Why CIOs and CMOs Need Each Other

By Jeffrey F. Rayport

We all know the story: You see an item in a chain store catalog but decide to buy it from the retail store to avoid delivery charges. The retail store clerk, however, cannot find the item and after consulting the store’s product database, tells you it’s no longer available. At home you turn on your PC, find the store’s website, and miraculously locate the product. You order it, but now must wait for UPS to deliver. You get the result, but not in the way or the timeframe you wanted.

Similarly, you dial your credit card issuer, an automated voice-response system answers, and asks that you enter your card number. You dutifully punch in the 15 digits. After a lengthy wait during which you listen to a repetitive recording about how much the company values your business, a live customer service representative finally comes on the line and asks for your 15-digit account number. You tell her you already entered it. She tells you the system did not forward the information. You get the result, but again, not in the way or the timeframe you wanted.

So where does the problem lie? Is this a marketing issue for the CMO or a technology issue for the CIO? Of course the answer is: both.

Indeed, every time you see significant dysfunction in the way a company or brand interacts with its customers, it is not the fault of one corporate function but two—both marketing and technology. The combination of people and technology deployed across multiple service channels fails to provide the basic services you sought, let alone the world class services you expected.

So when will CIOs and CMOs join forces to address these challenges, not from their well-defended functional silos but together? The answer: when both parties take time to fully understand and account for the impact their solutions will have on the consumer.

Slumping Satisfaction, Rising Costs

The pressure is mounting for action. The irony is that companies have gone to heroic lengths and considerable expense to build multiple service channels to meet customers’ needs. These range from retail stores to catalogs, websites, call centers, interactive voice-response units, handheld PDAs and touchscreen kiosks, to name a few. In response, however, customers have grown increasingly frustrated by the lack of coordination and consistency of experience across these touch points.

According to the American Customer Satisfaction Index (ACSI), this proliferation of service channels has created a great deal of sound and fury signifying nothing…but bad news, especially for consumer-facing industries turning to service automation or outsourcing to boost competitiveness. Customer satisfaction has stagnated (and in recent years, declined), while costs of service have risen. In a recent Forrester Research study of 176 North American corporations with revenues over $500 million, only 27 percent of the sample fulfilled 80 percent of the basic criteria for providing an integrated service or sales experience across multiple channels. Tellingly, 73 percent of executives at these firms answered that “getting alignment across internal organizations” was their greatest barrier.

Dissonant Approaches, Unintended Confusion

Every website is, in theory, one part marketing and one part technology; or one part CMO and one part CIO. The breakdown occurs in an uneven execution of IT-enhanced sales and service functions which, upon deeper examination, often reveals unresolved issues between the marketing and IT disciplines.

Consult any Fortune 500 corporation website—from Wal-Mart to Cincinnati Financial—and try to locate an answer to any particularly relevant (and predictable) question or need. If both these functions are doing their jobs on most corporate websites, it’s hard to tell from a customer’s point of view. Most sites greet you with a seemingly blinding array of product choices and options, with no clear way to access specific services, transactions, or data.

Even when a splashy promotional campaign directs you to a specific online drill-down location for product information, you may find yourself lost. When Motorola introduced its sexy new camera phone in 2004 (the V710), it stitched glossy bind-in brochures into upscale magazines such as Vanity Fair and The New Yorker to lure readers online to access a special microsite for the handset within Motorola.com. Marketing e-mail campaigns to drive traffic to the same special URL revealed nothing more than a general information page on the company’s cell phone line. A search on the site for the V710 yielded absolutely no results. The new model was actually listed on the site, but not under its retail model number. No one from marketing or IT had configured the site to receive the campaign’s traffic—or to mention the new product by name at all.

This is one of an infinite number of examples of the CIO and CMO speaking different languages in the design of the “presentation layer,” the interface that makes a software application visually appealing and user-friendly (Windows vs. DOS) or accessible to the non-tech savvy self-taught consumer (World Wide Web or AOL vs. BITNET and USENET). Effective corporate presentation layers are the work of a solid partnership between CIO and CMO; the outcome is a customer-friendly gateway that is experientially compelling. Large corporations cannot expect their customers to navigate the arcane backwaters of a corporation’s systems and sub-systems, any more than a software maker can expect customers to learn machine language to use its products.

