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Marketing DO or DIE – Managing Customer Interfaces

In case of any company that is selling products and services that people are interested in enough to find more information about, have customer relationships with continuous or repeated purchases, succeed or fail because of their customer interfaces. In the current business environment, where the competition is hard and people have other players available in a ‘click’, you can not afford to fail in converging visitors or people who get interested to buyers. For CMO, these are the new priorities:

  1. Most accountable and rapid growth is available from current customers, their loyalty, re-purchases and cross-selling increasing lifetime value. This game is all aobut customer experience
  2. Strongest growth of customer base is available from own customer interfaces by expanding their reach and increasing conversion rate. The core goal is to recognize these people and start servicing them in order to sell (=selling by servicing and inspiring approach)
  3. Other market – non customers, is most unaccountable and most difficult to really increase ROI from. Content marketing driven SEO success, positive social media, referring traffic and general positive WOM are all free medium generating new visitors to own customer interfaces.

CMO has a rather large liquid capital to invest and in most cases its has been spent on external media channels and advertising. As I am writing this the old spending habits are changing rapidly. Instead of trying to advertise the company’s image, preference and top-of-mind to the new hights, smartest CMO’s and companies are concentrating their efforts on customer experience and customer interfaces. Customer Journey and how to manage it is very much dependent on data and it is now rather easy to capture that data, which is changing the game rapidly (There is nothing wrong with advertising, but I have witnessed way too many times that the advertising has increased demand in general and sold competitors products. So, don’t advertise in case you don’t know that your customer interfaces actually deliver sales to your own brand. Once you do, they will sell also when your competitor is advertising and your own advertising will deliver much higher ROI)

When designing the customer journey and marketing priorities the external touch points are as valuable as their capability to pull people to the company’s own interfaces. Once they are on the company’s interfaces it’s vital to recognize them, which makes it much easier for you to inspire, serve and create feeling of trust or trigger purchases. Own interfaces are as valuable as their capability to convert visitors to buyers or at least recognize who the potential buyers are. In banner advertising this kind of action is called re-targeting, but that secondary compared to marketing automation tools and rich CRM data captured with 1st party cookies. So, here’s a how you can break the picture above in to more detailed contributors along the customer interfaces:

It’s actually not that difficult to pull together data about these interfaces and their contribution to the corporate overall success. Once you have all that data pulled together it is much easier to concentrate on how to make the whole system work more efficiently. These frameworks are tools for Topsight -kind of view. However, they give you a better perspective about what is the role of advertising and what could be possible with your existing customer interfaces, natural traffic, visitors, people considering your product and learning about it, or the role of CRM and existing customer database.

Once you have understanding the next level would be about creating systematic and automated tools and processes for further scale. Here is one more frame for such approach (cycle for success) in the online marketing environment:

This cycle for success starts from customer understanding: Who, what, where and why we should target. The budget allocation for “who” is the foundation for potential to succeed.
The second stage is about performance attribution explaining the active performance of a creative portfolio. Multivariate testing (MVT) with variety of creatives and continuous improvement of best campaigns will deliver you results that are several times better than regular practices deliver.
Clicks however are not money. You must take the time and make sure that the process delivers sales eventually. That is about optimization of landing pages and customer journey. Very little things can deliver much better sales. I don’t think there is any other area in marketing where you can get such amazing ROI that you can get from increased conversion.
Once you do create sales, you also create customer database. Analyze them thoroughly and it becomes an asset you can feed back to the allocation model and create effective marketing automation in order to optimize customer life-time value. Customer understanding is also the best food for creativity.
This is the cycle of success I think will become standard within the next few years.
Everything explained above is already working in practice. Its still very much about continuous learning but already there – not in the distant future.

Loyalty for pragmatists – it’s not about loyalty schemes

This post is about loyalty. Loyalty is about people’s willingness to stay as a customer or re-purchase when the time comes. Attrition is about customers leaving the company (defect).  For one reason or another customer relationships end inevitably, in grave at the latest. Here are some learning’s about reasons for attrition and ways of avoiding it as well as possible.

Most established companies could get enough new customers relatively easy. The biggest effect on revenue comes from attrition. In many cases new customers could take two years to breakeven. When any customer who has been a customer for more than two years leave or stop buying repeatedly, it’s directly away from profits. If customers leave before breakeven, their effect has been negative. The easiest profit increase would be an outcome of increased loyalty.

