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Organizing Marketing for Success: CIO-CMO collaboration

Forrester Research and Forbes made a study and article about CIO-CMO collaboration: “Why The Most Important C-Suite Relationship For Marketers Is Still The Trickiest” The article concentrate on the challenges and approaches to enable and enhance collaboration and how to create common ground and language between the two very different specialist areas. I did agree with everything that was said in the article, but I couldn’t help thinking whether CMO-CIO collaboration is actually enough. Customers today engage with companies in multiple touchpoints and environments, their expectations change along their customer relationship and -journey (check out article: definition for Customer Experience) and their motives and needs have great variation. In my opinion CMO should be in charge of customer experience, promises, concepts and methods that drive great brand experiences, brand loyalty and engagement. However, the reality is that currently many of those channels and touchpoints are managed by customer service and business units or online service development unit. Often the research and analytics are also outsourced or in a separate silo. In case the CMO really has the wide customer experience management role, I agree that CMO-CIO relationship can drive phenomenal success, in case that is not the case, there must be even wider collaboration across business units. Here’s Accenture Interactives documentation about the subject: “The CMO-CIO disconnect – Bridging the gap to seize the digital opportunity”

Tom Asacker captures why customers think of corporate experience  holistically. A brand, he says, is “one, interdependent system of behavior”. The problem is that in too many organizations the “system” has many masters and each wants independent control of their domain. CMOs, who might be expected to have responsibility for the overall experience as of right, do not. That’s because large chunks of the interface with customers, and the factors that influence that interface, remain for the most part outside of their control. They do not fit neatly into the “normal” org chart definition of what constitutes marketing. (Full article: Brands: One System Of Touch)

Some time ago I wrote an article in which I claimed, that the marketing organisation is like an engine from 60’s. “The Duke University’s CMO Survey 2013 results highlighted again the need for marketing and CMO’s to carry more responsibility and integrate better with the corporate management and operations. It seems to me that marketing is facing the same evolution that car engines have gone thru since 1960′s. In the 60′s car engines were large, heavy, powerful and impressive but their gas consumption was just terrible and their efficiency unacceptable in current evaluation. Currently engines are much smaller but deliver a lot of power with very low gas consumption. The big and impressive modern engines have amazing power with acceptable gas consumption. The engine game is all about efficiency, as it should be – and the same rule apply to marketing management”.

Inbound marketing technology provider Hubspot has created their view of agile, rapid, realtime, evidence based marketing function and organisation. They don’t actually define the business units that should be involved, that must be considered case by case. Hubspot’s process is based on SCRUM-software development process and methodology. I find this approach to marketing quite appealing and interesting. Inbound marketing is about creating content and turning that content and stronger online traffic in to demand and leads. The approach is all about relationship marketing in the digital era and omnichannel environment. Please comment if you have any experiences about implementing such process to your organisation? Check out the presentation:

I’m working with company’s customer interface development and customer experience design. What I see in my everyday business, is clear need to break thru silos and increase collaboration. The SCRUM-process and organisation outline in the presentation must be considered separately for each organisation. The SCRUM-team should be a group of people influencing customer experiences across the Funnel and customer relationship in order to really make most of the approach. Short term analytics and A/B-testing are naturally important tools in such approach to marketing, but also the long-term development must be carefully considered. The brand image changes rather slowly and is an outcome of everything the company does. The SCRUM process easily change perception to short-term development and generate blind spots in larger scale opportunities. Team like this must make sure that they have both insight and topsight views to what they are doing and developing.

Please, share your experiences about how to organise marketing function for success!!! What worked, what failed?

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

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

Join FutureCMO Movement LinkedIn Group here

Who is the CMO of the future?

Digital Surgeons, founder, @petesena, takes a look at what the landscape looks like for the future role of the CMO. Gartner is predicting that by 2017, the CMO will spend more time than the CIO on technology. We’re seeing this already happening with progressive brands shifting budgets towards digital.  Peter shares his thoughts in a Slideshare above on the hybrid nature he thinks the role of chief marketing officer will begin to shift into. What are you doing to stay ahead of the curve?

