How restaurant CMOs are adapting to emerging tech, media channels
To stay competitive in an age of hyper-convenience, savvy customers and social media dominance, these executives are marrying marketing with IT.
One glance at restaurant coverage throughout the past decade shows just how quickly the industry has changed. The pace of this transformation is the product of a perfect storm of change — emerging technologies, new media channels, savvier customers and busier consumer schedules.
These trends are forging a new era of hyper-convenience that has blurred the lines of foodservice. Specific segments are no longer easily defined. Major companies like McDonald's can count convenience store chains, meal kits, groceraunts and restaurants with third-party delivery partners among their competitive set.
These competitive forces have added another layer of pressure to the executive tasked with keeping up with the marketplace — the chief marketing officer.
As Richard Sanderson, co-leader of marketing officers practice of Russell Reynolds, said recently in Forbes, "The days of the brand-oriented, marketing communications-focused, creative-led CMO are waning. CMOs are now required to demonstrate balance of left brain and right brain skills. They are expected to play a leadership role in data analytics, customization, personalization and optimization and to drive highly targeted, sophisticated, complex, digital-led campaigns and activities."
With such pressures come notoriously short tenures. According to consulting firm SpencerStuart, the average CMO tenure in 2017 was 44 months. The average CMO tenure is the lowest of all c-suite titles, with turnover caused by job loss due to perceived underperformance or departure due to frustration.
That frustration can be compounded in the competitive $800 billion restaurant industry, where brands are fighting tooth and nail over every disposable dollar. But turnover can pose big issues, as Jack in the Box has recently learned. The QSR chain has been without a CMO since August, when Iwona Alter left after less than two years. In today's climate, this loss is especially dangerous — without a focus on marketing, restaurant chains could struggle to stay relevant in a rapidly evolving space.
The digital era
Though the CMO position has only been around since the 1980s, the position has changed quite a bit. A few years ago, we wouldn't be having conversations about Wendy's success on Twitter or KFC leveraging Amazon's Twitch. The changes in the marketing landscape have been extraordinary and swift.
"In a short time, the industry has moved from online ordering to mobile apps for ordering to enhanced loyalty programs to third-party delivery," Rich Hope, CMO at Jersey Mike's, told Restaurant Drive. "The speed of change is significant. The challenge is identifying which opportunities are 'sticky' and will last."
Devin Handler, director of Marketing at Garbanzo Mediterranean Fresh, told Restaurant Dive that the days of marketers holding narrowly-defined roles that only emphasize advertising and brand management are gone.
"They are now strategic activists, they chart out ways to use data and technology at scale and they drive measurable business results," Handler said.
Because of the staggering growth of online and mobile commerce, the major driver of this change is technology and how it relates to customer experience. Jodie Conrad, vice president of Marketing at Fazoli's, said marketers today must have at least a fundamental understanding of how different technologies work — for customers and the organization.
"[CMOs] are now strategic activists, they chart out ways to use data and technology at scale and they drive measurable results."
Director of marketing, Garbanzo Mediterranean Fresh
"I never remember marketing and IT teams spending as much time together as we do now," she told Restaurant Dive. “You certainly have to be a generalist to survive in a lead marketing role in today’s organizations. It's not just advertising, pretty pictures and clever phrases, but 'capital M' marketing that encompasses all of the customer journey and experience."
New technologies have forced restaurants to restructure in a way that enables marketing departments to work more closely, or integrate, with IT. Pei Wei, for example, restructured so that its chief information officer reports to Brandon Solano, the chief marketing officer.
"While we work with the usual suspects, like finance and operations, IT has taken a front row seat given the integration requirements of online ordering," Solano told Restaurant Dive.
Despite the increased partnership with IT to deliver digital user experiences, however, operations and R&D remain marketing's closest partners.
"I'm in constant communication and always collaborating with the operations team that ultimately owns the experiences, campaigns and promotions that our marketing team dreams up," Matt Schmertz, director of Marketing at FreeRange Concepts, told Restaurant Dive. "Operations, culinary and beverage departments bring the marketing and customer experience vision to life, so without tight integration between these teams, the expected experience can be missed or executed incorrectly."
