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Library of Congress Cataloging-in-Publication Data:
Petersen, Lars Birkholm.
Connect: how to use data and experience marketing to create lifetime customers / Lars Birkholm Petersen, Ron Person, Christopher Nash.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-96361-6 (hardback); ISBN 978-1-118-96360-9 (ebk); ISBN 978-1-118-96362-3 (ebk)
1. Internet marketing. 2. Customer relations. I. Person, Ron, 1948- II. Nash, Christopher. III. Title.
HF5415.1265.P486 2014
658.8′72—dc23
2014025611
The authors will donate all royalties from this book to selected charities. To learn more and help decide which charities the royalties should be donated to, visit www.ConnectTheExperience.com/charity.
You cannot create experience. You must undergo it.
—Albert Camus
Many strategists realize that the world is only becoming more connected, not less. Yet many executives still wonder when all of these crazy texting, selfie-taking, snapchatting, lunch-tweeting shenanigans are going to finally fizzle out. I don't know about you, but I'm already dusting off my rotary phone and digging out my floppy disk collection just in case we do decide to go backward.
Not really.
You get it. I get it. Do we really need yet another pep rally to celebrate our like-minded perspectives and passion to bring about change? Yes. In fact, we need to ready ourselves to march the significance of the changing customer right on up to the C-suite to drive home the importance of customer-centricity not only for the benefit of people but also for the future of our business as well as our place in the market.
See, customers in all of their connected glory are evolving with or without us. At the same time there's a mind-boggling lack of urgency and a resulting sparsity of support, resources, and budget to understand and engage this rising connected customer.
Ladies and gentlemen, we have ourselves a customer experience (CX) imperative. But before we go any further, I must press pause for a moment to share something stark yet common-sensical: technology alone isn't the answer. That's right. Even though we're faced with radical changes in customer behaviors, expectations, and preferences as a result of technology, to lead the next generation of customer experience does not begin with technology. It starts with people.
Therefore, the opportunity for customer experience requires elevated discussions where organizations assess current experiences against a vision for what they can and should be. For example, is today's customer experience a by-product of our brand promise? Do we deliver against our stated intentions, and is that experience reinforced at every touch point?
Approaching customer experience in this fashion takes what is typically today a bottom-up approach and shifts decision making to a top-down model. And we all know that true transformation comes from the top. The difference, though, is that implementing customer experience initiatives with both top-down and bottom-up strategies sets the foundation on which customer-centricity can build and flourish. One is directional, the North Star if you will, where customer experience initiatives map against a vision for how brand promises are enlivened and reinforced before, during, and after transactions. It sets the standard for investments in technology, engagement, insights, and pilots. It also sets the standard to follow and the benchmark to measure against for all those who are responsible for the experience, wherever and whenever it's formed or affected.
The result is a brand promise that's measured by the experience that customers have and share. It ladders up the importance of customer experience, transcending it from a functional role to that of an enterprise-wide philosophy.
Good intentions are just the beginning, but they are not enough.
Let's assume that businesses, for the most part, want to do the right thing. After all, they're making increasing investments in customer relationship management (CRM), social, mobile, digital, etc. With spending comes sincerity and intention, right? After all my years of advising executives and researching the evolution of markets, I can honestly say that executives seem to care. I can't say that I've ever heard anything from executives indicating any intention of dethroning the customer as king.
I can't imagine sitting in a boardroom and hearing leadership reveal a new direction of anti-customer-centricity: “Team, we just don't care about our customers. And to be honest, we couldn't care less about their experience. We believe this to be a shorter, sweeter path to profitability and earn-outs.”
Depending on which definition you align with, customer experience is often characterized by the perception a customer has after engaging with a company, brand, product, or service.1
If customer experience is a critical pillar to build relationships and business outcomes, why is it that we are still fighting the good fight? If so many executives agree that the future of business lies in customer experience, why are we spending this time together right now? What's the point? The answer is that there's a disconnect. The link between aspiration and intention is separated by vision and action.
To my surprise (well, not really), a recent study2 found that only 37 percent of executives are actually beginning to move forward with a formal customer experience initiative. Considering that businesses race along with the speed and agility of a cinder block, I'm sure that even this initial group of leading businesses will not make significant progress to establish a competitive edge any day soon. But some companies will aggressively invest in CX and innovation in products, processes, and services, and that will set the stage for disruption.
Why?