You might also be interested in the following articles:

From marketing automation to service automation

Managing Social reputation – Brand is a verb

2013 Internet trends; Mary Meeker & Liang Wu

Digital Trends for 2013 by Adobe

What best performers do differently; Aberdeen

How to map and study Customer Journey

What best performers do differently by Aberdeen

I found a great article from Slideshare about the role of analytics and data-driven decision making in all aspects of marketing to focus on the voice of the customer and drive revenue. The best performers simply work harder and more methodologically. The process and tools need to be in place and they are being actively used. This is all quite obvious, still too rarely executed in real life.

This is in short, what is supposed to be in place and in operational execution:

Best-in-class PACE framework What are the difference then?

Best-performers are different in operationsWhat about technology use?

Best performer technology useLet’s make a mental note, that this study and results are from 2011. Marketing analytics for social media and marketing automation have become much more influential since then. However, this study is a great reminder of the fact, that performance comes from hard work and dedication.

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

Source: Aberdeen CMO Study

From Poor-Data and Poor-Insight to Rich-Data and Better-Insight

As we already know, organizations have ability to collect, store and analyze massive amount of data from multiple sources. They have spent a lot of money managing this big data. Investments in technology and analytics are useless unless employees can use data, information and knowledge in their decisions-making.  Many companies are facing a big challenge in data-driven decision-making. Good and rich data won’t quarantee good decisions on their own. I posted May 2012 an article about Insight IQ. It was based on April 2012 issue of the Harvard Business Review where Shvetank Shah, Andrew Horn and Jaime Capella argue that Good Data Won’t Guarantee Good Decisions. In this article I continue this theme a bit further.

Shah, Horn and Capella found that there are three main types of decision makers:

  1. Visceral decision makers (gut feel decisions)
  2. Unquestioning empiricists (rely on the number alone)
  3. Informed skeptics (gut feel with data)

If we consider the matter in data perspective I defined simple data collaboration or data insight maturity scale. It emphasizes level and maturity of data collaboration in decision-making.

Organizations on the right ‘high side’ are capitalizing the data in decision-making. They combine the gut feel with data and can drive decisions that make a real difference in productivity and profitability. They can drive real competitive edge from and behind the data. They drive all necessary information from markets for better decision-making. They know their customers and customer journey. Although the decisions can be very complex with limited amount of time and there are many options to choose from, they can still make the decisions and carry out them fast. These companies are the winners. They have hit the jackpot, but unfortunately I see these kinds of companies quite seldom. However, that is the goal to go for.

Another way of looking at this variety in corporate behavior is to divide companies in three categories according to state of data maturity. There are three types of companies: data collectors, data analyzer and data innovators.

1.       Data collectors

These companies are collecting and learning which data is important for their business. Light segmentation is used and it is more building and focusing on different customer groups. Analytical skills are very low and decisions are made as gut feel or based on basic sales figures and income statement

2.       Data analyzer

These companies have systematic way of collecting and storing data. They are invested in the technologies that are available to analyze the data. They can do basic business reporting but are not able to drive the real value behind the data. They are good at analyzing and reporting but suffer the lack of interpretation skills to drive deeper business insight.

3.       Data innovators

These companies are more comfortable with big data sets and technology. The focus is in how benefit from actionable insights and strategic big data. They have effective ways to share business information across functional areas that better decisions can be made. They have many data-savvy employees and data-driven decisions are informality in C-Suite.

Steps from data collector to data innovator

It is all about people, process and technology. Here are six steps to improve data-driven decision-making.

1. Emphasis on right data

  • collect all relevant information into one single platform
  • from business understanding to data understanding
  • automate the data collection process

2. From silos to holistic business view

  •  map all the relevant data, which is essential for decision-making
  • data preparation, consolidation and visualization are necessary
  • CMO & CIO partnership

3. Choose the right technology

  • find technology that meets your business demands
  • choose technology, which accept and read data from any source

4. Online reality

  • today’s business and business environment needs real-time data
  • online data as enabler of quick decisions and insights
  • rapid resource allocation
  • online business management and intelligent decisions

5. Create strategic marketing dashboard

  • KPI’s by channel
  • true values from returns and investments
  • identify risks and opportunities
  • measure and lead the customer journey

6. Create systematic analytic skills competence development program for employees

  • find the data-savvy workers in your organization
  • make them to train everyone else of their analytics skills and method
  • leverage analytics know-how widely in your organization
  • C-suites as exemplary for others

Big Data, Big Decisions and Big Management Change

Big data is out there. Data volumes, velocity and varieties have multiplied, in fact exploded.  The big question is how to find the best ways to make all of it and how analyzed data is changing decision-making ways and management. Are big decisions based on analyzed evidence or intuition?

