Customers seek agile interactions, painless fulfillment and, most of all, memorable experiences. CMOs are increasingly embracing a new priority: identifying new and recurring revenue opportunities and optimising the consumer experience to maximize customer lifetime value.
Yet whilst most CMO’s have being doing digital for years now, they have typically been stand-alone activities, either via their creative digital agencies or via their marketing platforms. These leaders are mostly not yet integrated as part of a digital supply chain that connects end-to-end through the core of their business operations and systems. With significant company budget reallocation toward digital transformation and front office, customer engagement and revenue activities, I have identified four challenges and insights that most marketing organisations need to address.
INSIGHT #1: Great CEO expectations, but mind the gap
CMOs are wielding more power in the boardroom, with CEOs increasingly calling on them for strategic input. Why is that? The convergence of technology across mobile, social, big data, internet of things & cloud has changed basic expectations for individuals (consumers, business buyers and employees alike).
Organisations are now coming to understand that the experience an individual has with their brand, products, services or strategy is the new point of entry to sustainable, profitable business relationships. The user experience generates the most valuable information any enterprise can possess — information on individual preferences and knowing what makes customers “tick,” e.g, our values, beliefs, habits and quirks.
Forrester has named this era ‘The Age of the Customer.” This stands even if your organisation sells B2B, since in the business context, “people still buy from people.” Potential buyers expect that you have done your homework by nurturing and building a personal relationship and trust so that you are able to predict behaviour, pre-empt needs and automatically provide solutions and frictionless WOW fulfilment experiences just as required.
As understanding and influencing consumer and user behaviour has always been the traditional domain of the CMO, it is now needed more than ever and thus why expectations for this role have increased.
This does require significant digital transformation across all business functions – covering the business model, operational processes, to the customer experiences (not just marketing).
However, with respect to the Marketing function, very few CMOs have made much progress in building a robust digital marketing capability. Still only around a fifth of organisations have set up social networks for the purpose of engaging with customers, while the percentage of CMOs who have integrated their company’s interactions with customers across different channels, installed analytical programs to mine customer data and created digitally enabled supply chains to respond rapidly to changes in customer demand is even smaller.
Many marketing organisations are still modelled on traditional models in that they have siloed functions such as the social media team, brand team, demand gen/campaign team, comms teams, analytics teams and so on. They too need to break these silos, and create more agile approaches to listen, curate, prototype, execute and respond. This is creating a significant capability gap for marketing.
INSIGHT #2: The marketing funnel is dead. It’s all about the customer experience lifecycle.
Customers now have endless online and off-line options for researching and buying new products and services, all at their fingertips 24/7. Under this scenario, digital channels no longer represent “a cheaper way” to interact with customers; they are now critical for executing promotions, stimulating and fulfilling sales, providing after sales service and care and increasing market share.
Even in B2B sales, research by the Corporate Executive Board showed that buyers are 57% of the way through the purchasing decision path before they engage with any supplier for the first time. This is because it is so easy for people to do their own research, ask for advice and seek referrals and form ideas on what solution, supplier and price point they think they need, well before engaging even their incumbent suppliers for advice.
Yet tools and standards are changing faster than companies can react. Customers will soon be able to search for products by image, voice and gesture; automatically participate in others’ transactions; and find new opportunities via devices that augment their reality. How companies engage customers in these digital channels matters profoundly — not just because of the immediate opportunities to convert interest to sales but because two-thirds of the decisions customers make are informed by the quality of their experiences all along their journey, i.e. their path to purchase.
Even this path to purchase has changed. We now need to consider the multi-dimensional nature of social influence; the non-linear paths to purchase; the role of advocates who aren’t customers; and the shift to ongoing relationships beyond individual transactions.
Rather than a funnel it’s more like a User Experience Journey into which opportunities for transactions are thoughtfully embedded. Prospects don’t come in the top and customers out the bottom; they move through an ongoing set of touchpoints before, during and after a purchase.
In fact, buyer behaviour is changing so fast that even in B2B sales environments, commercial buyers act like consumers. They want to try before they buy, they want to see, feel and experience what they will get. They want to log on. They want to experience the service. So marketing has a role in not just driving demand, but in getting prospects to “experience the service” through digital channels, as a critical first step to purchase. Marketing needs to move into traditional sales and account management territory.
