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Salesman didn’t die.. but got help

Every time something new comes up and people jump on it, they learn something new but it seems that they often start forgetting the best features of the previous while learning. Then came the content marketing era and inbound marketing surge. Now there is a swing back to ABM (Account based marketing and proactive sales). Danny Wong from Blank label just published an article about this with 9 B2B sales predictions for 2016 in Huffington Post (source: http://www.huffingtonpost.com/entry/the-future-of-sales-9-b2b-sales-predictions-for-2016_us_56beb9b0e4b06fb6526b67c9)

It was great article and I totally agree with Mr. Wong.: Outbound and account management are musts, buyer journey and customer centricity are imperative. Marketing automation is fantastic in existing customer management and content marketing. Still, in case of new prospect recognition most visitors don’t leave their contacts or signs of interest which leaves most potential customers unrecognised. This is something that has bothered me.

Then I learned about Leadforensics… (because they reached out to me and outbound works:-) ) They gave me a short introduction to their software (phone+video), we did a pilot with two weeks of data capturing after which they presented me the results and pitched me an offer. I got hooked and bought the license.. and I am even more hooked now. (By the way, their process is very much worth experiencing too, its brilliant. You can book your trial contact here)

This is something I just have to share, because I find Leadforensics to be so elegant, easy and effective. The foundation of the service is IP address recognition. The service lets you know from which companies people are visiting your website, how many of them, which content, time spent and so on. In B2B this intelligence is often enough. You know which companies are looking right now in your sector and they are already considering your company. In case you are considering marketing automation or need leads for sales to follow, Leadforensics is a great tool to take as a first step in operational and cultural change or as part of the lead generation development in marketing automation project. This is what you get (this data is from this site):

#1 Visiting organisations

1 visitor list

#2 Sorting visitors

2 Sorting visitors

Example of multivisitors

3 multivisitor

#3 Company details and visitors

4 company details

In this case 3 visits by one person

5 visitor number

#4 Potential people to contact

6 contacts

#5 Dashboard

7 dashboard

#6 Sorting and actions

Now that I have the tool in use, I can upload my customer register and create a current customer group with assigned contacts. I can also create prospect list with assigned persons who will be notified about new visits. You can also define goals, not every content is a sign of buying intent, but some are exactly that. Assigning goals and actions for them is quite easy and effective.

My company FutureCMO – Catalyst for Growth is a super temp one man show with a network of other entrepreneurs and I am mostly helping large companies with their digital and customer experience transformation. My challenge is, that projects are large and take my time while running them leaving me little time for selling next cases. When they end I can easily drop between projects. This kind of transformation work is quite time sensitive and frequency of doing it is rare. Also, The lead-time from interest to project could take a lot of time too. Another challenge has been, that I have a globally competitive knowledge, methods and approach, but my work has been local sofar. Now I am going to make my first attempt to get my first very own international clients onboard. While working for WPP and Omnicom this was natural, but as an entrepreneur now it would be a big leap. This is why I think Leadforensics will help me target right companies at the right time and make certain that I can get my projects in without long stand-by periods. I am also working on a start-up for which we are raising money to get started and knowing which companies are interested in our pitch is very important. I am only in the beginning of using Leadforensics, but I am quite impressed with it.

In case you find Leadforensics interesting, you can book your own demo and trial period here (Link URL )

In case you are using some other tools for lead recognition, I’d be very happy to hear about your experiences!

Segmentation 3.0 – disrupting marketing, media and management

Designing advertising, services, products or doing media planning requires us to understand customers and target markets. The more we understand about behavioral preferences, attitudes, lifestyles and multiple other variables, the better we can do our jobs. Combining all sources of data: research, analytics, buyer segments in real time bidding (RTB) targeting engines, qualitative research.. its such a wealth of data that it has become too big to manage. Right now we need to be able to simplify and turn such wealth of data in to understanding and actionable priorities. This is exactly what segmenting should be all about.

Segmentation 1.0 is about creating customer understanding inside organization. The segments are actually stand alone pictures and stories about customers. These segments can’t be connected to data, which means that they steer creativity but don’t offer KPI’s, real business management tools or monitor market share changes.

Segmentation 2.0 is about more data driven and actionable segmentation. Dynamic interest grouping with online targeting tools allows you to calculate probability of click or purchase and adjust your investment/segment accordingly. Same method applies to existing customer analytics, which offers steering such as next best offer, likelihood of negative churn or the level of monetary value of different segments. It’s already about making data actionable. However, these technology specific, not market level segments.

There are two cases of Segmentation 2.0 that are now leading the way to 3.0 available in Finland. Finland is interesting because of advanced population register allowing you to do interesting solutions easier than elsewhere. However, these learnings will soon become internationalised.

The story about Finnish church is quite eye opening. Since 2000 the Finnish national church membership level has dropped from 85% to 72%. The Church is in crisis.

Church churn

Church has been responsible for registering population since the beginning of organized society in Finland. Everyone who gets baptized start paying church tax as part of their national taxation. My personal church tax was more than 1000€ last year. Losing members means losses in church taxation and losing young people means losing their life time taxes calculated in billions.

Church needed tools to understand their members and ways of preventing churn. Actually the church needed to re-invent them selves. They needed segmentation. Jarmo Lipiäinen, head of Kotimaa’s sales and marketing recognized this challenge and took action. Member 360 was born. This segmentation divides people in to segments by their religious tendencies and multiple other lifestyle variables. This segment tag is attached to everyone in Finland, member or not.

Screenshot 2016-03-16 10.17.58

Picture: Main and sub-segments

Screenshot 2016-03-16 10.18.12

Picture: Example profile – Disconnected experience seekers

Making the segmentation applicable required tools. Jarmo Lipiäinen led the project and they created data visualization tools for parishes. You can now look at areas and understand what kind of segments are there and buy addresses to people from different segments. This allows church to speak to their members and prospects in language and perception they can agree with. Church is not just about religion, it’s a second layer of safety net for under privileged people and has multiple other roles in society . People don’t leave church only for religious reasons, they expect church to act for greater good and help people. Church stands for a lot more than God.

