The impact of digital technologies on the roles of marketing

To create value for our customers, we need data. But what counts more than the quantity is the quality, according to Flaminio Francisci, Global Director of Customer Value Management and Data Science at the Nexi Group. For this final article of the Profession CMO series, we discussed the impact of digital technologies on the roles of marketing.

Nexi is a company that doesn’t have the official position of CMO. So, a good place to start is to ask you to explain your job title - Global Director of Customer Value Management and Data Science. This role would traditionally belong to marketing (creating value for the customer), so why doesn’t it get the classic label of CMO at Nexi? Where exactly is marketing at Nexi, and why don’t you have a CMO?

Customer Value Management (CVM) is a function of the Group, deployed across every business unit. Marketing is tasked with crafting and developing a display case of products and services and the relative marketing mix, while CVM is responsible for sizing them up for customers with a 360° scope. So, it’s true that there is no Group CMO, but there is Group CVM. The reason is that the products are verticalized by business unit and market, while as far as customer engagement and customers themselves, every aspect is handled at headquarters.

The goal of CVM is to activate a virtuous cycle of value that starts with data on our customers, so we can understand them and engage with them, meeting them where they’re at, in personalized way, encouraging them to use the products and services that they need, when they really need them. This shores up their perception of value for money and prompts them to utilize new products and services more often and more effectively, which in turn boosts ARPU (average revenue per user). The end result is an increase in value for the company, which can then invest more in feeding into this cycle.

So what’s the difference between CVM and marketing today? Well, once upon a time, organizationally speaking, CVM would often report to marketing, as if it were a marketing specialization. If we wanted to take it to the extreme, we could say that today the exact opposite is true. For CVM to be effective, we need to have control over multiple dominions, and marketing is one of them, along with data, marketing technologies, CRM, digital channels and more.

But if we take a look at corporate org charts, “customer” is a word that comes up in many company roles and in many teams. On one hand, this would lead us to believe that customer orientation (or “centricity,” as we usually say today) has finally taken its proper place. But this also brings a paradox to mind: customer value management is so fragmented over so many roles that it loses the single-minded, overarching customer-centric vision. So basically, we’re back to square one. Isn’t it the CMO role that’s missing?

Customer centricity has to permeate everything for the reasons we talked about before. The customer is the starting point and the finish line. Products and services are necessary conditions, as always at the epicenter of competition, which is heating up because switching costs are lower and comparing offers is easier. Customers expect products and services that align with market benchmarks. This dynamic calls into play their rational side.

Customer engagement and value management are enough, because they create a connection, an affiliation, tapping into their irrational, instinctive side, which is far more resilient over time. This has pushed marketing toward specializations, moving from a centralized model headed by a single CMO, to multi-marketing, operating with various specializations, including CVM. For example, in IT, often there’s a Strategic CMO (brand and strategy) and a Field CMO (markets and delivery). In fintech, specialization is even more pronounced, due to the complexity and the variety of business models.

So how should we deal with this paradigm?

• Have a few shared KPIs, for example the Net Promoter Score, that serve as metrics for that all the teams who handle customers.
• Maintain a Single Customer View, one that’s accessible, democratic, and unified; one that all stakeholders can use.
• Implement CVM to orient all actions in a “customer-facing” direction, connecting the dots to create a consistent experience.

What does it mean to connect the dots? It means locking in the 5 Cs of CVM:

• Coherence = Customer management has to be coherent over time, among different services, and in different channels.
• Channels = Customer management happens via the channels chosen by the customer, in a consistent way.
• Context = We have to consider the context of our customers and their customer life cycle.
• Continuity = Customer management must be complete and continuous; no silos, no disconnects.
• Closed-loop = The process has to be iterative, with multiple rounds of test & learn.

Digital technologies, big data, and AI are radically transforming work in companies, as well as the responsibilities of the people who handle relationships with (and value for!) the customer. Future marketers will have to have the right blend of competences in marketing and data science. This fact has become a mantra, so much so that we’ve started taking it for granted. If we wanted to be more specific, dive deeper into detail, which competences will marketers in data-driven companies need?

It’s true! Quality data are fundamental. And in this transformative phase, triggered by generative AI, the quality of data is the basis for everything. By now what’s clear is that it’s better to have high-quality data and less of it, rather than lots of low-quality data. Beyond data competence, marketers also need competence in using marketing technologies, and channel management and control tools. The challenge is to build an operating model that fits the company’s size and investment budget, keeping in mind

that today to do CVM you need a range of competencies. And remembering that it’s a process. We can group these competencies into three areas:

• Experience Management: How do we incentivize customers to act in a given way? What’s the Customer Journey? Why do they choose to sign up for a service or buy a product?
• User Management: How do we deal with customers throughout the customer life cycle? What data do they provide? What can they do? How can we incentivize them to do more?
• Knowledge Management: How to we engage our customers to create trust and loyalty? How do we extract knowledge from the data we’ve collected? What can we do to be relevant?

Luckily, we don’t need to have everything right away, but only what we need for our target use case. But what does that mean?

•  Start with use cases with manageable complexity, that are compatible with the company’s level of maturity. The idea is to build knowledge and competences over time, following a sustainable path.
• Set up an attribution model to find out if what you’re doing is working. If it’s not, you can make a course correction using an iterative process.

Thanks to this iterative approach, CVM becomes a true asset that grow and develops over time. A defendable competitive advantage that isn’t easy to imitate for other players.

PREVIOUSLY ON “Profession CMO”:

When the CMO returns to the BofD

The role of the CMO in highly symbolic industries

The CMO’s role in BtoB manufacturing companies