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Loyalty in an interactive digital market


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

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

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

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

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

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

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

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

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

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

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

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Branding = Change Management and Operational Excellence

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

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

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

CMO and corporate must win battles

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

branding, marketing, operational excellence

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

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

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

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

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

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

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

Internal and external data use in marketing

The role of internal and external data:

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

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

See also:

SEE ALSO:

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Marketing technology and Branding – free book

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

A NEW BRAND OF MARKETING – free book by Scott Brinker

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

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

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

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

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

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

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

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

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

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

Download your free copy now.

Reviews of A NEW BRAND OF MARKETING

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Marketing attribution modeling

I just found Mr. Kfir Pravda’s article “Revenue attribution 101”  Mr. Pravda’s key question was: How do you measure revenue attribution – money and profitability for marketing activities. He had split the revenue attribution measurement according to touchpoint sequence from last to first and combined as customer journey. I agree with his measurement frame and guidelines. It’s a great article. I would recommend reading it.

Mr. Pravda’s article got me thinking about how do I actually approach this subject in my planning and implementation process.

First: I always start attribution modeling from owned channels

  1. What is their capacity to bring traffic and visitors (eg. stores and online)?
  2. What is their capability to convert recognized customers?
  3. What do people actually look in to and buy?
  4. Who are the customers actually – what kind of attributes, motives, interest contexts etc. do they share?

Once you have your own channel conversion, increased owned media demand generation impact and marketing automation tuned effective for the first time purchase t’s time to get more people interested.

Second: With the knowledge about contexts, customers and motives that generate interest and traffic it’s rather easy to recognize interfaces and channels that enable you to present a relevant and appealing messages for customers. This first touch planning is very much data directed iterative testing and learning process. What ever works, you scale up and automate in any given channel from online to direct marketing, telesales, face-to-face sales or advertising. I do prefer channels that I can measure direct ROI from, but I’ve also seen how media marketing has created stronger customer relationships and willingness to pay premium. These secondary KPI’s are about brand attributes, preference and willingness to pay premium.

Third stage is about learning and planning how to increase customers’ basket size, purchase frequency and expand customer’s buying behavior to more than one category. This stage is about using marketing automation technology in order to create service automation customer care programs for great customer experience and sales.

This process is completely founded on customer journey analysis and understanding in an omni-channel environment.

I think you might find these articles interesting:

Admap best practice article: How to map customer journey
Marketing’s new and re-designed 7P’s
Managing Brand – The most profound KPI’s and measures /
From marketing automation to service automation
Marketing Do or Die – managing customer interfaces

What about others? How do you approach marketing attribution measurement and planning in omni-channel environment?

About Author

Toni Keskinen ,Chief Editor for Future CMO Movement (http://futurecmo.org)
Toni.keskinen(at)futurecmo.org
http://www.linkedin.com/in/tonikeskinen

How to map Customer Journey – The key questions

When a customer initiates conscious consideration and buying, he’s often  the one who’s active. He’s making searches online, reading ads, discussing about his interest with friends and family, reading product reviews, asking questions from professionals and stores, visiting several websites and outlets, asking opinions and advice. Majority of this behaviour can be analyzed online or with research.

When the customer initiate this journey he’s in charge. At least that’s how he feels. That needs to be taken for granted. He makes decisions. While he’s in charge, he’s being influenced by media, marketing, brands, professionals, sales people,… There is an exception though, in case it is possible for you to earn a position as a trustworthy and respected specialist, then you can sell with specialist recommendations. This approach to sales works much better than hard selling. In the end the customer is quite likely to buy something he could not have imagined before actually entering the journey. He does the decision eventually and your role is to influence the choices he makes if you know how to do it.

Check out a collection of Customer Journey Map visualisations in Pinterest “Customer Journeys and touchpoints”

The things that are often neglected, which I find very important are:

  1. Chain of events > you need to know and understand the people flow across channels and touchpoints
  2. Competing & neutral touchpoints > You need recognize and understand also the impact of your competitors touchpoints. Your channel capasity to convert customers is the key and you must understand that the customer is not visiting your touchpoints only, but your competitors too. Increasing your conversion and business dynamics score is the ultimate goal of the entire Customer Journey work

The mapping of the customer journey is composed of he following parts:

0. Customers: Who are they? How do they live? What kind of life style and life stage are they in their own lives? What is their socioeconomic status like? How can you reach them? What kind of behavioural conventions their everyday life has in the context of your offering? What do they value? What kind of solution would they appreciate? Who are your most valuable customers? How do customer profiles differ from one product category to another? What kind of potential can be found from your existing customers from cross-selling point of view? What kind of people keeps your company in business now and where can you find growth potential?

