This is a presentation that McKinsey consultant, Tim McGuire, made at the recent Direct Marketing Association conference. It is very thought-provoking and inspiring one, because it is about practical value and applications of data. In direct marketing scoring models and regression analytics have been an approach any seriously result oriented marketing responsible has already tested. However, the availability of data and applications in the rich and influential online environment has exploded the value to completely new level.
The CIO’s are currently challenged with new needs that come from marketing department and marketing department can no-longer operate without collaboration with ICT responsible people. Although Big Data sounds like an elephant, you don’t need to eat it with one bite. Majority of Big Data corporate scale initiatives can be done manually in smaller scale or with less expensive technologies. Testing, piloting, learning and calculating business cases from them enable solid foundation for larger investments and management attention.. even urgency. Every change starts from recognition and inspiration. This presentation might just spark that first step towards major transformation. Enjoy and share with your management team!
McKinsey just published an article about customer decision making journey. It’s an approach based on a single research and 20000 respondents. I find it great that Customer Journey work and methodologies get real attention and McKinsey’s article proved that customer journey understanding, analytics and design are maturing and becoming real business management tools. We have taken it further with Jarmo Lipiäinen and created Customer Journey Management methodology for sustainable management model. We are also trying to have Customer Journey Management – the book – published, but in the mean while here are some thoughts about how to apply customer journey mapping and understanding to your business.
To start with:
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)
Media company’s customer journey would be about daily use contexts in multi-channel environment reaching the customers with online, print, tablets, email with variety of media types. The thing is, if you simplify customer journeys too much, you will not benefit from the analysis either.
1st: Concentrate on what they did
When you are diving in to customer behavior along their decision-making journey, you need to understand that only customers who have recently done the purchase can tell you how they did it. People are very bad at behaving according to their preferences – so you need to learn from what they did – not from what they think they would do. When people enter the decision-making journey – they can not know how they come out of it. Here’s an example of car purchases
When customers enter the maze they have certain brands in mind. When they are inside the maze they will consult professionals, read reviews, visit discussion forums and discuss with friends. When they are in the zone they will pay attention to advertising they normally ignore and they are likely to learn a lot. Eventually, when they buy something, it could be something they wouldn’t have thought in the beginning.
2nd There are dynamics – rules of engagement so to say – but each category and brand journey is different
If you consider decision-making journeys from buying a nuclear power plant to buying a bottle of coke – here’s how you can analyze the rules of engagement
The customer journey for a well-known, liked and preferred brand is extremely different from a journey for unknown new brand. Read more from article: Brand as a roadsign. It is also good to understand that if you have several product categories, each of them is likely to follow different dynamics.
3rd Look at the whole market – not just your own touch points and understand the market flow!
Here is an example of market flow for a telecom operator. The Dynamic market flow is interesting concept that medical companies are using. They don’t look at the overall market shares but dynamic market, which is about new prescriptions and changing prescriptions. Similarly, looking at the market change is where you can best see how your work is influencing. The market share will follow. Here is some idea about how the idea works from a telco case I made a year ago. I can’t give any actual data out because it is proprietary but I can explain the methodology. First of all, what is the size of dynamic market and how does it flow:
This data tells you how many actually bought, how many of them bought spontaneously and how many did considered purchases. Earlier I did a customer journey decision-making mapping for 3G bundles in Finland, Denmark and France. I can tell you that the differences in national behavior also vary very much. When French people make considered purchases, Finns buy 3G bundles like sausages. These two markets have very different dynamics. Ok. Let’s dig deeper. Here is how you can break down each product category:
This graph has very important information presented in a single page. I know it is not beautiful but it is highly practical. First of all you need to know whether people are newbies and making their first purchase or experience buyers. Then, what is it that makes people tick and initiate conscious consideration? When they do get activated, do they really look for more information or just rely on their brand related heuristics or do they just buy spontaneously? There is great different between customer journeys that are spontaneous and those that are considered. There is even more important figure to understand, that is outbound tele sales share of dynamic market. When you have all this information about your brand and your competitors, I can guarantee you will find insights and surely learn what to do differently. Between brands there will be major differences in conversion rates from preference to purchases and differences in sales via different channels: outbound, retail, online, inbound…
4th Different types of relationships
You buy milk several times a week, you use video rental service occasionally, but very rarely rent the same movie. In average you buy a house once in a lifetime. The relationships are different, very different. This difference has a major impact on how you can create customer relationships and apply customer journey methodology to them. Here are the variables:
These variable form a quadrant with typologies:
It is obvious that every brand should work their way up and to the right. Even if a customer only buys the product or service once in a lifetime, you could still create relationship that feels like continuous relationship.
5th Leverage all your information assets
Understanding the whole customer journey makes it possible for an organisation to re-define relevance and information sources. I’ve published an article about how to cure corporate autism earlier and you can find more from there. Check out
However, you need to understand how the market works and how does your products and services flow with the market. The Customer Journey as a full help in defining what to pay attention to.
Along the Customer Journey you can analyze customer behavior with online analytics, CRM, marketing automation tools, CSAT, VOC-studies, look at market data, research marketing and brand outcomes, analyze social media.. Ok, the list is endless. This is why you need to re-define relevance and build your KPI’s accordingly.
Business Dynamics Score is one of the most fundamental decision journey metrics. It tells you how many customer that preferred you originally, did you keep and how many did you lose. Of those who had no preference or preferred competitor, how many did you win or lose.
LAST but not least
If you really step in to your customer’s shoes, you understand that for a customer a brand is a single entity. If you really analyze customer journey you will find out what to change in order to perform better, but it could be anything. The challenge I have faced most often when I have done customer journey mapping and analysis for my clients is, that it is difficult to tear down silos and act on customer behavior needs. Instead of print campaign it might be better to spend the money on new online webstore, or investing in marketing automation software enabling event based servicing. In my opinion customer journey work is an extraordinary innovation methodology for corporate transformation, change management, and amazing performance.
Author: Toni Keskinen, Marketing Architect & Customer Journey Designer
Join FutureCMO Movement LinkedIn Group here