Many organizations are thinking how to drive the real business value behind big data. They are drowning with data and don’t know what to do with it. To drive competitive edge from big data, organizations need new competence and new management style. These are very big issues in today’s business environment and get accentuated all the time. For example, Gartner’s top 10 strategic technology trends for 2013 addressed strategic big data and actionable analytics. These two trends were number six and seven. And believe me, these two trends are raising top of that list the near future.

Ten years ago I created Intelligent Contact Management (ICM) concept at MicroMedia. It was holistic approach for sales and target marketing. The main idea was to translate inside and outside, online or offline data into information, information into deep knowledge, knowledge into action and action into measurable results. Action means in this case multichannel sales and marketing approach. Right and relevant message to right targets at the right time. Way of handling and managing touch points in customer journey.  The concept of ICM presents in picture below.

Is there any significant changes in ten years. Nothing much, except tsunami of unstructured information has swept over. After ten years we are facing with information that comes in varieties and volumes we could ever imagine. That is not a threat, it is the big opportunity to handle and manage more precise information for predictions and decision-making.

Big data is a management revolution.

There was a very interesting article about big data and management revolution in Harvard Business Review, October 2012 issue by McAfee and Brynjolfsson.  They wrote that “data-driven decisions are better decisions – it’s as simple as that. Using big data enables managers to decide on the basis of evidence rather than intuition. For that reason it has the potential to revolutionize management”. I could not agree more, using and analyzing data for evidence-based decision-making is the quantum leap from hunch and “super intuition”. This leap composes a big managerial challenge.

Are data-driven companies’ better performers?

There is a lot of buzz and skepticism about the real value of being data-driven organization. McAfee and Brynjolfsson made a research to find real evidence that using big data will lead to better business performance. They interviewed executives at 330 public North American companies about management practices, both organizational and technological and their annual reports. The major finding was that companies using big data and data-driven decision-making are performing better financially and operationally. In fact they are 5% more productive and 6% more profitable than their competitors.  But, and this is a big but, 32% of respondents set their companies below 3 at 5-point composite scale when asking is your company data-driven. So, there is a lot of work to do in this field.

Destroy the empire of HiPPOs

Is your organization making decision HiPPO-style? McAfee’s and Brynjolfsson’s definition for HiPPO: the highest-paid person’s opinion. These executives are making decisions based on their experience and old intuitive patterns. The big question is are these executives ready to cancel their decisions if analyzed data is telling the opposite than their intuition and hunch. The answer is yes and no, but the big shift is happening. In today’s business world, executives can rely on data and predictions. The biggest factor is that they can ask the right questions. When the data-driven decision-making movement advances further, HiPPOs will mute and extinct. New data experts will arise. Future CMO will be this kind of expert in executive group.

Manage the big change

McAfee and Brynjolfsson picked up five management challenges when moving towards data-driven company and evidence-based decision-making.

Leadership

  • create leadership teams, set clear goals, define success and focus on asking the right question
  • do not forget the human insight
  • think creatively
  • communicate clearly with employees, stockholders and stakeholders

Talent management

  • employ data scientists

Technology

  • invest in technology
  • update IT competence

Decision making

  • create cross-functional cooperation
  • locate the big information and decision-making in the same place
  • improve problem-solving techniques
  • ask the right questions

Company culture

  • move actively away from hunches and instinct
  • do not pretend be more data-driven than you really are
  • forget the HiPPO-style decision-making

The big data will become a key basis of innovation, productivity and competition. According to research by MGI and McKinsey’s Business Technology Office there are five ways in which using big data can create value. First, big data can create value by making information transparent and usable widely inside the organization. Second, organizations can collect more accurate and detailed performance information, analyze it and drive performance. Companies are using big data and analysis to make better management decisions. Third, big data allows ever-narrower segmentation of customers and therefore much more precisely tailored products or services. Fourth, actionable analytics improve decision-making. Fifth, big data can improve the development of the next generation of products and services.