Since the Member 360 was introduced, now +100 parishes are using the tools and changing the way church works and is relevant to their members. Church is now rewriting their story, hiring service designers to design engagements and services for members. One experiment, internet priest with chat, was very popular among young people who were in distress but would never have reached out to church advice or someone to talk face to face. The role of church, the message and ways of being part of peoples’ lives is now changing fast. Church is learning member centricity.

Commercial 2.0 segmentation

Another initiative took place simultaneously on commercial side, Fonecta Buyer Classification. This toolkit looked at people’s lifestyles and buying preferences and was also connected to the entire population. On top of that, it is also connected to   media buying tools and TNS research data. I have personally implemented multiple cases with buyer classification in travel, restaurants, hotels, telco and retail. Buyer classification has 8 main segments and sub-segments.

  1. Budget-Concious young adults
  2. Bargain hunters preferring finnish purhases
  3. Parsimonious Pensioners
  4. Brand-Focused thrill seekers
  5. Ordinary citizens
  6. Service-seeking couples
  7. Family-focused quality seekers
  8. Solid and prosperous elite consumers

The segments can be attached to your own customer database which allows you to see how many people there are in each segment, how they behave, how valuable they are, what do they buy. You can use this understanding to reach out potential new customers out there based on insights from your own data. Buyer classification allows you to connect internal and external realities with same segments and also monitor market development in numbers: who’s winning and losing what kind of customers. Business is not just simple numbers – won and lost, its very much about value too. The whole point of segmenting is about understanding where to concentrate your resources and optimize your profitability. You have to make choices, segmenting allows you to do make better decisions for those that matter most. This kind of generic segmenting attached to media buying and external data is a whole new game for business KPI’s and corporate management. It’s a possibility to connect creativity, resource allocation and business goals together

Human 360 – Next generation – segmentation 3.0

The next level is currently entering the market. Same segments are now connected to online behaviour too. You can now do online media planning by segments and use same segments in real-time-bidding. That’s a minimum standard in this day and age, but there’s more.

Member 360 and Buyer Classification were single purpose segments that could be adapted to other purposes but weren’t optimized for them. The next generation is about connecting multiple segmentation tools together:

  • 1st You have your own core segmentation or generic segmentation that has been made for your business sector’s specific needs. This segmentation is used for business management and company wide KPI’s
  • 2nd You have supplementary contextual segments for further insights: eg. Food, travel, technology, sports, politics, religion, fashion, housing,… you name it

To say it simply, the new generation approaches individuals holistically. People have different kind of passions and interests, capabilities and life situations. These contexts can be translated as passions and orientation. You can now approach people based on their orientation and you can analyze what kind of passions and orientations your current and potential customers have. You can also calculate scores for each segment allowing you to evaluate which approaches to your customers have strongest likelyhood of meaningful impact. Creation of business scenarios and relevant communications has never been easier.

Screenshot 2016-03-16 10.22.30

Such insight can be used for creative planning, media planning, new service development, partner selection,.. well, designing the future of the company.

Segmentation 3.0 enable us to connect 4C’s together and create a corporate GPS for success:

Screenshot 2016-03-16 10.22.42

Sofar Google has given a price for words with Google Adwords. This kind of segmentation will give similar price variation for people, it becomes the unifying currency in media buying. Some people have a much higher profitability potential than others. The future of media profitability will be dependent of reaching those audiences and people, advertisers are willing to pay most for. We are truly entering a new era in data driven analytics, planning, marketing, creativity and management. This development will have major impact on general management, mediabuying practices and entire creative industry. This kind of methods and tools will allow us to work miracles in unseen scale.

Aller Refinery

This development will further enhance marketing’s strategic role in management and strategy. Data will enable us to manage end-to-end processes better than ever

Screenshot 2016-03-16 10.22.54

Author Toni Keskinen and Jarmo Lipiäinen have published “Journey with customer – from product centricity to symbiosis strategy” –book in Finnish 2013.

 

Disruptively Customer Centric B2B sales – Tools for Crossing the Chasm

B2B sales has been under major disruption due to content marketing and automation surge. I am a big believer and practitioner of these tools and methods my self and I’ve been convinced that this is the way to create naturally supporting customer journey towards a happy end and the results have proved how well it works. Now I have to admit that you can go way beyond.

Let’s  consider the B2B buyers and procurement and their process:

TOP OF THE FUNNEL has to do with planning and designing the change. This work is mostly done with internal stake holders, consultants and designers. The buyers are exploring options, pondering their current solutions and how they fit with the change. This stage is really about learning and defining what would good outcome look like.

PROBLEMS:

  • The buyers don’t engage with vendors at this stage, although they are likely to use vendors’ content marketing materials. Most of the buyers’ time is spent searching on Google.
  • Buyers have hard time finding relevant content because the market is quite cluttered with generic content that doesn’t really support buyers’ process. What customers really need and look for are: Solution facts, Business Cases, White papers, Success Stories, Reviews… Tangible and concrete tools for their process. These are not easy to find!
  • Customer would benefit from dialogue with the vendors, but they don’t do it because they don’t want to get harassed by sales. Buyers want to drive the process and manage it efficiently. Active sales is considered disturbing.
  • Large vendors dominate the space, because they have resources to produce content, they have strong page ranking and their brands pull customers to their resources. This logic and dynamic will enforce status quo and buyers don’t find NEW, INNOVATIVE AND MORE COST EFFICIENT OPTIONS. These vendors are not known yet and they concentrate on their product and service development – not in content creation. Their page rank is low and Google doesn’t find them. The buyers interest is to find the best solutions but they have very hard time finding them.
  • When the logic of top-of-the-funnel goes like that, it influences the request for proposal (RFP). The RFP and vendor list that will get that RFP will consist of well known players and leave very little room for innovative approaches
  • You don’t get trustworthy reviews from B2B companies anywhere, really. It’s difficult to compare sales pitch with actual delivery experiences. Success cases underline success, but hide failure.

