Is customer experience and the voice of the customer the CMO’s salvation?

The Economist Intelligence Unit has recently published a report titled ‘Outside looking in: The CMO struggles to get in sync with the C-suite’, sponsored by SAS.  This report has showed up as rather interesting for me and I want to share with you that which has caught my interest.

CMO’s face a number of big problems

The fundamental problem is that CMOs don’t get much respect from the rest of the C-suite.  CMOs say that they are doing a difficult job well: making a contribution/delivering significant value to product development, sales and customer service.  The problem is that the rest of the C-suite don’t agree – they question the value/contribution that CMOs are making.  And it doesn’t look like they listen to CMOs with much respect.  Here is how the EIU report puts it:

“CMOs believe they are constrained because the rest of the organisation does not consider marketing to be strategic; the C-suite believes marketing has not earned the right to be more strategic because it is ineffective at demonstrating value of its investments.”

Here are the other big problems that CMOs face:

1. Many organisations have trouble defining, clearly/exactly, the CMO’s role and responsibilities. Which could explain why it is that there is no agreement on what business objective the CMO (and the marketing function) should focus upon and be held accountable for.  Worse still there is a fundamental disagreement between what CMOs see as marketing’s priorities and the priorities that the other members of the C-suite assign to the marketing function.  Which makes me wonder if members of the C-suite actually talk with each other, share and agree what they expect of one another.  Doesn’t look like it. The EIU report says “..their greatest challenge: getting everyone to agree on marketing’s priorities.”

2. The  marketing function is not coping with the challenge that comes with the territory that falls under the market umbrella: advertising, brand, market research, communications, customer analytics, social media, mobile and so forth.  Why?  First, the marketing function lacks people with the necessary skills and expertise to cope/deal with this broad/dynamic challenge.  Second, members of the C-suite do not feel the CMO’s pain – they are not approving the necessary marketing investments.

So whilst it looks like CMOs are in a difficult position, there is no need to despair.  The EIU reports offers a route to influence, credibility, impact and respect from the C-suite.

What can CMOs do to make an impact and amass influence/respect in the C-suite?

The EIU report advises CMOs to focus on the customer experience and the voice of the customer. The authors pin their hopes on the following quote from Steve Cannon, CEO, Mercedes Benz USA:

“Every single customer experience is a brand moment of truth. If we create an aspiration through our advertising, and a customer walks into a store and does not deliver on that promise that reflects on marketing.” 

Any intelligent person could drive a coach and horses through this assertion.  And for the the time being lets just accept and go with this assertion.

OK, if Customer Experience is the unifying theme and the rallying call for the organisation then how exactly can the CMO contribute to this play given that the CMO is not the CEO and does not control all the touchpoints, which as a whole, generate the Customer Experience?

Focus on the voice of the customer:

Chief marketing officers (CMOs) stand a better chance of increasing their internal influence – and changing lingering doubts about marketing’s strategic contribution to the business – if marketing can consistently deliver insights and tools that benefit others across the organisation, from salespeople to call centre agents to merchandising teams.”

How feasible is this ‘success route’ being put forward by the EIU?

I say that there is a big difference between a poor strategist and a good strategist.  A good strategist takes into account feasibility.  Specifically, he asks this question: what is the likelihood that my client can execute this strategy?  And the good strategist keeps on going until he comes up with a strategy that the client has a good chance of being able to execute successfully.

So let’s ask this question, how likely is it that marketing can:

a) marshal the voice of the customer from all the disparate sources and turn this into a comprehensive view – single view of the customer;

b) generate actionable insight into customers, how they interact with the business as a whole, the jobs that they hire the business to do for them, and their experience of using the product and dealing with the company?”; and

c) inspire the various members of the C-suite to act – to make changes in their priorities, policies and practices – so as to improve the customer experience?

I’ll let you decide for yourself.  For my part I could not help noticing the following hurdles identified in the same EIU report:

1. Single customer view.  “The airline [BA] has spent the better part of the last decade integrating its systems to support the effort; data warehouse not stores 200 separate data sources from different parts of the business to provide a more granular view of the customer, based on information they have volunteered.”

2. Converting data into actionable insight. “For all the talk about data-driven customer insight, marketers are just starting to understand how they should be using the growing repository of information they are collecting through digital media and other channels.”

What do I say?

I say that if you and your organisation are serious about building your competitive position and commercial success on the Customer Experience then follow the example of Steve Cannon the CEO of Mercedes Benz USA.  Why?