In the end, one rule of thumb to remember: Big data will never replace Big thinking!

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

Great future for creative agencies

Creative agencies have been under siege for a long time. The business has changed completely within relatively short time and the balance of power between disciplines within agencies has shifted tremendously. Agencies must have changed a lot by now, but they need to change a lot more in order to meet the demands Future CMO will require from them. I would consider that challenge a great inspiration though, it can be an amazing adventure. Let’s look at where agencies stand now:

1. Creative agencies key asset is.. well creativity. People trained to open up their minds, simplify and recognize what is the thing that makes people (customers) move. The challenge is that advertising agencies have limited their use of creativity in communication and doesn’t have a credibility or position to use that creativity for more general business development, which would be very natural. In the very heart of creativity is customer insight. Using that insight to new purposes is much easier to do than teach non-creative people to become creative

2. Data is now available and media agencies have a long history of analysing it. In the current environment and the direction we are heading, corporate own channels, CRM and business data allready meet media data at media agencies. This will become standard practice over the next couple of years if it hasn’t been done yet. Media agencies are trained to measure and predict impact of different actions. Their role will be also to analyse different options in product portfolio scenarios and pricing, distribution etc. CRM and marketing automatatization will be a natural next step after people have already become professionals in making real time bidding online marketing, direct marketing, direct response advertising and managing revenue/cost ratios and communication portfolios

In my opinion the creative communication ecosystem will have to grow-up and take responsibility more than they have used to. Once agencies really take responsibility they can earn their way to the business development and real corporate management. As Future CMO has already cracked the door open, the CMO’s ecosystem must prepare to take the heat and meet the demands that should be seen as the new brave world with tremendous opportunities.

IBM CEO study was crystallized as three major change drivers by Mr. Samuel Palmisano, CEO and Chairman of IBM

1.The World’s private and public sector leaders believe that a rapid escalation of “complexity” is the biggest challenge confronting them. They expect it to continue – indeed, to accelerate – in the coming years
2.They are equally clear that their enterprises today are not equipped to cope effectively with this complexity in the global environment
3.Finally, they identify “creativity” as the single most important leadership competency for enterprises seeking a path through this complexity.

Well, let’s consider creative agencies and the CEO challenges. The complexity of the world is clearly a challenge when you look at it top-down. If you look at the company from customer’s point of view, that complexity becomes much easier to handle. Creative agencies should really be capable of both reducing the complexity to the minimum AND help coping with it. Media agencies with their capability to analyze markets and customer behaviour should certainly become very handy. The third challenge, creativity, is the bread and butter for creative agencies. So, why wouldn’t agencies start meeting these challenges.

Actually, the new breed of agencies have started doing exactly that. They are just called Service design agencies and their methodology is based on Design Thinking. The basic value proposition is to offer companies a) very clear customer insight b) services that meet the customers’ needs in new ways driving growth and profitability. They are actually changing marketing in to service. Pushy communications no longer work, making communications that inspire, entertain and serve customers are relevant and interesting.. and they sell better.

Dear former colleague, Adman and thinker who has inspired me more than any other person in the world, Rory Sutherland, has made a case of meeting the challenges with one single concept: Behavioral Economics. His case below is a great eye opener for any Ad exec or CMO. There is a great future for creative and media agencies if they just embrace the opportunities, take responsibility and are prepared to unleash their capacity to more meaningful purpose:

“IPA President Rory Sutherland explains why he is championing behavioural economics We need to broaden the definition of what we do to reflect the new reality of the market place because if we don’t create a new model based on human understanding, then we are in danger of using 1950s packaged goods persuasive techniques to solve todays communications problems! With behavioural economics we can align ourselves to a recognizable science and not be held hostage to the media budget. It gives us a framework that will refresh our thinking and our talent pool and with it we can use ideas to turn human understanding into business and social advantage.”

