As Rod sat outside the conference room waiting to be called in to present Marketing’s quarterly results to the board of directors of his Fortune 50 public company he reflected on how marketing is changing. What a long strange trip it’s been from the Grateful Dead song “Truckin’” keeps popping into his head. Rightly so, Marketing has become overly complicated and just a bit weird. Not just because of the myriad of technologies that CMOs like Rod have been buying in an attempt to understand and manage holistic customer lifecycle relationships. But despite the plethora of channels, content and ways to attract-engage-convert customers, ROMI (Return on Marketing Investment) is only slightly more predictable than it was five year ago. “I have lots of analytics and detailed metrics on conversion and performance but consistently accurate predictability of marketing generated revenue? We’re not there yet,” thinks Rod. That lack of predictability is a problem on many levels, not the least of which is that Boards expect it. Rod is one Chief Marketing Officers (CMO) that participated in a qualitative study on emerging marketing trends funded by Marketo. The marketing leaders interviewed were with B2B or B2B2C companies ranging in size from the Fortune10 to early stage start-ups across financial services, manufacturing, high technology and SaaS industries. Marketers have abandoned educating the rest of their organizations on the importance of marketing specific metrics and have dropped using terms such as TOFU, MOFU, MQL, etc. in conversations with Sales, Finance or other parts of the organization. By talking about marketing programs and investments in financial terms, CMOs have seen an unprecedented level of alignment occur across the organization. With Sales the conversation is not about leads but pipeline, customer engagement, conversion and close rates. In an ideal world CMOs would like to have more strategic conversations with their CEOs and Boards about the value of activities and the impact of investments that are not directly tied to revenue. Reputation, awareness, customer experience, tracking cohort customer groups, pipeline by channel, influence of communities/digital properties, and how to drive growth are a few of the topics CMO would like to talk about. But having been burned in the past, CMOs keep the conversation strictly on revenue. Rod knows his CEO and board expects him to routinely report out revenue forecasts based on current and alternative marketing spend scenarios as part of evaluating business strategies that management is considering. He needs a data science team, help from the CIO and strategic MarTech vendors to build a predictable model that includes all the channels, programs, conversion rates, target industries and customer segments. Having spoken with a handful of progressive CMOs that have built credible market models, Rod knows it’ll enable his team to focus on where the strong and weak points are in the marketing stack, understand why and whether it’s an execution issue or a customer/market shift. The team would be able to spot market shifts – buyer, industry, competition, economic – and respond faster by changing attraction, retention and product programs. Rod’s longer term vision is to do historical benchmarking as well as against competitors. Being able to model, in detail, LTV of customer lifecycles would enable his team to un-complicate marketing and increase their precision in forecasting revenue by defining and aligning touchpoints, content and offers to customer journeys. Marketing has the real, hard data to prove its contribution to the topline – as long the language the CMO speaks is financial. The rising sophistication and transparency of marketing ROI is enabling every CMO to have a credible seat at the board table. The real power of the market model lies in its ability to link metrics and programs to what the Board and his CEO cares about – leads, pipeline, wins and market share. As the CEO comes out of the conference room to call him in to present, Rod stands up confident his conversation with the board can go to a new level and that he can demonstrate, tangibly, the importance of what marketing is and can do. First published in CustomerThink
We all know or heard of someone who did something they shouldn’t have. A long time ago I worked with someone who was responsible for setting up international sales events. She would book the venue on her credit card, get reimbursed and then cancel it, pocketing the cash. There is little disagreement that this is unethical behavior. But it took a while before the company acknowledge the behavior and addressed it despite her actions being common knowledge. What about questionable behavior that an organization seems to accept as OK? Actions like making decisions that impact your bonus without really looking at the facts, pressuring a prospect to buy more product than they really need, writing marketing copy that stretches the facts beyond truth, or positioning yourself as an objective intermediary where you have a financial interest in the outcome. If an organization’s culture implicitly condones questionable practices does that make unethical behavior ethical? Multiply the implicit acceptance of questionable behavior to a grand scale and you get situations like Turing Pharmaceuticals, Enron, Uber, the financial meltdown, and the list goes on. These are not anomalies but routine events to which we all exclaim shock at not having foreseen the impending crisis. If leaders are generally ethical and want to do the right thing, how can so much go so wrong? I asked Margaret Heffernan, best-selling author of Willful Blindness and her response was not what I expected. Instead of being told about the corruption of society, tyrannical bosses, and the fallacies of hyper-capitalism, Margaret responded that it’s a function of human nature to “turn a blind eye.” By only seeing the error in retrospective, we engage in willful blindness. “This is not a function of