s data tools and analytical models make it easier to get more rapid cycle insights that improve decision making. This is important as innovation and speed to market are essential ingredients to produce sustained business results.
Clifton: Neil, hearing you say that, I am reminded why throughout my career I was particularly dogmatic about discipline and measurement: it is very tempting for an executive to buy-in to the creative side of marketing — that is yield to the psychological and visual thinking (as your CMO may often tell you) as ‘you are not the target market’. And a CMO truly does have to really get that side of their craft. But CMO’s that you hear say that too often, however, last about 1-3 years in their organization/role before you will see them popping up somewhere else to often derail another brand. Banking executives often seem attracted to the mystery of the creative spirit they emanate, trust them temporarily, not see results quickly enough, and either cut budgets or force
Brand-building is a multi-decade discipline and more science than art. Where some get confused is Advertising, which is more art than science. Both are important. And remember even creativity can be measured — if you are creative enough.
So don’t let a CMO put a smokescreen up just because parts of marketing require creativity. Too many do.
Hall: David, well said. I have a creative learning disability so I was never seduced by CMO’s that argued for $$ that way. I really like your distinction between advertising and brand building. It is where I did see (within the marketing community) that argument play out. I am with you that even creative can be measured. I think the “art” in measurement is in determining the measures and the calibration as I did encounter argument for change of direction, budget adds, new agencies, etc. that where often not grounded in facts.
Managing Director, New York