This blog is the first part of a two-part series. Click to read Part 2.
The July 1898 issue of Scientific American introduced the first ever print advertisement for an automobile. It touts the benefits of the Winton Motor Carriage – it is better constructed than the competition plus it is easier to care for than a horse!
Then came the Don Drapers of the world who refined the discipline of pulling emotional levers to sell mass-produced products to the generalized mass of consumers. This was nothing more than a sophisticated version of the Winton Motor Carriage advertisement. Brand messaging was still in control of the marketing function.
Fast forward to today, with the advent of internet technology and where customers are more educated and therefore can be more selective in how they want to experience the brand be it via the call center, the physical store, online, or mobile. They want to shop with ease, comparing prices and reviews, as well as be delighted in discovering new products. The empowered customers of today have tipped the traditional buying-selling relationship where customers are in control of the brand and their experience is key.
As customers’ expectations evolve, so must the business operations such as marketing capabilities. Additionally, deep cross-functional collaboration is required to deliver the compelling customer experiences effectively that cutting edge marketing teams are envisioning.
Forward-looking CMOs are therefore taking on broader responsibilities to help manage the requirements for delivering exceptional customer experience while they are simultaneously navigating the shifting landscape of marketing and technology.
Customer obsession is not just a buzzword. It is a strategy to stay in control of your brand in today’s hyper-competitive marketplace
An influx of choices, competition, and technology has necessitated companies becoming more customer-obsessed to create customized customer interactions and drive deeper customer engagement. This includes investing smartly in brand advocacy programs that recognize the power of loyal customers and word-of-mouth.
In a 2016 survey from the BrightLocal Consumer Review, 86% of consumers say they trust online reviews as much as personal recommendations (vs. 79% in 2013). The value created from word-of-mouth advertising and referrals can be seen not only in increased sales but also in longer-term customer engagement. It is shown that brands that leverage social influencers to spread their message are seeing up to a 10X increase in conversion rates. And not surprisingly, customers who were acquired through social influencer efforts have a 37% higher retention rate.
While it can take years to build brand equity and a loyal customer base, it takes very little to undo the goodwill and reputation of a company. United Airlines learned this lesson the hard way when it failed to remediate the $1,200 of damage to Dave Carroll’s beloved Taylor guitar. After failing to receive a resolution from United for nine months, Carroll, a member of the band Sons of Maxwell, made a music video entitled “United Breaks Guitars” on YouTube. Within four days of release, the song garnered 1.5 million views. And within this same period, United’s stock price plunged by 10%, costing shareholders approximately $180 million. While the song may not be the sole cause for United’s $180 million loss, it certainly showed how social media and voice of the customer can have a real impact on brand equity.
Companies must pursue a relentless customer-centric engagement strategy and transform the brand and organization in the process of doing so. How to do this a big challenge for CMOs as they are faced with the complexity of changing technology, people, vendor ecosystem and the need to integrate and rationalize data like never before.
In a complex, evolving, and customer-driven marketplace, what can CMOs do to stay ahead of the curve?
As customer’s needs, expectations, and behaviors shift, so too must an organization’s internal business capabilities.
Plain and simple, business capabilities are the “what’s” that are needed for the future marketing organization and its objectives/priorities. The “when” is dependent on the readiness of you and your organization for a potentially large-scale transformation. The “why” relates back to an inordinately complicated and exponentially expanding ecosystem. (How expansive are we talking? At last count, there are over 3,500 marketing technology solutions currently on the market – that’s 87% growth over last year.) To avoid analysis paralysis, it’s important to know where and how to invest in the right technologies for your organization. And finally, the “how” will be addressed in an upcoming blog.
Business capabilities provide the fundamental infrastructure that enable organizations to not only withstand, but to adapt to and benefit from shifts in the marketplace. To that, most companies might claim: “Sure, we have business capabilities! We have marketing and finance and operations and the like to support our success.” That’s not precisely what we’re referring to. We mean consciously coordinated capabilities, not an historical assortment of tools and abilities. We mean meticulously orchestrated capabilities that enhance each other’s performance all in the name of customer experience.
In Part 2 of this blog, we will break down business capabilities in more detail and also discuss why marketing and innovation go hand in hand.