 

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

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

Join FutureCMO Movement LinkedIn Group here

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

Revolution in marketing – driving management change

Mr. Stephen Cook, Founder of Fortune CMO made a great case about the changing role of CMO in his article “Its time to Raise the CMO bar”. Here are some of his key findings:

“My sources consistently mentioned that CMO roles have been adapting piecemeal over the past decade, but we are now at a tipping point where CMO roles need to be updated to deliver a more relevant 21st century value proposition. Think about it: The CMO role came into vogue in the early 1990s during a mass-market, mass-media, one-way push, predigital, pre-social-media, pre-smartphone world. While many classic marketing truths are still relevant, the dynamics, needs, and expectations of the CMO’s constituents (e.g., customers, CEO, internal and external partners, NGOs/third parties, etc.) have radically shifted. While I heard a range of situational-specific differences facing B2C and B2B CMOs across diverse verticals, when I stepped back I could see some universal truths.It all boils down to this: The CMO role as we’ve known it does not capture where the role needs to go to remain relevant. We all know the CMO role today is immensely more complex than it was just a few years ago. For each unique CMO role, I believe there is an increasing need to focus on the highest level strategic value-creation opportunities given the faster pace of business and marketing ROI objectives. I also heard that CMO roles need to expand beyond the traditional marketing silo to include a more comprehensive commercial leadership role with a focus on how to accelerate growth. I propose that a “Commercial Growth Accelerator” role with five high-level strategic focus areas (the R5) would better communicate and guide a more relevant leadership value proposition.”Mr Cook concluded that the CMO’s role is to become the Commercial Growth Accelerator within a company. In this time and era this really seems like a fantastic opportunity for CMO’s to show what they are made of. Mr. Cook’s full presentation with some great cases below. Enjoy!

Author: Toni Keskinen, Marketing Architect & Customer Journey Designerhttp://www.linkedin.com/in/tonikeskinen

Join FutureCMO Movement LinkedIn Group here

Lost insights and corporate blind spots

This is a post about current state, corporate malpractices. Corporate standard is to use apr. 20% of the value their data assets provide.. well it could actually be even less. This post is about recognizing the needs for change and offer some ideas about how to get it done. These are just some learnings from searching insights while doing customer journey analysis and service blueprings for companies. More will be published in the book – Customer Journey Management  September 2012, which I’m co-authoring with Jarmo Lipiäinen

“Open mindness.. may be defined as freedom from prejudice, partisanship, and such other habits as close the mind and make it unwilling to consider new problems and entertain new ideas. (But) it is very different from empty-mindness. It includes an active desire to listen to more sides than one; to give heed to facts from whatever source they come; to give full attention to alternative possibilities; to recognize the possibility of error even in the beliefs that are dearest to us.” -John Dewey How We Think 1933

The above text came from Mrs. Madeline L. Van Hecke’s book, “Blind spots – Why smart people do dumb things”. Well, it’s not just people becoming blind in their own lives, but also at organisational level. When you are working in an organisation, it’s natural to start taking things for granted: what is impossible, what can be done, how is it done in general, etc. Gradually thinking some things are impossible or too difficult which leads to tunnelling – narrowing sight, dismissing things that should be reconsidered. Conventions are effectively blind spots. Being busy makes it difficult to take a wider look from must-have details, short cuts (best practices) that made you effective could make you blind. It’s all very human and natural. However, it’s also dangerous. All cases that have been described earlier are actually common sense customer behaviour. These cases were not very special in nature. Still, they could be hard to detect. After they have been detected they seem obvious. Why is that? The biggest reasons are the company practices that are fractured in silos and responsibilities making it difficult to see the big picture. Within a company different parts of organisation are also having different perspective in time. CEO and marketing are looking in to the future trying to reach goals and measure the progress toward it. Sales and customer service are experts in NOW. HR and CFO are looking in the mirror, which is past. Having this kind of variation in perspectives result challenges. Having fractured information spread around organisation just emphasizes the effect. Management teams are struggling with complexity and it’s especially difficult to combine Top sight with Insight.

Let’s take a look at commonly used practices, business as usual. I am simplifying a little bit in the following but I have seen bad use of money and poor practices and learned from them. Current conventions equal money spent anyway, and they also result assets. The value of these assets is higher when combined. Single asset does not tell a story as well as combined data and resources. Innovation is often found between disciplines, not inside one.

