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‘Tis The Season

December 11, 2012 1 comment

As we move closer to the holidays, many things are once again cropping up, just like clockwork.  Some – including the airing of The Christmas Story and It’s a Wonderful Life – are always welcome.  Others, like frenzied mall traffic and egg nog, you want to forget.  And then there’s the blitz of year-end predictions – just like holiday songs, they can be a mixed bag.

I promise I won’t declare 2013 “The Year of fill in the blank”.  But as we look forward to the New Year, there are some trends that CMO.com highlighted earlier this year that are worth revisiting. In fact, it’s my view that three are going to be increasingly important for B2B CMOs to pay attention to as we look toward 2013:

1.      Show Me the Money – I mean it.

With the economy teetering on the edge of what many are calling a “Fiscal Cliff,” I can’t stress enough how important marketing ROI has become in our field.  As I noted previously, what matters most is what has the most measurable impact on sales and customer retention.  Did sales increase, did sales velocity increase, did average customer value increase? What about marketing to sales qualified lead conversion ratios and customer retention rates, and what was marketing’s measurable impact on any and all these numbers?  There are many ways to objectively demonstrate relative contribution by marketing.  Getting agreement on what to measure and what success looks like is key to showing the true value that marketing contributes.

2.      The Silos are Broken

Marketing is no longer viewed as a stand-alone function. It is now expected to strategically drive more of the customer experience to help support customer acquisition, expansion, loyalty and retention goals.  As one CMO recently told me, “I need to prescribe the ideal customer experience at every touch point – Web, call center, retail store, etc. – regardless of reporting structure.  I’m providing guidance on how to drive a better customer experience so our company can optimize every interaction and drive positive word-of-mouth momentum.”  This new dictate applies equally well to B2B and B2C marketers.

3.      Word of Mouth Spreads

As CMO.com notes, social has proven to have vast benefits for all companies that become adept at it.  While that’s a big “if” in some cases, the role of social media is relentlessly increasing as it becomes more prevalent.  Companies that once turned a blind eye to certain channels like mobile or Twitter or LinkedIn are now being forced to embrace them all – simultaneously. Or else they risk losing impatient customers who can go elsewhere for better customer experiences.

There’s little doubt that B2C organizations – especially those with millions of customers that come into daily contact with consumers – have more opportunities to show they’ve embraced this. At Pega, while our target-account approach differs from many other B2B organizations, social has become an integral and formidable medium for us to leverage throughout our marketing and communications. We’re active on Twitter, Facebook, and LinkedIn to ensure we’re engaging with our customers appropriately, but also so we can continue building our brand awareness. As we move into 2013, we’ll continue to increase participation in these areas, with the objective that we’ll be drawing more attention to our increasingly known brand.

For all organizations, the key to getting ahead in this area will not only be proactive listening.  Companies mastering social will be continually participating in opportunistic ways to drive customer engagement and improve business outcomes.  That ultimately impacts the way enterprises respond, what solutions they sell, how they sell them and their relative market success.

Sure, this is no easy task. But then again, neither is enduring those long lines and packed parking lots.

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Q/A on Social Media with CMO Grant Johnson

This Q/A with Grant Johnson, conducted recently by Drew Neisser, CEO of Renegade, a NYC-based social media and marketing consultancy, also ran here on The Drew Blog.

B2B companies for the most part have been playing catch up to their B2C counterparts in the social media arena. One company that is coming on strong in this area is Pega, a company that helps other companies be more focused on their customers via BPM and CRM software solutions. I was delighted to able to catch up with Grant Johnson, Pega’s CMO as part of the soon to be released Social Media Fitness Study. (BTW, CMO’s can catch up with Grant at The CMO Club Thought Leadership Summit starting April 26th in NYC.)

DN: Large B2C companies significantly outscored large B2B companies in this study. Why do you think this is the case?
While social has proven to have vast benefits for all companies that become adept at it, there’s little doubt that B2C organizations – especially those with millions of customers that come into daily contact with consumers – have more opportunities to show they’ve embraced this. At Pega our target-account approach differs from many other B2C organizations. That’s not to say we’re not embracing social media, because we are, but we’re leveraging it in a far more targeted way than most B2C organizations do based on the size of our audience.

DN: Can you speak to the role social media plays in Pega’s overall marketing mix?
Social has become an integral and formidable medium for us to leverage throughout marketing as we at Pega view it as part of our overall customer-centric market approach. We’re active on Twitter, Facebook, LinkedIn to ensure we’re engaging with our customers appropriately but also so we can continue building our brand awareness. We’ve added another dedicated full time resource to further our social media efforts and we’re confident that this role will continue to increase.

DN: You mentioned that social wasn’t gaining as much traction as you’d like. What are doing to address this?
I’m actually dedicating much more resource as traction is building faster this year.

