June 18, 2019
Comprehensive Customer Experience - What Innovative Boards Will Need To Demand Of Marketing & Digital Teams
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Do you have a "persuasion architecture" that scales customer loyalty and gets you lots of repeat business?
If the CMO is still giving away money to agencies to buy media and only able to attribute a small part of revenue to that spend, then you are marketing in the dark ages. If the CIO has been attempting Digital Transformation and still has not even delivered a Customer 360, then you are taking a knife to a gun fight. If neither CMO nor CIO are clamoring for technology specifically to foster Customer Loyalty and market to the full Customer Lifecycle, then prepare for customer attrition and obsolescence. Products, Marketing and Technology cannot work independently any more. They must wield real time, individualized, messages, offers, engagement, education, pricing, negotiation, community, support and appreciation or suffer customer desertion and eventually competitive irrelevance.
Here is how customer expectations have dramatically changed, how most brands are faring and what companies have to do to sustain customer bases and revenue.
Customer Expectations Have Changed:
Never mind what your competition is doing, your customers' expectations are changing very fast. Brand charisma does not cut it any more with customers who are "digital natives". This breed of customer wants a connected experience, where everything is personalized. They follow, are fascinated by, and buy into innovation. They worry about their data. 73% of B2B purchase decision making involves 20-35 yr olds who rely on web search, social media, peer reviews and know nearly everything needed before a sales person even enters the picture. As these customers get ever smarter, they demand convenience and an immediate and highly relevant experience no matter how they connect with the brand. The buzzword "omnichannel" is obsolete in the face of ever evolving new channels. The perception of and affection for a brand can turn on its head in minutes in the Digital age. Information, fit, convenience, immediacy and consistent support drive loyalty. Whatever their intention in engaging with you, how many chances or clicks will this new customer give you before they turn away in disappointment, dissatisfaction or distraction?
With the proliferation of peer review sites and social media, widespread reputational damage can set in very quickly.
Here are examples of bleeding edge innovation that customers have seen and come to expect. Woebot's chatbot maintains ongoing conversations collecting data to act on and deliver individualized health advice. Vi and UnderArmour Apps provide personalized workout advice based on health and performance. Peloton brings the exercise community into your home. Gatorade utilizes sweat profile analysis of individual athletes to facilitate more efficient rehydration. Here are examples of AI being used to provide exemplary customer experience. Rare Carat has an AI powered Jeweler that provides education and best deals to folks looking to buy diamonds. Sesame Street has an AI powered vocabulary learning app that adapts to the child's ability and performance. Compared to these, Amazon's "also bought" type recommendations seem commonplace. This is the state of customer expectation. Anything less will not inspire attention, much less loyalty.
State of Brands:
Many brands are still struggling with creating well known personalization plays for customer experience. For online and eCommerce plays here are table stakes that are yet to be delivered: Weather-Sensitive Personalization, Adjust Navigation to Visitors’ Interests, Recommend Product Categories Based on Browsing Behavior, Personalize Search Results, Send Personalized Email Based on User Behavior, Use Geo-Location Targeting, Show Category-Specific Discount Coupons, Sort Recent Products by Interest Level, Suggest Complementary Products, Pitch an Upsell at and after the Purchase, Remind Shoppers of Previous Engagements, Use a Style Finder, Show Product Recommendations Below the Product, Personalize the Homepage Banner by Category, Show Personalized Offers to Returning Visitors.
This survey of customer experience answered by marketers is telling. Here are marketers agreeing and disagreeing on whether they are getting personalization right. 83% of marketers at organizations with $1 Billion or more indicate that marketers are not getting it right.
The average company seems to store customer and visitor data in 3 or more separate systems
Marketers are not personalizing the most important customer touch points, particularly those later in the customer journey where the customer is more invested and brands have the most to lose. Note that navigation, search, and pricing are least customized:
Data most indicative of customer's intent, and behavior such as stage of journey and previous visits are the least leveraged for insight and personalization:
This is further exacerbated by nebulous performance indicators for the CMO such as Ads to Sales ratios and the inability of the marketing machine to attribute their spend with sufficient granularity and accuracy to cite actual CAC and CLV. Lastly, fragmented and dated digital infrastructure leaves marketing with inadequate options. This sets up a vicious cycle making them forage for external infrastructure, further fragmenting data and creating a problem no one can solve.
So what should a brand that wants to stay alive do?
What is the experience needed to keep customers happy? What will it take to ensure CAC is not spent repeatedly for the same customer? How can the CLV and total revenue from it be increased? Loyalty means repeat revenue ... and also advocacy. The only way to survive is to make loyalty a strategic objective and not merely another chance at marketing. Here are three imperatives core to such a strategy:
Which Department should own this endeavor?
Neither the CMO, nor the CIO is incented or budgeted to grow revenue. In fact, marketing likes to talk about technology but does not actually care to directly wield it. They pay Agencies for that. Also, while IT likes to build technology, it does not actually wields it either. Further, they pursue their own schedules and turn a blind eye to the change management required to realize ROI on the builds. Product/Service owners or GMs are merely supported in their attempts at sales performance by Marketing and IT. Marketing hands off traffic rather than conversion and IT rarely even speaks the language of revenue. If this continues, customer expectations cannot be met, innovation in experience along the customer lifecycle can neither be built nor wielded and increasing revenue based on CLV will remain a dream. Marketing and IT are usually constituted as cross organization support functions and therefore given independence. Unfortunately this has dissolved into silo behavior and inability to understand the objectives and imperatives or other teams. Product, marketing and technology cannot function independently any more. They must come together and act in concert to conquer this new world. Customer expectations and technology are changing so fast that no organization can afford to dawdle. Continuous digital transformation is live or die for organizations. This risk needs to be addressed by the Board and C-Suite. Understanding the problem, the strategy and preserving digital transformation efforts to ensure that they continue to evolve over time as market and customer expectations evolve has to be owned across the company. Full customer lifecyle personalization and experiences with a view to fostering greater customer loyalty must be driven by the Board, C-Suite and heads of product, marketing and technology.
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