Latest findings from PwC’s Pulse Survey
say that values-based expectations for brand, products and services impact them greatly
are prioritizing becoming more involved in business strategy decisions
say demonstrating return on investment for marketing is a Top 3 priority
Marketing leaders work on the front lines of the business. They’re closest to consumers and have the ear of the customer. As a result, they’re the first to see trends impacting their business.
While CMOs and other executives agree that talent acquisition and retention and cyber threats both pose serious risks to their companies, our latest PwC Pulse Survey highlights the visibility CMOs have into customer behavior. CMOs cite a number of issues that weigh more directly on customers as serious risks than their C-suite peers do. But they’re also optimistic about what’s to come.
CMOs recognize that many business risks may impact customers directly.
of CMOs see tax policy as a serious risk.
Tax policy and high interest rates top the list of issues CMOs see as serious risks to their companies. Geopolitics, US divisiveness and climate change also rank high on their list, and CMOs see all of these risks as more serious than their C-suite peers. Just under a third (30%) of CMOs see COVID-19 variants and other health crises as a serious risk compared to 25% of all executives. Marketing leaders may be more sensitive to the impact these risks have on customers. Such headwinds may hinder their ability to drive consumer demand, adapt to changing customer preferences and keep up with rapid technological advances.
Still, CMOs see some bright spots about the future. In the next year, they’re more likely than their C-suite peers to say supply chain disruptions will ease (60% versus 47% overall) and that businesses will proactively be more transparent with their stakeholders (53% versus 45%). They’re also less likely to predict a recession (48% versus 60%).
The CMO may indeed be ahead of the curve with their comparative optimism emerging at the same time that consumers appear to be feeling slightly better about the economy. August showed a slight uptick in consumer sentiment as inflation began to show some slight signs of easing.
CMOs report being impacted by a variety of external factors.
Meeting customer expectations for their brands, products and services is the biggest issue for CMOs, with 37% listing it as a top 3 issue.
The biggest issue for CMOs is values-based expectations for brands, products and services, with 37% of them listing it as a top 3 issue. This is likely a consequence of shifting customer behavior as people increasingly make buying decisions based on how companies address ESG issues. In fact, 34% of CMO respondents cite societal and environmental concerns as a top 3 issue — tied with post-COVID omnichannel customer expectations and regulatory changes. CMOs play a key role in how the company communicates its societal role and values to potential customers.
What else is on the CMO radar? Regulatory changes (with 34% listing it as a top 3 issue) and technology disruption (33%). Marketers are directly impacted by regulatory changes around privacy and customer data. In addition, marketing budgets typically aren’t keeping up with the rapid pace of change, including the metaverse. As a result, marketing leaders are challenged with balancing the potential benefits of new technologies against current marketing priorities. Rounding out the list is the elimination of third-party cookies (30%).
What you can do: Pay close attention to how your company communicates its values to customers. Consumers are making decisions based on their perception of your company’s values. Monitor the regulatory environment regarding privacy and customer data and make appropriate changes to help confirm that your company is in compliance. Include your privacy team in the early stages of product development to make sure data privacy gets its due. Assess your customer data strategy to see if you can collect more and better data at a lower cost.
CMOs face a variety of challenges related to pricing, customer engagement and technology.
of CMOs cited appropriate pricing in the wake of soaring inflation, softness in the economy as a top 3 challenge.
Appropriate pricing in the wake of soaring inflation and softness in the economy is a top challenge for CMOs (32% cite it as a top 3 challenge). Marketing leaders are often tasked with shaping product demand and are central to crafting messages to customers to communicate price increases. While price increases during an inflationary environment may be inevitable, CMOs are rightfully worried about losing customers as a result. One potential remedy might be to introduce alternative products, pricing and product bundles to satisfy price-conscious consumers.
The second biggest challenge cited by CMOs is changing customer expectations and preferences, with 31% citing it as a top 3 challenge. The COVID-19 pandemic fundamentally changed many needs and preferences. On top of that, inflation and a turbulent economy are also influencing buying decisions. CMOs are looking to increase customer lifetime value and reduce the likelihood that they’ll leave. In order to do so effectively, they’re looking to deliver a personalized experience. This, too, however, is a concern, with 29% citing personalization as a top 3 challenge.
What you can do: To help build and maintain strong customer relationships, be transparent about your company’s core values and how they align with customer expectations. Take a hard look at the products and services that you offer and consider whether changes should be made. Don’t overlook the potential to retain customers by offering innovative bundling. Focus on customer loyalty by delivering a differentiated, personalized experience.
As companies transform, so has the role of the CMO.
of CMOs cite becoming more involved in business strategy decisions in the next 12 months as a top 3 priority.
Today’s marketers are working hand-in-hand with other executives on pricing strategies, omnichannel sales tactics and revenue forecasts. No surprise, when asked their top priorities, becoming more involved in business strategy decisions is highest on the list with 48% of CMOs citing it as a top 3 priority.
Another top goal for CMOs involves demonstrating return on investment (ROI) for their marketing activities (45%). As marketing metrics become more reliable — led by innovation in customer data — CMOs need to demonstrate that both big and small marketing investments are delivering results to the bottom line.
In a time when the average tenure of the CMO is falling, we anticipate heightened scrutiny of marketing budgets and investments. CMOs should seek out innovative and reliable ways of measuring marketing performance.
Thirty-five percent of CMOs cited expanding relationships across the C-suite as a top 3 priority. CMOs are increasingly working with their counterparts across the organization, including HR and technology executives.
They also report seeing a higher prevalence of workforce challenges such as hiring freezes (70% versus 52% overall), a reduction in overall headcount (66% versus 50%), and the rescinding of job offers (70% versus 44%). Like other C-suite executives, CMOs recognize the importance of having employees with key digital and technical skills.
What you can do: Consider offering digital upskilling and coaching to your teams. Help improve campaigns and prove value to the business by encouraging working with advanced analytics and other martech tools. Look for employees who have a healthy understanding of data, technology and digital marketing. Go beyond using data to design and personalize campaigns. Track a campaign’s ability to drive customers through the sales funnel to demonstrate value. In addition, look to data and automation to help manage the cost of customer acquisition.
Our latest PwC Pulse Survey, fielded August 1 to August 5, 2022, surveyed 722 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and the impact those risks have on company strategy and growth plans. Of the respondent pool, 91 are CMOs.
Technology, Media and Telecommunications Transformation Leader, PwC US
Customer Transformation and Loyalty Partner, PwC US
Marketing Transformation Leader, Strategy& US
Principal, Marketing Transformation, PwC US