DN: Is there a hope that if more employees are active in social that this could benefit the whole company?
We are encouraging more people to be involved in our overall social media efforts and we want to make sure the right people are engaged with customers and prospects across the whole client management lifecycle, whether it’s account executives, industry solutions, public relations, as well as ensure they know what’s appropriate and what’s not in this medium.

DN: Lots of companies especially B2B struggle to develop engaging content. Do you think this is category wide problem?
Yes. Many companies have reams of content, but it’s too centered on company promotion vs. customer and prospect engagement, when taking into consideration what stage of the buying cycle they are in (e.g. someone just surfing your Web site for the first time is not ready for a “how to pick a supplier” checklist). Also, we want to make sure we present content in the most digestible way possible. While they’ve no doubt proven useful at many things, 140 characters or 300-word blogs aren’t always the most appropriate way to do this.

Architecting a Superior Customer Experience

Recently I led CMO Roundtable discussions with several CMOs in the Metropolitan D.C. area and Philadelphia to explore their roles in architecting the customer experience. In the Web 2.0 world, customer experience and loyalty have become the key differentiators between leaders and laggards.  While the importance of delivering great experiences for customers is generally understood by most companies, executing well (and consistently) across all customer touch points is a challenge for most.

This topic spurred a lively dialogue about the expanding role and responsibilities of marketing in an increasingly digital world.  Marketing is now expected to drive more of the customer experience to help support customer acquisition, expansion, loyalty and retention goals.  As one CMO put it:  “I need to prescribe the ideal customer experience at every touch point – Web, call center, product, store, etc. – regardless of reporting structure.  I’m providing guidance on how to drive a better customer experience so our company can optimize every interaction and drive positive word-of-mouth momentum.”  This new dictate applies equally well to B2B and B2C marketers.

Another key takeaway was that companies are striving for greater integration in customer management across functions and systems.   The CMO is naturally one of the primary executives that companies are turning to so they can orchestrate this cross-functional, strategic initiative to enhance customer lifetime value and operational efficiencies across sales, marketing, service and support.   Without appropriate department, process, and systems linkage, execution suffers.

While this approach is new to many companies, there are a number of world-class organizations already leveraging Pega’s software for customer centricity approach in their operations to help drive increased revenues while hiking productivity.  Whether it’s with insurance claims, corporate banking, or resolving healthcare claims, these leading-edge companies are making themselves more agile and successful. They are also rapidly realizing time to value and streamlining operations – with their customers top of mind.

We’ve driven a myriad of business benefits including:

The good news for CMOs is that with proliferation of technologies that support optimizing the customer experience to drive increased loyalty and lifetime value, there’s never been a better time to lead the charge to a better performance with more predictability.   If you are involved in driving the customer experience, I’d love to hear from you.  If you have 5-10 minutes, I invite you to take our survey on architecting a superior customer experience.

Memo to Super Bowl Advertisers: It’s Time to Draw up Some New Plays

February 7, 2012 Leave a comment

Good communications succeed by connecting with the audience. Whether you’re talking about a business-to-consumer organization or an enterprise software company, it became clear that not all ad agencies and their clients subscribe to this mandate as I watched wide range of ads airing during the Super Bowl on Sunday.

While the game kept viewers on the edge of their seats up until the very end when the New York Giants won, the same cannot be said about most of the commercials. Far too often, it felt like advertisers were trying to do too much just to be different and forgot that you also need to connect to consumers and get them to actually want to do something about your ad, not just be entertained. In most cases, they dropped the ball more than some Patriots receivers!

Sure, there were a handful of exceptions – including the Coca Cola polar bears, Clint Eastwood’s heartfelt monologue in a lengthy Chrysler commercial, a dog bribing his owner with Doritos to keep mum about a missing cat, and Ferris Bueller skipping work to drive around a new Honda CRV.  But I am no closer to buying briefs donning David Beckham’s name now than I was before the game. I won’t be downloading TaxACT anytime soon, and I won’t be visiting GoDaddy.com in the foreseeable future (nor should I expect the entire female population to, either).

Considering advertisers paid $3.5 million for 30 seconds in front of 111 million or more viewers, I can understand the need to stand out, and let’s face it, sometimes missteps draw as much attention here too. But what exactly determines success for these ads?

One measure I use as a barometer for effective communications, especially advertisements of this nature, is whether they are both relevant and distinct.  In such high profile, expensive to produce spots, a lot of the commercials will be distinct, demonstrating creativity, edginess and inspiring the sense of seeing it for first time.  But as we saw too often, it’s much harder to be relevant.  You need to push forward a clear, concise message to viewers who are paying just as much attention to their buffalo wings and beer. And you have to make it actionable.  In other words, make them want to go out and shop for your car, beverage or snack food.  Or at least spark a desire to find out more your product or services – not just a colorful ad – when they are considering the category of product you represent. It’s on this very front that brands fall short far too often.

