CMO Q&A: Sears' David Buckley on the Changing Role of the CMO

David Buckley is a busy marketing executive. As CMO for Sears Hometown & Outlet Store, Inc. (NASDAQ: SHOS), he's responsible for development, planning, and execution of the consumer marketing strategies for not just one, but four retail chains under the Sears brand. He understands traditional media while embracing the advantages that digital media have brought to the marketplace. Before taking the CMO post with Sears, he served as global director of advertising for the Associated Press, where he led the advertising strategy for digital assets, focusing on mobile and tablet technologies.

Describe your role as CMO.
I am responsible for the consumer marketing strategies for four unique formats: Sears Hometown Stores, Sears Home Appliance Showrooms, Sears Appliance and Hardware Stores, and Sears Outlet Stores. With our more than 1,200 locations across 50 states and Puerto Rico, my team and I are tasked to execute a national marketing strategy that also leverages the hyper-local aspect of retailing. We plan and execute marketing campaigns across a wide variety of marketing assets including newspaper (preprint, ROP, TMC), radio, cable TV, billboard, and direct mail. In addition, what we market in traditional media needs to be integrated into digital media, social media, and our loyalty marketing program, "Shop Your Way Rewards."

What's the most challenging part of being a CMO today?
It's no different than I think you would hear from most CMOs: there are more new and exciting marketing opportunities than any organization has the capacity properly to execute. Like most people in my position, we learn to prioritize our marketing approaches within our strategy. The job is less about finding a good idea, but rather finding ideas that are both scalable and likely to produce a higher marginal ROI than current programs. A large part of this is understanding and prioritizing emerging opportunities.

What are the 3 most important keys to being an effective CMO leader?
By far, the most important key is the ability to understand data. There is an amazing amount of customer data available that can be used to drive large strategic decisions, as well as more targeted offers at the consumer level. An effective CMO today must possess the ability to not only read the data, but draw inferences from that data and build actionable plans around it.

Another key is understanding both traditional and emerging marketing opportunities and how they influence each other. Too often, traditional media are pronounced dead prematurely, while the newest trend is often pursued with a disproportionate level of spend and resources relative to the size of the audience and how that audience engages with those media. I firmly believe that people consume multiple sources of different media in a variety of forms, and those media influence each other.

A third factor is the ability to build relationships and credibility with cross-functional members of your company's senior leadership team. A strong CMO has a role at the table when the strategy is refined, representing the customer in these conversations. In addition, the CMO needs to provide more input than just managing the marketing expense line in the P&L. The CMO needs to provide guidance to the rest of the team as to the expected ROI for different possible actions. It isn't enough just to drive top-line sales; the CMO needs to ensure the incremental profit from these sales provide a sufficient return on the marketing investment.

How do you measure marketing results and effectiveness?
There are three major ways. In all cases, it is effectiveness, as measured by a positive ROI on the marketing spend based on incremental profit generated by the efforts. On a large scale, we use complex multi-variant models developed specifically for our business based on large amounts of store-level data. These models go well beyond marketing investments to address pricing, weather, macro-economic factors, and a variety of other variables. This type of analysis takes a great deal of time and effort to complete, but it helps us answer some of the larger and more strategic questions surrounding marketing for our business.

For shorter-term testing, we leverage the benefit of more than 1,200 physical locations by running test and control groups to better understand the impact of our actions. We measure every new thing we try. We are also able to leverage this approach with our franchisee base. We've run marketing tests in partnership with our franchisees and have been able to aggregate the results to show them the impact we saw nationally, which they would not be able to recognize in a few stores. With our ability to create large test and control groups, we are able to help our franchisees differentiate between response and results. The last type of analysis we do leverages customer-level data, and allows us to understand consumer reactions to various efforts by constructing test and control groups at the consumer level.

Describe your marketing team and the role each plays.
My marketing team is divided into closely integrated teams. The marketing operations team is responsible for all media planning, budgeting, and execution. The marketing creative team brings our marketing to life across all forms of media. These two teams closely collaborate with each other, as well as with the digital marketing team, which integrates the strategy across all digital assets. Both the marketing operations and creative teams work extensively with our creative and media placement agencies. It may sound like we have very distinct teams with a segregated work flow, but they are so tightly integrated that the lines between them sometimes blur.

Are you using "cloud" technology or other tools regularly? How?
We use cloud computing to manage the data in "Shop Your Way Rewards," our loyalty program. We use it to append endless member information together from disparate sources. The more we collectively know about the member and store in the cloud, the better we can contrast and compare it with similar member behavior and identify what and when they want to hear from us. The cloud-based technology allows us to quickly slice and dice the information in many ways, forming meaningful and actionable member segments. This allows us to be more targeted and relevant in our interactions with the customer.

How do you work with other internal departments and does technology help?
We work very closely with all internal departments. Our field leadership engages our franchisees surrounding our marketing events. Our merchant team builds offers and ads in close coordination with my creative team. We also work very closely with our operations team to ensure all of our promotions execute as planned when a customer is at the register. Technology plays a role in each of these relationships.

How is your marketing/branding strategy developed, and how does it flow through the system?
Our marketing and branding strategy is a collaborative effort that includes key stakeholders from finance, IT, merchandising, and our field teams who represent our owner base. It flows through a series of cross-functional meetings that happen for annual planning, key seasons, and a regular biweekly meeting that addresses short-term tactical implementation within 90 days.

How do you manage costs and budgets for the marketing department?
We develop annual marketing budgets for each format and that budget is managed on a monthly and quarterly basis. Portions of that budget are planned far in advance while other portions may be used to react quickly to market factors. Throughout this process, attention is paid to store-level investment to ensure that stores are equally supported.

How have marketing strategies/tools changed over the past decade? How have you adapted?
The answer to this question could be an entire book in itself. There have been major changes in media consumption and consumer technology in the past five years alone. To adapt to these changes, we are constantly testing and evaluating our marketing choices and using data to make decisions. However, the biggest change is that the control of the brand has irreversibly changed from the CMO to the customer. The experience happens at the store level, and the customer is going to share that information instantly and permanently online. Now a bad experience is posted instantly for everyone to see, and these reviews are showing up in search. To adapt to this change, we are paying close attention to the feedback we receive from our customers, not only through our surveys, but through ratings and reviews on sites like Yelp.