Let’s take a look at some loyalty strategies:

  1. Rational  
  2. Emotional Loyalty
  3. Habit based loyalty
  4. Legal loyalty
  5.  Structural bonds
  6. Imprinted customers
  7. Symbiosis strategy (subject to another article: Symbiosis-strategy-creating-the-ultimate-value-proposition/)

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. 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 program effectively lower the best customers profitability. It’s completely rationally driven model that create a behavioural pattern for customers to buy when it’s cheap. Naturally, they don’t if you don’t have an offer for them.

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 solutions from a single company result 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.

Newspaper and magazine subscription sales are a great example that illustrates what kind of damage you can do to the market with your own actions. Short-term victories could easily result long-term losses. Similar fight has also been raving around mobile handset and connection plans. When companies are concentrating on new business, they easily neglect the effects of such orientation to their current customer base resulting negative churn. Another example could be mortgage marginal wars, selling home loans at almost non-existent loan marginal just for the sake of market share. People could be lazy but they are not dumb. If loyalty becomes twice as expensive compared to small efforts and feels unfair and at worst offensive. Such strategy is not likely to create a lot of sympathy or feeling of being appreciated as a customer.

If you are making strong offers, you need a justification for them. Justification equal short term and special conditions enabling such offers. If you don’t have justification people start expecting lower rates in general and just stop buying at normal price. Rational loyalty is a strategy that works for price fighters and low cost offerings that don’t have a brand or other competitive tools. For others, rationally driven programs without further consideration should be considered dangerous. Buying loyalty is bad for business.

Emotional loyalty

In many cases one of the strongest driver of loyalty is the brand. Brand as a whole has its foundation in customer experience, quality, integrity, service, ethics, corporate responsibility and values. If the brand feels right for the customer he’s less likely to consider competitors. Also, the loved brands don’t lose customers without warning. If customers love you, 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 dialogue or giving you advice how to improve your service even more or what new services they would love to buy from you.

As the world is becoming increasingly transparent any actions the company does influence the brand. Where is the production done? How does the employer take care of employees? How environmentally conscious the company is? What kind of values the company is having it’s foundation on? How do those values show for me as a customer? In current business environment there’s too much of everything all the time. It’s very difficult to differentiate yourself by offering or pricing. For customer loyalty programs stand for them showing their loyalty to the company. There are stages from bronze to gold and your role is to climb up that ladder. If you do, you get stuff even cheaper. Great. Completely opposite strategy that is more emotionally driven is to consider how the company can show loyalty towards the customer. How do you take care of your customer? 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?

IKEA is an amazing case of combining rational and emotional value in to a complete package. IKEA has justified their “democratic” business approach by making it clear to all customers why they can offer premium quality at low cost. How they are solving your challenges at home at affordable cost. IKEA marketing is about Scandinavian design, the advertising highlight high quality and beauty and the prices next to products are not the core message, but they effectively look like a bargain in that context. IKEA Family loyalty program is quite rationally driven but the company brand has more to it. IKEA’s service processes are also in place and it’s easy to return or exchange purchased products without questions asked. Once you have visited IKEA, the other options don’t really feel the same ever again. If IKEA had chosen to emphasize price, they would have been just another low cost player and would never have become such dominant global player.

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 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. 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. Actually, customers find out about the invoice after it’s already paid. Another great way to avoid attrition and increase predictability is to sell service for certain period of time.

When people establish behavioural 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. If you have any way to enforce habits you should take them.

If the business environment is turbulent and advancing very rapidly you could come to situation where your existing customers are clearly paying too much to the point where you just can’t justify it anymore. Finnish telecom operator Elisa doubled broadband customers speed twice in two years because the price of bandwidth was decreasing so rapidly. This approach generated strong loyalty and healthy margins because the brand actively improved service level according to market conditions. Such approach strongly enforced customer’s habit and decision to stay with the company instead of changing to another one. Combination of rational and emotional response enforced habit.

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. Relationship driver services are major issues that are big enough to question the current relationship. This is rare though and in case the bank meets, even close, the other offers, people will stay. Online banking is like water, 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. Previously most of the profits had come from bigger investors and bigger loans. 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

Especially in case of professional service, customers are not necessarily loyal to the company, but person they are in 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 interface, 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 for 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.

In car sales it’s a known fact that the best car salesmen have customer relationships that follow them and exchange from one car brand to another just because the person is advising them to do so. Getting people imprinted to the people they are buying from should be considered as a strategic loyalty approach.

In business-to-business customer relationships the change of contact person is one of the most likely discontinuity probability increasing situations. Relationships are personal and the new person equal almost the same as changing the partner. It is really important to handle such situations carefully.

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. Customers want to have a new mobile phone every two to three years. The need to get a new handset created natural discontinuity to relationship. Mobile operators have oriented at offering 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 months agreement and were sold with handset subsidies. Against your 24 months agreement you got the mobile phone at 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.