Marketing department is often using tracking tools for recording awareness, preference, advertising recall and also often buy data about competitors marketing spending for benchmark. In the current marketing landscape decision-making is concentrating and result smarter tools for decision-making. Previously marketing department was fractured in PR, dm, online, retail, tactical, events and brand advertising. Currently the structure of marketing department looks more like a single entity and is often combined to sales organisation. Different mediums and approaches are analyzed simultaneously and results are compared against each other. CRM, advertising, email marketing, in store promotions and other actions are planned as a whole resulting improvement in effect. All this data should result very much information that help recognizing customers needs, understand what drives value for them and how to deliver it. Lately the tools that analyze social media also enable tracking the company’s volume, share of voice and reputation in social media. Marketing department is actually drowning in research and data. The sad reality is, that very often, marketing management is not considered as a driving force for the company’s business development though. CMO’s have hard time justifying marketing investments and in down economy these investments are easiest to cut down. The insights and learning that could be used for overall performance development represent often only fraction of their potential value. CMO’s role is to make most of the company’s current state, justify higher margins by improving brand and increase awareness, preference and consequently sales. That is a valuable role but not optimal though. Customer relationships should be considered as strategic source of insight and improvement vehicles.

CFO. Financial departments tools for analyzing performance, costs, production efficiency has improved dramatically due to improved business intelligence tools and rapid access to ERP (Enterprise Resource Planning) data. Financial departments use this data to recognize cost cutting opportunities and improving over all profitability. That’s valuable information also and has natural position in the board of director’s decisions. However, the combination of CFO’s analysis, marketing research, CRM and operations offer so much deeper understanding. Data tells you what has happened, it doesn’t explain it and it doesn’t offer best possible insights for innovation. Very often innovation is invisible in CFO’s figures until it’s been implemented. If you were Nokia’s CFO, by the time iPhone effect shows in your data, you are already terribly late.Managing with knowledge does not mean managing with financial data, which is an outcome, not the cause.

Sales. In business-to-business and major single purchases the sale departments have effectively adapted sales funnel analysis with CRM tools and use those tools for analysing success and managing resources. In these businesses sales is often working quite closely with marketing because the whole process is designed around a funnel: prospects, leads, offers, closed deals. The challenge in this approach is that sales is considered as a-push action only; offer customer the products and services that the company has. Best sales organisations take a deep dive in customer’s situations; dig challenges and position products and services, as a solution for customers needs. These organisations thrive. Push sales don’t do very well in the current situation although most of the sales reps still meet customers to present their inventory and end up bargaining to close deals. If sales team stop to listen the customers and discuss about needs and optimal solutions, they hold very much information that can be used for business development. Listening customers also drives brand equity, trust. Customers could get imprinted at best.

Experienced sales manager can give input for new product or service value proposition, how they appeal customers, even at very first concept level. They can also give valuable insights for improvement. This resource is most often neglected and the new products are presented for sales when it is time to start selling them. Such practice neglect tremendous immaterial resource, which is also responsible for selling it to the client. If they were fully behind the new product and their opinion would have been heard, it would certainly have double effect: product improvement and winning spirit.

Human Resources. HR is an out-dated name for a unit in general. The business is about skills and culture; know how, education, change management and indeed, human capital. HR does analysis about internal employee satisfaction. This information is giving feedback about how employees feel about their employer, atmosphere, colleagues, management and company’s direction. This information is also valuable as such and helps recognizing improvement areas. However, unleashing employee capability is not best harnessed with that alone. In Customer Think blog Dr. Graham Hill presented case Toyota, that explained how the Toyota implements a million improvements in their processes in a year, which come from their employees. 95% of these ideas are implemented within ten days after submitting them. People adapt to what they are supposed to do and start following the procedure as directed unless the company purposefully start breaking habits and offer recognition for those who challenge the current ways with better ideas. Small ideas result major changes when there is enough of them. HR should be the aggregate of human capital within the organisation. First allowing and then aggregating these ideas and feedback has enormous power that is available at any time. Engaging employees like this also improve satisfaction, because company start paying attention to its employee insight assets.

Gary Hamel presented fantastic cases of harnessing employee capability for innovation in his book “Future of management”. In his book he explained in detail how for example Whole Foods Ltd. has given employees the freedom of developing their unit within a grocery store. The team also

choose manager among them selves and decide whether to hire a new person in the team or not. The new hire means sharing bonuses and makes people think whether the new resources really result value that is worth sharing the upside. Whole Foods and Toyota are great examples of employee power to drive excellence when a company decide to really take advantage of these opportunities.

