The CMO Must Be The Voice Of The Customer

Larry LightJune 20, 20225 min

The primary role of the Chief Marketing Officer is to be the voice of the customer for the brand-business. The CMO embodies the customer informing the organization. Customer understanding and insight generation are the CMO’s highest priorities. Sure, the CMO has numerous other functions these days. But, being the voice of the customer must be the number one function.

CMOs must embed themselves in customers’ psyches and, then, create future scenarios and actions to keep the brand-business viable, especially during volatile, uncertain times. According to a new book from two Deloitte principals, one of the main CMO roles is to translate customer needs into “… trendspotting that will then generate observational insights” that will hopefully “… shift” the brand-business strategies.

To do this well, CMOs cannot just rely on interpreting digital data. These data provide answers on what customers have done and what they are doing. Based on past and current behaviors, data can provide predictions. But, these predictions are behavior-based and do not allow for consumers changing their minds and their behaviors. Most data do not tell the CMO why customers are behaving in these ways. Knowing what is happening is interesting. Knowing why it is happening is imperative. Knowing what is information. Knowing why is insight. This means the CMO must not just focus on what the customer wants. It means focusing on problems and concerns. For which the brand-business can create solutions.

CMOs need to be interacting with consumers daily, in real time, translating what into why. With this knowledge, the CMO must act. CMOs must allow their informed judgments to provoke strategic actions. Without actions, the knowledge is useless. As the well-known, well-respected economist and Harvard Business School professor Theodore Levitt said, “Ideas are useless unless used. The proof of their value is in their implementation. Until then they are in limbo.” Professor Levitt believed that just having the insights without taking the responsibility for implementation is irresponsible.

According to the Deloitte authors, CMOs are supposed to be the “sensing system” for the organization.

As you will read, that sensitivity was not as acute as it should have been over the past year. Unfortunately, for some big-box retailers, a lack of real-time customer knowledge and strategic action triggered bad, grim news. Target, Walmart, Big Lots and Wayfair are just a few retailers that admit to being blind-sided by changing consumer behavior and the speed of this changing consumer behavior.

Statements from executives indicate that during the pandemic, these businesses went out of their way to give customers what they wanted. Target and Walmart went as far as hiring their own container ships to bring in goods that consumers desired.

But, with lock-downs ditched and with inflation rearing its ugly head, consumers have changed their minds. Products consumers wanted during the pandemic are not the items they want post-pandemic. Retailers are stuck with inventory that will need to be sold with steep discounts. Such a scenario eats into margins, affecting profitability and earnings.

Of course, there are multiple reasons for this disastrous situation. Consumers stuck at home bought goods for the home and for dressing at home. That balky washing machine could no longer be ignored. It had to be replaced. Dressing for Zoom meetings did not require that buttoned-up office look. US manufacturing lines were hindered due to operators calling in sick with coronavirus. Overseas manufacturing was also slowed. Ports faced similar issues: longshoremen get sick, too. Containers piled up at piers.

When these back-ups started to ease up, the products in-store were no longer desired. As Bloomberg reported, retailers have “too much stuff” that no one wants and is now piled up in warehouses and stores.

This current dilemma is not due solely to supply chain issues, although supply chain is a driving force for the inventory mishaps. CMOs could have provided better real-time intelligence. Although knowing the customer intimately could not have prevented the current inventory situation, it definitely could have worked to prevent the scope of the current inventory situation.

CMOs could have been quicker to alert the brand-business to rapidly changing customer attitudes and behaviors.

CMOs had an amazing opportunity to get ahead of the pandemic. However, The CMO role is now tasked with far-ranging, multi-functional responsibilities. CMOs’ array of functions – digital transformation leader, personalized customer experience leader, leader of customer-focused data capture and usage, and customer data privacy captain – means that there is less time allocated to being the voice of the customer.

Reading the press reports, it is clear that real-time consumer intelligence could have been better. Predictive analyses that forecast demand and potential disruptions to inventory are terrific tools. But, in a volatile environment, there needs to be a more intense focus on the customer. The retail brands experiencing the worst inventory pile-ups are all admitting that there needs to be a stronger focus on customer understanding.

As reported in The Wall Street Journal, Brian Cornell, Target CEO, told investors, “We’ve had some additional time after earnings to really evaluate the overall operating environment.” This includes “watching consumers’ behaviors as they face high rates of inflation.” He added, “the demand signal has changed.”

The CEO of Big Lots, Jonathan Ramsden, told The Wall Street Journal, “We didn’t anticipate the abruptness of the change in consumer behavior.” Suffering from excess inventory, Big Lots’ net sales fell 15% in the quarter ending April 30th.

Macy’s CFO, Adrian Mitchell, said, “We know that our ability to maintain margin depends on our understanding of consumer demand within and across categories. A spokesperson for Macy’s told The Wall Street Journal that the brand had anticipated declines in certain popular pandemic categories, it was just that “The shift happened at a quicker pace than expected.”

There is an urgency to truly understanding the customer. As Andrea Felsted writes for Bloomberg, retailers are soon going to be ordering for the holiday season. What will consumers want to purchase?

This current situation at these remarkable retail brand-businesses should be a wake-up call for the C-suite’s perspective on the value of the CMO. Being the voice of the customer must be the highest priority of the CMO’s role. When a brand-business loses its real-time connection to customer behavior and customer attitudes, the brand-business suffers. Even when there are extenuating circumstances such as supply chain issues, taking your eye off of the customer creates losses. Let’s make sure that the CMO in the brand-business’ is the voice of the customer.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

*Join the former CMO of Electrolux, Lars Hygrell for this pre-recorded Free presentation on brand leadership and marketing transformation.

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