If customer is not really experiencing very bad service, they are likely to stay in the current relationship. Human nature is lazy and towards many product and service ranges, indifferent. If customers are happy, they could ask offers just to bargain with current partner. That’s still better than losing clients. People rarely start actively comparing other options if they are satisfied. If they do, it’s most likely to check the pricing. In order to gain market share in a business like this brand has to actively sell and create discontinuity with sales. Electricity agreements are 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% and the power which 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? In case of larger IT companies, structural bonds are the biggest driver of loyalty. When you buy an ERP (Enterprise Resource Planning) system and your company becomes completely dependent on it to function, you certainly have bought a structural bond. It’s an interesting approach to loyalty to create value in which the customer becomes dependent on. There’s interesting consumer applications to this too.

When Polar Electro introduced their wrist top computers with heart rate monitoring they soon created online Personal Trainer to supplement additional training advice for users beyond possibilities in 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 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 training history. These platforms effectively still create structural bond although it’s 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.

Facebook also has such a 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 company actually managed to winback 80% of already lost customers. Win back operation was probably the most profitable function the company had ever created.

When you are trying to develop your company’s customer relationship excellence, you can’t just look in to customers who are happy. 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.

Some actionable and easy advice

Here are some advice for improvement in loyalty, customer experience and business with customers using your services or products:

  1. When you are developing your offering and customer relationship, you should try to recognize the contexts and motives your customers are using your products and services in and what is their value in use. Understanding value in use and delivering a service experience hold insights for improvement and innovation. Single purchase could be changed in to continuous relationship by turning your product or service in to a platform that allow creation of even higher value and new solutions that increase value, profitability and scale.
  2. You need to have a communication channel with customers. If you have a loyalty card offering or continuous relationship that is easy. If you are selling 3i- services or products (high investment, -interest or –involvement), people are willing to give their contacts for you. If you are in FMCG of CPG business, you should still strive to get people to connect with you directly or using platforms like Facebook or Twitter. Direct connection with your customers enables feedback, advice, and introduction of new, capturing dissatisfaction and making it right. Connection to customers is vital for improvement and creating a feeling of relationship – it’s the company’s most valuable asset. It should be taken care of keeping that in mind.
  3. If you collect data from your customers, they expect you to use it. Asking questions from customers and capturing their customer behaviour on card transactions equal promise. Brand’s responsibility is to redeem that promise.
  4. Communicating personally is respect. Understanding customer and communicating personally show appreciation and create emotional loyalty. Asking questions and responding personally is rarely used method of engaging and creating emotional relationship that is capable of breaking habits and creating new ones.
  5. Analogical is becoming premium in the era of digital communications. Face to face, phone service by a person and traditional mailings are becoming statements of respect and appreciation in highly digitalized businesses. Just think about receiving a letter from Facebook or Apple. That would really be special J A hand written note as a letter would really indicate that someone has taken the time to consider you personally.

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

Planning 3.0 – combining Creative, Communications, Experience and Business planning = Customer Journey Management

Admap published a writing competition results – best articles about “Planning 3.0”– How will we be planning in 2020? The winner, Nick Hirst said “We need to transcend the often polar disciplines of ‘conceptual’ (creative agency) and ‘practical’ (media agency) planning to deliver, not communications, but great brand experiences.”

I couldn’t agree more! Although mr. Nick Hirst’s and other rewarded articles were great, what really made an impression to me was the pre-words the judges wrote. They analyzed the articles they received and came to conclusion that the future of planning looks like… ‘We don’t know’, or at least, ‘we don’t agree’.

According to judges the most striking theme about the entries was not about how the entries were presented but how they represented a clear new chapter of planning, not necessarily a consistent chapter, but a new one nonetheless. This new era could be dubbed the, ‘the post-specialist era of planning’. 

Planning has grown around specialists in data and analytics, user experience, information architecture, trend analysts, digital strategy search optimizers, social media and crm gurus… Until now, the dominant conversation about strategy has been about the need for these specialists, and for them to be distinct and separate from what has gone before.

Entries to this Admap Prize competition no longer championed the specialists as skill sets that deserve their unique place. Instead, they argued that they should be the very future of planning in its entirety; the planning specialism becomes the planning mainstream.  According to judges, authors wrote of the data and analytics skill as simply becoming planning – all tasks of planning would become measurable and, therefore, the measurement/analytic skill would become planning. Or, the specialist skills of social media strategy would become the fundamental of brand planning, given the very social future that brands face.