Screenshot 2016-01-19 07.06.45

MIDDLE OF THE FUNNEL is about engagement with 3-10 recognised players who will get the RFP. This is the first time for the buyer to allow vendors to ask questions and study options with them. Vendors have experience from multiple customers and they can reflect previous cases and their results which could potentially lead to better outcome than the one outlined in the RFP. Connecting customers challenges to vendors solutions could create a new solution, which would be the best case

PROBLEMS:

  • Most innovative and best solutions are not the ones to get the RFP and the customers will probably choose solutions that are established, expensive and quite similar to those that their competitors are using
  • The most innovative people don’t get to influence the buyers thinking and the buyers don’t get the kind of edge to their operations that would have been possible
  • The market logic will enforce status quo: innovative SMEs don’t get to grow and once their technology is proven the entrepreneurs will make an exit and sell their company to big players years after the development of better solutions and at that point the big players will introduce the solutions to the market and scale them. At this point buyers don’t get such benefit from their choice anymore and they will pay much more than they would have paid a couple of years earlier

I met the Founder and CEO of SpendLead Fabrice Saporito last autumn and their solution really impressed me. SpendLead is an environment where the optimal buying process has been made possible and allows the most innovative players to engage with buyers early. The founders have their history in procurement and they have developed a dream environment for the buyers to realise the optimal buying process!

SpendLead founders have their history in major companies buying processes, which has allowed them to get these buyers in. There are already major companies procurement departments which have combined buying power worth more than 200 Billion/year using SpendLead which gives the service a unique value proposition. eg. BBC

Screenshot 2016-01-19 07.36.28

The service has been built around these buyers interests, which means that they have embraced it and adopted it rapidly. It’s now time for sellers and marketers to take advantage of this possibility. How it works for marketers promoting their services in SpendLead? You publish exactly what the customers are looking for:

Screenshot 2016-01-19 07.43.23

And you get tools to do you engagements and lead generation:

Screenshot 2016-01-19 07.43.40

For an SME this environment gives full toolkit, allows very easy publication and enables anonymous engagements with buyers who want to learn more at the top of the funnel. This will speed up and strengthen the innovative solutions adoption. This environment magnify solutions and their impact, not brands. That’s why I think that SpendLead can disrupt the market logic over the next couple of years. The service is completely free for buyers and the business model is based on leads. Their pricing is very affordable, 1,99USD/lead and it will probably disrupt the lead generation market also in case of bigger brands. At least it is great way for SME’s to scale their sales reach. I don’t think that big companies can afford to neglect this kind of player in case their buyers adopt the service.

SpendLead is definitely worth trying and their thinking is solid. I’m really interested in seeing how this kind of disruptive new service will change the way we do B2B selling and buying!

In case you have experiences about customer dialogue and sales process inside SpendLead I’d be very interested in hearing actual experiences from both buyers and marketers point of view

Making millions with pennies – BEHAVIORAL ECONOMICS

Growth and productivity

When I think about board member’s day to day life and board meeting’s average content, I know it’s full of big decisions. What is our growth strategy? Are we willing to invest millions of euros/dollars in technology in order to enable customer relationship strategy and automation? How can we reduce our churn? How can we lower over all costs and increase productivity? Thinking big is important, but I’ve come to conclusion that thinking big also makes board members blind to potential that is at their reach with minimal investments.

I’ve been working on direct marketing, sales development, customer journey analytics and customer experience-  and customer interface design since 2004 and learned that the potential is amazing. Realizing the potential often only cost pennies, but requires new point of view and strong experience. So what is this really? It’s BEHAVIOURAL ECONOMICS. Using BE in order to rapidly create major changes has to do with Choice Architecture and Nudges, leveraging behavioural patterns. It’s very much like Service Designing, but doesn’t necessarily require total make over, just adjustments. I decided that I collect and publish some of the actual outcomes that I’ve discovered with my clients so that there is tangible proof of what I am talking about. These cases are anonymous and from multiple market areas including both B2B and B2C cases:

Conversion: Sales increased by 240% by only re-designing the way the product was introduced and how customers actually were steered to made the purchase. Investment level 5000€ – sales value in millions
Sales: Changing messaging order and starting marketing by allowing own members to buy first, before others. Creation of momentums inside the campaign. Sales index was 200% in a first year and 260% in second year compared to the original target budget. Investment level – no change. Double profitability impact:  higher margins and stronger sales. The sales impact was + 20 millions.
Churn reduction: By changing the way how the company did invoicing, the company’s churn reduction was almost 1/3. Investment level in thousands – savings/improved loyalty > 1 million
Customer service cost reduction: Changing the way invoicing was done, we were able to cut contact center calls to half and allocate that free capacity to proactive contacting of customers who had given critical net promoter scores. Multiple impacts: NPS increase, higher loyalty, higher ARPU, lower cost to serve. Customer feedback also gave insights to overall service and product development. Investment level in thousands – impact in hundreds of thousands
SEO/SEM improvement: Cost of acquisition is often a critical profitability factor. In one case I analysed company’s current reach of SEO and SEM and came to conclusion that 1) Their all key words were targeting the last moments of decision making = most expensive 2) They completely missed the contexts that made their service interesting and valuable = high reach, low cost. Also, they renewed their website, which cut their lead generation to half. The solution: conversion fixes on website with minimal cost, new approach to SEO/SEM. Investment – re-allocated current marketing budget, projected impact more than 200% sales increase
Proactive service messaging: Sending customers service messaging with automation multiply their frequency to use service, increase spending and reduce churn. Investment apr. 100K, sales increase impact in millions.
What board members should consider:

We already have technologies and on-going spending – can we improve their impact
We already have thousands/hundreds of thousands/millions visiting our customer interfaces. Can we improve conversion to sales?
What is our level of contact center costs? How many contacts is there? What is causing those contacts? Can we do something about it?
What is our churn level (leaving customers)? What does that mean in euros/dollars? Can we do something about it?
We have tons of data. Have we really understood the value buried in it? How can we transform data into money (operational improvement with current offering – potential for new businesses and offerings)
One case I am currently working which is special for one major reason, its public, is Kela (Finnish pension insurance company). KELA is government managed and doesn’t have competitors, which means that I can talk about the case without breaking any NDA’s. Due to a legislation change, Kela is going to take over a new service area in the beginning of 2017 that currently employs 600 working years in employee resources. I have a privilege to analyze how customers are currently using Kela services, how and why they use office- and call center services. Based on this data I am looking for ways to increase self service level and decrease cost of servicing. The goal is, that by changing the customer interfaces and service processes we can decrease the service need so much, that Kela DON’T need to hire 600 more people to fulfill the new responsibilities. Since I started analyzing data, interviewing customers and customer service people, we have already found improvement points that allow Kela to cut hundreds of thousands and eventually millions of calls or manual applications. Very little user interface element changes alone can reduce costs by 1,5 million euros in one single service segment. These findings are now in process to be realized with lean UX workshopping.

