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    Forrester embed the_customer_life_cycle_across_marketing_jan_2013 Forrester embed the_customer_life_cycle_across_marketing_jan_2013 Document Transcript

    • Forrester research, inc., 60 acorn park drive, Cambridge, Ma 02140 usa tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com Embed The Customer Life Cycle Across Marketing by Corinne Munchbach, January 22, 2013 For: CMo & Marketing Leadership professionals key TakeaWays Marketing Must evolve To align With a Fragmented path To purchase The explosion of personal technologies and social network connections has ruptured the formerly linear customer purchase path, disrupting what it means to have a seamless brand experience. Marketers must evaluate the influence of each touchpoint on particular customer groups to redefine and support the new brand experiences that customers have. it’s Time To Replace The Marketing Funnel With The Customer Life Cycle The benefits of the marketing funnel are no longer valid, as the complexity of the customer journey mandates marketers embrace 21st century consumer behaviors. Marketing efforts undertaken in the new model better influence that behavior, result in better data, and provide the platform for superior experiences and better business outcomes. Customer obsession Will drive Marketers’ adoption of The new Model The only companies that will be successful in the age of the customer are those that obsess about their customers, marrying digital engagement, traditional marketing, and data to create complete brand experiences from need identification to ongoing loyalty. The customer life cycle puts the customers’ fundamental needs at the center of the strategy.
    • © 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester® , Technographics® , Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com. For CMO & Marketing Leadership Professionals Why Read This Report Today’s empowered customer has the world at her fingertips — literally — through the multiple keyboards and connections to opinions all throughout her day. The challenge for today’s marketer is to get through to these well-informed audiences. Marketers who follow the traditional marketing funnel are not designing their marketing efforts for this new consumer who lives in a less linear environment than in the past. Forrester’s customer life cycle provides a better model for modern marketing, as it places the customer at the center of the effort, which forces marketing to deliver the right approach to that customer at the right time, in the format and via the channel of her choice at any moment. The customer life cycle involves the entire brand experience and describes an ongoing relationship with customers, making it the only approach that will drive success in the age of the customer. This report will help CMO and marketing leadership professionals discover the vision that guides the strategy to transition their organizations to customer life-cycle marketing. Table Of Contents The Marketing Funnel’s Linear Approach Is Outdated The Customer Life Cycle Better Serves 21st Century Marketing The Customer Life Cycle Recognizes That Marketing Is Continuous The Customer Life Cycle Helps Companies Map Marketing’s Core Challenges WHAT IT MEANS The Customer Life Cycle Will Propel Marketing Into The Future Supplemental Material Notes & Resources Forrester interviewed 14 vendor and user companies, including dunnhumby, Kimberly- Clark, L’Oréal, Macy’s, MePlusYou, and SapientNitro. Related Research Documents Evolve Your Approach To Acquisition And Retention December 12, 2012 Competitive Strategy In The Age Of The Customer June 6, 2011 It’s Time To Bury The Marketing Funnel October 28, 2010 Embed The Customer Life Cycle Across Marketing Vision: The Customer Life-Cycle Marketing Playbook by Corinne Munchbach with David M. Cooperstein, Luca S. Paderni, and Samantha Merlivat 2 3 8 9 January 22, 2013
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 2 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 the marketing funnel’s linear approach is outdated After more than a century of providing the basic framework for marketers to think about customer persuasion and engagement, the marketing funnel’s ability to represent that relationship has become outdated. Its simplification of consumer psychology, marketing mix measurement, and business value of marketing worked well in the unidirectional advertising environment of the 20th century. But it fails to represent the far more complex landscape that 21st century consumers and marketers face.1 Even in the two years since Forrester proposed its alternative to the funnel, the customer life cycle, we’ve seen the further breakdown of the linear marketing-centric approach the funnel offers, as: ■ Consumers’ purchase and decision journeys have become ever more fragmented. Sixty- nine percent of US online consumers say that they have researched products online in the past three months, up six percentage points from 2010.2 