intelligence,” said Margaret during a recent interview in San Francisco. “All through history these situations happen, it’s just much more prevalent today.” Her book is full of stories about leaders ranging from ship captains to Wall Street traders who inadvertently stepped astray of ethics believing they were playing by the company’s rules. Speed and complexity play major roles in explaining why unethical corporate behavior is on the rise. “Speed is very fashionable,” explains Margaret. “We believe that in order to be competitive you need to be the fastest which accelerates business cycles and our proclivity for working 7 x 24.” Leaders, managers and employees feel they need to run faster to keep their job or move ahead. “The problem with speed is that the faster you go, the less you see and the even less you feel,” shares Margaret. Speed is particularly dangerous for CEOs. Pattern detection becomes blurred because you pick up less data and good decisions are rooted in knowing and having the right data. Complexity is our other love affair. In the quest for agility we have achieved the opposite. Complex markets, distribution channels, product families, and staffing models has resulted in organizations that are too complex to manage. CEOs and management teams long ago lost the line of sight from problem to solution. Sales and Marketing struggle to connect and have a meaningful relationship with their customers. We’re unable to manage these complex global organizations as we’ve seen in the retrospective analysis of troubled financial institutions, automotive manufacturers, technology companies and economies. The inability of the governments to stimulate their economies and other countries to resolve the spreading immigration crisis are proof points. So what is a CEO to do? Margaret’s advice is to change how they manage. She points to three truths discovered while researching her book. 1. Employees almost universally believe their bosses don’t want to hear any bad news or information that challenges commonly held beliefs. 2. Business leaders understand that they don’t know what they need to know and rely on their employees to tell them what is happening in the business. 3. Every organization has fundamental orthodoxies about things that cannot be talked about. Her advice to CEOs is to consciously slow down. Companies like Eileen Fisher, an apparel and design company which also happens to be a winner of the Great Places to Work award, slowed down their production and design cycles along with their decision making. The result was a dramatic increase in their profitability and competitive stance. In the fast paced world of fashion, this seems counter intuitive and is a good example of why we need to un-complicate our lives. Next, CEOs need to change how they communicate. By slowing down, CEOs and their teams can have more meaningful conversations about the business, data patterns, and thoughtfully evaluate different courses of action. Conversations should:
- Take longer,
- Draw in a wider range of stakeholders and audiences,
- Allow for more organizational dissent, and
- Gain wider buy-in and consensus on key decisions.
Why is customer centricity such a challenge? Theories abound ranging from customer ownership delegated to someone other than the CEO; a culture that does not appreciate the link between employee engagement and customer success; lack of in-depth customer understanding; processes that don’t consistently deliver a valued lifetime experience; or a perspective that customer engagement belongs to marketing, to name a few. From my experience working with Fortune 100 to 5000 companies across a wide range of industries, these ‘theories’ are at play but they are not the root cause of the challenge. That lies in their business strategy. Setting business strategy is as critical to an organization’s success as having delighted customers. The first sets direction and focus. Done correctly it enables employees and partners to align their efforts, resources and plans to achieve the measurable and time-bound objectives of the organization. The second, delighted customers, is the path to market share growth. Yet many business plans lack specific goals or objectives for customer success. The two are one; not separate. The role of the annual business plan is to get everyone in the organization to have a shared vision of the future and agree on what needs to be done, when, by whom and with what resources to achieve target end state. Only through planning can we confirm that everyone sees the same thing and has worked through the issues to reach that point of acceptance. Not only does everyone in an organization need to sing the same verse from the same hymn from the same book, they need to also sing it with the same level of gusto. It sounds trite but it can be hard to achieve. Most organizations have no problem setting goals. Goals are broad statements of the company’s aspirations for the future, stated in external business environment terms, are generally enduring and often not measurable. Rarely do companies struggle with setting goals around revenue/profitability, mindshare, reputation, market share, product mix, thought leadership, organizational agility, culture or customer success. A typical customer success goal is worded along the lines of: “To maintain solid, sustainable customer relationships with the highest level of loyalty and sustained satisfaction.” The challenge comes in defining objectives. Objectives are internally focused and defined in financial, statistical or numerical terms. Performance against measurable objectives is the prime indicator of whether the related goal is being achieved. While goals are stated in multi-year terms, objectives are time bound and stated in quarterly, monthly and/or annual terms. Planning teams inevitably get stuck on setting objectives for the ‘customer success’ goal. They get stuck because the company often views customer delight / loyalty / satisfaction (pick your favorite label) as