There’s one specific finding that I just have to point out. In every application context Kela gives an average decision making time. The idea to give an average time is natural and intuitively right way to approach the customer need. However, there is a problem. Giving an average time for decision will create expectations. Giving an average time actually means that HALF of the applicants feel they get below average service, get worried and call. The number of such calls is +200K in total. What can we do? We can change expectations by changing ONE LINE across all services.

“The decision making typically takes AT LEAST xx time”

The change of this one line has very meaningful benefits:

half of the customers feel that their service EXCEEDED expectations
The other half is more patient
The projected saving for this very simple change is at the level of +1 million euros. The cost to make that change is 0€. When scaling all improvements together the savings will be calculated in multiple millions.

What is that KELA case really about? It’s about recognizing why people get worried, feel anxiety, what they don’t understand and how can we improve their feeling of confidence that things are going well. In practice we improve customer experience. In a commercial context this means higher NPS, stronger customer relationships, higher demand, higher conversion rates, lower cost of acquisition… the list is endless and it’s full of direct profit impacting factors.

What I suggest for your next board meeting is, that you take the board consideration list above and put it on  your agenda.  Then honestly consider if there is room for improvement. My experience is, that there always is. Then contact a person who has real experience about recognizing improvement points, analyzing the data for potential and capacity to create insights and design changes that make millions in ROI.

This is what I do.

Here is a short introduction to my offering and how does it impact company’s customer centric transformation, management, culture, infrastructure and processes: Behavioural Economics offering


Let me know if you want your company to take a leap to a whole new level of productivity. Let’s have a chat and see if we both get excited:)

Toni Keskinen
+358 50 55 222 76
toni.keskinen@futurecmo.org
http://www.linkedin.com/in/tonikeskinen/
@Toni_Keskinen

Business Design and Transformation process for growth

I have been privileged to be part of some major enterprise transformation processes over the past decade that have taught a lot about how do you actually enable and enforce change for customer centric, holistic, agile and innovative corporate culture. In the business world we are living in today, brands are created with customer experience and corporate culture. The capacity to serve customers in an omni-channel world the way they want to be served is becoming a competitive requirement instead of being an advantage.. This can not be done with silo organisation with responsibility barriers, split budgets, strict hierarchy, fixed roles and waterfall development processes. Those things are true status quo traps that will eventually kill any business sooner or later.

Just like Jeff Gothelf and Josh Seiden, the authors of Lean UX -book, I got fed up with cases that were perfectly planned but never implemented or the implementation was too far from the plan and naturally didn’t deliver as expected. I’ve also grown out of creating strategies and roadmaps and moved to actual change making. I really love Lean UX. Lean Start-up- and design thinking adjusted to established enterprise environment. Solving real problems, creating customer insights, direct applications and implementing them asap is much more rewarding for everyone involved than just designing the change. Getting results fast accelerate learning, inspire innovation and motivation beyond anything else. The gradual change is also much easier to manage than a complete turnover at once.

The key rules for success are:

  1. Outside-in > understand customers and markets first, then look at your offering, customer interfaces, brand, invoicing, agreement processes, up-sales, cc etc. Be honest and learn.
  2. Bottom-up > The need for a change should be recognized at the board level, however the change learning should start at the bottom – with people who are directly communicating with customers and know their frustrations and understand company’s challenges. Most often they can directly tell you what needs to be changed. Once you know these, you can take it to the board room and be honest again and learn more
  3. Do and learn fast, adjust and improve. Don’t try to get everything right before releasing something. There are no watertight facts before there are real life results. Most things can be tested small before scaling or making major investments before proof of concept. Stay curious and lean even in case of larger enterprise

Based on my experience, this approach works every time:

customer centric management transformationIt is crucial to work you way bottom up in order to obtain actionable insights

Bottom-up strategy creation and implementation

1. Create customer insight. Use customer data, analytics, scoring model, online data, research and any available data sources in order to understand who the customers are how do they behave. If you don’t have enough data, get it, make 1-2-1 interviews or research and mash-up other datasources. Create a customer journey map based on these findings and engage with people who work in direct customer interfaces like sales, retail, call center, research, support, invoicing, credit negotiation, specialists, etc. By connecting these two realities you can see a couple of things:

  1. Who are the customers, what are they doing, how and why?
  2. How does this customer behavior show in your customer interfaces, what are the most important pain points and frustrations customers have and what can you do about it. Once you have the facts, you can see how you can extract painpoints by re-designing the customer journey experience across customer interfaces and how that will reduce costs to serve while also improving NPS. That has a direct bottomline impact. Also, you can recognize opportunities that will help you sell more effectively, improve conversion rates and thus drive marketshare and sales up.

When you have understanding about the customers and you can define Customer relationship-, Customer experience vision, set goals and recognize their impact to revenue and bottomline. The Customer interface and customer analysis becomes the roadmap for better and enables a shared language thru organisation. Everybody can agree with the facts and understand their own role in the customers’ process. The discussion is around customer behavior and going forward, it’s not about blaiming anybody for their decisions in the past. The mandate for change comes frome the customers and dictates what needs to be done. This is why everyone can agree with it and don’t lose face or feel the need to defend prior decisions. In every single case this first part has been capable of igniting inspiration, trust in own capabilities to do meaningful changes and realize them. Insights and understanding create momentum that makes it possible for a company to change fast in a meaningful way. This change is done because people love it and their hearts and minds are burning to make an improvement. It’s not done because management has told employees to change or because the management team has come up with new organisation chart… This route to transformation can be rapidly implemented and the results are quickly at hand. These results justify futher improvement.