1. Touch points: mediums, services, personnel, re-sellers, physical spaces, online. 

Do you have control of the touch point or does a partner manage it? At what point of a customer journey is the customer getting involved with a certain touch point? What can you do in that moment and what are your goals and KPI’s? Can that specific touch point result in to an acquisition or do you need to direct the customer further? What kind of roles a single touch point has and how can you make certain all roles are played out right along the customer journey?

2. Service moments and context

What are the most likely contexts in which the customer engages with the touch point? What is he trying to do? How can you help him achieve that? How is that done? How could it make your product or service look more appealing or at best, a most likely option?

3. Motivation and drivers

Are the customers reaching out for you or is it the other way around? In what kind of mindset does a customer engage with your brand? What could drive him further instead of abandoning your brand? What are the conventions and customs in your business and how could you exceed customer’s expectations by breaking them? Are there other companies that have a similar logic to yours and could you implement their approaches, which already have a proven logic?

4. Decision making process

What is the customer’s decision-making process like? Is he doing it himself or using a consultant or services for comparison? Are there predictable qualities in customer’s selection process that would enhance your capability to adapt your organisation to the customer’s behaviour with right content, value proposition or services? How does the customer move from one stage to the next?

5. Triggers and Moments of truth (initiate/choose/drop/buy/attrition)

Where and at what point are the most important moments of truth defining the majority of your business success? What triggers them to decide or act according to your will? Can you trigger customer behaviour? How can you do that most effectively and which kind of approach result in best outcomes? Why do you win and what do your competitors do better if you lose business to them? How can you outperform your competitors’ actions?

6. Post-purchase satisfaction and recommendations

Would customers buy again if they had a choice? What is your Net Promoter Score Index? What were they satisfied about? Was there dissatisfaction? How can you improve your customer experience in order to earn higher opinion? Do your customers discuss about your product online or face to face? What are they saying? Are they endorsing your brand? Could you use their endorsement for others who are still considering it?

7. Business systems, research and analytics

What kind of information your systems currently store from your customers’ behaviour? How could this data help you serve your customers better and create systematic methods for continuous development of your company? Consider ERP, CRM, Online analytics, Contact Center systems, email communications, customer satisfaction and voice of customer studies, reclamations, customer feedback and ideas for improvement etc. How does the infrastructure  combine different data sources and make it available for people working in customer interfaces? Do you have marketing automation software in use that could adapt your operation and communications to individual customer’s behavior and store customer’s online engagements and interests that enable realtime action and individual customer care models?

Here are a couple of visualisations I find particularly informative and inspiring:

One by Desonance

Another by Hear of the Customer: Customer Journey Experience Map – Top 10 requirements

Here is a great presentation about how the job gets done and what is the impact on business performance:

Beyond HBR’s “truth about customer experience”

Harward Business Review just published a great article about Customer Experience and Journey. See here. The main point of the article is, that managing single touchpoint engagements doesn’t provide sufficient customer experience.

HBR - Truth about customer experience

My advice is: Don’t design just touchpoints – Design chain of events, proactive and reactive. Development and measurement is often done engagement by engagement. The service design approach also highlight such emphasis. I’ve done Customer Journey mapping and methodology development since 2004 and agree with the article, only it’s lacking tools and methods how you should approach the challenge. I can help with that.

I’ve written an article series about customer journey management and you can choose and pick, which areas you are interested in or read them as a series of articles:

  1. Customer Journey FLOW
  2. How to map and study Customer Journey
  3. Customer Journey stage 1: Brand as a platform
  4. Customer Journey stage 2: Initiation
  5. Customer Journey stag 3: Choosing and buying – cross-channel influence

In order to really do Service and CX design for the entire customer relationship, you need to understand that there are very different journeys to begin with.

