Why CMOs and COOs should be BFFs
Everybody has a role to play in a company. Take marketing and operations. Marketing makes brand promises to customers; operations finds a way to deliver on them. Marketing lives in a world of grand visions; operations live in a world of realities. Both are necessary.
Though it may seem that dreamers and pragmatists are naturally at odds with one another, they are really partners focused on the same goal—happy customers. In fact, every company would benefit from the CMO becoming closer to the COO. When COOs accomplish objectives around company-centric metrics like speed, costs, accuracy, or reliability, they offer marketing a new level of value to tout to the market. In other words, marketers can (and should) merchandize the innovations of operations.
Let’s start with the promises. Every good marketer has a keen idea of how a customer should experience a brand. This isn’t a matter of idealism because a positive brand experience prompts loyalty, customer referrals, and social sharing. A positive brand experience can be magical, but there’s nothing magical in making it happen. Customers delight when an order arrives when it was promised, the packaging is beautiful, and if an item doesn’t meet their expectations they can return easily and for free.
That’s not magic, that’s operations.
Marketing often has an outsized focus on a small slice of the customer experience: introducing customers to the brand and getting them to fall in love with it. While critical, it’s just the beginning of the customer journey. Profitable acquisition is hard, so once a prospect comes to an e-commerce website, operations has a huge influence on brand impression.
For instance, if a marketing campaign drives thousands of new visitors to a product page, will stock be depleted faster than anticipated? Can the fulfillment center handle the influx? What happens if the product sells out and needs to be reordered...is the campaign landing page updated, and a form implemented that invites customers to provide their email address or mobile phone number so they can be notified when the item is back in stock? Especially for e-commerce, much of the overall success of a brilliant marketing campaign rides on the operation's ability to put great processes in place.
The same is true within the overall shopping experience assuming the product is available.
Before purchase, customers increasingly want to know when they can expect to receive a package before they buy it. Maybe it's for a specific reason (I really need this gift before the weekend party!), but often it is because consumers simply want reassurance of reasonably fast delivery on a committed date. Not only has this shown to have a meaningful impact on conversion rates, it helps reduce downstream WISMO? customer support tickets.
Then, during the checkout phase, consumers universally prefer either fast shipping or free shipping but are generally reasonable in not expecting both. It's up to operations to ensure both options are presented during checkout because if either one or the other is missing, a big chunk of customers either way will quickly check elsewhere.
Center Conversations on Metrics that Matter to Consumers
One way to do a better job at meeting customer expectations is to shift the internal conversation away from inward-facing metrics—e.g., Order-to-Ship or Ship-to-Deliver—to metrics that the end customer cares about, namely Order-to-Deliver or sometimes called Click-to-Deliver. Let’s just say a giant retailer everyone has heard of took that approach and gradually changed the standard for every online retailer.
Another aspect of WISMO? is real-time updates. DTC brands are pretty good at inserting a link to FedEx or UPS so that customers can track their orders but still lag behind the brand experience provided by big players like Target, Amazon, and Walmart. Working together to incorporate real-time parcel information into a DTC’s overall brand world is one of those small things that deliver a big impact on the customer experience. Real-time updates about deliveries or returns goes a long way in promoting marketing loyalty. It tells your customers you care about their order as much as they do.
Marketers are very passionate about the unboxing experience and for good reason: it’s the first physical experience a customer will have with a brand. First impressions count. More than that, a beautiful unboxing experience is likely to prompt the customer to snap a photo and post it to social media, which means that experience offers critical social proofing.
But if you walk backwards from the experience … how does it become a reality? There’s a dependency on operations to figure out those processes at the fulfillment centers and to do so in a way that won’t obliterate margins. It’s rather mind-boggling to consider all of the logistical steps that go into delivering an unboxing experience that meets marketing’s vision.
Here’s where a frank conversation between the CMO and COO will be useful. Does every unboxing experience need to be equal? What if first-time customers received items hand-wrapped in tissue paper like marketing wants, and future ones are packed in poly bags? Is this an acceptable compromise? Or what if you gave customers the opportunity to choose generic packaging in exchange for a lower handling rate? (Again, operations will need to figure out how to make this happen.)
It’s a question of looking at the customer retention model and determining how to get the most bang for a buck.
And ultimately, it’s a question about trade-offs.
Process flows—all the steps required to pull an ordered item from a shelf and package it up for delivery—are difficult to scale for DTC brands. It’s one thing to sell and ship just a small number of items, say a range of candles that are all the same size, and fit into the same boxes, which is complicated enough. Once you add in a small number of SKUs the complexity increases exponentially. So do the costs. And because no DTC is the same, it’s hard to find shipping companies that can offer the kind of scale that lowers cost when packaging is so niched.
I’ll give you a surprising example to demonstrate the point. We worked with a startup that shipped its products in a 12x12x13 inch box. After some quick analysis, it was clear if they decreased the size of their package by just one inch to 12x12x12 they could use a different carrier method and cut shipping costs by double-digit percentage points. I’m sure the conversation about the tradeoffs between packaging and costs was long and fraught.
Merchandize Your Operations!
Here’s another example, which was the spark for this article.
We worked with another startup that didn’t know how quickly its customers received their orders. Playing it safe, the website promised that each order ships within 2 days, and will arrive 5-7 days after the order was placed. We looked at the data and discovered that 72% of the packages were received in 2-3 days. Many, in the right zip code, received them the next day. Operations had done a bang-up job selecting where to place the company’s two fulfillment centers.
Once we told them the true state of their shipping, marketing immediately ran with shipping as one of its competitive differentiators. Why not promise faster shipping to the 72% of customers who will receive it in 2 days, which will help improve conversion?
In other words, marketing began merchandising the innovations of operations. But marketers can’t do that if they don’t know about those innovations, which is the best reason I can think of for the CMO and COO to become regular best friends.
Kris leads marketing at Shipium, the platform for ecommerce supply chains. He is obsessed with using holistic solutions to solve complex problems, which is why Shipium tries to level the playing field for all ecommerce operators.