By researching products online and with mobile devices, consumers expose themselves to brands they might not have previously considered, enlarging their consideration set at exactly the point where, according to the traditional funnel, it should narrow. Even that exploration phase is fragmented by channel and context, as mobile phones link prepurchase and in-store research together and social media provides unexpected comments and reviews. Likewise, consumers don’t reach the end of a simple linear funnel after a purchase. They can seek out more information about their purchase, and if they are repeat customers, they will loop back into the purchase journey without the marketer necessarily having to rebuild awareness. ■ Customers are now the only source of sustainable competitive advantage. 2010 marked the start of what Forrester calls the age of the customer, an era in which firms can no longer compete on traditional sources of competitive advantage and instead must place the customer at the center of the business to succeed against the competition.3 Marketers must elevate retention and loyalty over acquisition in the strategy and particularly since the recession. We’ve seen progressive marketers, from Kimberly-Clark to Caterpillar, meet profit goals by increasing sales within the customer segments with the greatest lifetime value.4 By investing additional spend on retention marketing to increase share of wallet with existing customers, marketers are placing their money on a much surer bet — people who have already demonstrated some level of affinity for the product or brand — than an indiscriminate cast out to the wider pool of potential shoppers or buyers. ■ The funnel fails to distinguish between the relative influence of different interaction points. A whopping 80% of US online adults credit communication with people they know personally for helping them discover new brands, products, or services. More importantly, 94% of those respondents actually purchased or tried a new brand or product after hearing about it through the grapevine.5 And yet the funnel does not call out the connection between repeatedly delighting customers who then advocate for the brand with positive word of mouth (WOM). This leads marketers to bias their marketing mix toward each individual sale, not the longer-term brand experience that would make customers more likely to share and discuss
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 3 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 with others. With so many more potential touchpoints along a consumer’s consideration journey today, marketers need to map the myriad interaction points at each phase for relative influence on various desired outcomes, including but not limited to sales. For example, with social elements such as ratings-and-review functionality on nearly all manufacturer and retail sites, consumers are able to take advantage of what Bazaarvoice calls “C2C” — consumer-to- consumer platforms. Procter & Gamble’s Tide brand has written and video review capabilities embedded into its site, which it can also syndicate out to retailers.6 the customer life cycle better serves 21st century marketing Forrester believes that the customer life cycle provides a better guide to modern marketing, as it aligns marketing activities with customers’ path to purchase (see Figure 1). We define the customer life cycle as: Customers’ relationship with a brand as they continue to discover new needs, explore their options, make purchases, and engage with the product or service experience. The customer life-cycle model is a better fit for how leading marketers conceive, execute, and measure marketing because it: ■ Puts the customer at the center of marketing. At the heart of the customer life cycle is the customer, the target for all of the dollars spent and programs created, which intentionally makes the phases about customer action, not marketing objective. Modern marketers focus on their customers continuously, obsessing about their experiences and lifetime value. The grocery chain Kroger and its analytics partner dunnhumby segment the chain’s most loyal shoppers and customize engagement accordingly, anticipating future need based on previous shopping behavior. Kroger’s Loyal Customer Mailer reaches more than 10 million households across direct mail and email and at the till, and each one is 97% unique. The program has up to a 70% redemption rate. ■ Involves the entire brand experience. Everything the company does — in the store, on a website, or at the call center — affects the customer’s perception of the brand. A large beauty retailer tracks sales by customers, not channels, and uses a score to track customer satisfaction in stores, which affects individual store performance more than sales. A range of other influences — from customer reviews to media coverage and competitor actions — also colors that picture. By expressing the full scope of modern marketing, the customer life cycle encourages marketers to focus on the total brand experience, not just traditional activities. ■ Describes an ongoing relationship. Smart marketers realize that a successful sale doesn’t automatically generate loyalty — it’s something they must earn and work to retain. When marketers do this well, they can inspire satisfied customers to share their experiences with their peers — further strengthening the brand. For example, Delta Air Lines has a program