Because, the role and this responsibility or organising the business around the Customer Experience is a huge change full of organisational politics. And as such it is beyond the remit and the capacity of the CMO and the marketing function.  This role/challenge – that of aligning the organisation around the customer experience requires marshalling resources, reassigning resources, engendering and dealing with organisational conflict – belongs to the CEO.

Here is what Steve Cannon did in the words of the EIU report:

“..aligning the organisation around a superior customer experience has been the focus of Steve Cannon since he took over as CEO in January 2012…. Investments in customer experience programmes have been large – such as the formation of a dedicated customer experience team – and small – like providing Mercedes Benz dealers with iPads equipped with custom apps and videos.” 

As regards what Steve Cannon is doing at Mercedes Benz USA I draw your attention to the following:

1. Steven Cannon was the CMO before he came the CEO.  When he was the CMO he did not take charge of “aligning the organisation around a superior customer experience” No, he did it when he became the CEO.  I say he is a smart man who has a sound grasp of reality.

2. If the CMO had come up with the clever idea of buying hundreds of iPads for dealers it is highly likely that he would have reinforced the C-suite’s already always listening of the marketing function as the “department of coloured pencils” (how one CEO described the marketing function) and s/he would not have got the budget approved by the CEO/CFO.

What do you say?

Marketing and Customer Experience: the value of tapping into diverse sources of ‘insight’

The world is messy and we are creatures that like to fit the world into boxes.  Why?  Because one we have put the world into boxes then we feel able to orients ourselves in the world and to act upon the world.  This is particularly so in business especially in the areas of marketing and customer experience.  After all we need to know about our target markets and our customers if we are going to pull the right levers and shape the world to attain our desired outcomes.

Whilst there is nothing ‘wrong’ with that approach there are downsides associated with the way that we go about it.  Often we do not ‘push and prod’ the world at large in various ways to get a rounded picture of our customers, our target markets, the world at large.  As a result it is easy to get a one-sided, distorted, view and then we leave ourselves open to ‘failure’ because we have created an inaccurate map of the territory.  Lets, make this real by looking at the CMO – particularly what is on the mind of the CMO.

IBM’s CMO 2011 Study

In October 2011 (this year) IBM published a global CMO study and according to this report CMO are grappling with complexity with the following top ten factors being the ones that they are struggling with / concerned with the most:

  1. Data explosion
  2. Social media
  3. Growth of channels and devices
  4. Shifting consumer demographics
  5. Financial constraints
  6. Decreasing brand loyalty
  7. Growth market opportunities
  8. ROI accountability
  9. Customer collaboration and influence
  10. Privacy considerations

Convinced that you understand the world of the CMOs and what is keeping them awake at night?  Of course you are especially as the IBM report reads:

What’s hurting most?

So, what are the main sources of concern?  We probed more deeply to find out whether CMOs feel equipped to manage the impact of 13 key market factors…..”

Findings from the CMO Exchange Conference

In July 2011 the  CMO Exchange conference held in London.  If you were at this conference you might be forgiven for thinking that the following are the “Ten challenges keeping CMOs awake at night:

  1. Convincing powers that be to support an idea
  2. Getting resources and budget committed to a campaign
  3. Clarifying expectations and budget of the CMO
  4. Keeping up with changing times and tools
  5. Long term focus versus company’s short term view
  6. Proving that value was created to justify spending
  7. Leveraging digital marketing to engage target audience
  8. Convincing company to embrace new techniques
  9. Lack of understanding of marketing within the company
  10. Challenging the status-quo without losing support

So who should you and I believe?  IBM’s study or the write-up from the CMO Exchange?

The six blind men and the elephant

Have you heard of the parable of the six blind men and the elephant?  If not then it goes like this:

Once upon a time, there lived six blind men in a village. One day the villagers told them, “Hey, there is an elephant in the village today.”  They had no idea what an elephant is. They decided, “Even though we would not be able to see it, let us go and feel it anyway.” All of them went where the elephant was. Everyone of them touched the elephant.

“Hey, the elephant is a pillar,” said the first man who touched his leg.

“Oh, no! it is like a rope,” said the second man who touched the tail.

“Oh, no! it is like a thick branch of a tree,” said the third man who touched the trunk of the elephant.

“It is like a big hand fan” said the fourth man who touched the ear of the elephant.