Customer service. When customers hesitate, face challenges or feel disappointed they call to customer service. This is one of the most important moments of truths there are. Customer service is actually a fevermeter of the company’s situation. For every call there is at least 10 more people who feel the same way but don’t bother to call. Very often customer service is considered as a cost and measured in “cost to serve”. The goal is to have fewer calls and cut costs in person-to-person service needs. This approach is acceptable but should not entirely replace personal service with online. Dissatisfied customers should be thanked for their effort to contact and inform about their experience. The resulting data about customers’ feedback should directly feed product, service and process development. Customers who give feedback should be recorded in CRM and engage with them with ways to improve the performance of the company in the areas where the customer feels the company has failed. These people are assets, not cost. Customer service personnel learn very effectively how different value propositions, marketing and other actions will result feedback for them. One client of ours showed all offers and campaigns to customer service team before publishing them and got almost always good feedback for improvement. Customer service team recognized expressions that would result confusion and issues that would potentially result dissatisfaction. They need to know what goes out in order to prepare for feedback, but they can also help in improving the outcomes.

Online Analytics. The online environment offers a wealth of data. You can track anything in real-time. Online has become a major influence in sales and because of the data, it also has clearer goals and action points than brand advertising for example has in general. Companies that take most advantage of online potential use effective analytics tools that enable optimization of online service’s potential. Data driven online development is actually using very similar methodologies that have been developed earlier for direct mail testing. The golden rule in analytics is to “look at their hands, not their mouths”. Asking people’s opinion is secondary to testing. Direct marketing has taught, that for example stickers and other dumb feeling parts in the mailing should not be used because they increase the cost per mailing. The tests have shown that leaving them out result e.g. 20% decrease in sales. Even though no research ever has approved such tools they still work. Same apply in online analytics. Most companies only track visitor and conversion rate of their online service.

Those figures are important but represent only fraction of the opportunity. If a company has 100 000 visitors per month and 2,5% of them purchase 50€ worth in average, it means 125 000€ in sales per month. If the company uses analytics tools and multi variant testing effectively, they could increase the online services success in search engines resulting 20% increase in traffic and double the conversion rate. As an outcome company would sell 300 000€ per month.

Online environment is probably the fastest source of incremental sales growth that is also cost-effective to produce. Multivariant testing means testing for example alternative landing pages, home pages, headlines, triggering offers, value propositions etc. The goal is to continuously make improvements bit by bit increasing the overall success. This work does not mean re-designing and implementing the service but small bits of it. This kind of process is likely to result very high return on investment. Ainoa Helsinki, company concentrating on online marketing optimisation has developed Banner Suite called tool that enable using banner templates and creating variety of different headlines and pictures within the banner. Production of variation cost very little. Implementing such approach and optimizing the use based on resulting conversion has increased success incrementally. The same methodology represents multivariant testing when developing home pages and e-commerce services. Online analytics tools tell where the customers came from, which content did they use, for how long and where did they go next, which search terms did they use, which paid links or banners did they click and much more. All this data is used for online service development. All that available data would also offer food for insights about how that data could be used for business development, marketing in other channels and sales. Currently most of this data is only used for single channel development though.

Research function serves variety of needs of business units, marketing, product development, sales and management. Research departments make market research, buy mystery-shopping analysis, test products and benchmark the company against competitors. Voice of the customer researches also aim at understanding the value creation in detail compared to competitors. Customer satisfaction research is a must tool for all research departments. The challenge is that in order to create actionable insights, the best results are possible when analysing several of these studies simultaneously. The worst case scenario, that is all too common, is that single study does not create actionable insights and is indeed wasted money. Research practice has outdated practices also that must be recognized. Customer satisfaction research is a great example. When studying customer satisfaction customers are promised that their answers will be analyzed anonymously. That sounds good at first but downsize the potential upside effectively. There are two main reasons for it:

1. Anonymous responses. Anonymity means that if customer has had bad experiences the company has no way of fixing their failure. In the current media landscape, that is very much social media driven, even low percentage of customers who have been dissatisfied can result very bad publicity. Web does not forget and published bad experiences could have very long tail in effect. Anonymity also mean that the potential of actually recognising where the company has failed could have been turned in to asset. Most customer driven companies would be delighted to recognize dissatisfied customers and engage in dialogue for them and use these customers opinion for improvement with open innovation and user driven co-creation methodologies. Dissatisfaction should be recognized as an opportunity to create competitive advantage and customer satisfaction studies should be completely re-considered. Voice of the customer study is a step in to right direction but it could be improved even further. We are aware that this claim has certain level of conflict with ESOMAR rules and regulations for research. ESOMAR is a forum, which set standards for research agencies. However, it would also be accepted according to ESOMAR that people’s responses would be dealt with individually in case it’s told for the customers in the study and approved by the customer. This is rarely done though. The basic rule is that you only report results according to demographics and other quantifying factors. Looking at the same issue from customer perspective is completely different issue. When people know that they are giving information about them, they expect companies to act on that information. When they tell they were dissatisfied with something, they expect the company to pay attention and make it right. Currently used anonymity make it impossible.

2. Looking back in time. Customer satisfaction studies often concentrate on perceived value in the past. Looking in to past is fine and offer valuable information as customers can only comment on experiences they have actually engaged in. If company would concentrate in customer value creation, it would not be satisfied with past though. Customer satisfaction study should be re-positioned as customer service study that has a time span from past to future. People engage with the company by giving feedback.

Company could offer value for that engagement by promising better service in the future. Such value proposition justify questions about how customer would prefer to be serviced in the future, what interests him, in what kind of contexts the product or service use would take place, does the customer have more than one roles as a buyer. Great example of several roles is travel: Travelling with family, with a spouse, with friends, with colleagues in work related situation etc. One person could fit in several segments and offer much higher sales potential than the one segment the company has recognized earlier. Customer service questionnaire should be placed in the heart of personal communications planning and be used as revenue driving dialogue tool instead of just recording experiences in the past. The money spent in customer satisfaction study will not result much ROI, customer service approach will. One thing about research is that they can do research and report results, but they can’t give analysis based on the results in great depth. In order to create effective insights research results should be analysed against operations. This is actually why media agency Toinen is doing a lot of research and analysis for our clients. Research alone is knowledge, analysis of results, operations and effects as a combination result insights. Research agency cannot give the most valuable advice because they are most often completely external; research department does research and often is not well aware of what is going on in the market place. These things result blind spots. The more you know and the bigger picture you have of the whole, the better analysis you can do from research. Outsourcing research to research department completely is most often a bad decision. Outsourcing it to an external partner who is not actually involved in operations is even worse.

CRM. The CRM is no longer just taking care of your existing customers but has developed further, closer to open dialogue in social media resulting social halo effect which increases company’s transparency, trust and immaterial value stretching to potential customers. Taking care of your own customers is currently resulting endorsement and becoming a media on it’s own right. You can’t really run Social CRM according to real CRM ideology without capturing individual customer buying behaviour. You can’t manage what you can’t measure. However, you can create CRM for your own customers, which leverage Social mediums in the approach. You can create personalized emails to your customers, just as well you could publish in your customer’s wall on Facebook or use Twitter while taking care of your customers. Customer’s primary communications tools should be applied as your tools. Adapting to customer behaviour is becoming easier and you can exceed expectations by applying new ways of communicating.

Conclusions of Business as Usual defects

Companies are often blind to the assets they have at their disposal. The information is often fragmented in the organisation and does offer the management tools that would really drive excellence. It’s not about money though. Companies spend money in data collection as described above anyway. What is missing is the aggregation of this data that would combine different sources of information in to tools that would effectively drive development of the company. This is why Bigdata-idea is currently so popular. But let’s not forget that it’s more about mindset and recognition of these opportunities than about extra cost. Aggregated data would support business development, marketing, sales and improvement in people skills and at best, creativity and innovation. Dialogue instead of research would create relationship equity instead of just data. Considering what would give you the ultimate knowledge about your business isn’t rocket science. Your can and should break corporate habits and start capturing much higher return on current investments.

So, if CMO doesn’t take action, who does?

SEE ALSO:

Business Design with customer centricity

How to enable smart company and avoid corporate autism

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

 

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

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

Join FutureCMO Movement LinkedIn Group here

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