The Future of Marketing: Seizing the Customer Experience
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86% of CMOs and senior marketing executives believe they will own the end-to-end customer experience by 2020. Watch our sponsored webinar to learn why you should never leave the side of your customer on their buying journey and how to prepare for a customer-centric future. We’ll share insights from top CMOs, revealed in new research from The Economist Intelligence Unit, on how they expect to: - Leverage data and technology to understand customers’ behavior - Personalize the customer experience through top marketing channels (and how innovative brands are already succeeding) - Boost their brand value by delivering a better experience
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The Future of Marketing: Seizing the Customer Experience
- 1. The Future of Marketing: Seizing the Customer Experience Mina Seetharaman SVP, Global Creative Strategy The Economist Group Chandar Pattabhiram Group VP, Marketing Marketo
- 2. ABOUT THE EIU 2 Founded in 1946 Global network of analysts and editors Rigorous editorial standards and independence
- 3. CORE QUESTIONS Which technologies and trends will transform marketing organizations most by 2020? What are chief marketing officers doing about it today? 3 “The ability to be external- and future-oriented is no longer optional. You’ve got to have a point of view about the future if you’re going to be where it’s headed.” Keith Weed, CMO, Unilever
- 4. A GLOBAL CROSS-INDUSTRY SURVEY Conducted in Q1 2016: 499 senior marketing executives (>50% were CMOs) North America (27%) Europe (30%) Asia-Pacific (36%) Rest of World (7%) Annual Revenue <US$500 million (48%) >US$500 million (52%) 4
- 5. IN-DEPTH INTERVIEWS Chris M. Kormis, Associate Dean and CMO, McDonough School of Business, Georgetown University Kristin Lemkau, CMO, JPMorgan Chase Jonathan Martin, CMO, Pure Storage Hans Notenboom, Global Head of Digital, Philips Keith Weed, CMO, Unilever 5
- 6. Customer experience drives brand value. CMOs own the customer experience full stop. But marketing complexity is growing sharply. Marketo: Top-Level Findings
- 7. Trend: The connected customer. What are their expectations?
- 8. Page 8© 2014 Marketo, Inc. Marketo Proprietary and Confidential Tomorrow’s Marketing Monologue Dialogue
- 12. MODELLING ENGAGEMENT 12 Personalization everywhere Value for customers & organizations
- 13. PRESSURE ON CMOs Find, win, grow, retain customers A different model of brand building is taking hold with leading CMOs: …a shift from “Big Ideas” to “Big Capabilities” … 13 “You want to understand their likes and dislikes. And then, you want to personalize your content to them.” Chris M. Kormis, Assistant Dean & CMO, School of Business, Georgetown University
- 14. REQUIRES: A SINGLE, BEST VERSION OF CUSTOMER TRUTH A single, best version of customer truth: Harmonized from various data streams: Demographics/Psychographics Clickstream/Purchase Device/Location Derived from analytic capabilities: Uniqueness/Privacy Applicability/Value 14 “The key is connecting the different pieces of the puzzle and ensuring that the right data are exchanged at the right point.” Hans Notenboom, Global head of digital, Philips
- 15. ENABLES: PERSONALIZATION EVERYWHERE Personalization blends: Deep understanding of a customer’s wants, needs and desires; Timely and tailored delivery of relevant content, products and services; The top three channels to the customer in 2020 will be social media (63% of respondents), the World Wide Web (53%) and mobile apps (47%). 15 “You’re no longer marketing AT people. You’re influencing them in an environment where they’ve already had a chance to form a view.” Kristin Lemkau, CMO, JPMorgan Chase
- 16. CREATES: A WINNING CUSTOMER EXPERIENCE EIU cross-referenced customer experience (CX) leaders with metrics around profitability, revenue growth and customer acquisition: Nearly one-half of CX leaders were profitability leaders in their industry; Over 40% of revenue growth leaders were CX leaders across industries; CX leaders accounted for 43% of customer acquisition leaders. 16 “If I can’t combine analytical and creative smarts, it’s virtually impossible to be an effective CMO.” Jonathan Martin, CMO, Pure Storage
- 17. How will brands engage fragmented audiences across unlimited digital shelf space? Marketers must master a personalized customer experience (CX); CX requires a harmonized view of the customer -- - a single, best version of truth; These data are combined with technology and talent to drive personalized customer experiences across platforms and at scale. 17 RESULTS IN: VALUE FOR CUSTOMERS AND ORGANIZATIONS “The experience is the marketing and the experience is what drives performance.” Kristin Lemkau, CMO, JPMorgan Chase
- 18. EXAMPLE 1: Unilever – “All Things Hair” 18 Unilever and Google analyzed 11 billion anonymous searches for salon styling and hair care; Unilever derived relevant hair- & styling-related topics from the search data; Unilever developed & curated custom tutorials and products about various hairstyles for a bespoke YouTube channel.
