Convention is Out, Agility is In: What CMOs Care About in 2023 and Beyond
While it’s true that marketing tactics and consumer behaviors do shift and change every year, Chief Marketing Officers (CMOs) have found themselves navigating truly uncharted waters in 2023. Economic uncertainty, disruptive market dynamics, and drastic changes in consumer habits and patterns have ushered in a new era of challenges for marketing leaders. But obstacles always come with new opportunities, and CMOs are here for it. As we round the corner towards 2024, CMOs can start to take what they’ve been focusing on in 2023 and reassess their priorities, adapt their tactics, and focus on what truly matters heading into the new year. In this article, we'll delve into what CMOs care about in 2023, shedding light on how they are steering their marketing teams toward success through some of today’s and tomorrow’s biggest challenges.
Challenge 1: Designing Customer Experiences That Bolster Customer Loyalty
Conventional pillars of brand value, such as brand reach, positive brand sentiment, or perceived differentiation, face mounting challenges in the face of emerging market dynamics. These challenges include new, disruptive brands entering the market, increased demands from consumers on business leaders, and the ease with which consumers can now uncover unfamiliar brands. This environment, with its added cloudiness and without the certainty of conventional benchmarks to measure brand value, has necessitated a refocusing. More than ever, CMOs are thinking about highly immersive, technology-driven, personalized experiences capable of catering to specific consumer preferences.
In other words, it’s all about the customer, and the name of the game is brand loyalty.
According to Gartner analyst Ewan McIntyre, “In the past, marketing has perhaps been guilty of putting messages out there or creating experiences that are helpful to marketing, but not necessarily helpful to the customers or prospects. There needs to be a genuine appreciation about what the different stages are in those customer journeys and genuine efforts around creating some sort of value exchange at each stage.”
In a 2023 survey by PwC, a quarter of consumers said that their loyalty is won during experiences they have before they purchase a product or service; 20% said it starts during the online shopping experience and another 5% say it starts as early as when they start researching products.
A whopping 51% of consumers said that an online shopping experience can impact their loyalty if it is not easy to use or enjoyable.
Enter digital platform optimization. It’s clear that maintaining searchability and accessibility on a website or platform so that customers do not have to struggle to find or reach the information they need is extremely important.
While the digital brand experience is often the first touchpoint in the consumer’s journey, seamless experiences across touchpoints both URL and IRL is a key factor in driving a great customer experience. (If you’ve heard the buzzword “phygital” to describe the blend of physical and digital interactions, this is where it comes from.) CMOs are also introducing more immersive experiences like AR and VR to their customers’ journeys to marry their digital footprints with their physical ones.
The role of the CMO is increasingly being asked to manage the entirety of the customer experience ecosystem, sussing out new messaging strategies and touchpoints that unifies their brand and drive loyalty within their customer base.
Challenge 2: Data-Driven Marketing and Privacy
The regulatory environment around data privacy and the advent of enhanced consumer safeguards such as the removal of browser cookies and the introduction of new privacy features in iOS and Android are rendering established digital marketing strategies outdated.
And consumers are catching on: more and more consumers and B2B buyers are becoming reluctant to share their personal data when given the choice. Analytics and tracking methodologies that marketers have relied on for the past decade are less reliable and CMOs are more and more reluctant to make business decisions based on this data.
So, how are CMOs approaching data-driven marketing within this new landscape?
Brands are moving away from third-party data and towards first-party and zero-party data. Think: user engagement with the brand’s site, apps, or social media. And in the case of zero-party data, think quizzes, surveys, preference control centers, and contests that require an exchange of customer information in order to enter for a chance to win.
Consider Sephora. Its loyalty members fill out “beauty profiles” with information about their skin and hair as well as products they are interested in. Sephora then sends members personalized product recommendations through automated email and SMS communication flows. Sephora takes it a step further and also provides the “why” to their recommendations; for example, “You told us you have oily skin, here is a cleanser to help you combat it!” In this case, personalization creates an opportunity for relationship building and for Sephora to remain the consumer’s go-to provider for all things beauty. I mean, why go anywhere else when your retailer knows you so well?
It’ll be key to test new approaches to first- and zero-party data capture, while respecting and addressing the growing concerns surrounding data privacy and ownership.