According to published reports, 48 percent of U.S. consumers believe companies need to do a better job integrating their online and off-line experiences by creating seamless, omni-channel experiences. There is a premium for getting this right. One major bank unlocked more than $300 million in additional margins by integrating digital channels.
According to other recent studies, those companies that have achieved high- performing revenue results through digital not only spent more on analytics throughout each stage of the customer lifecycle, but they had the highest focus on Customer Advocacy. Real-time, predictive analytics will assist in the creation of unique, relevant and timely experiences at every touchpoint, while an increased focus on how to drive Advocacy will be key to an enduring Experience lifecycle.
In a world of global sourcing and efficient supply chains, your competitors can copy or undermine the moves you take to compete … in fact even your customers can now become your competitors. Your only successful response — the only way to retain customers and their loyalty — is to become customer-obsessed and focus on experience and not acquisition.
According to an analysis by Watermark Consulting, regardless of whether the customer is a consumer or a business buyer, the 10-year investment returns from publicly traded customer experience leaders (measured by Forrester’s Customer Experience Index) were 43%, while investments from customer experience laggards generated negative returns.
INSIGHT #3: CMO – Data-driven with real-time impact means new accountability
The CMO is becoming increasingly accountable for monetising revenue streams and sales results. As customers expect basic free “digital services,” so the surrounding “network effect” is what will drive new revenue models, increasing the need to build connected communities and eco-systems.
The Metrics and KPIs used to track indicators of success are evolving to better capture the real-time actual Customer Experiences occurring at each touchpoint “transaction” vs. the traditional Funnel conversion metrics. This allows for immediate adjustments to messages, design, offers, process etc., to keep testing and tweaking, so results are optimised. Those organisations that are able to optimise channels will achieve significant customer acquisition, retention and loyalty benefits.
Note the importance of always-on marketing: Only 13 per cent of businesses are able to effectively target customer segments and measure results. Now imagine doing this across a network or eco-system.
To achieve this, CMOs are looking for real-time visualisation dashboards to monitor KP’s across all the touchpoints that impact experience – social, physical and digital channels, events, face to face, etc. In fact, with this level of visibility and agility to respond and impact customer behaviour, the next-generation CMO should be aligned to some of the same growth metrics as their sales and account management peers.
In addition, the Customer Lifetime Value measure is increasingly relevant, as a way of measuring ROI from end-to-end organisational efforts to delight, retain and increase share of wallet in the pursuit of enduring customer experiences vs. one-time marketing campaign activities or even nurture programs.
INSIGHT #4: The next-generation CMO needs a new generation of talent
Perhaps the biggest barrier to digital transformation is culture and talent of marketing teams. Organisations need their CMO and Marketing team to be digital disrupters. So new kinds of talent will emerge to support the CMOs vision. Summarising key ideas from published content in this space, talents include:
- Digital signallers who can scour the world of search, social and mobile for insights into the “digital body language” of customers and prospects;
- Marketing traders, or those who think like investment portfolio managers to determine which channels and segments should be invested in and what allocation mix will yield the greatest return;
- Content editors who can marry customer intent with content across an array of media, from videos to white papers and deep product specs targeted to the right individual at the right moment in the purchase journey;
- Big data sociologists who can combine usage analysis with understanding of customer context to enable your ability to succeed in a customer’s moment of need;
- Agile marketing technologists who master technology and design thinking. These change agents champion greater experimentation, working within the function and across the company to create competitive advantage;
- Sales enablers who are no longer afraid of the front line and can partner with sales reps and account managers to co-create and tailor programs for the individuals they are curating experiences for.
Of course the next-gen digital marketer must have the next generation of technology and tools – integrated with financial and ERP systems. Standalone marketing systems are no longer sufficient. The Gartner Transit Map highlights the potential scale and complexity of this connected and mostly SaaS based eco-system for marketing. So the key is building a strong working partnership with the CIO to build out the business case, and identify key projects to kick off together.
Thing big, but start small in order to show immediate results.