It has been interesting to learn, how much silent knowledge, un-tapped knowledge and supressed passion can be found in any given organisation. This capacity can only be realized by deploying the change within the organisation. This is why outsourcing the planning is not a good idea in my opinion. Carrying light inside with a bag doesn’t help, you need to light up the people. Once you release that passion and knowledge in constructive way, it will change the organisation permanently. The way of working will change, it will improve job satisfaction and willingness to push the limits further. At best, it will create a positive cycle for competitive advantage and growth.

2. The next stage is about turning insights and understanding in to systematic Way of Working. This is actually very practical consideration about recognizing responsibilities, ownerships over larger entities, creation of KPI’s and information flows or designing the approach to commercial management in general. Often there are factors like scorecards and conflicting interest in the organisation that need to be fixed, rewarding mechanisms or silo cultures that just need new perspective and solving. Very often dysfunctional organisation has everything in order on the surface, but multiple little things that paralyze the operational engine, innovation, productivity and motivation. Sometimes management isn’t even aware of such issues that could be historical relics that should have been solved ages ago.

What ever there is in the way of working, the new perspective gained in the first stage will help in finding solutions to them. The work is done gradually case by case and the excitement and positivity for change gradually take over the entire personnel. At this point, the company should reach a positive cycle that feeds winning mentality, job satisfaction and capacity to innovate.

3. The first two stages have already revealed the challenges that can be found from systems architechtures and platforms. While the first stage already enables major improvements with UX design and coding, the platforms enable strategic development and automation. This naturally takes more time and is different kind of project, but by this time the needs, benefits and requirements should be selfevident. As the learning has already started at frontend level, the understanding about available business benefits should also be clear for decision making and investment planning.

This kind of change can improve efficiency and productivity very fast without showing anything outside yet. However, when the company is really changing it should also show outside. In my experience advertising is actually very effective mean for internal change communication. The promises that the company gives outloud enforces the internal resolve to follow thru and deliver as planned. Advertising is about communicating the core values and that goes to own personnel, customers and the market. There’s just the question of timing that must be carefully considered. If the advertising starts too early and the personnel hasn’t really got on board, it might have double negative impact:

  1. internal feeling of disconnect between promises and capability to deliver and
  2. customers feeling that there isn’t enough substance behind those promises which could damage the brand and destroy the momentum that would have been available.

Like anything that has to do with people and emotions, these are delicate matters and require consideration. In order to do things successfully you need to have a clear plan but it has to be flexible enough so that it can be deployed in right order.

These transformation stories are truly interesting and educating processes. I’d love to hear your stories and experiences about them. Please comment and share:)

SEE ALSO:

About Author

7P’s interview – Ephlux Insights with Toni Keskinen (of Future CMO)

Here’s my interview with Mr Babar Khan Javed about the backround of my thinking that led to re-creation of Marketing’s 7P’s published in ADMAP November 2014

Further reading:

Author: Toni Keskinen, Change Catalyst & Executive as a Service
http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

Loyalty in an interactive digital market


The concept of loyalty is a very profound human emotion like love and trust. Loyalty is an outcome of shared values and experiences, forged with time. It’s not a fling, its about integrity, trust and dedication. Loyalty truly is the holy grail of brand relationship even in the interactive digital marketplace. When we think about loyalty between people, we know that it takes a long time to develop such deep feeling of trust. The same aspect of time certainly applies to brands too. Brands are concepts you can see, feel and experience, even have a dialogue with via customer interfaces and people representing the brand in question.

Well, think hard and consider which brands, products or services are you loyal to? I would imagine there are some. Then think, which brands show genuine interest in you, making your life easier, helping you, respecting your wishes, sharing your values, trusting you completely. Can you think of any?

Companies are quite good at “doing things right”, professionally and operationally delivering what is expected from them. The superb quality of certain product does create trust and loyalty as such due to rational and emotional consideration. This is especially true when your life could depend on that product. On the other hand companies are not that good at “doing the right thing”. Doing the right thing has to do with a context of engagement, feeling of fairness and trust. If your phone breaks a day after the guarantee closes, what does the company do? In case you have bad luck and you fall behind you payments for some period of time, what does the company do then? If the company has a choice between 10% higher profit margin and environmental or societal benefit, which will they choose? There is a lot of data that shows, how profitable “doing the right thing” actually is in case of reclamation. When you do the right thing, listen to your customer, pay attention and do your very best to make things right, the customers reward such deed with their wallets and hearts.
So, my advice for brands is coming straight out of the Bible, Matthew 7:12, The Golden rule: “Do to others whatever you would like them to do to you.” This truth is eternal and applies to Brands on- and offline just as it does to people. Loyalty truly is a concept that takes time to evolve and it can only be earned over time.
Well, the concept of loyalty, in case of commercial operation, means that brands are measuring their brand loyalty with KPI’s like RFP analysis (recency, frequency and monetary), length of customer relationships, life-time-value, share of wallet and Net Promoter Score. All of these measures have to do with loyalty, but they could also be about something else. Not all behavior that appears to be loyal has to do with the concept above. Let’s take a look at commercial loyalty strategies:
1. Rational Loyalty
2. Emotional Loyalty
3. Habit based loyalty
4. Imprinted customers
5. Legal loyalty
6. Structural bonds
Rational loyalty
Most loyalty programs don’t deliver brand loyalty, really. That is due to the fact that people have all loyalty cards and they pick cherries from where ever they happen to find best offer at that point in time. Points based loyalty programs are often buying loyalty from customer. You get more discount when you buy more and you get offers only available for members. Loyalty can be completely rationally driven model that create a behavioral pattern for customers to buy when it’s cheap. Naturally, they don’t if you don’t have an offer for them. In the open online market its very easy make comparisons.
Most often, members also get bulk messaging in which there is nothing personal. A membership equals the license to sell. Selling is often positive. Customers consider selling as active relationship in which the company is offering new services and value for them (servicing by selling). Buying several products or services from a single company generate stronger relationship and lower attrition probability. Everything above is basically positive, better than no program. However, when customer relationship is based on rational decision, another company with more aggressive approach can do considerable damage.