  • Purchase journey (From awareness to consideration and transaction, Acquisition)
  • Service journeys post purchasing (Using the product or service, value-in-use)
  •  Planned (e.g. Address change, regular maintenance etc.)
  •  Unpredictable (e.g. Product failure, reclamation, insurance coverage, etc.)
  • Delivering a service as a customer journey (taking a cruise or flight, restaurant, using media, etc.)
  • Retail customer journeys (e.g. IKEA store experience)

Once you have both Insight and Topsight level understanding about customer journey in full, you need to take a look inside the company. What organisation bodies are involved with customers, what kind of technical environment direct their operation and what kind of data steers their actions. The reality is, that management reporting practices represent management understanding and decisions. The systems and technical infra on the other hand define how the corporate body acts. In case you need to change the way how the corporate body in total behave, you need to define required technical changes, change management and manage change. In my experience, creating Service Blueprints has been quite effective tool for both challenge recognition at current status mapping and Customer Experience planning.

The potential is absolutely amazing. The customer’s expectations are constantly growing harder to fulfill and companies that are agile enough to cure “Corporate Autism” and take the steps required to move from “inconsideration marketing” and mass mailings to service automation, Customer Experience and Journey design at total relationship level, can win marketshare and increase profits considerably. The business-as-usual approach is no longer sufficient, you need to free the full potential an organisation can offer and tear down silos in order to take advantage of synergies available.

In the big picture, your company must act professionally and fulfill minimum requirement perfectly. Failing these requirements cause criticism and decrease your NPS results. Acting human, being considerate, thoughtful and proactive on the other hand increase the number of people willing to recommend you and increase you NPS score. Succeeding in both cumulate earned trust, which is the foundation for long-lasting and profitable customer relationships and strong brand.

creating customer loyalty and trust_improving NPS

In case you do well, the process will enable you to design lean processes and define the best possible value your business processes can possibly deliver. In my opinion this is the Future for CMO’s position inside the company. It’s not the job for CMO’s to define business process management, but it’s the CMO’s responsibility to make certain that everything the company does, delivers maximum customer value and experience across all customer interfaces

Customer interface reach & effectiveness

In case you can capture customer contacts, you can start servicing and inspiring customers individually and simultaneously your capacity to influence increases. The bigger share of the customers buying in a certain category you have in your database, the more effective means you have to influence their behavior and market dynamics. The ultimate goal is to synchronize customer portfolio with product and service portfolio across all touchpoints and marketing interfaces.

customer portfolio_customer touchpoint & marketing portfolio_product and service portfolio

In my experience the only way to do successful customer journey and experience design and create sustainable management model for it is to do the work upside-down. You start from the actual interfaces, motives, contexts and people. From there you continue inside the company culture, practices and technology and design the strategy level after you understand everything else. Like this:

Bottom-up strategy and data analysis

The Holy Grail of customer value is Symbiosis. Check Symbiosis Strategy – creating the ultimate value  -article here.

This is a video by on Sep 12, 2013, It’s All About the Customer Journey

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer, Toinen PHD

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

Join The Future CMO Movement LinkedIn Group here

How to map and study Customer Journey?

Customer Journey Mapping

http://www.servicedesigntools.org/tools/8

Generating and visualising the map is one thing, capturing data and understanding to generate it is another thing. I’ve done Customer Journey mapping and analysis since 2004 and learned a lot about the differences in methodology and their value. I’d like to share some of my experiences here.

The first thing to start with is to consider how you approach this task. I’ve learned that when the designer him self engage in customer journey mapping and research, the time spend in studying is actually effective planning time. Outsourcing this work to a researcher makes everything much harder. When you as a designer and planner are responsible for planning, you have a completely different idea about what to study and pay attention to instead of researcher.

I’ve learned that starting the work with qualitative interview really help in understanding what it is you need to pay attention to. In the qualitative interviews I have used methodology that has a name in Psychology: “Interpretative phenomenological Analysis”. See more from Psychology – magazine This approach thoroughly study customer’s lived experiences from their perspective. The point in this is, that you need to understand the whole big picture with different touch points, different brands and their content, value proposition and services. You need to see from the customers eyes and experience the market in full. Once you have studied 6-8 people like this, you will be ready to write quantitative study for those customers who have recently done the process or are currently in it. Here’s one sample story about buying a GPS navigator and about conflicting interests along the Customer Journey

How to divide the study in phases?

