What do the stock prices of Domino’s and Pizza Hut, the average tenure of a CMO, Panera Bread’s mobile delivery system, and Coca-Cola’s widely-debated position of chief growth officer all have in common?
Answer: A commitment to the idea that what you got you success in the past, won't guarantee the same level of success in the future. Or said differently, the idea that it's not where you've been, but where you're going.
It's Not about the Technology...It's the Ability to Reduce Friction For Your Customer
The blue line is Domino’s stock. The red line is Pizza Hut. At the beginning of 2013, there was virtually no difference between the brands: both had national campaigns, both had (arguably) similar quality and types of pizza, and both were household names. Now in 2017...none of that has changed. They still sell pizza! And Domino’s stock is valued at $217 (as of this writing), while Pizza Hut is languishing at $73—a respectable price, but far from Domino’s upward trajectory. So what happened?
To say that Amazon Echo’s integration with Domino’s pizza made their turning point would be myopic and incomplete. You can see the trend line moving upward long before the 2014 release of the first home speaker. But it is the perfect example of Domino’s commitment to change. [UPDATE, 8/30/2017: Now Dominos is partnering with Ford to send out self-driving cars for pizza delivery.] Many CEOs would have said (and indeed have said), “We make pizza! What do we need smartwatch apps and home speaker integrations for? It’s a distraction! It’s a cost center!”
Far too many CMOs are crying themselves to sleep (more or less) because they work for organizations that just don’t get it. CMOs are telling their organizations that their differentiators are disappearing altogether. After everything you do to demonstrate better flavor or better ingredients, it’s still pizza. Or technology. Or pet care. Or whatever. CMOs have their fingers on the pulse of the market probably more than any other executive officer.
Now, fast forward to 2018, Dominos is a tech company that sells pizza. A few years ago when then CEO, Patrick Doyle made this statement, many balked. However, as their sales continue to soar, with 28 consecutive quarters of posted positive sales. And their initiatives only continue to move forward with driverless cars and implementation of A.I. technology. Which, to most, doesn't seem like an industry a 'pizza place' could own.... but those who had that same thought process 10 years ago about apps, on-demand delivery and other technology are now sitting with negative stock prices.
Is it about the "Marketing", or about the "Growth?"
Could that be why Coca-Cola has phased out the role of CMO entirely, replacing it with a chief growth officer? Coca-Cola understands that they aren’t about drinks; they’re about happiness. And they are committed to changing their business at its very foundation in order to become better at delivering happiness—usually involving a red and white can, eventually. A CMO got Coca-Cola here...but the role of running ads and reporting on ROI isn’t what will get them through the next decade.
When companies don’t understand that truth, then they start losing market share. Suddenly the CMO is on the chopping block, but the cycle continues. What do organizations do about it? If reports are right, they cut the CMO and start over... perhaps never recognizing that the common denominator may not be the CMO at all. That’s why the CMO’s average tenure is only 42 months, as of Q2 2017. Chief marketing officers become chief growth officers when they can see that differentiators are disappearing and delivery methods are completely different now than they were 10 short years ago...and then the CEO and board has to listen and act.
The last statement is key to all of this too. If Patrick Doyle wouldn't have had the Executive team buy-in from the beginning, none of this would be possible. Sure, they can say, "hey, that's a great idea!" However, having your Executive truly back the initiative is key to the success.
Panera Bread is beating Corner Bakery
Let’s head back to the stock market for another example: Panera Bread versus Corner Bakery is another clear example of changing your operation strategy to differentiate.
Both are national bakeries. Both serve coffee and quiche and croissants. Panera Bread has made online ordering cut the wait time from 8 minutes to 1 minute, and now online orders make up 25% of their sales. Corner Bakery has checked the box of online ordering, as well, but their $40 stock price can’t compare to Panera Bread’s $314 price in 2017. On into 2018, the stock prices continue to show how Panera is dominating the scene holding on at their $314 price, while Corner Bakery inches up to around $46 per share.
You can always argue stock prices versus market caps. You can argue operating costs and other factors. But growth, strategy, and trajectory is about where you’re going, not where you’ve been. Remember Circuit City, Kodak, and Sears? They all once had fantastic market caps, too.
How to Take This Back to Work
If what got you here won’t get you there, then how can you know how to get “there”...or what “there” even looks like? Marketing plays a big role, but it’s not the only solution. CMOs find success and drive a stronger direction for their companies in this age of disruption when they define the customer’s needs and goals, and use those customer goals to drive the business. Domino's isn’t really about pizza—the company is about convenience. Apps are convenient. Pizza is convenient. They put together teams from marketing, product, and customer service to get closer to their customers’ goals. So can you.
The final takeaway:
- Discern what your brand/organization really stands for to your audience.
- To grow, stretch into another area of your audience’s life that coincides with the same zeitgeist your brand already plays in.
- Teach your audience about it.
If you know where you’re going but need help getting there, then maybe it's time to Go Rogue.