The customer landscape is shifting. It always does. This time, however, the door to digital Darwinism has been kicked off its hinges. Technology and society are evolving faster than the ability to adapt. Consumers are becoming more connected. As such, they're more informed. With information comes empowerment. And with newfound connectedness and power, customer expectations begin to shatter current sales, marketing, and support models.
Social, mobile, and real-time connectivity each contribute to a new reality for customer experiences and engagement. This isn't news. In the previously referenced study, researchers found that 81 percent of executives agree that social media is critical for success, yet 35 percent don't support social media for sales or service.
Businesses either adapt or die. Ignoring this fact hastens digital Darwinism. Jumping in without understanding or intention is a moon shot without aiming for the moon.
This isn't just a channel strategy.
This isn't just a technology play.
This is a shift toward a new movement where customer experience now screams for us to “Create experiences!”
Indeed, customer experience happens with or without you.
The customer experience imperative needs you to make the business case.
In your organization, people are talking about customer experience right now. But for some reason it's just not a priority. Actions don't reflect promises. In CX, you must create a sense of urgency to accelerate to match or outpace the speed of market transformation. Without doing so, a sense of urgency will be created from the outside in.
It's not just about the customers you have today; those who are not already your customers represent your future growth.
Connect will help you get ahead in the new marketing revolution. Even though your customers are in control, you don't have to react to them. Lead them. In doing so, you'll learn to transform your customers' experiences, create lifetime connections with your customers, and jump ahead of your competitors.
When you take a new approach to engagement, customers feel the difference, and you feel the difference.
Nothing begins without you…and that is why you are the hero and this is your journey. The future of digital marketing and customer experience is in your hands. Feel it. Design it. Advance it.
If you don't lead it, who will?
Brian Solis
Digital analyst and anthropologist, and
author of the best sellers, What's the Future of Business? (WTF)
and The End of Business as Usual
Marketing in all organizations is at a crossroads. There is a big revolution happening right now in consumer and business buying behavior. Gone are the days when your marketing is seen as a trusted source. No longer can you dictate customer behavior or the customer buying process. Face it—customers are in control. As a marketer, you need to understand and adapt to these rapidly changing behaviors, if there is any hope to regain credibility and become meaningful again to today's connected customer. Let me tell you how this revolution impacted me personally and how my cell phone provider lost a lifetime customer.
My second daughter was born at 12:07 a.m. Luckily the birth went well, but, being in love with technology, I was also watching the clock as the new iPhone was released at 12:01 a.m. My daughter quickly fell asleep and I found a moment to use my smartphone to browse the web store of one of the biggest cell phone carriers. I spent the next 25 minutes ordering the new iPhone. It should have been an easy task, using a smartphone to shop for a smartphone. But the experience wasn't optimized for my smartphone, even though it was a smartphone that I was shopping for. In an age when Cyber Monday nets 17 percent of all online purchases on mobile devices,1 this was inexcusable. But I was determined—I needed the newest member of the iPhone family, and I was willing to go through the extra-painful experience of zooming and shrinking to get the task done.
Finally, I got my iPhone, and about a month later I received a newsletter from the carrier, promoting “Lars, buy the new iPhone.” Surprised at how irrelevant this was to me because I had already bought the iPhone through the same vendor, I replied and asked if this was a mistake.
There was no mistake about the attitude I got back in the reply: “No, this is not a mistake; this is a mail we send to all our customers.”
Here's the problem with getting a reply like this and why this newsletter upset me in the first place: the vendor is demonstrating that they doesn't know me and certainly doesn't value me as a customer. This isn't how we want to be treated as people. The last thing I want is to be treated like just another number in a customer database being marketed to by the vendor. I don't want to be marketed to if it's not something I feel is relevant to my needs.
Organizations that are doing this have not only failed to adapt, but they are in danger of losing the last shred of credibility through their marketing. Rather than connecting with customers, they are disconnecting from their customers at a blistering pace.
As a professional, I'm a busy guy, so as a consumer I need and expect the brands I deal with to be able to offer me increasingly relevant information and offers. What I want is the same experience I get when I visit the local department store, where the clerk remembers me, asks about my experiences with my last purchase, and comes back with relevant recommendations based on our dialogue. That makes me feel a connection to the store, almost to the point where I feel guilty if I don't go there to make my purchases. It's that type of relevance that keeps me coming back, because it makes me feel that the store and its personnel value my business by looking out for me and wanting to help me. It makes me as a customer feel connected with them and I happily advise my friends to buy at the same store.