“You certainly have to be a generalist to survive in a lead marketing role in today’s organizations. It’s not just advertising, pretty pictures and clever phrases, but ‘capital M’ marketing that encompasses all of the customer journey and experience.”
Vice president of marketing, Fazoli’s
Such deep integration allows for marketers to gain a high-level view of how the business works. Because of this, sometimes the CMO turnstile exits into the CEO, COO or brand president role. Taco Bell, Chipotle, KFC, Arby's, Quiznos and Applebee's have promoted their marketing chiefs to CEO or brand president in recent years. Schmertz said this is a logical succession.
"Marketing's role continues to evolve and with the growing impact of social and digital channels, consumer insights and feedback, and community management and review feedback, marketing executives have the ability to leverage this deep understanding of the guest experience and consumer expectations to drive meaningful change across the organization," he said.
Navigating a number of challenges
Of course, understanding consumer expectations is never an easy task, especially as those consumers are able to get any meal, anytime, anywhere. Changing consumer behaviors is one of the major challenges marketers have to navigate.
Conrad said it's important to ask why behaviors are evolving and how those changes impact the experiences her brand, Fazoli's, is trying to provide.
"Our greatest challenge is to keep our messaging as relevant and personalized as possible. As a smaller brand, we don't have the budget to out-shout the competition in traditional media venues," she said. "So, we continue to look for ways to communicate more directly and more often to stay top-of-mind."
To do that, restaurants must become masters of storytelling across all platforms, Handler said. But he added that this is just one piece of the puzzle.
"You need to be a triple threat — connector, storyteller, rebel. As a connector, you need to marry art, science and technology, mine your insight and make message maps to meet the needs you've identified. You must become a master at the art of storytelling across all platforms," Handler said. "Finally, you must not be afraid to boldly go where no one has gone before."
Of course, marketers need to navigate more challenges than just changing consumer expectations. They also need to differentiate their messaging in an era of information overload.
"You need to be a triple threat — connector, storyteller, rebel."
Director of marketing, Garbanzo Mediterranean Fresh
"Fighting for screen share and attention in a cluttered environment is forcing marketing departments to fight for their share among all other types of content," Schmertz said.
Leveraging influencers is one way to do this. Sixty-five percent of surveyed multinational brands plan to raise their influencer marketing spend over the next eight months, and 86% stated the goal is to better brand awareness, according to a study by the World Federation of Advertisers. Seventy-four percent of marketers reported they will use influencers to reach targeted, new audiences, and 69% will partner with them to bolster brand advocacy.
"Marketing messages can now be communicated in a unique, authentic and curated way," Schmertz said. "Influencers allow brands to tell their story and what makes them unique via a trusted source that consumers resonate with, often more than with traditional media."
Another challenge is prioritizing opportunities. With a growing number of channels and opportunities — paid, earned, social, sponsored content, streaming platforms, etc. — this is easier said than done, especially for brands with younger, digitally-savvy consumers.
"With a growing and diversifying amount of consumer touchpoints and opportunities to reach, connect and engage with consumers, we should be focusing on the top platforms and channels that drive the most engagement and highest return," Schmertz said. "There will always be more things we could be doing, but identifying the tactics, campaigns and platforms that reach and engage with the right consumers at the right time will always win over trying to do everything for everyone at all times."
Despite these challenges, Hope said the good news is that the media landscape seems to have stabilized.
"Now, digital/social is just another media choice. It's not as mystifying as it was when digital and social media first hit the scene. It's not as much the Wild West as a couple of years ago," he said.
"... identifying the tactics, campaigns and platforms that reach and engage with the right consumers at the right time will always win over trying to do everything for everyone at all times.”
Director of Marketing, FreeRange Concepts
Although technology has pushed the CMO in new directions, that doesn't mean the expectations have changed much. Solano — who has held marketing roles at Domino's, Papa Murphy's and Wendy's before moving on to Pei Wei — goes so far to say the degree of change in the CMO role is "overblown."
"Every technology evolution brings change, but the basics of mass communication remain the same: message, media, creative," he said. "Great work that people talk about will always trump the latest delivery of an average message."
Hope agrees. "Consumer habits always change and the competition doesn't lessen. What's most important is to remain authentic and true to your brand," he said.
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