Emotional loyalty
Emotional loyalty has to do with the true concept of Loyalty. Brand as a whole has its foundation in customer experience, quality, integrity, service, ethics, trust, corporate responsibility and values. If the brand feels right for the customer he’s less likely to consider competitors. Also, the loved brands become part of customer’s own identity and they don’t lose customers without warning. If customers truly love your brand, they let you know if your pricing or position is having a strong challenger and they actively ask your approach to the situation. Emotional loyalty is not price driven. You can have healthy margins and customers accept it. In such a position customers also offer their helping hand and are much more open to participate in open innovation or co-creation dialogue or giving you advice how to improve your service even further.
In current business environment there’s too much of everything all the time. It’s very difficult to differentiate yourself by offering or pricing. The truly emotionally driven approach to loyalty is to consider how the company can show it’s loyalty towards customers. How do you take care of your customers? How do you make certain that the value you are delivering to your customer becomes even higher? How do you solve problems that your customers have?

Habit based loyalty
In most businesses there comes a time when customers re-consider whether to buy the same brand again or to buy something else. If the customer is involved in continuous relationship it requires active sign-off from the current relationship. If you can turn single purchases in to continuous relationships in any way, you are likely to drive much higher loyalty. That’s the best part. Once the customer is engaged in continuous relationship it requires time and effort to close it. The bigger the required effort is, the less like people are to go thru with it. Some of the best psychological themes for loyalty are laziness and minimizing points of discontinuity creating experiences like billing. One of the great ways of improving loyalty is allowing customers to have automatic payment methods directly from account or via credit card (eg. Netflix and Spotify). As a result customer does not get direct invoice for the service delivered but it’s included in credit card invoice or directly paid from account. Attrition probability drop is quite significant with such a method and the relationships could continue for as long as the credit card is valid.
When people establish behavioral patterns like reading a newspaper every morning, their likelihood of attrition is much lower. Habit based loyalty is really about keeping the status quo. Low profile and making certain that there is no need for active consideration for the customer enable very profitable type of loyalty.
I have have been completely loyal to LensOn contact lens selling online store for the past four years. This is because they send me an email enabling me to repeat purchase with only two clicks. I didn’t even remember the brand, but in case I didn’t order instantly I would go back to my email and search: “contact lenses”. This search will bring me the email I am looking for and with only two clicks I’ll order new package of contact lenses. Because my credit card information is already stored in the service, this habit is extremely easy for LensOn to maintain.
Another fantastic case of habitual loyalty is online banking. The first online bank was issued in Finland and since then the whole retail banking has changed completely. People no longer have a reason to go to the bank. They can take care of all their finances online. As an outcome people have become user interface loyal. Only in case of major need for relationship driver service, like mortgage, people would consider changing their bank relationship. Online banking is like electricity, as long as you get it when you need it, there’s no problem. If you don’t, you have a major problem. If the service keeps on going there’s nothing to question the current relationship. Online banking enabled huge cost cuts and automated service processes. Cost to serve is now marginal. Once online banking was introduced and became a habit for customers, the vast majority of customers became profitable. Banking margins and profits have grown and the profitability has increased without attrition.

Imprinted loyalty
Customers are not necessarily loyal to the company, but person they are in a relationship with. If customers get imprinted to their counterpart and the person stays with the company, relationships could be very strong emotionally, rationally and habitually. Trusted person can be an enormous asset for a company. The online revolution has diminished the role of person-to-person relationships in consumer businesses. The role of brands and trust in service processes has substituted the void to some extent. It’s not quite the same but works too.
The company’s customer interfaces and people servicing customers should still be trained to reach for such relationships. The brand is as good as the person representing it. Some major hairdresser chains evaluate their employees based on the fact, how many of the hairdresser’s customers book their next visit from the same hairdresser. This measure is beautifully simple and revealing. Being a great hairdresser is not just about the quality of your work, it’s very much about the whole experience. Especially women open up and discuss at the hairdresser. They could easily spend two hours with the hairdresser and spend a lot of money on the experience. It’s about being heard, appreciated and pampered along with getting your hair cut and dyed.

Legal (Contractual) Loyalty
Mobile operators in Finland suffered from very high attrition rates after number portability was enabled. Churn rates reached +30% level even though customers were very happy with their operators. This is a great case proving that customer satisfaction DOES NOT EQUAL loyalty. Customers want to have a new mobile phone every two to three years. The need to get a new handset created natural discontinuity to relationships. Mobile operators have an orientation to offer good deals for new customers and winning higher share of dynamic market. This orientation led to higher advantage for changing a company than staying with the current one. These operators had same level of perceived value and customers had rarely real preference. Most customers had only options that were equally good in general. Only differentiating factors were the brand communications and current offers.
The operators started selling customers 12 month agreements, which offered lower cost calls in the evenings or weekends. These agreements sold quite well and led to lower attrition rates. Once 3G bundles were introduced they included 24 month agreement and were sold with handset subsidies. Against your 24 months agreement you got the mobile phone at about half price. These agreements dropped attrition rates below 10%. In other words agreements offered steady relationships and predictability. As a result mobile operators profits increased and people purchased more expensive mobile phones, which enabled major increase in the use of data creating completely new mass market. Everybody won. After the 24 month agreements ended, the attrition rates increased back to 15-20%. Although the attrition rate increased, they didn’t reach previously familiar 30% rates.
Human nature is lazy and towards many product and service ranges, indifferent. In order to gain market share in a business like this brand has to actively sell and create discontinuity with sales. Electricity agreements are a great example of this. Very few people compare electricity pricing and actively change a power company unless it’s actively sold. When you get a call offering you -5-10% and the offered power is produced with water and greener than your current option, it’s easy to agree. Even better, the new company also close the previous deal so that the only thing you need to do is say ”yes” on phone. It is possible to surprise a competitor with heavy attack in a case like this. Unless the competitor has closed agreements for certain period of time, they are likely to lose a lot of customers almost over night. Who would start comparing for 5%? Very few would. Who would accept such offer when it doesn’t require any effort? Quite many will. Only thing hindering people to accept such an offer would be to tie them in the relationship with an agreement for certain period of time.
Loyalty by structural Bond
What could you sell your customer to make him dependent on you? Structural bond is an interesting approach to loyalty and how to create value in which the customer becomes dependent on.
When Polar Electro introduced their wrist top computers with heart rate monitoring they soon created online Personal Trainer in the end of 1990’s to supplement additional training advice for users beyond possibilities of the cadget in it self. Personal Trainer recorded all your training to a database and created record. It helped analyzing your training requirements and results very effectively. In the early 2000 this was a ground-breaking innovation. When all your training history was online, Polar Electro had a structural bond on you. If you wanted to change to more advance training tools, you had to buy another Polar wrist-top-computer in case you wanted to keep your training record ongoing. Currently mobile phones have same functions and you can use variety of platforms for storing your data eg. Samsung back-up, Apple iCloud or Android saving to Google account. These platforms effectively still create structural bond although some of them are now cadget independent and available to iPhone, Nokia and android. Still, Polar Electro’s Training Tool is an effective loyalty driver for everyone who has been using it for the past decade. The current rush to “internet of things” will produce massive offering of services just like Polar Electro’s training tool. As this market is only just opening, every brand should consider right now, how can they lock their customers in.