a separate set activities loosely related to other goals. Nothing could be further from the truth. Customer success is interdependent as well as part of all other goals. Miss any goal’s objective and it will have a direct impact on achieving customer success. Two things typically happen at this point. An epiphany occurs on the depth of the interdependency between the rest of the business plan and customer success. Or management focuses on putting customer success in a box. Most companies opt for the latter because addressing the interdependency is seen as “opening Pandora’s box”. Their focus, incorrectly, is on finishing the plan instead of planning a path to assured success. The missed opportunity is on the road less traveled. Companies that invest the time to understand their current and future target customer groups’ lifetime ‘value’ expectations and match them to the organization’s strengths, weaknesses, market opportunities, threats and resources consistently develop more achievable strategic plans in good times as well as bad. Best-in-class companies do this matching across a number of internal and external scenarios to identify where the ‘rubber meets the road’ in achieving true customer and company success. Not only are their plans more consistently achieved, their companies also have significantly greater internal alignment, are more agile and innovative. The most common push-back to this approach that I hear is “it takes too long”, “we know our customers”, “our business strategy is not dictated by customers”, and/or “we don’t have time to overhaul our strategy”. None of these are really true; they are just excuses for not getting outside of one’s comfort zone and seeing the many shades of future reality. Leaders looking to ground their business strategy in customer success can start by: 1. Journey map the lifecycle of their highest value current and target customer groups. 2. Map interactions, their associated emotional and value states. 3. Conduct a detailed SWOT, emerging trends and competitive chessboard analysis. 4. Co-create with highest value customer groups a higher value-producing, distinctive customer lifecycle experience. 5. Evaluate current 12 to 36-month macro-strategy against #3 and #4, identifying areas of change. 6. Define the target end-state and timeframe for change area. These six steps will give you a solid start down the path of customer-centric business strategy. The key is to not boil the ocean, be too attached to sacred cows, and limit future opportunities by screening them based on today’s resources and market states. The holistic focus enables employees to understand the key interaction/process activities, emotion/culture intersections, and internal/external variables that drive preference, engagement and market share growth. Embracing the interdependency of customer success turns the platitude of customer delight into a tangible, achievable reality.
Customer co-creation is a powerful technique through which customers and vendors can jointly work together to create value. I define this as “the purposeful action of partnering with strategic customers and employees to ideate, problem solve, improve performance and/or create a new product, service or business.” Today, almost two decades after customer co-creation was introduced as an academic concept by Venkatram Ramaswamy and the late C.K. Prahalad of the University of Michigan Business School, this promising process is finally finding its way into the mainstream.
Co-Creation Creates ValueCompanies as diverse as Zappos, DHL, The LEGO Group and Starbucks are now working with customers to engage them in everything from product creation to corporate strategy. Yet the prospect of sharing the kind of detailed strategic and financial information necessary to interact openly and transparently with your top customers can be daunting. Breathe easy. Your company can start harnessing the power of customer co-creation in a way that’s a lot less intimidating — by better understanding the customer experiences your company provides. That’s because consistently delivering the kinds of customer experiences that create value are key to building trust and credibility. And creating those high-value customer experiences in turn creates a virtuous cycle: When you invite customers to help your company in more strategic areas, your trust deepens those customer relationships by expanding engagement, encouraging accurate and truthful interactions and improving product performance.
Start with Qualitative Journey MapsYou can begin a customer co-creation initiative by taking three steps that invite your customers to work with you to create better, more valuable customer experiences:
- Use qualitative interviews to develop detailed “outside-in” journey maps — both pre- and post-purchase — for each key customer segment.
- Use that interview data to identify key interactions and gaps where the current experience your company is delivering deviates from those journey maps. Often the best way to do this is by putting together a cross-functional team in an internal workshop setting.
- Follow up your internal effort by inviting 6-10 strategic customers to a co-creation workshop aimed at helping your internal team to prioritize and improve the experience gaps. Enlist your strategic customers to help you set new success metrics and targets.
Create Listening OpportunitiesInviting your strategic customers makes a great starting point because they have a vested interest in making the time to participate. What’s more, implementing what comes out of the workshops demonstrates your commitment to keeping the communication lines wide open and minimizes your risk exposure as a company. But don’t get carried away and invite every customer to your co-creation workshops. Reserve participation for customers who represent your most strategic future growth market segments. That keeps the number of workshops manageable and your team focused on the right actions needed to move the needle.
