Tips for the Risk-Averse CMO
First, Let's Look at How We Define Risk
Given the pace of change in every industry, you would expect CMOs to constantly experiment, adapt, innovate and implement. But my experience is just the opposite -- too many CMOs are caught in the middle. Short-term pressures to drive this quarter's numbers result in a go-to-market plan that is familiar, tried-and-true and cautious. Take 10% of your budget and try something new, and you run the risk of missing a number, and getting chastised for being careless. Pull ahead some spending to make a bigger impact, and you run the risk of not having enough impact and then facing a lower level the next quarter -- and questions from your boss. Don't get approval for deviating from the safe plan and run the risk of getting creamed afterwards.
So what defines risk? I worked with a major automotive manufacturer for years and during a planning effort with the strategy board it became apparent that building a $2 billion plant was deemed low risk, because it was familiar; but allocating $50 million to launch a web-based marketing initiative was deemed high risk, because they had never done it before. So it was killed. As were several other "different" initiatives. Chief financial officers demand an ROI, procurement looks at costs through a common lens, chief operating officers want to know the path to risk mitigation, and corporate communications wants to brace for negative backlash. The CMO, despite a brief moment of courage, gets beaten down and ultimately falls into the trap of incremental changes.
Now CMOs are faced with "risk" questions around social media. Does it drive leads and sales right now? What is the ROI? How does it translate to brand metrics right now? How does it compare to money spent on our TV spots, or a radio promotion? These are important questions to address, and efforts in social media need to be measured and, ultimately, linked to business results. Otherwise it will always be a small channel on the periphery to too many organizations. My agency focuses aggressively on measuring social media around three dimensions: social pulse (metrics like engagement, activity, sharing, etc.); purchase funnel metrics (awareness, consideration, preference, etc); and business results (leads, trial, sales, loyalty, etc.).
But if you step back, the best CMOs are powered by innovative and forward-thinking CEOs. And if you believe that there are more individuals shaping your brand outside of your four walls than in it; and if you believe that social search is going to transform the search model; and if you believe the reports that show that consumers trust friends and family the most, perfect strangers second, and brands third; and if you believe that understanding the ecosystem around your customers and potential customers (the individual, their influencers, the brands they love, how and where they spend their time, what their passions are) is paramount to creating a successful marketing machine -- then the innovative CMO will embrace the social space as a "gotta have" core component.
So what do you do?
Listen: Follow your customer. How does she spend her time? If your target is a Mom, make sure you know how some of the 4 million mommy bloggers are influencing purchase decisions. If your target is a doctor, make sure you understand how the mobile web is changing the dynamics of information gathering, research and consultation. Look at how Pampers engaged with Moms, or American Express added value to small business with Open.
Fast Pilot: Get started. Try something. Don't mortgage your third-quarter numbers, but place a solid bet on a product or service, or a customer segment, or a geography. If your customer is heavily engaged in the space, you have to be. Delta piloted ticket sales in distributed places like Facebook and small business hubs. Sony engaged book group bloggers for its e-reader products.
Learn: Be clear whether the program is focused on driving brand perception or leads. Make sure your metrics and measurement efforts are aligned accordingly. Nothing will kill a pilot faster than setting up the initiative to test for pre- and post-brand perception while telling the C-Suite that it will drive sampling and near-term sales.
Keep Innovating: Put the next program in market. Measure the impact. Roll it out, adapt it or kill it, but keep innovating. Ford is a master at trying different ways to connect with its core audience, placing bets and learning from them.
The organizational immune system may kick in to blanket your effort as "risky." But as a marketer, I would suggest that not engaging where the customer is spending her time; not adding value to the discussions; not identifying and partnering with their key influencers -- now that is the true definition of "risk."