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 4 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 for its loyal fliers called Middle Seat Mondays where Delta proactively reaches out to address any displeasure caused by sitting in a middle seat. The flier gets an email apologizing for the inconvenience, and Delta deposits miles into the flier’s SkyMiles account on top of it.7 The customer life cycle emphasizes that marketers must earn and retain this goodwill in an ongoing way by investing in customer relationships. Figure 1 The Customer Life Cycle Is A Better Fit With Modern Marketing Source: Forrester Research, Inc.89261 Discover Explore Buy Engage Awareness Consideration Preference Purchase Loyalty The Customer Life Cycle Recognizes That Marketing Is Continuous The customer life cycle surrounds the customer with the total brand experience across four relationship phases. Because consumers today have so many options with which to fulfill their needs, marketers must be agile to respond to any stimuli at any channel that their customers put out. By understanding what takes place for a consumer and why across the phases, marketers will be better positioned to meet those needs (see Figure 2): ■ Discover. Every customer must discover a brand or product category that can meet their fundamental needs for comfort, connection, variety, and uniqueness. These four needs, which manifest both consciously and subconsciously in response to perceived opportunities and threats, drive all consumer behavior, and marketers must start with an understanding of how to meet those needs and build marketing in response (see Figure 3).8 This ability to help consumers discover the initial trigger will lead consumers to a new need or repeat purchase of an existing need. The encounter can be active or passive, and different channels prove to be better at facilitating active and passive discovery. In our research, 68% of US online adults who discover or find out about brands via Facebook say that they come across information about new products on Facebook rather than seeking it out, while for those who discover or find out about brands via ratings-and-review sites, 81% actively seek out the information.9
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 5 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 ■ Explore. In this phase, customers explore your brand — and their other options. When they visit the online store and read product information, compare ingredients or performance metrics, or handle products in a well-crafted brick-and-mortar store, they are immersing themselves in the explore phase. The amount of time spent in this phase will vary by category. Armed with mobile phones throughout their exploration process, consumers now have information at the final decision point. Forrester has found that 11% of US online adults who own a cell phone say that they use their phones to look up product information while in a physical store.10 ■ Buy. Customer experiences during this phase include product availability, inventory lookup, and satisfaction with the checkout process. It also includes the actual price paid, the perceived value, and the experience with the sales channel if there is a problem. Indeed, when asked about an online purchase that left them very dissatisfied with the experience, 62% of US online consumers say that they will likely avoid that website again, and 52% say that they will likely avoid that company’s physical store as well.11 Synchronizing the brand experience across channels, even on those owned by partners, will facilitate purchase and help alleviate shopping cart abandonment online, which happens between 50% and 70% of the time due to shipping costs alone.12 ■ Engage. After buying a product or service, customers engage with brands in many ways. To inspire loyalty and WOM, companies must engage the customer regardless of the touchpoints the customer uses — owned properties or third-party platforms. More than 60% of consumers who interact with brands they like do so with multiple channels, so it’s critical that brands provide a consistent cross-channel experience.13 Furthermore, successful engagement promotes rediscovery and can serve to accelerate the customer through the cycle for additional purchases. BMW’s four-year guarantee of free maintenance — now common among luxury vehicles — engages BMW owners by bringing them in to their dealership for service, both ensuring post-purchase interactions and catching consumers right at the beginning of their next discovery phase as they see new models in the showroom while they wait.
