State of Customer: What I Learned During 2016

Some years I find myself working on matters of strategy. Other years I find myself with ‘dirty hands’ working at the coalface – helping organisations build capabilities, and deal with operational challenges in the areas of marketing, sales, service, and CRM.  2016 has been a year where I have worked both on strategy and operations. What have I learned?

Customer Strategy

Either organisations do not have a clearly defined customer strategy or the folks working at large organisations are inept at articulating it. At best, I have found the customer strategy to be something like retain existing customers and get more new customers. That is not strategy. That is talking about desired outcomes without articulating how the organisation intends to generate those outcomes.  Maybe, I just don’t get strategy.

Customer Loyalty

I have found that the hard work of engendering customer loyalty has been bypassed by putting in place some kind of customer loyalty programme: do X and get Y points. The challenge with these loyalty programmes is that there is no heart in them. Mostly they are marketing gimmicks. Enough customers realise this and drop out of the loyalty programme – too much effort to win the points, and it takes forever to earn enough points to buy anything of value with the points. A sizeable number of customer loyalty members are inactive.

Then there are folks who see customer loyalty as a one way street. These folks see customer loyalty in terms of monetising the customer base. So they are busy figuring out which kind of marketing tricks will entice loyal customers / fans to spend more. Their heart is transactional – through and through. Why do I say that? Because what is missing is commitment to generate superior value for loyal customers and earn a suitable reward for creating that value. It is like noticing that someone is into you and then using that to get your way with that person just because you know you can.

Customer Experience

Without doubt Customer Experience is the latest buzzword. It is everywhere. Anything and everything is being linked to or brought under the umbrella of Customer Experience. Just about anything and everything is being justified on the basis of improving the Customer Experience.

What isn’t happening is this: real substantive efforts to actually improve the Customer Experience not just at specific touchpoints but also across the entire customer lifecycle. Further almost all organisations are thinking in a blinkered manner when it comes to CX. What do I mean by that? Think Amazon Echo.  What an improvement in the customer’s experience. How many organisations are working on new products that create entirely new, delightful, customer experiences?

Why so much talk but so little real action?  Because for many it involves the equivalent of turning the caterpillar into the butterfly. Just about everybody prefers the butterfly to the caterpillar. Yet, rare it is to find an organisation where the folks are up for the effort, pain, time, and risk involved in the transformation process.  There are easier-safer things to do like embracing ‘best practices’ and the latest channel or fad.

Digital Marketing / Marketing Automation

There is real shortage of skills when it comes to digital marketing / marketing automation.    It is easier to buy digital marketing / marketing automation systems than it is to operate these systems with skill.  There are folks with sophisticated content management systems yet the sophisticated features, like personalisation, are not being used.

Or you have organisations with digital marketing hubs that are not being used well. One organisation that I came across was sending out welcome emails, birthday emails, anniversary (of signing up) emails, and weekly/monthly newsletters. Why just these? Because only these emails came out of the box!  No event driven marketing communications. No dynamic content / personalisation. No predictive content… Yet, all of this functionality is there in the marketing automation suite.

Single View of The Customer / CRM

The biggest challenge / hurdle many organisations are facing is that of constructing that much desired yet elusive single view of the customer. The theory was that CRM systems would make that challenge easier by bringing more and more customer-centred data into one system. This hasn’t actually happened. What has happened is that there are more and more systems holding customer related data – each disconnected from the rest.  If anything cloud based vendors have driven fragmentation as it is easy for marketing folks to buy a marketing system ignoring rest of the organisation. What goes for marketing goes for sales, for the call-centre, for field service……

The Core Challenge is That of Integration

My experience is that the core challenge is that of integration. There is the challenge of integrating the various systems (data sources) to provide the single view of the customer. Then there is the challenge of integrating the organisation players around a well defined, coherent, clearly articulated customer strategy. And a clearly defined customer experience across touchpoints / interaction channels, for the entire customer journey.  It occurs to me that it is only worth gluing up the systems if the folks that run the organisation are willing to glue up the organisation itself. In the absence of that commitment, money spent gluing up systems is likely to be wasted.

Until the next time I thank you for your listening and I wish you the very best.

 

 

 

 

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?

Are we, the Customer community, living in the land of make believe?

I believe that you and I are in communication because at some level we have a deep interest in improving the customer experience: doing right by the customer and expecting that reciprocity will kick in and the customer will do right by us and as such we all win and in the process create a better world.  Am I right?  Perhaps, that is just where I am at and what I am about.

