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The Return of the CMO

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The CMO may be back in style.
In the past 18 months, companies in a wide range of industries have named new chief marketing officers or executives with equivalent titles—a trend that some industry observers interpret as a revival in the discipline of b-to-b marketing.

For example:

• Office Depot named former Motorola CMO Jocelyn Carter-Miller as exec VP-CMO.

• Ascential Software Corp. appointed Mark Register as VP-CMO.

• CDW named Diane Primo as CMO.

• Eastman Kodak Co.’s Health Imaging Group promoted Atul Minocha to VP-CMO.

• General Electric Co. named Beth Comstock as CMO-corporate VP of marketing, a position that had been vacant for nearly a decade.

• Rust-Oleum Industrial Brands promoted John Simons to VP-marketing.

• Tyco International named Charles Young as senior VP-corporate marketing and communications. Three months later the company added James Harman as VP-advertising and branding, a new position reporting to Young.

"In the last year or two, companies have been saying, ‘We’ve taken all the costs out. We have the best ERP system we can buy. What we need to do is go after market share. We have to grow by marketing,’" said Tom Colella, a senior client partner at executive recruitment firm Korn/Ferry International.

Over the past three years, the economic downturn pushed many
b-to-b marketing departments back on their heels. But, with the current emphasis on growth rather than on cost-cutting, executive recruiters have seen a trend of b-to-b companies searching for top marketing executives as a way to build their revenues.

Figures supplied by online recruiting site Monster appear to support the assertion that new marketing hires are increasing. Monster said that job openings on its site in the advertising, marketing and public relations category increased 35% between September 2002 and September 2003.

"Their growth has stalled, and they’re asking where to go next," said Bradford McLane, an executive recruiter with Russell Reynolds Associates, referring to b-to-b companies. "They’re losing touch with their end user or the customer. They don’t know who that customer is anymore."

Consumer experience sought

To regain contact with the customer, many b-to-b companies are turning to executives with consumer marketing experience. "They’re saying, ‘Find us better than just an industrial marketing guy,’ " Colella said.

There is a long-running debate in marketing circles about the advantages of consumer experience vs. b-to-b experience. Some argue that consumer experience is necessary in a marketing world where many b-to-b companies rely on broadcast media. Others say that
b-to-b experience is essential because the decision-making process, with buying teams and hard-to-identify influencers, is so complicated that it requires b-to-b specialists.

In hiring Carter-Miller, Office Depot, which has a customer base that is 70% businesses, tapped a CMO with some consumer marketing experience. Prior to her stint at Motorola, Carter-Miller was a marketing executive at toy-maker Mattel.

At Office Depot, she viewed her hiring as an effort to move the company beyond simple marketing communications into genuine marketing.

Delivering on the brand

"Marketing is something that becomes part of the fiber of a company," Carter-Miller explained. "Everybody delivers on the brand. The experience that people have in our stores tells more about the brand than any TV commercial I could ever do."

In a year and a half at Office Depot, Carter-Miller has increased the marketing department’s headcount by about 2%. For key management roles, she has added executives with consumer experience at marketers such as Procter & Gamble Co.

Experience in consumer marketing is a plus, she said, especially in the ability to segment the customer base. Consumer marketers also tend to be more customer-focused in their approach to the discipline, she said. "We understand our customers, what channels they’re using and what their purchase behavior is," she said. "We have a real understanding of who our customers are and what they need."

Carter-Miller said she and her staff have been able to segment the Office Depot customer base. The company has customized messages to small, midsize and large businesses as well as to women and Spanish-speaking customers.

Carter-Miller’s b-to-b experience also comes in handy. At Motorola, she was part of a complex company that sold a complicated array of goods ranging from cell phones to semiconductors. The experience prepared her for Office Depot’s complexity, numerous channels (retail stores, delivery and online) and a global presence.

Office Depot debuted b-to-b spots in the fall. Using humor, such as comparing Office Depot’s delivery truck to an ice cream truck, the commercials spotlight the company’s tagline, "What you need. What you need to know." Carter-Miller said it is too soon to tell how the campaign is performing. She is confident, however, because early results point to success.

Rust-Oleum taps veteran

At about the same time, Rust-Oleum elevated a b-to-b sales and marketing veteran to its top marketing post. With nearly 30 years in the industry, John Simons was promoted to VP-marketing in October.

Simons said the promotion was, in part, a recognition of the increasingly important role marketing plays at the company. In the past, what passed for marketing strategy at Rust-Oleum Industrial Brands was giving the sales staff the tools they needed to compete for market share. Now, he said, the company is stepping up its understanding of the marketplace and aggressively trying to outthink its competition.

Marketing drives strategy

Simons points to two key examples that show how marketing, and not sales, is driving strategy at the company. In one instance, a Rust-Oleum competitor introduced a new coating product and was winning business on price. Rather than engage in a price war involving its premium product, Rust-Oleum decided to launch a new, lower-priced product line called Industrial Choice.

"What this allowed us to do was better position our higher-priced product line," Simons explained. "In the past, customers would just come to us and say, ‘Your price is too high.’ The only choice was to discount or lose the sale."

In another case, Rust-Oleum faced a running battle to stay one step ahead of environmental regulations on the amount of volatile organic compounds in its coatings. During one meeting about how far to lower these VOCs in a new product, one participant blurted, "How about zero?" Simons recalled.

"We looked at him like he had two heads," Simons said. Quickly, however, the marketing value of an environmentally friendly solvent became clear. In October 2002, Rust-Oleum bought Sierra Performance Coatings, which makes a product with no VOCs. The decision, Simons said, was one driven by marketing, not by sales.

"Marketing has taken the lead role," he said. "Sales looks to marketing more than it did in the past."

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