I had no problem switching to a new cell phone carrier, just as I have no problem changing brands for TVs, supermarkets, and the like. There's just no loyalty there. These things are commodities in my mind. But I would not change my insurance provider, who made it personal and connected, and whose people have managed to transcend the customer relationship beyond a commodity transaction by recognizing me when I call. They give me relevant information and they even send me birthday cards with savings on products they know I want and need. Yes, I know most of it is automated and done by using data, but it shows me they know who I am and our relationship has substance.
Stories like this are daily occurrences for all of us. Consumers are taking charge and expect more meaningful experiences from organizations and marketing. Customers expect their experiences to parallel the way they interact with other people, where they aren't assaulted by mindless robotic marketing, but rather engaged in a human way that is centered on everything that makes a customer feel connected to your brand. Experience marketing is helping organizations to better understand their customers and interact with them in that human, friendly way.
Organizations today are at one of the most significant crossroads ever: taking the “business as usual” road will mean the same old generic “one size fits all” content as usual at each customer touch point, delivering largely indifferent customer experiences. The other road, the road to rich customer relevance and humanized marketing, will not be an easy road—there will be many changes needed with new processes and new relationships between organizational units. It's not easy, but the payoff is huge: you win the hearts and minds of customers and build long-term relationships that endure having impact on retaining and creating vocal customers. So it could be hard work, but it will put your organization on the path to connecting with your customers and building relationships for life. Marketing is an important stakeholder in this process, but only one part—other parts that will contribute to the connected experience are sales, service, finance, and so on, all with a big impact on the total experience. In many cases this will start as a marketing revolution that over the longer term will transform marketing into being involved in measuring and improving every business function that touches customers.
This book helps you take the right road to lifetime customers. It gives you a staged approach on how to steer your organization on this path. Whether you are in business-to-business (B2B), business-to-consumer (B2C), retail, nonprofit, government, or e-commerce work, this book is relevant for you.
Whether you are an executive or involved in day-to-day operations, this book serves as a guide, with recommendations, initiatives, work-arounds, and step-by-step processes on how you can move your team to a higher level of marketing excellence. The authors of this book have extensive experience, through our daily work in Sitecore's Business Optimization Services team, advising and consulting with many midsize, large, and global corporations. What we share in this book are the best practices we've learned through sheer hard work at countless customers around the world. This is the secret sauce in the recipe for marketing success in this rapidly evolving era of the connected customer.
Using tactics shared in this book, you will learn how:
Along with this book you have access to a website, www.ConnectTheExperience.com, where you will find updated content, access to our frameworks, high-resolution illustrations, templates, organizational assessments, and calculators that will help you become more connected and relevant to your customers.
We hope you enjoy reading this book, but most important, we hope you find valuable best practices you can use in your marketing to serve your customers and organization better.
Lars Birkholm Petersen
This book shows how you can take advantage of a marketing revolution affecting all types of businesses and organizations. With so many forms of business and organizational types, we have had to use terms that differ among industries, for-profit and nonprofit, and B2B and B2C. The following short reference can help you understand the terms we use.
Decision journey. Throughout the book we refer to the decision journey, which is the decision and commitment process the customer uses to make a commitment or purchase. In many organizations—for example, hospitals, municipalities, activist nonprofits—you aren't selling products, but a decision and commitment are still necessary. By decision and commitment we are simply referring to the point where the customer moves to the next step of engagement with the product and/or service. For example, this could be as simple as getting a customer to fill out an online form.
For most organizations, branding and loyalty are critical. In those cases the decision journey continues through to creating a lifetime of commitment.
We love helping organizations adapt to the needs of the connected customer by building meaningful and connected customer experiences. We would like to get your feedback on our thoughts and practices in this book, as well as to learn what is working well, what isn't working, or missing pieces that should have been in this book.
We can be contacted at authors@ConnectTheExperience.com or by using #ConnectCX for any feedback or questions you might have.
The only thing that is constant is change.
—Heraclitus
The stakes have never been higher for marketing; to win the marketing game is to transform marketing into one of the most important drivers in achieving business objectives. To lose or even fall behind in marketing could result in your organization dropping back as your competitors take control.
Organizations and marketers need to adapt to, take advantage of, and stay at the leading edge of emerging technology. Marketers need to use technology as a competitive advantage, like Netflix eating Blockbuster's market share or Amazon.com changing first how we buy books, then changing how we buy retail products, and now disrupting everyday shopping with the Amazon Dash. Marketers who aren't ready to adapt and use the new technology will be left behind.
