Bridging the CMO-CFO divide

With advances in AI, predictive analytics, distilled big data, customer analytics, web and social analytics, the CMO’s role has evolved and at times been misunderstood. Their outstanding achievements in this new digital, customer- centric, data driven, and ROI centric times has not been easy.

Not taking any sides – traditionally, the CMO has been the center point between the external agency of record and the business. To realize $$ for the intangible Don Draper- ish magic of TV, Print, Billboard advertising, with a splash of behavioral psychology thrown in ‘was/Is’ yet not really convincing to rest of the C-Suite.

Pepper in demographic shifts, the new customer experience desired by customers, the emerging touchpoints, the 8 second attention span (a goldfish has a 9 sec attention span) and hypnosis into the equation, it gets even tougher to determine’ Where is Waldo’, the holy grail in dollars, the infamous ROI.

Hard to attribute ROI in ‘dollars’ which the CFO does not frown upon, CMO/CFO relationship has seemingly been like ‘Apples and Plums’. ‘Apples and Oranges’ would simply be absolution.

The CMO accountable for building, maintaining the brand equity, marketing the organizational revenue generating segments, staying ahead of the curve with Customer experience, while balancing the introduction of new devices, channels, and the application of emerging marketing technology, it is a big plate……and extra laps around the track.
It is a persuasive argument for the C-Suite to consider ‘Marketing’ as a ‘revenue generating center’, not as a ‘cost center’, a burden.
Alignment and the prevailing climate between the CMO, and the CFO has to give way to solutions:

– Hammer out a sound unquestionable ROI attribution strategy, for intangibles and tangibles.
– A ROI attribution which audits the existing determinants and adopts CFO inspired tweaks. Having ‘Skin in the game’ makes the entire game plausible.
– A quarterly ROI health check which tracks monthly variances, with historic and cyclical attributes factored in.
– This proposed health check would lead to a robust Marketing plan for the next budget planning year.
– Finally, a forecast, where ROI and spend could be traced back to the budget

These efforts do require time and effort. From my cost accounting days, I know how crucial and illuminating this exercise can be.
From a business road mapping perspective, it brings agility and a shortened roadmap from the traditional 5 year plan.

The Fate and a Possible Future State of Fintech. A Mass Migration to greener pastures?

 

The recent news of the federal financial regulator granting ‘Fintech’ companies banking charters has made headlines. The topic remains fluid with speculative outcomes. A new regulation requires agencies to solicit for public comment and decision making is based on evidence. Needless to say, it is a lengthy process.

My optimism lies in the wake which ‘Fintech’ brings with it. It has morphed and matured and into a broad landscape and a massive ecosystem of its own.

‘Innovation from within’ in US regulated industries remains in rapid fire from networking & partnering to investing, inventing, incubating, acquiring, and building MVP’s.

‘Fintech’ companies are seeking independence, due to an oversupply in the US, while demand remains limited, due to regulation limitations on banking charters.

The graphic below sheds a global outlook:

a. Asia-Pacific (‘Fintech’ presents the most opportunity, less of a threat)

b. The United States (‘Fintech’ presents more of a threat, less of an opportunity)

Fintech bank charters related risks are a reality and a cautionary step by step approach by Federal & State regulators is real as well. Tolerance of risk and reward is just one of the factors shaping the future.

Choking the competition, never to see the light of day, has not worked, either.

The US shares a lot of firsts, one of them hybrid and electric cars and is recognized as an early contributory pioneer. However, it was an Asia Pacific country who mass produced it, in 1997.

In a global and shared economy, a containment outcome runs the risk of mass migration of US ‘Fintech’ startups to emerging economies, and/or the Asia-Pacific regions, where regulations are ‘Fintech’ friendly and State funding is readily available.

The Fintech innovation success stories from regulation friendly parts of Europe, and a few APAC countries have not gone unnoticed by the UK’s old guard.

The loosening of some UK financial regulation, has seen successful outcomes. This has possibly tipped the balance in the US.

Regulators to grant Bank charters to Fintech Firms

A top regulator, ‘Thomas Curry’ from the Office of the Comptroller of the Currency revealed -Fintech firms shall be treated as ‘special purpose national banks’.

The agency would for the first time start granting banking licenses to “Fintech” firms, giving them greater freedom to operate across the country without seeking state-by-state permission or joining brick-and-mortar banks to function.

This regulatory response is open to public comment through Jan. 15 and is expected to create tremors in the banking industry, followed by deliberations inside the OCC. Will this first U.S. federal regulator to allow non-bank Fintech firms to fly on its gradual own, who for now relies on a symbiosis with larger brick & mortar banks, including the state-by-state permissions and other capital requirements, and more.

This may be the first, of many more volleys of regulation challenges, bureaucratic debates, and stakeholder jousting. The eventual political opinion/actions shall determine, if US banking and Fintech firms are to be equals.

This move by regulators, since Dodd-Frank have been working hard at seeking an equilibrium between innovation, consumer choices, unmet consumer choices, while extending traditional protections to new and booming financial products which began to emerge, post 2008 Financial crisis.

The proposed move was cheered by the tech sector who had long been seeking independence, but frowned upon by financial institutions, some consumer groups and state regulators who see threats in reversing the traditional order.

A legislative/executive action may possibly determine, if US banking and Fintech firms are to be equals.

Innovation – not talking drones – updated 6/24/15

I t is the innovation decade and sweetening of the e commerce value proposition continues. This time it is not drones.