1999 was the year that I got deeply involved in the whole Customer movement when I joined Siebel to build its consulting practice.  And in mid-2000 I was working with The Peppers & Rogers Group evangelising and consulting on 1to1 marketing.  Even in those days we were selling the following: the need to put the customer first in corporate decision making; engaging in genuine dialogue with customers; cultivating a learning relationship with customers;  putting relevance and personalisation into marketing communications;  gluing up the touchpoints to provide an integrated customer experience;  rising the importance of the call centre – focusing on effectiveness first and efficiency second; creating a single view of the customer by gluing data together from disparate touchpoints and systems; and a smart use of technology where technology enables the execution of the customer strategy and improves the customer experience.

In 2011 I am reading an array of article from customer gurus, customer evangelists, marketing academics, service centred academics and software vendors.  And they are talking about selling the same messages that me and my colleagues were selling over 10 years ago.  Yet, how much of the business world has really grasped and acted on this advice?  Yes, I know that there are a few exceptional companies that live the ‘customer-centric’ ethos and are prospering.  What about the rest?  Why is it that the rest are pretty much doing business pretty much they way they were doing it some 10+ years ago.   I got a glimpse of an answer this week and I’d like to share it with you.

As my wife is French she regularly travels to France with the three children and so I have taken out European Breakdown Cover with the RAC.  Well the annual policy was due to lapse on the 7th August and I had got a renewal reminder letter in the post.  My wife was due to leave on Tuesday 2nd August – earlier this week.  So I rang up the RAC call centre to renew the policy and here is what happened:

I rang the RAC and chose the wrong option: travel sales.  Why?  Because the renewal reminder had “Travel Sales” right at the top in a huge font.  When I got through to customer services agent (CSA) he was not able to help me because I needed to select the ‘Breakdown” IVR option.

Hitting the IVR for the second time I got through to the CSA in the Breakdown team.  I told him that wanted to renew the policy for another year and provided him with the policy number.  He quoted me a price and I accepted it.  Then I handed over my credit card details and the transaction was completed.  So far so good. Then I came across a problem.

The CSA asked me if I had a pen and paper handy.  I asked why I needed it.  He told me that he had a new policy number for me.  I replied that I did not want a new policy or a new policy number – I simply wanted to renew the existing policy and keep the existing policy no.  The tone of the CSA changed abruptly as if I had hurled a personal insult at him or was being a ‘difficult’ customer.  He  asked me what the problem was with a new policy number.  I replied that instead of my wife having one policy number she would have to remember two policy numbers and remember when each policy started and finished.  Life would just be simpler keeping the old policy number.  The CSA told me that was not possible – the ‘system’ did not allow it.

What I took away from this

I can get the difficult involved in putting together a single view of the customer.  There are lots of interaction channels and the proliferation continues.  The organisation is fragmented into silo with each doing its own thing and that is not easy to change easily.  Then there is a whole spaghetti of IT systems some under the control of IT and some not.  So putting together a single customer view continues to be a major undertaking and not every company wants to make that investment, that effort.

But how difficult is it to redesign the IVR so that the options speak in the language of the customer?  Why send a renewal reminder which says ‘Travel Sales” when I should be renewing with the Breakdown team?  Why did the renewal reminder spell out which number I had to contact and which IVR option that I needed to select?

Yet what really got me is the fact that the RAC (a brand name organisation with millions of customers) has not thought through the renewal process from the customer.  It really does not take a genius to figure out that the creating a new policy and a new policy number creates complications and extra effort for the customer.  And it may lead to extra work for the RAC – when customer comes on the line and quotes the wrong policy number.  The thing that has really taken me by surprise is the inability of the system to simple extend the existing policy to another year – thus making it unnecessary to issue a new policy.  Why has this issue not been fixed?  Surely I am not the first customer who wants to keep his existing policy and is it really that hard to make that change?

To conclude it does appear to me that there is huge gap between the reality on the ground and all the evangelising by us, the Customer community.  Are we living in a land of make believe?  Are we like the traditional economists who live in a world of superhuman rational actors and perfect information when the reality is that humans are driven/influenced/shaped by subconscious stimuli and in built biases and who find it extremely difficult to make purely rational decisions and who do not have access to perfect information.  What do you think?

PS:  I am going to join my family in France and am taking a break from blogging for the next 2 – 3 weeks.  If you are going on holiday then I wish you the very best.  furthermore, I thank each and everyone of you for reading what I write, sharing it with your network and by commenting.  I look forward to sharing my thoughts with you upon my return.  And if you are a customer evangelist it may be worth remembering that if the Customer stuff was easy then it probably would not be that much fun and there would not be any competitive advantage in it!