This is not a problem that CIOs can solve without CMOs, or that CMOs can solve without CIOs. It’s time for the two to act together. Yet, in most corporations, they don’t. And that’s when customers jump ship, stock values slump, and corporate reputations are battered.

It’s Not What You Sell, It’s How You Sell It

When corporations grow to mass market proportions, their scale alone creates complexity that requires one or more presentation layers. Indeed, without integrating a corporation’s touch points into an appropriately configured presentation layer, a company’s offerings (its brands, products and services) and its operations (its people, organization and processes) can behave in ways that make little sense to customers and present a corporate “face” that’s wildly inconsistent from one customer encounter to the next. Such conditions can also create opaque, unresponsive or simply uncaring corporate behaviors, which don’t align with the intent of most corporate brands.

Nowadays, with so many organizations competing for too few customers, it’s easy to conclude that companies are having an ever more difficult time establishing sustainable advantage. The hastened product lifecycles that were once exclusive to electronics have become the norm across the entire economy, and IT is the universal driver. The tyranny of “three-six-one”—Acer founder Stan Shih’s term a decade ago to describe the computer industry’s product lifecycle: three months to formulate a differentiated offering, six months to sell it at an elevated price point, and one month to liquidate excess inventory after it became a commodity—is the rule of competition today across an ever widening range of industries.

The best corporate performers with global customer pursuits know that product or service innovation is necessary, but in isolation, not sufficient to ensure long term advantage. Innovation must focus not only on what companies sell but on how they sell it. That means how companies orchestrate their interactions and relationships with customers, how they manage the touch points that enable those relationships, and how they bring marketing and technology together to get that job done. It’s the art of interaction that makes the difference between great brands that transcend the fate of individual product or service offerings (Nike, Starbucks, or Lexus), and those that live and die based on the often short-term viability of what they have to sell (Reebok, Burger King, or General Motors). It’s a new frontier of competition, and winning requires integrated marketing and IT savvy.

Today’s complexity of service delivery systems across multiple human and technology touch points places a premium on all facets of the customer experience. In many cases, only by integrating front-line service workers with automated service interfaces can a company’s brand promises be realized on a cost-effective and consistent basis. By way of illustration, Niketown stores reflect Nike’s performance ethos not only in the products on the shelves, but also in the interior design of the retail environments; the sales personnel who work there (their attitude, training, and dress); the machine interfaces of the inventory management kiosks; the high-tech elevators and escalators surrounded by audio effects; and the theatrical sounds and imagery that make each sporting goods category from department to department come alive. You could hardly ask for a purer expression of brand marketing than a Niketown store, but competitors take note: Each installation is equipped with an aggressive investment in customer facing and back office retail IT to achieve optimum customer response.

Restructuring the CIO-CMO Relationship

All of which makes us ask: How will your company bring marketing and technology together if your CIO and CMO don’t appear to inhabit the same planet? And what can the CMO and CIO do to achieve greater functional synthesis, independent of the CEO whose occupation is elsewhere?

The strategic dialogue between CIO and CMO must begin with consensus as to the desired customer experience and brand. Often these conversations are best guided by an outside facilitator with objective hearing and broad industry context. This probing can highlight impediments of the company’s organizational structure and governance, management incentives, and enterprise economics. Together, the CIO and CMO must know the customer perspective on these issues:

• Have we deployed the right touch points (human and technology) in the right places in the right ways—and do we have we too many or too few?
• Have we optimized each of our touch points according to customers’ preferences and needs, by customer segment and usage occasion?
• Have we understood the processes or pathways our customers select to interact with our company in each and every purchase or re-purchase cycle?
• Have we aligned and integrated those touch points (along with the people, processes and systems that enable them) into consistent and coordinated expressions of brand and offerings to deliver coherent customer experiences?

The orchestration of the presentation layer cannot be left to chance. It calls for expert practitioners of marketing and technology, who know what their customers want in order to create the interfaces and measurements to guide their organizations to delivering on these expectations and preferences. CIOs and CMOs who together lead and integrate their workforces in innovative ways will reinvent how brands are defined, how services are delivered, and how companies will compete. Marketing and IT must come together, and the CIO-CMO teams who can pull it off will each hold the keys to their company’s competitive future.

Jeffrey F. Rayport is co-founder and chairman of Marketspace LLC, a strategic advisory, executive development, and software unit of Monitor Group. He is co-author of Best Face Forward: Why Companies Must Improve Their Service Interfaces with Customers.