Accelerating digital experience agility through a CIO-CMO collaboration
Brands and technology go together like wine and cheese: They’re different but complementary, and, when paired well, each one dramatically improves our experience of the other.
Similarly, CMOs and CIOs are the new power partnership of business: Inherently different, and once sharing little in common, they now operate in a symbiotic relationship that has never been so mission-critical to the success of organisations.
The impact of the COVID-19 pandemic on business has thrown into sharp relief the importance of seamless collaboration between these two members of the C-suite—despite traditional differences in priorities and processes—when it comes to reengineering the customer experience to enable organisations not only to survive but to thrive.
A mostly digital world
As economies across APAC swing between operating freely and partial (or more severe) shutdowns, almost every transaction needs to be digital.
“The biggest opportunity in business today is that connection between the CIO and CMO in terms of delivering a great customer experience,” says Carly Lynch, Adobe’s head of digital performance strategy for APAC. “The difference in 2020 is every problem is now a digital problem.”
The speed of shifts in purchasing habits and the resulting digital transformation required has created new expectations around the timeframe in which change can be executed. It’s either transform now, or risk your customer going elsewhere for the product or service they need, delivered via the experience they prefer.
“Previously companies may have tabled something for a digital solution down the track,” says Lynch. “That is now being played forward. CIOs are being asked to execute and deliver that in the shortest possible time.”
Traditionally, he added, CMOs have focused on new customer acquisition, and perhaps not as much on retention and loyalty. But there is now a huge focus on existing customers, maintaining those relationships and increasing customer lifetime value.
“It presents a great opportunity for the CMO to work with the CIO to design and deliver great ongoing customer experiences.”
The two roles have arguably never been so closely intertwined. For example, while the CMO is often responsible for a brand’s website customer experience, the IT team is likely to be responsible for the e-commerce and data platforms on the back-end. Providing the right online offer to the right customer segment at the right time, and enabling an immediate, frictionless purchase, is no longer optional in the current climate.
Petbarn’s seamless integration
Pet supply retailer Petbarn is seeing the benefits of seamless integration between marketing, customer relationship management, e-commerce and fulfilment to improve the customer experience.
Traditionally an offline retailer, Petbarn’s digital transformation over the past year led to improved customer segmentation and online offers based on purchasing behaviour that generated 43 percent higher revenue from new visitor purchases and boosted conversion by 44 percent over the previous year.
Through A/B testing, the team fine-tuned its incentives to grow the basket size of online shoppers—findings that were also rolled out in stores. “We found that the $10-off-a-$50-purchase approach far outperformed the 10 percent discount in terms of revenue per visitor,” says Linden Martin, who heads up customer experience and CRM for the retailer.
While online sales had risen to 6 to 7 percent of sales, continued optimisation for the Repeat Delivery service increased subscriptions by 20 percent with a single test. “At this rate, we’re on track to grow Repeat Delivery business by 140 percent in just two years,” says George Wahby, CEO of parent company Greencross.
“Our online sales tripled almost overnight, but we didn’t have the fulfillment network to handle the sudden increase in demand for deliveries,” he adds. After testing the service with a limited online rollout, the company pivoted to use its 250 stores as fulfilment centers, offering same-day delivery to customers.
A relationship that build agility
Seamless integration between IT and marketing is paying dividends as companies pivot to cater quickly to changing consumer trends and buying habits.
Accenture calls it a “Living Business”—one that adapts at speed and scale to offer the right customer experience and achieve sustained growth. In Accenture’s playbook, CMOs must re-orientate businesses around the customer, be the architect of a new, connected operating model, and pursue “new avenues for future growth that overturn outdated legacy processes and redefine customer experience”.
It’s a long-term shift, according to Accenture managing director and global consumer packaged goods lead Oliver Wright. “While we have been seeing these trends for some time, what’s surprising is the scale and pace — compressing into a matter of weeks changes that would likely have taken years,” he told CMO by Adobe in a separate interview.
FoodServiceDirect is a case in point. The Unilever-owned bulk food service supplier, which sells primarily to restaurants, hospitals and schools, was looking to increase online sales by delivering a tailored buying experience to its B2B customers and upgrade its e-commerce platform. A decision to market its products direct-to-consumer has also paid dividends.
“Restaurants are our main customers, but many are idle right now,” says Adeel Murtaza, FoodServiceDirect’s head of e-commerce technology. “What we are seeing instead is more movement to our B2C site.”
In April, FoodServiceDirect’s B2C sales grew tenfold, while B2B sales and new customer acquisitions rose 40 percent and repeat purchases more than doubled.
B2C now accounts for 45 percent of FoodServiceDirect.com’s e-commerce sales, up from 25 percent prior to the pandemic. “This is not a normal use case for us, but our decision to include a B2C site was the right one,” Murtaza says.
Investments in digital experience pay off during COVID
Traditionally, there is a clear financial benefit to investing in the customer experience. Companies that do so are three times as likely to exceed their business goals, Adobe’s 2020 Digital Trends Report suggests.
But while the economic goalposts may have shifted due to the pandemic, the level of urgency has increased, as has the emphasis on revenue and growth.
Online furniture retailer Pepperfry, which previously conducted nearly one-third of sales offline after expanding to pursue an omnichannel customer experience, had to close 10 percent of its physical outlets for two months.
The company is now focused on providing the experience its customer wants in the channel of their choice, according to CMO Kashyap Vadapalli. “All of the store consultants have started interacting with customers through video calls,” Vadapalli says. “The big trend for us is addressing the customer’s concerns and doing that in a scalable fashion.”
By July, chief operating officer Ashish Shah said online browsing time had increased by 40 to 50 percent and Pepperfry had regained 90 to 95 percent of its January volumes.
Similarly, BMW India announced it was transforming its business processes and the customer experience by leveraging new digital technologies to enable customers to explore and buy new and pre-owned BMW cars, book vehicle services and make payments securely online through a new Contactless Experience.
Budgets will shift post pandemic
Marketing spending on technology and digital channels will continue to grow, according to Gartner’s CMO Spend Survey 2020-21, even as marketing chiefs may face budget cuts in areas such as advertising and staff.
And around half of all martech purchasing decisions happen outside the marketing department, underlining the essential needs for a collaborative approach between CIOs and CMOs.
For their part, CIOs will foster a positive dialogue with CMOs if they can show the ability to “enhance, combine and deploy customer data in ways that help CMOs achieve their goals,” according to Gartner—while reflecting the speed at which marketing operates.
“CMOs, who are responsible for promoting growth, need the CIO’s help to turn the surfeit of customer data their companies are accumulating into increased revenue. …CIOs, obliged to turn new technology into revenue, need the CMOs to help them with better functional and technical requirements for big data initiatives,” according to Gartner.
As the pandemic continues to highlight the importance of using technology to transform a brand’s customer experience, perhaps only one thing is certain: Customers will be the ultimate beneficiary.