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 6 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 Figure 2 Agile Marketers Map Responses To Customer Needs Along The Life Cycle Source: Forrester Research, Inc.89261 Customer trigger Marketing response Discover Customer exposed to new fundamental need • Ensure that the brand positioning conveys how it meets needs. • Align marketing content with needs met. • Align product and marketing strategy to capture and message need clearly. Explore Delves into options available by brand, price, or location • Map your customer’s path to purchase. • Identify key conversion points to prioritize for marketing collateral. • Ensure comparison and review information is widely accessible across touchpoints. Buy Completes purchase in the most convenient channel at zero moment of truth • Ensure seamless purchase capability from channels used in explore phase. • Provide consistent experience and data about customer across online, offline, and third-party channels. Engage Connects to services or provides feedback post- sales; engages with user community for support • Capture customer service data. • Solicit reviews with incentives. • Identify new needs that can lead the customer to discovery of a new need to accelerate the cycle. Discover Explore Buy Engage
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 7 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 Figure 3 The Four Fundamental Human Needs The Customer Life Cycle Helps Companies Map Marketing’s Core Challenges Marketers can use the customer life cycle to simplify three key marketing issues: consumer psychology and behavior, measurement, and creation of business value. This model forces marketing to adapt, but each of these areas is deeply complex, both strategically and operationally. Marketers must embrace this complexity and use the customer life cycle to show links between the overall strategy and specialized thought in each of these areas, which includes: ■ Customer journey mapping to understand relative influence of interaction points. The customer life cycle simplifies a marketing principle, but what takes place in each of the phases is vastly more complicated and varied. Marketers should use tools such as customer journey and path-to-purchase mapping based on ethnographic and qualitative research to identify key touchpoints along and within the customer’s life cycle. The insights from these exercises will make messaging and engagement initiatives better targeted and more relevant for the customer, enhancing the experience and likelihood to move to the next phase. Kimberly-Clark uses its own life-cycle model called the Commercial Platform to understand its consumers’ journeys and identify white space where the brand can make a real impact. Source: Forrester Research, Inc.89261 Comfort Needs addressed: reassurance, serenity, security, and safety Variety Needs addressed: excitement, novelty, diversion, and positive uncertainty Connection Needs addressed: touch, conversation, shared experiences Subconsciously Consciously Uniqueness Needs addressed: preparation for possible opportunities or improvements to one’s situation Threats Opportunities Needs optimized to prepare us for: How needs are expressed Source: February 4, 2010,“What People Really Need,”Forrester report
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 8 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 ■ Incorporation of metrics into the whole marketing mix. As consumers move seamlessly from channel to device to touchpoint, marketers have the enormous task of planning, deploying, and measuring marketing efforts across a fragmented landscape. One consumer packaged goods marketer told us that marketers rarely pay attention to the changing path to purchase, paying lip service to the concept and basing their budgets on last year’s plan and performance metrics. CMOs should use the customer life cycle to call out conversion events that are critical to the customer journey to track how the consumer moves through the experience and appropriate marketing spend accordingly. ■ Customer lifetime value management to guide the overall brand direction. One of the keys to deriving more value from marketing is to focus on the customers who offer the greatest lifetime value.14 As more CMOs start using the customer life cycle to understand each of these customer groups, the natural next step is to focus on the life cycles that show the greatest opportunity to increase lifetime value. FreshDirect, the online grocer, has identified key consumer segments that demand different types of relationships from the brand and delivers the particular value and unique experiences with a centralized marketing team, allowing the company to remain nimble when scaling. CMOs need to assess who their most important consumer groups are and target them based on an understanding of their process of discovery and exploration. W h at I t M e a n s the customer life cycle Will propel marketing into the future The age of the customer has firmly closed the door on the marketing funnel and ushered in an era where relationships and engagement with customers will be the only way companies achieve success. In the next five years: 1. Successful companies will disrupt themselves to meet customer needs. The power of digital is such that it enables organizations to create better experiences that will build stronger customer relationships and do so in a way that enables those experiences to be brought to market faster and at lower cost.15 To capitalize on this opportunity, CMOs must engage with the rest of the C-suite to address how digitally-ready the organization is and begin taking the necessary steps to incrementally disrupt themselves before a competitor does. As Bill Kanarick of SapientNitro puts it, CMOs should not be trying to predict what is next but ask, “What does readiness look like?” in the face of this digitally disruptive landscape. This could manifest itself like the following: Whirlpool, as it adds the ability for its refrigerators to track the freshness of their contents, will be able to propose recipes and shopping lists based on the content and family makeup. It could then communicate with the brands and allow shopper marketers to presell complementary offers or replenishment of staples.