Customer Journey

Majority of the potential innovation driving information is easy to access in case you have a customer register. Considering other journeys apart from buying customer journey, each journey should be separately studied and measured post delivery. I normally study acquisition journey as one study from brand-as-a-platform to Choosing and buying and also ask about post-purchase satisfaction. Using is another study or it can be combined with re-consideration phase, whether people leave or re-buy. Loyalty as such is very much tied to using phase or experiencing the service, which is why combining the latter two would also be a good idea. Always study both won and lost customers. Especially the customers who were lost have a lot to give. By combining different customer groups you will have a better understanding how the market actually works.

If you don’t have a database in use, you can recruit respondents from a panel source with this brief. Depending on the business and brand, the company’s reach in the market place differ very much. If it is possible to find out the number of new deals customers are doing annually, it’s easy to calculate how many did ask for a proposal from you. Closed deals are calculated as conversion from proposals. There’s also hidden movement in companies data they are not aware of. For example customers that are members of your loyalty program also buy from your competitors. Every now and then it’s healthy to ask from current members what they have recently purchased in order to find out how to best approach them and minimize loss of sales and risk of losing members to your competitors. Recently lost customers got initiated for some reason too. How did that happen and why did they not continue their relationship with your brand.

Along with studying customers afterwards, it is very eye-opening to follow what they are doing and to interview them right after they have made their choice. This is different from mystery shopping, because the emphasis is on the customer, not on the store personnel.

The third important source of information apart from customers is your internal organisation working in customer interfaces like helpdesk, customer service, maintenance and sales. They know what questions are frequently asked, what challenges (product failure, need for advice, compatibility issues etc.) are causing most of the costs for the organisation. They are also excellent advisors when considering options how to solve these challenges.

Marketing research often looks into the future perspective and ask about awareness, top-of-mind, preference and shortlist of potential brands. These are all good measures and valuable, but intentional – and could easily lead you to a wrong direction unless you have other KPI’s (key performance indicators) and tools to complement them. The challenge about researching future is that people are quite bad at acting according to their own intentions. Habits, convenience and instincts drive behaviour to unexpected directions that are difficult to predict by research. These studies also often miss a major point. They ask customers which brand they prefer and make them choose one, and consequently fail to recognize the fact that people might have only brand options and not a specific preferred brand.

Example: In case 76% of the customers have a pool of options but they don’t have a specific preferred brand, it means that most of the market is floating. People only have options and consider brands as equally good. When the time comes the best or first/nearest/most conveniently available deal will win regardless the brand as long as the brand is within the pool of options.

When a customer initiates conscious consideration and buying, he’s often active. He’s making searches online, reading ads, discussing about his interest with friends and family, reading product reviews, asking questions from professionals and stores, visiting several websites and outlets, asking opinions and advice. Majority of this behaviour can be analyzed online or with research.

When the customer initiates this journey he’s in charge. At least that’s how he feels. That needs to be taken for granted. He makes decisions. While he’s in charge, he’s being influenced by media, marketing, brands, professionals, sales people,… Eventually the customer is quite likely to buy something he could not have imagined before actually entering the journey. He does the decision eventually but you can influence the choices he makes if you know how to do it. The mapping of the customer journey is composed of he following parts:

1. Touch points: mediums, services, personnel, re-sellers, physical spaces, online. 

Do you have control of the touch point or does a partner manage it? At what point of a customer journey is the customer getting involved with a certain touch point? What can you do in that moment and what are your goals and KPI’s? Can that specific touch point result in to an acquisition or do you need to direct the customer further? What kind of roles a single touch point has and how can you make certain all roles are played out right along the customer journey?

2. Service moments and context

What are the most likely contexts in which the customer engages with the touch point? What is he trying to do? How can you help him achieve that? How is that done? How could it make your product or service look more appealing or at best, a most likely option?