- 19. MAPPING THE FRAMEWORK “All Things Hair” 19 Challenge: cut through the clutter in a CPG product area that is saturated and where people perceive little product differentiation Approach: Use search data to build a needs-based customer view. Enablement: they are able to focus and create content that addresses specific user needs. Experience: Capitalize on moment of need in the journey and serve the customer on whatever channel (search, desktop, mobile, social) they might want it. Result: Value for the customer in contextually relevant utility; brand builds audience and relationship over time where every intersection point makes the brand play a useful role to their consumer.
- 20. EXAMPLE 2: Philip’s Approach to Healthcare “Our direct buyers are only a small fraction of the ecosystem. But our solutions must create value for each and every member of the healthcare ecosystem if we’re to be successful.” Hans Notenboom, Global head of digital, Philips
- 21. MAPPING THE FRAMEWORK Philips Healthcare Approach 21 Trends: healthcare is moving away from hospitals into the home and daily life, leading to greater personal responsibility for health. Data complexity: Exchanging personal data effectively and securely across a range of health stakeholders is crucial for next-generation healthcare. Enablement: Connecting the dots, including things like real-time IoT data ensures the right data are exchanged at the right point in a stakeholder’s experience. Experience: Healthcare marketers take holistic approaches to engage patients across medical, nutritional, physical fitness and community- oriented contexts to help them make lifestyle changes. Result: Long-term, symbiotic relationship with all the stakeholders along the healthcare continuum to improve preventative measures and ensure better outcomes.
- 22. LOOKING AHEAD 22 Personalization everywhere Value for customers & organizations “Brands need to help people simplify life so we all don’t go mad as this world becomes more complex. I believe that people who focus on that will unlock the true power of data.” Keith Weed, CMO, Unilever
- 23. Page 23© 2014 Marketo, Inc. Marketo Proprietary and Confidential “If you’re still thinking of the CMO as chief megaphone officer, you’re stuck in the 1990s.” -Jonathan Martin, CMO, Pure Storage
- 24. 1. Create a single best version of customer truth 2. Shift from monologue to dialogue 3. Drive toward personalization everywhere Customer Experience is increasingly the basis of competitive advantage.
- 25. Thank You! Mina Seetharaman SVP, Global Creative Strategy The Economist Group Chandar Pattabhiram Group VP, Marketing Marketo
Editor's Notes
- A moment of background on the EIU. We were founded in 1946 as the research arm of the Economist magazine. Currently we have more than 650 analysts and editors around the world providing insight to companies, governments, and non-profits. And we maintain strict editorial independence. ------------------------------------------------------------------------ Transition to EIU-Marketo research project…..
- The path to 2020: Marketers seize the customer experience is an EIU research project, sponsored by Marketo, which tried to answer these two questions by looking at personalised customer experience as a new model of brand building. Marketers have spent much of the past decade trying to perfect their ability to understand the customer through personalisation of their digital content or their e-commerce shopping. What is different about 2016 through 2020 is the expanded role of personalisation which now includes most, if not all, of a customer’s experience with a brand. So customer support, sales support and even product development are starting to fall under the purview of the chief marketing officer (CMO). More CMOs are organising their departments to stand ready to engage the customer with contextually relevant, personalised experiences --- everywhere and anytime they interact with a brand. Moving in this direction requires a fundamentally different perception of the role of data by marketing organisations --- both the sheer volume of data that must be managed by marketers as well as new ways marketers use data to create value. This is the core complexity CMOs must navigate.
