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Brands that need to be saved by CMOs

Kyle Montero
Brands that need to be saved by CMOs Kyle Montero
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Never had it been so fun for publishers to pronounce the demise of a position until speculation spread concerning the probable "death" of the CMO. I am sure many remember reading Dominique Turpin's article published by Forbes in which the writer describes CMOs as "increasingly powerless and peripheral," especially within companies that fail to put the customer first, and demands that organizations dump the CMO title in favor of a new title -- CCO (chief customer officer). Though "The CMO is dead" is an attention-grabbing title, it's a bit misleading. The CMO is not dead; the position is simply regressing to its original purpose -- customer engagement. The CMO has always been responsible for an organization's marketing activities, and objective number one of marketing is to communicate the value of a product to customers


Predicting the CMO's "death" was likely encouraged by the disturbingly short tenure of those holding the position. In 2006, according to Ad Age, the average CMO tenure was a troubling 23 months. A position with a lifespan fewer than two years would surely be the first on the chopping block, as those within the role left unsatisfied or were fired by unsatisfied CEOs. However, oft-cited figures from 2013 assert that CMOs are staying in the job longer -- 45 months on average. Consequently, one must ask, "Why has the CMO's tenure nearly doubled?"



Brands that need to be saved by CMOs


It's not an easy question to answer, but part of it surely results from more CMOs reaching what Turpin urged in 2012: customer-centricity. The combination of new technology solutions, hard data, and numerous channels of engagement has led to much deeper levels of customer intimacy. And, with an increased ability to measure the outcomes of marketing activities, CMOs are demonstrating their value like never before.


As the value of the CMO continues to grow, brands that need a complete turnaround or those struggling to build meaningful consumer relationships will increasingly look to this position. In fact, a number of organizations have made CMO hires during problematic times. Here are the companies that have counted on (or are currently relying on) CMOs for serious change during difficult times.

JPMorgan Chase


If a company ever needed a reputation turnaround, that company was J.P. Morgan. As a result of its role in the American housing bubble and collapse, as well as by ignoring Bernie Madoff’s Ponzi scheme, the bank has paid a whopping 20 billion in fines. And Americans are still seething with anger at the banking industry. The corporate greed and moral turpitude that created the financial meltdown of 2008, as companies like J.P. Morgan essentially preyed on the public to make outlandish amounts of money, will never be forgotten…or will it? 


According to YouGov's BrandIndex, J.P. Morgan's reputation improved significantly in 2013. Using its Buzz score methodology, which measures public perception of brands by gathering more than 2.5 million interviews a year, the company found that J.P. Morgan's reputation was the fourth-most improved in 2013. How can this be?


Although we can't accredit results entirely to one role within an extremely complex organization, the CMO certainly had much to do with it. In August 2012, J.P. Morgan hired Claire Huang, its first ever CMO. Not surprisingly, in May of that very same year, YouGov released reports that J.P. Morgan's reputation had nose-dived to its lowest level since 2008 (the year YouGov started measuring the firm's reputation).


Finding itself below Goldman Sachs on the reputation scale (the company Matt Taibbi famously dubbed a "vampire squid" in Rolling Stone) J.P. Morgan was in dire need of a brand refresh, likely bringing on Claire Huang to hold the reigns. And customer-centricity was evidently her primary focus. When discussing the company's revamp strategy with Adweek, Huang explained,


"Since I arrived at [JPMorgan Chase], we’ve worked to develop a digital center of excellence. I'm working closely with our CTO to use digital channels more to deepen relationships with customers who are using digital/social media. Digital media also creates the opportunity to leverage big data to deliver the right products to the right customers at the right time."

By developing meaningful customer relationships via digital channels, J.P. Morgan hoped to hit two targets: showing the humanity of the brand while developing deeper insights regarding customer needs. Once customer needs were established, J.P. Morgan better aligned its marketing messages to its audience, depicting itself as a problem solver of various financial challenges of everyday life, evident in its "So you can" commercials: 



Even less product centered and entirely more customer focused was the company's commercial that ran during the 2012 Macy's Thanksgiving Day Parade:



Despite an effort that helped J.P. Morgan crawl out of reputation hell, Huang left the company and was replaced by Kristin Lemkau in early 2014 (maybe CMO tenures aren't increasing). Promoted internally, Lemkau will remain focused on consumer relationships and reputation management. As she told American Banker, "There is a lot of good that's going on in the company. We've got to do a better job of telling that story, and digital channels are going to be an important way to do that." At the onset, Lemkau finds herself in recovery mode, dealing with the now infamous J.P. Morgan Twitter debacle, in which the company invited users to tweet questions to vice chairman Jimmy Lee using the hashtag #AskJPM. You can imagine the onslaught of snarky tweets.


Clearly, J.P. Morgan is nowhere near out of the woods, but with customer-obsessed CMOs like Huang and Lemkau (and with more distance from 2008's financial meltdown), it may continue its rise in positive consumer perception.  

HTC


Though the company was founded in 1997, it didn't rise to prominence until adopting the Android platform and releasing the HTC Dream (the first Android smartphone) in 2008, which was reviewed by TechRadar as a "stellar phone" that "points to a future when a phone is as flexible and useful as the PC on your desk." HTC followed up the Dream with a number of Android phone releases, including the extremely lucrative HTC Desire, and found itself in third place within the smartphone market (behind Apple and Samsung) in 2011.