    • For CMo & Marketing Leadership proFessionaLs embed the Customer Life Cycle across Marketing 9 © 2013, Forrester research, inc. reproduction prohibited January 22, 2013 2. Shopper marketers will be replaced by customer life-cycle marketers. Today, many companies have shopper marketing teams that work with distribution partners and focus on converting consumers into shoppers. But the reality is that consumers must be understood holistically, and their purchase behavior is just one part of what needs to be a 360-degree view. Shopper marketers will bring their knowledge of how to drive transactions into a marketing organization aligned by consumer segment and provide the crucial link between brand marketing and marketing communications. 3. Consumers will manage their own data, forcing true customer obsession from companies. The fervent discussion about how to manage ownership and use of rapidly growing information about consumers will lead to a movement toward individuals owning their data and putting calls into the marketplace when a need arises. Consumers will be able to solicit offers that meet their needs, turning the idea of 1:1 marketing around to favor people who buy, not brands that sell. Truly customer-obsessed companies will be those that are agile enough to respond to those needs and facilitate a transaction that is by definition hyper-relevant and hyper-targeted. suppLeMenTaL MaTeRiaL Methodology Forrester conducted the North American Technographics® Retail Online Survey, Q2 2012 (US), fielded in April 2012 of 4,491 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 4,491), there is 95% confidence that the results have a statistical precision of plus or minus 1.46% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, broadband adoption, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 4,358. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. Forrester conducted the North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Buy Phase) Survey, Q1 2012 (US), fielded in March 2012 of 4,501 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 4,501),
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 10 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 there is 95% confidence that the results have a statistical precision of plus or minus 1.5% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 4,501. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. Forrester conducted the North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Engage Phase) Survey, Q2 2012 (US), fielded in June 2012 of 4,506 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 4,506), there is 95% confidence that the results have a statistical precision of plus or minus 1.5% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 4,506. (Note: Weighted sample sizes can be different from the actual number of respondents to account for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. Forrester conducted the North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Discover Phase) Survey, Q3 2012 (US), fielded in September 2012 of 4,506 US individuals ages 18 to 88. For results based on a randomly chosen sample of this size (N = 4,506), there is 95% confidence that the results have a statistical precision of plus or minus 1.5% of what they would be if the entire population of US online individuals ages 18 and older had been surveyed. Forrester weighted the data by age, gender, income, and region to demographically represent the adult US online population. The survey sample size, when weighted, was 4,506. (Note: Weighted sample sizes can be different from the actual number of respondents to account
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 11 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 for individuals generally underrepresented in online panels.) Please note that this was an online survey. Respondents who participate in online surveys have in general more experience with the Internet and feel more comfortable transacting online. The data is weighted to be representative for the total online population on the weighting targets mentioned, but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’ online panel, and respondents were motivated by receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a random sample. While individuals have been randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen to take part in the MarketTools online panel. Companies Interviewed For This Report Booz Brick Meets Click dunnhumby Etailing Solutions FreshDirect G2 EMEA HubSpot Kimberly-Clark L’Oréal Macy’s MePlusYou ProjectVRM Rockfish Interactive SapientNitro Shopper Sciences Endnotes 1 More than a century after its first use, marketing leaders still turn to the marketing funnel to describe three key aspects of their work: consumer psychology, marketing mix measurement, and the business value of marketing. However, as marketing has grown more complicated over the past decade, the funnel has struggled to continue to reflect reality. Forrester believes the funnel’s value as a framework is finished, and a new model — the customer life cycle — provides a better fit with modern marketing, as it puts the customer at the center of the effort, involves the entire brand experience, and describes an ongoing relationship with the customer. Just as the funnel infused every aspect of marketing historically, the customer life cycle will transform how marketers talk and think about their discipline in the digital world. See the October 28, 2010, “It’s Time To Bury The Marketing Funnel” report. 2 Source: North American Technographics Retail Online Benchmark Recontact Survey, Q3 2012 (US); North American Technographics Online Benchmark Survey, Q2 2010 (US). 3 We’ve entered a new era that Forrester calls the age of the customer. While companies have always, to a greater or lesser extent, called themselves “customer-centric,” this is different. This is not about “customer- centric” thinking or “the customer is always right” — instead, the new power of customers means that a focus on the customer now matters more than any other strategic imperative. See the June 6, 2011, “Competitive Strategy In The Age Of The Customer” report.