For example, Jet Blue had what appeared to be a fairly low cost to produce ad about a new employee being squeezed into a cubicle with two others and expected to actually get to work.  Everyone who flies could relate to the concept and so its relevance score for me was 100.

Sure, I may remember some of the awful ads for a while because they were distinct.  But I’ll do something about the ads that were also relevant to me.  Fortunately, my job at Pega is not causing a lot of sleepless nights, but if it were, I’d be sure to check out careerbuilder.com, whose monkey themed ads stood out again and showed they understand what’s on the minds of dissatisfied job seekers everywhere.

It’s Time to Make Marketing Dollars Work Smarter

January 18, 2012 1 comment

As we embark on another year with an uncertain and fragile economy looming, one thing is certain: most marketers are wasting money.  In the Web 2.0 world, and given the measurability of all things digital, at least it’s not as bad as the old lament:  “I know half of my money is wasted; I just don’t know which half.”  Nevertheless, many heads of marketing, especially at companies with broad product portfolios, are suffering from being far too egalitarian in how they allocate budgets by treating all budget centers and customer or prospect opportunities more or less equally.

But all customers are not created equal. Your best customers buy more of your products, are more loyal, less price sensitive and willing to recommend you more often to others.  So why are we not dramatically tipping the balance to the “20” in the “80/20” rule that can not only generate more revenue per invested dollar, but also more profit?

The main reason is the curse of entitlements and how established businesses generally approach the budgeting process by assuming that the prior year’s budget is the baseline – wherein each department or budget manager is entitled to some increase over the previous year.   This old-fashioned type of thinking typically leads to incremental vs. extraordinary improvement, and reinforces a “business as usual” vs. a “break from the pack” mentality, not only in terms of how budgets are allocated, but also regarding what market share gains are actually possible.   Geoffrey Moore addresses this level of stasis in his new book, “Escape Velocity: Free Your Company’s Future from the Pull of the Past”.  He says: “When organizations begin their strategic planning effort by circulating last year’s operating plan, they reinforce the inertial properties of the resources as currently allocated.”  To break away from the pack, Moore argues, companies need to be laser-focused on what they invest in and concentrate the maximum resources on strategies and investments that can create separation from the competition.

If one accepts the notion that all investments will not have the same impact and return, it’s not a big leap to realize that all customers and prospects should not receive equal shares of a budget.  The target segments and existing customers that have the highest revenue and profit potential should receive a disproportionately larger share of the marketing budget. One of the more important contributions to this type of non-traditional thinking is V. Kumar’s book, “Managing Customers for Profit”.  The quote from David Aaker on the back cover sums up Kumar’s approach best: “This book shows how a focus on Customer Lifetime Value (CLV) can change management toward long-term results by providing a fresh perspective on customer targeting, retention, and loyalty…it shows you the way toward strategic customer thinking.”

One of the key concepts that Kumar brings to light is how to transition from a product centric to a customer centric approach to marketing.  Rather than “peanut butter” the marketing budget across products equally, Kumar demonstrates how to target customers with higher profit potential and how to manage and reward existing customers based on profitability.   Kumar’s approach is also more holistic than many traditional methods that merely focus on lead generation and customer acquisition, in that he views customer value across a continuum, or lifecycle, prescribing a range of tactics for marketing resource allocation to optimize acquisition, growth and retention of a company’s most valued customers.

So, what’s this mean to you? If you haven’t already established your 2012 marketing budget and parsed out the allocations in a traditional fashion, where everyone gets their fair share approach, then consider a more radical or zero-based budgeting approach that can foster greater marketing efficiency and increased revenues and profitability.  If you are already locked in to the old way of doing things, who says it’s too late to shake thing up a little?  Marketers need to be agents of change, and there’s no better time to drive change than in the New Year.

Selective Hearing: The Voice of the Customer

November 8, 2011 Leave a comment

For many of us, the clarion call to become more customer centric is echoing throughout the halls; we all need to better acquire, serve, and retain customers.  While there are many avenues to customer centricity, one of the primary approaches to getting closer to customers starts with designing and implementing a Voice of the Customer program.

Wikipedia defines Voice of the Customer as “the in-depth process of capturing a customer’s expectations, preferences and aversions.”  Forrester defines the term as “a systematic approach for collecting customer insights and incorporating them into business decisions.”