Facebook also has a strong structural bond, your friends that are already there. When everyone is already there, it becomes very difficult to leave and completely stop using it. It is also very challenging for other services to get really active users, because Facebook is a strong habit and it holds your entire social life and has become big part of yourself – part of who you are and how you represent yourself to the world.

Attrition
No matter what you do, some customers will leave eventually. Still, applying effective win back strategies could diminish negative churn. One telecom company actually managed to win back 80% of already lost customers. Win back operation was probably the most profitable function the company had ever created.

Just one more advice, when you are trying to develop your company’s customer relationship excellence, you can’t just look at the customers who are happy and satisfied. Their responses will only strengthen the status quo and hinder innovation and adaptation to changing business environment. Lost customers on the other hand are a great source of insight and improvement advice. Any information that help you predict discontinuity, increase the probability of re-purchase, or shield customers from competitors influence and decrease retention clearly increase profitability.

Loyalty certainly is something worth thriving for. Just remember the Golden rule when you are making choices – even though you work in the interactive digital market place.

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About Author

Branding = Change Management and Operational Excellence

Over the past couple of years I have been involved in the development processes of SME’s and some major companies with hundreds of millions or billions in turnover. These processes are about change:

  • The emphasis is moving from advertising and external media to own touchpoints and communications with own customers
  • The marketing as such is becoming more and more targeted and measurable. Marketing has a business case and acts more and more like a business unit
  • The view is moving from products and services to customers and customer centric insight driven development
  • The development requires companies to change the way they operate and how they are organized
  • Big data about customers, their behavior and their needs is required in order to enable the change
  • The change requires companies to re-consider their KPI’s and what data do they use in order to increase transparency and enhance and empower internal innovation and cross-silo collaboration
  • This change must be managed and management must change in order to enable the change for better

I recently published my view on the new and re-designed 7P’s for marketing. In this article I already underlined the fact that marketing has changed profoundly. Brands are no longer created – they are earned. Brands live in customers’ minds and they grow from experiences.. own and peer experiences. In my opinion CMO’s are at the very core of corporate Must Win Battles like:

CMO and corporate must win battles

This is why I would say rather confidently that the path from good to great brand includes these stages:

branding, marketing, operational excellence

First: You need to have goals and vision. They act as a unifying master plan that everyone in the company can understand and accept. What kind of brand are we trying to create? What kind of customer experience and and relationship are we trying to deliver and earn? What kind of impacts are we trying to get?

Second: When you analyse the customer journey accross all touchpoints and channels, you get to see how are you currently performing, what and where do you need to improve. This is where the magic happens between your brand and customers

Third: You need to take a look at how does your company actually operate and how is it managed. Does your current ways support and enable the customer interface operations that you are trying to achieve. Are you organized right, do you have right kind of KPI’s, are different diciplines and silos working together or do you lose insights between gaps and inevitably cause corporate autism?

Fourth: Does your corporate infrastructure enable everything mentioned and planned above? Do you have legacy systems and technology, disconnected data etc. In case the technology and infrastructure doesn’t enable the change, how do you take action? What kind of roadmap and investments are required? What can be done fast, what takes more time and effort? What can be piloted and can you start the learning curve growth with some manual work that enable more effective technology implementation?

This same approach to change management can also be seen as work that moves from practical customer interfaces insights and understanding to top – not top-down. This is how it works:

upside down strategy workWhen I have been running these cases I have learned that this approach works very, very well. The reason is that everyone is involved and the process in it self actually enhances the learning and feeling of unity, shared goals and willingness to change. This is because the process inspires, makes difficult theory work feel practical and easy to adopt. Very often the process generates several small victories and improvements that can be implemented immediately. The good experiences start building up and people get the feeling that these things are really happening and we are really doing something meaningful. Once the plan is ready, the organisation has already moved several steps to the right direction and has become excited about the development. For the management this is extremely valuable situation, because they can just enable what the organisation is asking for instead of trying to order and manage changes top-down.

The reality is that the use of data and data driven operations are requiring new approach to technology and companies need to adopt it some how. Here’s an example about the use of external data ecosystem along with own data

Internal and external data use in marketing

The role of internal and external data:

the role of internal and external data in marketing and customer services

This is how I see the brand development in this day and age. Do you agree/disagree? Would you have any cases, experiences or hints how I could develop this approach further?

See also:

SEE ALSO:

About Author

Marketing technology and Branding – free book

Originally published at http://chiefmartec.com/2014/03/new-brand-marketing-technology/

A NEW BRAND OF MARKETING – free book by Scott Brinker

A NEW BRAND OF MARKETING: The 7 Meta-Trends of Modern Marketing as a Technology-Powered Discipline

Click to Download PDF: A New Brand of Marketing: The 7 Meta-Trends of Modern Marketing as a Technology-Powered Discipline

“The modern CMO and marketer can no longer be just a brand ambassador, they must also have a deep understanding of marketing technology. Scott Brinker helps the reader to understand how technology can be used for both successful marketing strategy and execution.”
Jonathan Becher, CMO, SAP

I’ve written a very short book, A NEW BRAND OF MARKETING, that’s free to download and share.