“It is like a huge wall,” said the fifth man who touched the belly of the elephant.

“It is like a solid pipe,” Said the sixth man who touched the tusk of the elephant.

They began to argue about the elephant and everyone of them insisted that he was right. It looked like they were getting agitated. A wise man was passing by and he saw this. He stopped and asked them, “What is the matter?” They said, “We cannot agree to what the elephant is like.” Each one of them told what he thought the elephant was like. The wise man calmly explained to them, “All of you are right. The reason every one of you is telling it differently because each one of you touched the different part of the elephant. So, actually the elephant has all those features what you all said.”

What is the Lesson?

If wish to understand an aspect of the world then tap into a variety of diverse sources.  If you are seeking to understand your customers, formulate a customer-centric strategy and/or improve the customer experience then you should consider tapping into and integrate the ‘findings’ from a variety of sources including:

  • Stepping into and walking in the shoes of the customer;
  • Observing customers interacting with your organisation;
  • Listening to your front line employees and their views;
  • What customers (and other influential people) are saying about your organisation online;
  • Customer complaints;
  • Converting call recordings into insight through speech analytics;
  • Mystery shopping;
  • Interactions through the website and web analytics;
  • Financial models including CLV (customer lifetime value);
  • Loyalty programmes;
  • Responses to marketing campaigns;
  • Market research;
  • Customer surveys etc.

Do you have to tap into each of these sources of insight? No.

Yet it is important that you tap into a variety of listening posts that collectively allow you to see the ‘elephant’ rather than simply pieces of the elephant.

How the world has changed: TeleTech buys The Peppers & Rogers Group

I was a part of The Peppers & Rogers team here in the UK at the turn of the century.  That is where I met some of the people who I find to be the most passionate about advising and assisting companies in creating sustainable competitive advantage through customer-centricity.

At the height of the dot com collapse I left Peppers & Rogers – as did some of my colleagues.  Yet, I have continued to follow the company as I have fond memories and am in agreement with what the company stands for: a customer centred approach to doing business.  So it is with interest that I read that TeleTech have bought 80% of The Peppers & Rogers Group.

What I find it interesting is that Peppers & Rogers has not been bought by a marketing agency. It has been bought by a company that specialises in outsourcing including Customer Management Outsourcing.  How times have changed!

When I worked at Peppers & Rogers (200 – 2001) I would never have imagined that things would turn out this way.  Those were the days of CRM.   At that time we did almost all of our consulting for the marketing function – typically the marketing director or the CMO.  Occasionally we did work for the Commercial Director and even the odd CEO.  Yet, the people who were in the driving seat were the marketing folks.

At that time I always envisaged that if anyone would buy Peppers & Rogers it would be a marketing agency.  And at the end of the dot-com collapse the UK arm of Peppers & Rogers was sold to Carlson Marketing – they used to own the Peppers & Rogers brand name in the UK but now it is branded Carlson 1to1.

CRM fell flat on its face because too many people in business are looking for the quick fix – the silver bullet – and the software companies (like Siebel) were happy to provide it.  Out of the ashes of CRM arose Customer Experience.

Today we live in the age of Customer Experience and in this age the marketing function is not the most important one.  Not by a mile – customers rarely decide to continue doing business with a company as a result of the advertising nor the direct mail pieces that land in the letter box.  In the age of Customer Experience the Customer Services function (and contact centres in particular) play a primary role: depending on which survey you read, some 70 to 80% of respondents claim their decision to stick with or leave a supplier is based on the service that they receive.  And a significant part of that service comes out of the contact centres. So it makes perfect sense that TeleTech has purchased The Peppers & Rogers Group.

I want to make it clear that I am not against marketers, the marketing function or even advertising.  Whilst I passionately believe that marketing and marketers have to embrace a completely new paradigm I also get the value that good marketing creates.  Good marketing contributes to the customer and adds to the bottom line.

One role of marketing – indeed advertising – is to add stuff that customers want and which is not in the product itself.  Think about the classic USA adverts for the Volkswagen Beetle – they took an odd-looking car and made it sexy.  Think about the Avis advertising – it took a number 2 position and made it into a virtue: we are No 2, we try harder.

Some brands – especially luxury brands – depend critically on good marketing: customers are buying status and the marketing has to continue to create that status.  Automotive insiders tell me that the quality of Honda cars is just as good as anything on the market yet no-one looking for status buys a Honda, they buy Mercedes, Audi, BMW….