Both definitions share the premise that the rigorous gathering of customer insight can improve a company’s ability to serve its customers more successfully.  The key of course is not just obtaining the insight, but acting on it.  Many companies start out the customer insight journey with good intentions, but have “selective hearing” with Voice of the Customer (VoC), and only hear what they want and change the easy things, rather than embarking on the difficult business policy changes required to meet customer expectations.  Lester Owens, Managing Director and Global Head of Treasury Services Operations at JP Morgan, said it perfectly during his keynote address at this year’s PegaWORLD: “It’s not about what we think we want, it’s about what the client wants.”

In the report “Voice Of The Customer Programs Don’t Deliver Enough Value,” Andrew McInnes of Forrester writes: “The vast majority of respondents (to the Forrester VoC survey) also admitted that their programs don’t systematically drive actions based on VoC insights or make those insights easy to access.”   So first, companies need to make sure they hear everything that the customer is saying.  Many companies are getting this part right.  Second, and more importantly, is the ability to drive change and take the necessary actions to improve the customer experience in ways that lead to higher levels of customer engagement, satisfaction and loyalty.

One of the things I’ve learned here at Pega, a leader in both the business process management and the customer relationship management markets, is that understanding the customer’s process, i.e. how they want to interact with your business, is as critical as anything else to orchestrating business processes and outcomes that meet customer requirements.  In the age of customer empowerment, no company can survive by making the customer conform to how the business thinks customer processes should work.  It’s now the other way around: businesses have to adapt their processes dynamically to customer needs and continue to change if they want to succeed in retaining and growing their customer base.  Only then will the Voice of the Customer research lead to better business insight and, ultimately, better business results.

Maximize Customer Lifetime Value by Managing the Customer Lifecycle

The ability to seamlessly manage customers across the entire lifecycle and thereby maximize customer value remains an elusive goal for most organizations.  There are many reasons for this: companies have established artificial customer service boundaries and silos that require multiple departments to service a single customer; different customer specialists are required to receive then fulfill a given service request; or they simply don’t have the right software technology and business processes to match customer need and service ability at the moment of interaction.      

As a result, organizations are only realizing a fraction of potential customer wallet share, experiencing high rates of churn and spending far too much time and money delivering repetitive information that only frustrates the customer.  From the customer’s perspective, they experience doing business with disparate individuals and companies, rather than a single cohesive organization.  Too often, customers hear the dreaded phrase, “I am going to have to transfer you to another department,” or “I am sorry, I am not empowered to do that, you are going to have to speak to someone who is…can you call back later when they are return to work?”.  When customers interact with the company, too often they are starting from scratch with every interaction, unable to benefit from the context provided during prior interactions.  

With social media’s ubiquity and pervasiveness, customers are empowered to communicate their every experience, and unfortunately, negative experiences are more frequently broadcast, so it’s more critical than ever to manage the customer across the lifecycle.  Savvy companies are breaking down the artificial and historic boundaries between marketing, sales and service so that in any conversation with the customer, they can make an offer, sell new or additional services, fix an outstanding issue, or proactively address a potential future issue – without the machinations required when these functions operate across organizational silos.   

Consider a typical customer who walks into a mobile phone store. They may have an expiring contract on their existing phone and have received an offer for a new phone and renewed service.  When they interact with store personnel, the conversation encompasses selling (find the right device that best matches that customer’s usage), setup (configure/update the account and all the critical information for that customer), and servicing (show the key features and functions of the device so they are ready use it right away).

In reality, many phases of the customer lifecycle do not happen within such a compressed time frame — they occur over time and across different channels, but the impact is the same.  A customer calling for service represents an opportunity to sell additional value-added products. The on-boarding or set up process is the right time to align customer needs with best-suited products and to educate customers on recommended product usage, which in turn can deflect future calls to the call center and lower the cost of servicing the customer.  

To fully manage customers across the customer life cycle, companies need: 

  • A commitment to customer-centricity – to rise above competing business goals and focus on the bigger goal of overall customer value and profitability;
  • The ability for business stakeholders to visualize, create and execute their vision in a collaborative manner and align operational ability to customer needs;
  • Access to a common repository where policies, procedures, processes and content can be reused across the lifecycle but may also be specialized for by customer types or categories;
  • The ability for content to be automatically applied in context for the specific role and usage – such as a marketing, selling or servicing interaction;
  • The ability to not only have a conversation with a customer, but also put work in motion and fulfill the promises made – regardless of the systems that need to be accessed or boundaries that need to be crossed.

By aligning organizational capability to customer need and seamlessly managing the customer across the entire lifecycle, companies can improve operational efficiency, enhance brand loyalty, increase customer retention, create net promoters and, most importantly, build customer lifetime value.  To achieve this level of customer centricity requires a new model of organizational collaboration and the right level of operational agility to both serve and fulfill the customer need, and in so doing, maximize customer value in every interaction.