As a marketer, these are very exciting times—we are in the midst of a marketing revolution and we get to influence the outcome. Making the right decisions now and acting on them will not only help achieve your business objectives, but will also increase your marketing skills, your personal expertise, and your professional value.
Traditional marketing is fading away and will soon disappear altogether. This is the legacy marketing strategy where the approach was to broadcast a generic set of marketing messages to large groups of customers in different channels, like television, billboards, web, email, and social. Even when the messages across different channels were related, the experience of the customer across different channels was not.
You experience this type of disjointed marketing every day. For example:
This isn't to say that traditional marketing doesn't serve a purpose. It continues to build awareness and it can educate. Traditional marketing was very effective in its heyday. Just think of the old 1950s commercials—they aimed at educating consumers to buy products from big brands. But that marketing isn't broadly effective anymore. Here's why.
What we have seen in the past 10 years is a revolution in how customers are able to connect with peers and share information—information about your brand like discussions, recommendations, and reviews.
This information has always been out there, but with the rise of Internet publishing and social networks, more information is easily accessible, and individual consumers have an unprecedented ability to broadcast their experiences with little to no effort. Where it took a lot of time and effort 10 years ago to research about products, services, and how other people experience them, it now takes next to none.
Fundamentally, customers haven't changed, but how they decide has changed. In fact, CEB (Corporate Executive Board Company) found that business-to-business (B2B) buyers are 57 percent through the purchase decision before engaging with sales.1 That's why it's more important than ever to have connected marketing that is relevant to customers' needs across the myriad of channels they use for research. Your brand must be in the customer's top of mind (preferably unassisted) so that it is at the beginning of the decision journey and one of the products the customer searches for before reaching out to sales.
The bad news for marketing is that the rate of change isn't slowing down. The marketers who adapt as rapidly as consumers will disrupt industry segments and steal market share from their competitors. Just look at how Airbnb is changing how customers find travel accommodations, what Uber has done to taxis and car services in cities, or what Esurance has done to the insurance industry. As a marketer, you will always be playing catch-up to the next agile marketer; and if that is taken with a losing attitude, it is a terrible position to be in. But take it with a winning attitude and it's great—it gives the agile marketer a chance to continually innovate and move ahead.
If marketing is to be effective, we must create a culture of connected marketing. Connected marketing demands that marketing align with customers by using their preferred channel for communication, heeding what your customers are telling you in their interactions with you, and demonstrating that knowledge by engaging them with relevant content and appropriate offers in their preferred channel for communication. Marketing must be faster and more agile than in the past, ready to move rapidly to emerging channels of communication, and constantly staying in tune with our customers.
This is experience marketing. This next generation of marketing provides marketers with a single view of the customer in real-time so that marketers can personalize every experience, across all channels.
How can we align how we sell with how customers decide?
First we need to acknowledge that the traditional marketing funnel is fading as marketing's first approach; with the increased use of different channels, marketing needs to be pervasive throughout the customer journey.
To better understand how customers decide, we need to understand the different groups of customers and their different intents, motivations, emotions, and decision journeys throughout the different stages of the customer journey. Depending on their objectives, some customers might be very methodical in their research, while others could be more spontaneous. Some will rely on social proof and liking, whereas others will try to be the trendsetters, others will be early adopters, and still others will use the brand as a statement for who they are.
The better we understand the different people we are marketing to, the better we can align messages and build relationships.
Customers go through different stages in their journey. In most cases their journey looks like Figure 1.1.
Figure 1.1 Stages of Customer Journey
As customers take more control of their journey their decision point moves closer to the purchase stage. That pushes customers need to contact sales farther down the journey. Most customers will reach out to sales late in the research stage or early in the decide stage. If marketers wait until these late stages to engage with customers, there is little time to influence the buying decision.
One of marketing's key roles is to move that point of contact earlier in the customer journey. To do that we need to build trust with the customer by aligning content with the customer's stage in the decision journey. Pushing the wrong content, offers, or communication at the wrong stage can destroy the marketing-customer relationship. At the earliest stages it's not about product features but more about the value and benefits of that product, with which the customer can identify.