Innovation often seems to emerge with a vengeance when outside forces encroach on industry revenue, as with legislation. There are few companies who see through this matrix and insert themselves early to solve, innovate and genuinely take a page out of Ideo’s book.

Digital innovation thankfully is not restricted by geography. With a billion plus strong users in China and plenty of capital influx there are some companies to closely watch, considered upstarts by some and frequently ignored by others. They are vehemently beginning to flex to connect the dots and making the experience simpler, nimbler and easing the customer journey.

Tencent, the 4th largest internet company behind Google, Amazon and eBay is attempting to marry messaging with Smart TV, along with a seamless payment solution; messaging to mobile to the living room with an integrated wallet solution. This brings social TV to a whole new genre; within one interface chat, watch and pay.

Can we put this on the watch list together? What would impress me is a purchase decision channeled by my brain wave (chip in my brain not an option); not to forget a confirm and accept prompt for my brain. I would not be pleased if my dreams were misread and during my morning jog I find a Lambo sitting in the driveway with a bow on it.

Keep me posted on efforts underway…I am optimistic.

Update July 2015

Close to a year ago I had written a post about Ten Cent, a messaging company in China.  There are a lot of Fin/Ins companies who have been behind the curve with social and digital transformation while a limited few finance & insurance companies have forged along  with  JV’s/partnerships and acquisitions type relationships

Close to a year ago I had written a post about Ten Cent, a messaging company in China.  There are a lot of Fin/Ins companies who have been behind the curve with social and digital transformation while a limited few finance & insurance companies have forged along  with  JV’s/partnerships and acquisitions type relationships.

Two observations from a year ago

  1. Ten Cent and like + (Socially & digitally transformed with mobile and tablet experiences in the cross hairs for millennials), these connected Fin/Ins companies’ are forming these collaborations and have begun to emerge in social and mobile. Kudos!!.
  2. Ten Cent is still a bull.

However it is an Alert! –  For global fin/ins companies to innovate with new demographically regional/state /country specific product designs which are uniquely positioned for the millennials. Innovation, Sales. Social + Digital Marketing + UX should have a  tighter bond.

Where is the ROI?, not the beef

I was going back in the time machine and recalling one of the jobs I had out of college with a degree in Commerce – working as a Cost accountant in manufacturing. It was a numbers oriented job working on the AOP, boring ledgers and keeping tabs on the monthly variances from paint to man hours. Development of the AOP meant precision. Every imaginable fixed and variable cost from power to man hours, from paint to parts would play a role into the projection. The past several years historical and cyclical trends and actuals would finally finesse the dreaded AOP. My presentation of the AOP to the boss blissfully matches the ‘woman sitting in the chair with the boss’ image accompanying this post. Notice the stiff arms? Well, that was me.

The following fiscal year would prove if the projection met the 0 to 60 in 4.3 seconds test. I would track the variances monthly and would have a beaming smile some months. End of the fiscal year a minimal $ true up was all that was needed. It felt good.

Ok, enough of this accounting conversation. I am really a marketing guy inside, which I thank a mysterious unscheduled meteor shower.

Fast forward the time machine ## years to the digital, search and social marketing world which I thoroughly and passionately enjoy. I sometimes hear a whisper in my ear gently reminding me how crucial the ROI component is to the meticulously and creatively developed marketing campaigns we endeavor to run all year, for the enterprise.

It is a stamp of approval to the thoughtfully planned fiscal year ‘marketing roadmap’ as well as the ‘marketing plan’; providing the confidence to the business, and perpetual smiles for the marketing group.

There are indeed market variables abundant in digital, search and especially in the very dynamic social media ecosystem. An ideal world – each digital and social channel pumping real time analytics to the analytics hub with built in campaign ROI assumptions. These efficiencies help make the MOR’s robust and very KPI oriented.

Result = serving, understanding and knowing the customer in this omni channel world.

Shhhh, it is about attribution and ROI, not ROO (return on objectives) which seem to breathe new life into the next fiscal marketing year.

Upselling and beyond, a balancing act

Was thinking about sending some food stuff (online seller name, intentionally left out) to my sister whom I have not seen in a long time and do my impulsive ‘family good’.

I did a ‘food stuff’ search for a deal and promptly landed via an affiliate link, on to a ‘major food site’.

Still intent on proceeding and encouraged by a $39 deal, I, in mechanical fashion moved through to ‘Add to cart’ to complete the transaction. To my not so shocking surprise I was presented with an upsell for $39 + $ 19.99. Still enthusiastic with a Czech pilsner comfortably urging me on, with finger flickering hesitation, I waved myself through – ‘Why not, I feel the love”. I clicked on “Add”. Yes, I felt good.

It was at that moment that things began to unravel – an ‘Upsell and Beyond” deal popped up for an additional $79 ‘food stuff’ combo”. I was perplexed and confused. I almost had it in my grasp. Almost.

Could we refrain, and not get carried away with the ‘Upsell and Beyond’ selling strategy?. The Pilsner only works for so long. I had it and I lost it. I hate it when that happens.

I know I have not been a customer before with this ‘major food seller’, so predictive analytics, even with cookies would not have kicked in, perpetuating this unfortunate eventuality.

All in a Sunday afternoon, where I wanted to do a little bit of good. Alas, it is unfortunately no more. I ‘xed’ out of the browser tab. The moment had elapsed and my attention had shifted.