According to main judge, JWT’s Guy Murphy two things will happen

1. There will be a sense of planning returning to be a more singular and holistic way of working. Certain planning tools will become the norm for all planners – just as the notion of ‘paid, earned and owned’ seems to have become standard currency for media thinking today.

2. Planning will become more influential. The assimilation of its new-found specialists skills will make it a richer, more effective and more confident force. It will make a decent fist of managing the huge and growing complexity that faces brand building and communication. This will shift the role it has been playing.

In my opinion 2020 is far far away and everything mentioned above is already happening. Planning is rapidly facing new requirements for its effectiveness and moving towards more holistic view. Actually this holistic approach is gaining momentum in general.

Last week IBM organized “Smarter business day 2012” event in Helsinki. Data analytics was an issue there too. What IBM’s director for Analytics division Juha Teljo presented that the whole analytics business is moving from application centered approach to analytics centered approach by 2020:

So, along with planning, also the whole infrastructure is becoming analytics – that is planning – centered.  Once I search about this matter, I also found IBM’s view on how to create Analytics Center of Excellence inside your own organisation. The 150-page material is attached here: 5Keys to BA Program Success

The winning article by Nick Hirst agreed with this idea of holistic planning. He recognized User Experience planners as the first breed of future planners: “User experience goes way beyond Information Architechture. While the latter is a specific discipline concerned with the organisation of information to ensure its swift, intuitive navigation, User Experience considers the experince of the user as a whole: their expectations, their level of interest, their attitudes  even how they feel. Concepts like surprise of disruption, or even entertainment – all proven tools for affective and effective communications – are anathema to a classical Information Architect, but entirely within the imaginative realm of the User Experience Architect.

Even now they think about both the effect of an indivicual, small experience – a piece of copy, a picture, the way a button workds – and the overall journey. Even now, some agencies are recognizsing the ‘planneriness’ of what they do, and reconceiving them as Experience Planners. But just imagine what would happen if we unleashed that kind of thinking on everything else that comms agencies do now.”

I think the future of planning will be even more amazing than expected and I do think that Nick Hirst’s dream is becoming reality. Here’s what I think:

  1. Planning marketing will be about planning competitive advantage, that is corporate strategy and operations. see Forbes article here
  2. Corporate Image will be more and more about actual experiences and shared opinions – planning will be about designing and managing customer interfaces and experience. Article here https://futurecmo.org/2012/11/10/marketing-do-or-die-managing-customer-interfaces/
  3. Comms and marketing to customers will become service experiences – event based automatic communications that integrate with the customer’s situation and needs in any given location or interface. Marketing automation becomes service automation along the customer’s journey. The center of gravity will be the Customer Journey understanding and design.
  4. Planning will become more holistic than ever – we are moving towards business design. At this point planners will become the McKinsey’s consultants of tomorrow or McKinsey’s consultant will take care of the business design on behalf of marketing planners of today. McKinsey is already moving towards customer journey and experience planning, see this article http://cmsoforum.mckinsey.com/article/winning-the-consumer-decision-journey#.UIOLl_Mukic.email I would take it even further, here’s why https://futurecmo.org/2012/10/21/customer-decision-making-journey-flow/

Companies that are taking analytics and planning seriously are already doing much better than their peers. By 2020 you really have to be great in order to survive. And let’s not forget – analytics is useless without understanding and decisions (generate corporate autism) – planning and management. I thinks this means the dawn for customer journey planning and management as the new breed of holistic planning work!

SEE ALSO:

“The CMO 2013 Study insights and what CMO’s should do now”

Lost insights and Corporate Blind Spots

Business Design with customer centricity

How to enable smart company and avoid corporate autism

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

Insight IQ

I read a very interesting article from HBR, April 2012 issue. Shvetank Shah, Andrew Horne and Jaime Capella wrote an article about how good data won’t guarantee good decisions and most companies have too few analytics-savvy worker. If you are not able read that excellent article from HBR, here is a couple of points from it.

We have already discussed in this group about the new era of decision-making and importance of customer insight. Ability to collect, store and analyze the big data has grown explosively and companies spend a lot of money analyzing customer data. BUT. And this is a big but although you have the best BI tools ever but if your organization cannot capitalize it the investments are useless. Like Shah, Horne and Capella stated in the article: ”For all the breathless promises about the return on investment in Big Data, however, companies face a challenge. Investments in analytics can be useless, even harmful, unless employees can incorporate that data into complex decision-making. At this very moment, there’s an odds-on chance that someone in your organization is making a poor decision on the basis of the information that was enormously expensive to collect”

Shah, Horne and Canella created Insight IQ, method that asses the ability to find and analyze relevant information. They evaluate 5000 companies from 22 countries. The founding’s were interesting. Three groups were found: ”unquestioning empiricists”, visceral decision makers” and ”informed skeptics”

Companies are seeking for ”informed skeptics”. They are data-savvy workers who are able to make good decisions. They have strong analytic skills, ability to balance judgment and analysis. However, the study found that only 38% of employees and 50 % of senior managers fall into this group.