It's also important to understand that a customer's willingness to engage changes over the decision journey. As a first-time visitor on a car website, most customers won't give access to personal details right away, unless it's relevant. At the different points of interaction, customers exchange different amounts and levels of information. The more specific information the customer needs, the more personal information the customer is willing to exchange. As a first-time visitor, customers are most likely browsing the market and gathering information to research and compare brands, to see which match their own values and needs. At this point the car website hasn't built enough trust with the customer, so the amount of information exchanged is limited. The customer might be willing to provide basic information such as an email address, as this is low-risk content. As the marketing information becomes more relevant, there is more credibility and trust and the customer is more willing to reveal additional information.
Different steps are necessary to achieve this information exchange. The steps for these tactics are shown in Figure 1.2.
Figure 1.2 Steps to Build Trust and Commitment
You need to be able to attract customers using key messaging or calls to action in the channels preferred by customers. At this point it may be through offline channels. It might be something as huge as a billboard in a strategic location, but ideally to capture the target audience the marketing message must be relevant. This could be done via targeted ads segmented by demographics and psychographics or by intent expressed through search keywords on a search engine. This information is tied to specific individuals and is incredibly valuable and should not be lost when marketing moves from external to owned marketing channels.
Based on the intent expressed by the customers, we marketers need to be relevant in our communication. For digital channels that means contextualizing the experience to the customer's needs, personal profile, psychological triggers, stage in the decision journey, and digital device. The more relevant our message is, both in content and context, the better conversation will be with customers and the more engaged they will be through our digital channels. Communication at the early stages of the decision journey is focused more on the customer values than on the product we are selling; we need to connect emotionally so that customers can identify themselves with our brand and want to learn more.
Relevant communication leads to establishing trust: trust of our brand and the relevant value we are able to provide. Trust will help customers revisit your channels and be increasingly more vocal about the content they have found. It's crucial to establish trust, as trust leads to commitment.
Throughout a decision journey, there can be many points of commitment, as shown in Figure 1.3. In the early stages, commitment moves the customer closer to your objectives. This could be as simple as exchanging an email address for low-risk content. Deeper into the decision journey the need for trust increases, the commitment required is greater, and you can collect more data from the customer.
Figure 1.3 Each Touch Point Is a Chance to Build Toward Commitment
Think of the commitments as being micro and macro conversions that move the customer toward your key objectives. At each of these micro or macro points, your communication needs to be relevant and must establish trust appropriate to that point.
Walk in the shoes of your customers and take our “Communicate with Intent” test.
| List one of your key products or services: _____________________________ | |
| Which keyword sentence would reveal if a visitor is interested in this? (Try to avoid branded keywords.) | _________________ |
| Go to your favorite search engine and type in the sentence; list which links are found. | _________________ |
| Click on one of the links. Which content do you see? Is this relevant according to the intent expressed in the search? | [ ] Yes [ ] No |
| Click to the front page of the site. Is this relevant to the customer's intent? | [ ] Yes [ ] No |
| What are you proposing as the next step for the customer? | _________________ |
| Is this step relevant for the customer? | [ ] Yes [ ] No |
| Have you established enough trust for taking this step? | [ ] Yes [ ] No |
| Which of these do you pass? | |
| Attract | [ ] Yes [ ] No |
| Communicate | [ ] Yes [ ] No |
| Trust | [ ] Yes [ ] No |
| Commitment | [ ] Yes [ ] No |
You can take the Communicate with Intent test online at this book's companion website, www.ConnectTheExperience.com/CWIT.
At every point of interaction, you exchange data with your customer. In the beginning, data from the customer is implicit and anonymous, but as the commitment increases so does the specificity of the data, and you get more access to explicit data, such as demographics and psychographics.
Accurate data is important to move the conversation to the next touch point where additional data can be captured and to be able to measure the connected experience.
For many marketing teams, this need for data at each touch point means a new approach and more data-driven marketing.
Welcome to the New Marketing Mandate, one of the most exciting times to be a marketer. You get to create a mandate that makes marketing essential to driving business outcomes. You have the chance to move marketing away from being the “poster” department to creating and executing a strategy that drives real business outcome. Through data-driven insights, you have the chance to forecast and optimize tangible business outcomes and achieve strategic business objectives.
Taking these steps will require many marketers to shift focus, assume different roles, and take new approaches. That is why we've written this book. We start with what you can do today by focusing on quick wins while helping to set the long-term vision and planning for marketing. All of this focuses on creating world-class relevant and connected customer experiences. This is a marketing approach that does more than increase your customer count; it builds customers who are your lifetime advocates.