Solving the Puzzle: Understanding the Intersection of CMO & CPO: What You Need to Know in 2023.
Maximizing Revenue and Retention: Driving Business Success with a Unified Approach to Breaking Down C-Suite Siloes.
Shortening tenures in the C-Suite is an indicator that companies are changing their Growth Strategy more frequently. How customer-centric is the basis for this strategy change?
The roles of the Chief Marketing Officer (CMO), Chief Product Officer (CPO), and Chief Growth Officer (CGO) can often overlap and create confusion in organizations. With the rise of digital, product-led growth, the confusion only grows. This is a complex issue that involves growth strategy, innovation, customer experience design, organizational design, incentive alignment, and key performance indicators (KPIs).
The challenge is figuring out who has the understanding of where customer demand will be, who is responsible, and which teams are needed to improve products and go-to-market. It's also important to determine who will develop and own the systems for data and analytics to refine customer retention and improve monetization payback periods.
Solving the Puzzle: Understanding the Intersection of CMO, CPO, and CGO for Growth through Customer-Centricity
Fortunately, companies are becoming more sophisticated in their understanding of leading versus vanity metrics. The growth of product-led and digital products is providing real-time insights into customer retention, new revenue growth, and reducing the risk of successful product launches. This data can guide the development of cross-functional teams with the skillsets needed to gather and react to the voice of the customer insights, which are crucial for solving growth dependencies.
To ensure a customer-centric approach, it is essential to gather these "voice of the customer" insights to understand the unmet needs of core target segments. McKinsey suggests these insights should be brought to the C-suite both before building and after prototyping new products. This aligns and guides the C-suite to inform decision-making, better distribute resources and drive a customer-first strategy based on differentiation, relevance and sustained competitive advantage.
Driving Business Success with a Unified Approach: The Importance of C-Suite Alignment for Efficient Resource Allocation
Who should orchestrate this process? Who in fact is now responsible for growth; Product leaders or Marketing Leaders? The CMO is often responsible for understanding and connecting with customers through marketing initiatives and customer research. However digital products increasingly acquire, engage and monetise online, increasing the dependency on product and marketing working intimately to align multiple touchpoints across customer journeys and time to achieve a singular growth strategy and competitive positioning.
Breaking Down Silos for Growth - Shifting Mindsets and Focus
In signs of proactive organisational re-design and growth alignment, Conny Braams’ of FMCG giant Unilever, has a new title – Chief Digital and Commercial Officer (CDCO!). This indicates an organisation shift in mindset to remove the “silos” between marketing and sales. Dropping 'marketing' from her job title in favor of ‘commercial’ is geared to better influence the integration of marketing, brand building and sales teams.
Each of the C-Suite with voice of customer access should be actively involved in gathering customer insights and ensuring that customer needs are rapidly and broadly made available to the C-suite for timely and regular adaptation to market and competitor conditions.
The Power of North Star Metrics: A Path to Incentive Alignment and Resource Orchestration
Aside from the obvious focus on growth and revenue in 2023, organizational design must encourage a focus on overall business impact rather than divisional KPI’s. It is not uncommon for marketing teams siloed from business strategy to have “achieved their KPI’s” only for sales to be unhappy with the quality and conversion potential of the leads brought in. Without joint and aligned North Star, leading indicator metrics, teams inadvertently optimise, and often in competition with each other. Therefore incentives must be design to orchestrate their cooperation and co-design for growth.
To ensure that teams are working towards overall business success rather than siloed goals, companies could, for example, shift their focus to North Star Metrics based on customer retention. A North Star Metric is a single, leading indicator that measures the core value a product provides to its customers. By tracking retention, companies can gauge their success in satisfying customers and generating long-term value.
According to research published by data analytics giant, Amplitude, customer retention is a crucial driver of business growth. By setting retention-based North Star Metrics, companies can create a shared goal and foster a customer-focused culture, tying bonuses, promotions, and other rewards to prioritize serving the customer and building long-term value, instead of solely focusing on metrics that may not contribute to business success.
Key Takeaways
In summary, companies can incentivize teams and set KPIs that drive business outcomes by:
When searching for new growth, the role and responsibilities of CMO, CPO, and CGO can overlap and cause confusion, but it is crucial to determine who is responsible for understanding customer demand and data analysis.
Gathering "voice of the customer" insights is essential to drive a customer-centric strategy based on differentiation, relevance, and sustained competitive advantage.
The C-suite should be actively involved in gathering customer insights to adapt to market and competitor conditions.
Organizational design should focus on overall business impact, not just divisional KPIs, by using North Star Metrics based on customer retention.
Teams should be incentivized to work towards overall business success by focusing on retention-based North Star Metrics, linking rewards to their achievement, and building a customer-centric culture.
By prioritizing customer satisfaction, companies can achieve sustainable growth and better serve their customers.
The CMO and product leaders should work together to align multiple touchpoints and achieve a singular growth strategy.