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 12 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 4 The impact of a conservative business environment, brought about by the global recession of 2008 to 2009, forced many marketers to rethink an acquisition-heavy customer strategy. Firms woke up to the fact that long-term enterprise value requires not just aggressive top-line growth but an equally strong bottom-line performance — putting the attention back on customer retention efforts. See the December 12, 2012, “Evolve Your Approach To Acquisition And Retention” report. 5 Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Discover Phase) Survey, Q3 2012 (US). 6 Source: Procter & Gamble (http://www.tide.com/en-US/product/tide-to-go.jspx). 7 Source: Sheryl Pattek, “Stuck In The Middle . . . Delta Makes It A Remarkable Journey,” Sheryl Pattek’s Blog, December 11, 2012 (http://blogs.forrester.com/sheryl_pattek/12-12-11-stuck_in_the_middle_delta_makes_ it_a_remarkable_journey). 8 It’s clear that human needs are neither simple nor straightforward. Yet we can summarize such complexity with just four distinct needs because these four can combine in infinite ways — and in response to local circumstances, they can produce the wide range of feelings, desires, and urges we feel each day. That’s why it has been so hard for product strategists to consistently serve consumer needs — they are a moving target, at both the aggregate and the individual levels. Yet that doesn’t mean that it is impossible to build a successful product strategy on them. See the February 4, 2010, “What People Really Need” report. 9 Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Discover Phase) Survey, Q3 2012 (US). 10 Source: North American Technographics Retail Online Survey, Q2 2012 (US). 11 Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Buy Phase) Survey, Q1 2012 (US). 12 Source: David Moth, “55% Of Shoppers Abandon Carts Due To Shipping Costs: Infographic,” Econsultancy, August 7, 2012 (http://econsultancy.com/us/blog/10490-55-of-shoppers-abandon-carts-due-to-shipping- costs-infographic). 13 Consumers connect with brands throughout the customer life cycle — they engage, discover, explore, and buy using a variety of channels. Companies today understand that engagement and positive customer experiences breed loyalty, and they utilize a variety of channels to interact with their customers. However, it is not always clear how, why, and where consumers prefer to engage with their favorite brands. This document is part of a four-part series of Forrester reports on how consumers progress through the customer life cycle. It examines the reasons for, channels for, and benefits of customer brand engagement. See the September 18, 2012, “Brand Engagement The Consumer Way” report. Source: North American Technographics Consumer Deep Dive: Investigating The Customer Life Cycle (Engage Phase) Survey, Q2 2012 (US). 14 Customer lifetime value is a powerful metric that potentially affects marketing execution across the entire life cycle — customer acquisition, targeting, and retention — and ultimately drives firm equity and
    • For CMO & Marketing Leadership Professionals Embed The Customer Life Cycle Across Marketing 13 © 2013, Forrester Research, Inc. Reproduction Prohibited January 22, 2013 shareholder value. It enables marketers to make resource allocation decisions with greater certainty and forces differential treatment of customers based on profitability. See the June 3, 2011, “Navigating The Customer Lifetime Value Conundrum” report. 15 Digital disruption is about to tear down and rebuild every product in every industry. Thanks to digital platforms, your customers live in a world of heightened expectations and abundant options; they can get more of what they want in more places at more times than ever before. Seizing this opportunity, digital disruptors threaten to make you irrelevant by delivering a more compelling product and service experience than you can and at a lower cost, often without even knowing that they’re upending you. To beat them, you must join them. See the October 27, 2011, “The Disruptor’s Handbook” report.
    • Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 17 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 29 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. 89261 « Forrester Focuses On CMO & Marketing Leadership Professionals As the person responsible for the brand experience, you ensure that digital and traditional marketing channels provide a consistent message to the customer, and empower your organization to bridge the gap between marketing and customer service. Forrester helps you create forward-thinking strategies to justify decisions and optimize your individual, team, and corporate performance. MELISSA LAKEN, client persona representing CMO & Marketing Leadership Professionals About Forrester Global marketing and strategy leaders turn to Forrester to help them make the tough decisions necessary to capitalize on shifts in marketing, technology, and consumer behavior. We ensure your success by providing: n Data-driven insight to understand the impact of changing consumer behavior. n Forward-looking research and analysis to guide your decisions. n Objective advice on tools and technologies to connect you with customers. n Best practices for marketing and cross-channel strategy. for more information To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at www.forrester.com. For a complete list of worldwide locations, visit www.forrester.com/about. Client support For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions.