Some of my recent blog entries around the evolution of marketing effectiveness capabilities collated and published in an eGuide.
The link is here and opens SlideShare in a new window.
Having a business strategy that centres around the customer is great, but only when the whole organisation believes and lives this ethos does it truly drive customer engagement.
World-class businesses have a mind-set of providing great experiences for their customers. This mind-set permeates the entire organisation from their front-line operations to the back-office processes and throughout their propositions and services.
They embed their customer-focused vision and strategy into their business culture so that it influences everything they do to best engage with their customers. These businesses recruit and retain the right people that best fit with their vision and values to build high-performing teams that are empowered to do what’s right for the customer. Ultimately, every business decision and customer action is framed in the context of how it aligns with the vision and delivers the strategy.
In essence, their ethos is their competitive edge in the marketplace and maximises the opportunity to engage their customers.
When it comes to marketing strategy, every business is different. You have to be: It’s a key part of your USP. However, some businesses are better than others in applying the marketing process because of their focus, how evolved their capabilities are, and the level of resources they make available.
From experience the most effective marketing businesses are the ones that focus on the customer, use insightful data to inform every decision and invest resources to exploit opportunities that best meet their customers’ needs. They have evolved their marketing capabilities to enable them to engage their customers with the most relevant products and services through the most appropriate channel at the most opportune time that yields the best result for both the customer and the business.
Getting to this level is not an easy journey. Established businesses may have amassed years of knowledge, skills and capabilities, but ensuring their data, legacy systems and thinking stay ahead of the game takes significant investment. Younger businesses might be able to leap-frog straight to the latest thinking, but the experience to truly exploit it doesn’t come cheap.
First steps: Direct Marketing and Automation
Businesses often start out with simple direct marketing techniques to select lists of prospective or existing customers that meet a short-term demand to drive (e.g.) increased sales. These lists can be produced using simple database tools and specialist technical resources, but as the number, complexity and speed of discrete campaign requirements grow, it quickly becomes a difficult problem to govern and remain agile so, marketing effectiveness can plateau.
The first major evolution is to invest in fit-for-purpose marketing automation tools that increase efficiency by helping the marketer to govern the overall activity schedule, embed test and learn techniques to help improve future targeting effectiveness, and manage the creation and execution of multiple, simultaneous activities to keep up with demand from whichever parts of the business are shouting loudest to meet immediate targets.
It is at this point that many businesses find their marketing effectiveness reaches another plateau and they get stuck just keeping up with business-as-usual. Marketing automation tools are good at ‘pushing’ campaigns that are driven by the business’ agenda and marketing calendar, but they’re not so good at being customer-friendly – e.g. was there a missed opportunity to do something better to engage the customer at a more opportune time and maximise customer value?
Being more customer-centric: Decisioning
To evolve further means overlaying a ‘pull’ approach where activity is driven by customer need and behaviour. Business rules and predictive analytics are applied through a decision engine to determine which, of all possible actions, is best in any given situation, often in 'customer time' during a transaction or interaction.
This personalisation process usually considers, for each individual customer: whether they are eligible for the action; whether it is the right timing; whether it’s the right level of relevance and appropriateness; whether it would generate the right outcome; and what the relative priority is in achieving the business goal.
Consequently, businesses tend to arrive at the third plateau of marketing effectiveness when the complexity of managing this decisioning process becomes too great: The number of different situations or actions has grown significantly, or overarching goals and constraints such as budgets, capacity or targets are inappropriate to apply at a customer level.
The next generation: Optimisation
The last evolutionary step is to optimise each decision to maximise the overall objective, such as return on investment and profitability, while satisfying all constraints, such as budget spend and enhancing customer engagement. This involves sophisticated algorithms to trade-off the different decision factors in each action to determine which best meet the overall objective while satisfying the constraints.
This might sound complicated…and it often is, but the pay-off is the business performance uplift it can provide, which can be significant. It also provides true, top-down control over marketing activity so, for example, flexing the decision factors provides an opportunity to explore different ‘what-if?’ scenarios and see which gives the best mix of business and customer benefits.
Keep moving forward
Whilst making optimal decisions could be the ultimate evolution, marketing effectiveness can still reach a plateau because your data, predictions and actions can quickly go ‘out of date’ in today’s marketplace: Every customer is different and has constantly evolving needs and interests that someone will be able to satisfy.
Consequently, the most important tools in your toolbox are insight and agility: Continually testing new ideas, actions and situations with customers to learn what works and what needs refining (or discarding) and then quickly adapting the capabilities of the business to generate value for your customers.
Real customer value is created by constantly listening to customer needs and adapting the business to deliver them.
Leading organisations constantly explore new ways to develop insights across customers and markets, pushing boundaries by creating value propositions around their ability to truly understand the customer and identify real life problems to be solved efficiently. They do this by continually testing different ideas on different customers and measuring the effect on a variety of dimensions such as customer relevance, opt-out, satisfaction, revenue, utilisation and churn.
Measurement enables these businesses to learn about which ideas work best for each customer and which do not. These learnings are used to refine their ideas for the next testing cycle and continues the thirst for knowledge about what resonates best with each customer to maximise their value and engagement.
This continual test-learn-refine methodology is central to their business credo and permeates everything they do, including their thinking, product design and manufacturing, customer relationship management (CRM), sales, analytics, service and marketing.
When a business’s market, competition or internal budgets change, it’s imperative to adapt quickly to stay ahead of the game. World-class organisations dynamically reprioritise initiatives and activities according to long term influences and short term changes in their market and business. They actively listen to their customer needs and rapidly adapt their capabilities and resources to address these needs, often ahead of the game.
This is achieved through an agile, co-operative environment of tightly integrated teams of users, business experts, developers and implementers. These teams are fully invested in the overall vision and empowered to prioritise resources to generate the most value in the time available. Prototyping enables them to quickly test the efficacy of new capabilities before committing to larger investment. Being agile enables world-class businesses to be more responsive to their customers’ changing needs and deliver experiences that drive better engagement before their competition.
Leading organisations constantly explore new ways to develop insights across customers and markets, pushing boundaries by creating value propositions around their ability to truly understand the customer and identify real life problems to be solved efficiently. They do this by capturing and maintaining a holistic view of the customer, bringing together all possible information from internal and external sources and then analysing and interpreting this ‘big data’ to identify realisable opportunities to maximise value. Every customer interaction becomes a research project - what if we did A or B or C for this customer? This continual test-learn-refine methodology is central to their business credo and permeates everything they do, including their thinking, product design, manufacturing, CRM and marketing.
Consumers are increasingly numbed by the myriad unsolicited and irrelevant offers and content sent by organisations to convince them to buy or use more of their products and services. Whilst the overall return of 'impersonal' marketing campaigns may be marginally positive, it is largely noise that wastes the organisation’s time and resources, and can erode brand image. Truly personalised marketing is much more than just getting the customer's name in the copy, it's tailoring the content to their individual circumstance, behaviour and interests to drive real engagement. So, why aren't more organisations doing it? Well, it’s fraught with implementation and operational complexities from having millions of customers with differing needs and behaviours, a multitude of products and services, and multiple interaction channels. Even more so when you factor in the organisation's unique business constraints, capabilities, processes and people. In essence, personalised marketing is hard to get right and many organisations just don’t know how to take those first few steps to see real customer benefits.
A personalised customer experience is key to customer loyalty so, in order to truly treat customers as individuals it is necessary to create tailored 1:1 engagement strategies that reflect each customer’s unique circumstance, profile and behaviour during every interaction. This means moving away from traditional one-size-fits-all product and service models and periodic, volume marketing that drives short-term ROI and, instead, use sophisticated ‘decision optimisation’ capabilities to determine the best engagement strategy, content, timing and/or placement for each individual customer to drive longer term loyalty and NPV.
Good customer-focused organisations have a Customer Relationship Management system that customer-facing staff use to view the customer record and support the sales process. It might include customer insights, such as segmentation or offer recommendations, but essentially it's a tool to enable efficient management of customer interactions. However, really great customer-focused organisations take this to a whole new level and treat CRM as a philosophy. It becomes a way of doing business with their customers that permeates the entire organisation, embedded into their business culture, throughout their operations and influencing every customer interaction. CRM is, essentially, their competitive edge in the marketplace.
The promise of the rich, new insight that Big Data could bring is a big incentive for any organisation to invest in data improvement…but, then what? Turning a data lake into real value takes more than just waiting for your analysts or scientists to discover the next big opportunity. It needs to be developed, commercialised and embedded to ensure that what’s relevant can be quickly realised.