3. Motivation and drivers

Are the customers reaching out for you or is it the other way around? In what kind of mindset does a customer engage with your brand? What could drive him further instead of abandoning your brand? What are the conventions and customs in your business and how could you exceed customer’s expectations by breaking them? Are there other companies that have a similar logic to yours and could you implement their approaches, which already have a proven logic?

4. Decision making process

What is the customer’s decision-making process like? Is he doing it himself or using a consultant or services for comparison? Are there predictable qualities in customer’s selection process that would enhance your capability to adapt your organisation to the customer’s behaviour with right content, value proposition or services? How does the customer move from one stage to the next?

5. Triggers and Moments of truth (initiate/choose/drop/buy/attrition)

Where and at what point are the most important moments of truth defining the majority of your business success? What triggers them to decide or act according to your will? Can you trigger customer behaviour? How can you do that most effectively and which kind of approach result in best outcomes? Why do you win and what do your competitors do better if you lose business to them? How can you outperform your competitors’ actions?

6. Post-purchase satisfaction and recommendations

Would customers buy again if they had a choice? What is your Net Promoter Score Index? What were they satisfied about? Was there dissatisfaction? How can you improve your customer experience in order to earn higher opinion? Do your customers discuss about your product online or face to face? What are they saying? Are they endorsing your brand? Could you use their endorsement for others who are still considering it?

Customer Typologies by behavior

You can easily argue this is not the whole truth. Not all purchases are done like this, consciously working thru a cross-channel decision-making process and eventually buying something. That’s right. And that’s why we needed to create a model for defining critical customer journey models for different kind of purchases. Conscious cross-channel purchase journey is most likely in case of ”3i” purchase. That is High interest, -involvement and/or -investment product or services. However, the buying models and patterns are more complicated than that. Also the behaviour dynamics differ between products, service ranges and between same category brands. You can divide customer behaviour in three major types: Adventurers, Flyers and All-inclusive cruisers

Adventurers: Journey driven people are interested in the products and their qualities. You need to support their needs and change or influence their attitude in order to break in to their awareness. As they search and compare, you need to be able to justify to them why your solution would suit them and guide them to decide and purchase your product/service. These people really consider their user experience and share recommendations in case your performance is beyond expectations. Supporting their needs helps you to perform better with other people representing different behaviour type.

Flyers: Destination driven people also need to be influenced at “need and attitude” -level in order to create better awareness of your offering and it’s qualities. However, this is more about leveraging past reviews and feedback from journey driven people. Destination driven people are more likely to be influenced by e.g. Magazine reviews of your product or other independent sources of information. With such support you can just concentrate on tactical advertising in order to encourage decision and purchase making. Destination driven people are interested in the user experience and reviewing their own experience to others.

All inclusive cruisers: Public opinion driven people accept your offering when it’s widely used and they are completely certain that choosing your offering has no risk what so ever. It’s all about tactical advertising and encouraging purchase. They are not likely to share their opinion to others or recommend your products or services.

The share of each of the previous groups vary by product category and brand. The rules of engagement apply and they must be considered in the mapping too. These laws apply like gravity and this means  that same tools and methods in marketing certainly don’t apply to every case in the same way. Here is the rules of engagement map: a) Level of 3i and b) who’s the active party.

Customer journey rules of engagement

I know doing this kind of mapping sounds like awful lot of work, but I can guarantee that doing it is one of those things you celebrate most later on. Trying to compile data from different sources or doing this with qualitative interviews will deliver 70% right answers and generate innovation too, but doing it this way will give you more insight than you have ever got about your competitors success and failure, understanding the role of different channels and information sources and about market dynamics in general. This approach is a gold mine.

Well, there are a number of ways how to maps and document customer journey. They are all ok, but built for different purposes and they offer different kind of value. One great source of information for visualisation and internal/qualitative process is http://www.servicedesigntools.org/tools/8

What do you think? I’d love to get some comments 🙂

SEE NEXT:

Key questions when stydying Customer Journey

Customer Journey stage 1: Brand as a platform

Customer Journey stage 2: Initiation

Customer Journey stage 3: Choosing and buying – cross-channel influence

also check out how to manage customer interfaces

Author: Toni Keskinen, Marketing Architect & Customer Journey Designer

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

Join FutureCMO Movement LinkedIn Group here

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