Challenge 3: The Impact of Economic Uncertainty on Customer Behavior
Due to rising prices across the marketplace and macroeconomic uncertainty, customer demand and buying habits are becoming hard to predict. In 2022, 30% of consumers bought more store brands rather than specialty (a significant shift since 2021), and almost one-fifth reduced in-person shopping, preferring digital alternatives instead.
With their pennies continuing to be pinched, customers are demanding more from brands than ever before.
Although price continues to be the top contributing factor for consumer purchases, Harris Poll research found that 82% of customers want a brand’s values to align with their own social principles. 66% of shoppers are seeking out eco-friendly brands and 55% said they would even pay more for sustainable products.
Management of this changing behavior through product innovation, digital marketing, and customer experience now requires a full court press. E-commerce, product innovation, and customer experience, all strategic initiatives that used to sit squarely under the umbrella of the marketing department, are now concerns that involve the entire company and require collaboration across sales, fulfillment, and customer service departments, among others.
An unfortunate side effect of this newly united front is that funding may continue to be drawn away from marketing departments. Many enterprise marketing departments have not rebounded to pre-pandemic budget levels, which can create a cycle of underperformance and strained teams. The job of the CMO has never been more challenging and never has it been more important.
Challenge 4: Do More With Less Budget
It should come as no surprise that 71% of CMOs believe they lack sufficient budget to fully execute their strategy, according to the Gartner 2023 CMO Spend and Strategy Survey. By the same token, 75% of CMOs report experiencing greater demands to achieve profitable growth with limited resources.
In other words, today’s CMOs are faced with the classic dilemma of “do more with less.”
Because of this, 86% of marketers said they must make significant changes to how the marketing function works to achieve sustainable results. Some have even attempted to reduce overhead by turning to MarTech solutions in place of labor. But is introducing MarTech alone really the solution? The same survey revealed that CMOs are being pressured to cut their spending on MarTech due to underutilization. Despite this, CMOs reported increased investment into MarTech and a decrease in labor; an obvious disconnect between how much is being spent versus how much is being used.
The pressure to find efficiencies is real, and while fiscal responsibility is always important, CMOs struggle to balance this demand while also maintaining a creative, innovative environment for their marketing teams to thrive.
Challenge 5: Increased Influence of Artificial Intelligence
There’s no escaping AI, and in fact, marketers will need to start embracing its capabilities now more than ever. Though many are still unsure how to proceed, a 2023 report by Sprout Social and The Harris Poll reports that most marketers are open to (and even ready to embrace) including AI as part of their creative toolkits for pursuing marketing tactics.
Artificial intelligence, machine learning, and big data analytics have the potential to enhance marketers' understanding of their customers, enabling the delivery of the kinds of highly personalized experiences that drive the customer loyalty they’re so eager to gain. Furthermore, these technologies have so far proven invaluable in addressing resource constraints, as they excel in processing vast amounts of data that may be beyond the capacity of human resources.
According to Forbes contributor and award-winning global marketing executive Sunshine Farzan, “Incorporating AI tools and technologies into marketing strategies will become increasingly important for CMOs who want to drive business growth and customer engagement.” Despite their willingness, marketing leaders encounter notable obstacles beyond just uncertainty when it comes to employing AI and ML tools for marketing. Most of these challenges stem from internal factors, such as their organization's limited experience in managing AI and ML integrations, a shortage of training or a fundamental grasp of how AI and ML tools can be applied, as well as resistance to change among key stakeholders.
Looking Ahead to 2024
What we’ve learned in 2023 will serve CMOs well as we head into what promises to be another volatile and unpredictable year.
Here’s what we do know: As we approach the new year, we’ll likely see CMOs continue to prioritize harnessing the power of emerging technologies to drive customer-centric strategies. Personalization will remain paramount, and great storytelling will always shine through. We’ll see more teams leverage advanced AI and data analytics to craft hyper-targeted, emotionally resonant campaigns, and sustainability and social responsibility will continue to gain importance, as consumers demand eco-conscious and ethical practices from brands.
The role of CMOs in 2023 and onwards to 2024 is one of constant adaptation and innovation as they manage brand growth through compounding complexities. The challenges they face–from the need to provide immersive customer experiences that foster loyalty to the evolving data privacy landscape and economic uncertainties impacting customer behaviors–all demand stamina and a forward-thinking, agile approach to both the role and the evolving market.