Conduct a Co-Creation WorkshopCustomer co-creation workshops will be most successful when you:
- Host your customers — all expenses paid — at a nice but not elaborate location. Make sure that you include quality time for customers to network with each other in the agenda.
- Company attendees should be the same people who participated in the internal gap analysis. Make sure that the customer representatives you invite are all peers in terms of responsibility and authority. Ideally, you want to invite two individuals from each company who represent different departments or functions.
- Facilitate your workshop using an expert with deep knowledge and experience in journey mapping, co-creation and customer experience. Remember, your objective is to redefine in detail the highest-value journey.
- Create a learning opportunity for your sales, marketing and engineering departments by inviting them as silent observers.
- After each workshop, have the facilitator share and validate the outcomes with each customer including sharing an implementation plan with milestones, periodic report-outs of progress and questions from customers who participated in the workshop(s).
Keep CommunicatingCustomer co-creation is neither a one-time project nor a race to some finish line, but rather a new mindset and company philosophy. Every company’s co-creation strategy will be different based on its unique market dynamics, organizational culture, competencies and customer segment characteristics. As you implement the process, feel free to keep what works for you and your customers and discard the rest. And above all, think of best practices as learning opportunities, not a definitive recipe for success.
Originally posted on Salesforce.com Blog at http://blogs.salesforce.com/company/2013/10/killer-content.html 30% of B2B marketing budgets are spent on content according to the 2013 B2B Content Marketing Report, yet a whopping 50% of vendors’ content is ignored by prospects according to New Business Strategies’ research. You can sidestep this expensive loss of money and prospect-attracting opportunities if you follow this approach: deliver the right content, through the right channels, at the right times for your kind of customers. In our increasingly digital world, most buyers look online for helpful information, often in ways that are invisible to you, yet some don’t have to be. As buyers evaluate a business purchase, they go on a journey that includes evaluating different ways of achieving their objective, researching solutions and getting input from their peers. Along the way they interact with a lot of content. Where does vendor content fit into their journey? Vendor content should inform, educate and establish the vendor as a trusted resource throughout in the buyer’s process. The challenge is that vendor content is not as trusted as customer- or peer-generated content. Even before the white paper is read, the buyer assumes the vendor will be biased and not objective. The trick is for vendors to understand and deliver a content strategy that takes into account buyer perspectives. Instead of delivering content that ‘sells’, vendors must adopt a strategy of delivering content that ‘enables’. While the steps that B2B buyers go through are fairly consistent, their specific content needs and expectations are unique to each brand and market-segment. Vendors with the right content strategy can out-perform their peers in conversion by three-fold or more. There are three steps to creating a content strategy that drives revenue:
1. Know Your BuyersThe first step in establishing a content strategy is to understand, in detail, your customer’s needs and expectations at each step of their purchase journey. For example, in the journey mapping that New Business Strategies conducted for Good Technology™, during the Search phase buyers looked for information on the pros and cons of different technology architectures. In most cases, prospects just used Google to find the information online. A third party blog post with the right keywords, a technical whitepaper promoted through Google Adwords and a webinar or video on the topic could collectively dominate the search results on this niche topic. Once the buyers’ journey is discovered and documented, you’re ready to start aligning content to your buyers’ expectations and drive conversion.
2. Dump What No One ReadsWhile downloading a white paper might “earn” the buyer 10 points in your marketing automation system, the action is only relevant if the buyer acts on the content and, because of it, goes on to the next step in their journey. When your team understands the buyer’s content needs and expectations at each step of the buyer’s journey they can compare it with current content inventory and do some house-cleaning. Knowing what content buyers need and where they look for it enables content marketers to facilitate strategic, surgical strikes rather than bombarding the web and “seeing what sticks.”
3. Craft Your Content StrategyBest practices in content strategy are to align every content asset, regardless of whether it is created by a vendor, customer or influencer, directly to a specific step in buyer’ journey. Leveraging journey maps, marketers can define their content strategy in four steps:
- Match each content (and channel) to a step in the journey, by persona.
- For each tollgate, identify the corresponding call-to-action content.
- Define content assets in detail for each target audience.
- Expand lead scoring to include the sequence of content buyers interact with.
- Use language and messaging that matches your buyers’ tone, terminology, and definition of value.
- Let your journey maps define campaign/touch frequency.
- Match Call-To-Actions to specific tollgates to help buyers successfully navigate their internal processes.
- Narrow down digital channels to those buyers told you that they trust and visit.