Shah, Horne and Canella identified four problems that prevent organizations from realizing better ROI in Big Data:

  1. Analytic skills are concentrated in too few employees
  2. IT needs to spend more time on the “I” and less on the “T”
  3. Reliable information exist, but it’s hard to find
  4. Business executives don’t manage information as well as they manage talent, capital and brand

Well, how to develop more informed skeptics? It demands constant competence development to increase data literacy and join information into decision-making. And of course, organizations have to give the right tools for analyzing the data.  Ongoing coaching is essential and formalizing the decision-making process based on data and information. Shah, Horne and Capella stated that “many of the best data-driven cultures have formalized the decision-making process, setting up standard rules so that employees can get and correctly use the most appropriate data. Companies should make performance metrics transparent and embed the in job goals. They should also make sure that compensation systems reward dialogue and dissent. Great decisions often need diverse contributions, challenges, and second-guessing”.

Tiffany and BCBSNC are the great example of companies who have shown growing awareness of the pay-offs from Big Data and data literacy.

Is your organization underinvested in understanding the information and maximize Big Data ROI?

Source: Harvard Business Review April 2012,

Article: Good Data Won’t Guarantee Good Decisions

Writers: Shvetank Shah who leads the information technology practice at Corporate Executive Board, Andrew Horne and Jaime Capella, who anre managing directors at Corporate Executive Board

CMO expectations and emphasis – CMO survey 2/2012

CMO’s are quite optimistic, increase spending overall but especially in social media, CRM and analytics (internally and externally)
CMOsurvey.com made a study of CMO expectations and emphasis in February 2012.
The wheel is already turning and the role of CMO’s changing. It is especially interesting to see that the traditional emphasis of CMO is now giving way to more strategic role:

The CMO’s role is starting to turn and take stronger role in the board of directors with development and innovation role

The results clearly state, that the role of CMO is to run competitive and customer analytics and take action with analytics and insights in innovation and business development. Marketing is finally moving towards it’s roots, the 4P’s and commercial growth driver role. I can’t wait to see the next H2 results!!
Prophet’s State of marketing Study also emphasize the paradigm shift:
Another study “CMO’s Agenda” report from strategic marketing consulting firm CMG Partners conclude four other core trends affecting CMOs:

  • Strengthening the CMO/CEO relationship:  Interviewed CMOs report that they are strengthening their credibility with the C suite, and CEOs in particular, through best practices that include framing recommendations in ROI terms (beyond creativity and the marketing budget’s P&L); educating themselves and top management on how marketing can contribute to the company’s growth/business performance; documenting where marketing opportunities exist and might be captured; and highlighting risks while laying out how those can be mitigated. Successful CMOs are also building relationships with fellow senior managers and creating intra-company alliances based on their ability to demonstrate marketing’s impact on their co mpanies’ performance.
  • Social marketing:  Social media are not only transforming traditional principles of brand-building and customer loyalty, but altering human interaction fundamentals, says CMG. While CMOs are best-positioned within their organizations to lead the mission of understanding and mastering these complex trends, by virtue of their ages/backgrounds, few are “native social-media speakers.” Study respondents reported that they are mastering these challenges through “generational seeding”: Creating internal teams that include younger, cyber-intelligent employees. This also brings the benefit of developing a talent pool that should secure the organization’s future.
  • Managing Millennials:  Millennial-generation marketing employees are critical because of their inherent understanding of social media, but their insights are too often dismissed because of their inability to present such insights with “crisp logic and presentation cosmetics,” marketing chiefs pointed out to CMG. Investing the time and energy to “connect the dots” to develop this generation’s thinking can unlock crucial learning for CMOs and their organizations, the participants stressed.
  • Demand creation:  Successful CMOs realize that the ability to position themselves as the rightful keepers of the “innovation flame” – the critical, differentiating mission of creating the perception among consumers that a brand is delivering what they need/want even before they know it themselves – is extremely powerful, and the key to advancing their influence within their companies.

Behind CMO survey that is done twice a year is Christine Moorman the Director of The CMO Survey and the T. Austin Finch, Sr. Professor of Business Administration, The Fuqua School of Business, Duke University. Full study is available below:

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

http://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

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