Not only was the company booming financially, but it was also climbing the charts of consumer perception. As Simon Hill writes in Android Authority, "The brand was seen as a cool alternative to its competitors...With the cash piling up and brand awareness at an all-time high everything was looking pretty rosy for HTC, and then it went wrong." At the end of 2011, HTC began an ugly financial nosedive that has continued into 2014, as this chart form Pocket-Lint makes evident:



Of course, HTC's revenue rises and falls in accordance with product releases, but such an enduring decline has everyone asking, "Why has the company fallen so far off track?"


Obviously, a comprehensive answer to this question would examine multiple factors, but one reason is certainly clear: bad marketing. This issue is magnified (even made tragic) when considering the ad budget and marketing prowess of competitors like Samsung and Apple, as well as the fact that HTC actually makes brilliant devices. And the problem runs deep within HTC, as Cher Wang, the chairman and co-founder of the company, told Bloomberg, "To tell the truth, we never think marketing is that important -- this is really not very good."


In fact, in an interview with Bloomberg TV, Wang accredited the companies collapsing earnings to poor communication, explaining that HTC has "the best technology and the best product" but the company must "communicate better" with its consumers. Furthermore, Ben Ho, the company's CMO, told the Wall Street Journal that HTC "hasn't been loud enough" when marketing its innovations.


Attempting to solve this problem, HTC hired mega actor Robert Downey Jr. -- for $12 million, as part of a $1 billion ad campaign in 2013. And what did they do with Iron Man? Used him to make awkward jokes about the HTC acronym (i.e. HTC = Humongous Tinfoil Catamaran or Hipster Troll Carwash) in awkward advertisements that failed to mention products and risked irrelevance by running roughly six months after the company released its newest flagship phone, the HTC One:



In the early stages of 2014, hoping to bounce back from the questionable "HTChange" campaign, the company released a YouTube video in which Robert Downey Jr. promotes the well-reviewed HTC One (M8). Unfortunately, HTC continues to fail its products with poor creative. Warning: This half-ass effort from Downey Jr. is hard to watch.



Fortunately for HTC, there is a light on the horizon. In desperate need of a marketing makeover, the company has brought on someone who actually helped drive its losses. It recently hired previous CMO of Samsung, Paul Golden; an individual who "created and launched the highly successful Galaxy brand," as stated on his LinkedIn page. And HTC will be leaning heavily on the man behind the Galaxy brand to more effectively communicate the value of its products to consumers. Details regarding Golden's responsibilities are not yet available, but he will certainly have his hands full if he hopes to remedy HTC's marketing woes.

RadioShack


RadioShack's troubles are renowned. The Economist recently named the organization a "Dead brand walking." In fact, since 2007, the company's stock value has declined more than 95 percent. Consequently, RadioShack's chief executive, Joseph Magnacca, recently announced the future closing of up to 1,100 stores -- roughly one-fifth of its total. Financially speaking, according to The Economist, by the end of 2013, RadioShack was left with about "$180 million of cash on hand (down by two-thirds from the previous year-end) and a total debt of $614 million." To refinance its debt, RadioShack secured $835 million, buying itself some time. But how on earth does this iconic brand plan on turning things around?


Whether you love it or hate it, RadioShack has been part of the American retail world for roughly 93 years. Naturally, consumers are prone to nostalgia for the company, specifically those remembering the RadioShack of the '70s and '80s, which introduced many Americans to the world of tech. At the same time, unfortunately for the company, the RadioShack of the '70s and '80s is the RadioShack that comes to consumers' minds, not an electronics retailer that's relevant in the 21st century. It's likely that most consumers under the age of 25 have never set foot in a RadioShack. And the company isn't reaching this population online, as RadioShack's digital sales account for only about 1 percent of its total sales. Yikes...


To establish relevancy in a post-Apple world, the company hopes to capitalize on this consumer nostalgia while presenting a new, snazzier RadioShack to the world. And, in 2013, the company hired Jennifer Warren as CMO to execute this vision; a vision made clear in the following self-deprecating 2014 Super Bowl advertisement in which the voiceover states, "It's time for a new RadioShack."



The new RadioShack is evolving in accordance with consumer opinion. Discussing the brand makeover with Fast Company, Warren explained, "When we started talking to customers to see how to remake RadioShack, what we discovered was whether they loved us or hated us, they still had a lot of passion for the brand…they still had positive memories of RadioShack from the '80s as this place where inventors and makers got their start." And through its marketing efforts, the company is attempting to reignite the do-it-yourself culture of the past but with a modern twist. Because the sheer amount of tech innovations can convolute the industry for the average consumer, RadioShack is promoting a "do-it-together" culture of collaboration in which the brand helps customers discover what's possible with modern technology. The following video is certainly aimed at folks who prefer to "do-it-together":



And a marketing campaign that promotes modern solutions to consumer problems goes hand-in-hand with new product offerings and reinvigorated stores, as RadioShack is creating more space for innovative products stocked in redesigned stores:



Clearly, Warren and company are well on their way to refreshing the RadioShack brand, having taken positive steps toward increasing its relevance in 2014. But, one can't help but think it may be too late for the struggling company. What do you think? Is it too late for RadioShack to be saved?


Kyle Montero is a contributing editor at iMedia Connection.


On Twitter? Follow iMedia Connection at @iMediaTweet.



"Image of young businessman showing superhero suit" image via Shutterstock.

Kyle Montero

Comments

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Commenter: Tom Goodwin

2014, June 25

Nice piece and well researched, but I don't think RadioShack's issue is a brand issue or anything the CMO could change. RadioShack is simply an irrelevant offering and it's got nowhere to go.