It frames the epic collaboration underway between marketers and technologists, set against the backdrop of two seismic shifts in marketing today:

First, how marketing is taking over the business. We can debate functions and org charts. But in a hyper-connected digital world, everything that a business does — the entire customer experience that it delivers, from the very first touchpoint onward — is now the scope of marketing.

Second, how technology is taking over marketing. Marketing has more software entwined in its mission today than any other profession in the history of computing. Leveraging these capabilities requires new approaches to marketing strategy and management — as well as new kinds of talents within the marketing team, such as marketing technologists.

These two massive shifts are the result of 7 “meta-trends” — each of which has dramatically changed the nature of marketing. And collectively, they have created a whole new brand of marketing:

  1. From traditional to digital
  2. From media silos to converged media
  3. From outbound to inbound
  4. From communications to experiences
  5. From art and copy to code and data
  6. From rigid plans to agile iterations
  7. From agencies to in-house marketing

At only 40-pages, this is probably the shortest marketing book you will ever read. But if you want to understand the context in which marketing has become a technology-powered discipline, I hope it may be one of the most helpful.

Download your free copy now.

Reviews of A NEW BRAND OF MARKETING

As modern marketers, we have to embrace technology in order to stay relevant. But how? In A New Brand of Marketing, Brinker dives into the shifting digital landscape and illustrates how businesses can transform their marketing to be more inbound, and ultimately more effective, with tech-driven strategies.”
Mike Volpe, CMO, HubSpot

“Scott Brinker nails it with his articulation of the 7 meta-trends that have fundamentally altered — as well as empowered — marketing. Technology now fuels the marketing discipline, where science and art come together to build a brand based upon customer experiences, where the interactions are more inbound than outbound and truly global in nature.
Amy D. Love, CMO, Appirio

“Scott has penned a veritable treatise on the subject of marketing in the digital age of digital. In this pithy work, Scott captures the key meta-trends that will define how all marketing is done in a world of technology enablement and customer empowerment. The punch line: read it.
Terence Kawaja, CEO, LUMA Partners

“The leading meta-trends transforming and growing business at the convergence of marketing and technology by Scott Brinker. This short story is a simplified illustration of modern marketing, disrupted and transformed by the growing evolution and impact of technology, the modern the face of marketing.”
Mayur Gupta, Global Head, Marketing Technology, Kimberly-Clark

A New Brand of Marketing articulates the why of marketing’s fundamental changes over the past 20 years better than any book or blog post I’ve ever read. Scott, in his succinct and thoughtful voice, showcases the how necessary to navigate to a healthy and successful marketing organization as only a thought leader and expert marketing leader such as himself can. A must read for every marketer.”
Jascha Kaykas-Wolff, CMO, Mindjet

With A New Brand of Marketing, Scott has put traditional agencies on notice. Clients are evolving faster than agencies and their organizational models. A New Breed of Agency is needed, with an operating system that has Scott’s meta trends at its kernel. Every marketer and marketing technologist should memorize this short read. Gold!
Sheldon Monteiro, CTO, SapientNitro

“Scott has provided a great overview of the trends that are driving the long-term changes in how marketers do their job and the role that technology plays. This book provides much-needed context to help marketers and marketing technologists build long-term strategies that will let them thrive regardless of what comes next. Better still, he does it in a clear, enjoyable writing style.”
David Raab, Principal, Raab Associates

“Scott has brilliantly framed the dimensions along which marketing has transformed — and where it is headed in the future. This should be required reading for everyone in the industry.”
Dharmesh Shah, CTO, HubSpot; Author, Inbound Marketing

“Anything is possible when marketing and technology collide. Brinker’s A New Brand of Marketing concisely captures the fundamental shifts driving the most transformative time in marketing history. Read it, share it, and use it to accelerate change within your organization.”
Paul Roetzer, CEO, PR 20/20; Author, The Marketing Agency Blueprint

One of the most important marketing books I’ve read in some time — short and concise, but intensely relevant for today’s marketers. This is a manifesto for math marketers out there, and perhaps a final warning and blueprint to those who haven’t yet are the transition (but will soon be extinct unless they do).”
Matt Heinz, President, Heinz Marketing

“When asked, ‘What’s your biggest challenge?’ — most marketing executives reply that it is staying on top of the constant and rapid change that shapes the current environment of marketing. While I don’t know of any book that can solve that problem, Scott Brinker’s new book superbly sets the conversation in which that challenge can be met head-on and managed.”
Ric Dragon, CEO, DragonSearch; Author, Social Marketology

“Scott has put together 7 extraordinarily insightful trends that every CMO and CIO need to understand. He calls marketing a ‘technology-powered discipline.’ And while I might rather call today’s technology a ‘marketing-powered discipline’ — Scott would forgive me for fighting for top billing. It’s just a wonderful, insightful, and just plain entertaining read. This is one that every marketer and the technology teams they work with should read together.”
Robert Rose, Chief Strategist, CMI; Author, Managing Content Marketing

“Scott Brinker does a great job articulating a compelling and exciting opportunity for today’s marketers. The 7 meta-trends that Scott breaks out are accurate, digestible, and actionable. I suggest all marketers move this onto their must read list!”
Sam Melnick, Research Analyst, CMO Advisory Practice, IDC

“I love this book. It brilliantly and simply explains some of the most important drivers underlying marketing today. Scott lays out the facts, using data to explain what’s happening in the world of business as it touches marketing and technology.”
Michael Krigsman, Strategy Advisor & Analyst, Host of CxOTalk

WARC Webinar Path to purchase Insight Keynote presentation

Here’s my WARC webinar presentation from 30th July 2014. Enjoy:)

Also check out:

  1. Managing brand – the most profound KPI’s and measures
  2. Customer Journey FLOW
  3. How to map and study Customer Journey
  4. Customer Journey stage 1: Brand as a platform
  5. Customer Journey stage 2: Initiation
  6. Customer Journey stag 3: Choosing and buying – cross-channel influence
  7. Marketing’s new and re-designed 7P’s
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