- We stress tested the idea of data-driven, personalised customer experience as a brand building strategy among senior marketing executives via a global survey plus in-depth interviews with current CMOs.
- We canvassed CMOs in industries ranging from financial services to connected healthcare to consumer goods to higher education and enterprise technology. The interviewees told a consistent story that their success is predicated on getting to know their customers better and being able to respond with a winning customer experience wherever and however the customer desired.
- Given all of the available choice to find the best deal courtesy of smartphones, search engines and social media, brands have never been more important --- or more easily tuned out by customers. Hence, customer experience-based marketing potentially offers a better model for building brands than advertising-based marketing in a crowded, information rich marketing environment. Today, the primary task of CMOs is to deeply understand customer behaviour and intent; be able to predict what they’re most likely primed to do next; and be ready to influence them at the right moment. Customer experience is the cumulative effect of that process played out across multiple touchpoints (ex. retail store, online, mobile, call centre and so forth) and technology platforms (mobile, tablet, PC). The goal is better loyalty and brand perception. Marketers listed raising customer loyalty and better brand perception (both 53%) as the top two benefits they sought through better customer experience. Not surprisingly, a larger number of customer-focused organisation tasks are falling under the purview of the CMO. Eighty-six percent of CMOs and senior marketing executives expect to be responsible for the end-to-end customer experience by 2020. More than 50% of survey respondents believe the accelerating pace of technology innovation, mobile lifestyles and an explosion of potential marketing channels via Internet connected objects and locations will change marketing the most by 2020.
- Talking at people to engaging with people Dialogue
- Metaphor is building relationships with other people Build relationships through trust, intimacy B2H Customer experience is the accumulated whole of every interaction Takes time – have to work at building relationships Earn trust/intimacy Whether friendship or romantic, we all understand what this process involves And, the relationship is more than just finding and winning those customers…
- It’s about the whole lifecycle – the pressure is on to grow, retain… create meaningful, lifelong relationships.
- With a complexity of channels to consider… So how do we confront this new reality – to find, win, grow and retain in this increasingly complex environment? I’ll pass it over to Mina to talk through the framework our research helped create.
- To classify what contributes to an engaging customer experience with a brand, the EIU developed a simplified, descriptive framework called “The layers of engagement”. The schematic illustrates the linkages between competitive pressures, new capabilities and the response by CMOs Starting at the base, CMOs are under pressure to acquire, grow and keep customers who are connected with one another, technically and socially. The core data asset for a contextually relevant dialog and/or two-way relationship is a single, best view of the customer and his or her world. Leveraging such data enables a personalised, winning customer experience that ultimately creates value for a customer and brand. It’s no accident that this framework looks like a technology “stack”. Marketing has become an intense data-and-technology-driven discipline across industries. More marketing leaders are emerging from technology fields while technology budgets for marketing purposes are becoming some of the largest budgets in the enterprise.
- All that sweat & effort to develop a single, best version of customer is targeted at better personalisation. Personalisation as a driving force for creating valuable customer experience is emphasised repeatedly in the survey results and interviews. This doesn’t mean that mass media channels are suddenly unimportant. IT means that technology or media channels that enable personalised engagements are gaining value in the eyes of CMOs compared with those channels that only deliver branded messages. The survey suggests that by 2020, the top three channels to the customer will be those that focus on personalisation and engagement, while the bottom three channels like TV (15%), print (14%) and radio (7%) will be those that focus on media and publishing. By 2020, the interactive touchpoints between a brand and its customers will expand dramatically as the Internet of Things, virtual reality plus artificial intelligence cause interactivity to spill out of screens and into the outside world. According to the survey, mobile devices & networks (59%), personalisation technologies (45%) and the Internet of Things (39%) will have the biggest impact on marketing by 2020.
- Two-thirds of CX leaders were marketing performance leaders. This suggests the marketing organisation of the future is likely to be built around modelling the customer and their behaviour and then choosing appropriate engagement channels in lieu of creating the most award-winning Pinterest or other channel-specific media campaign to acquire and retain customers. Interviews with CMOs are revealing that their hiring preferences for interactive talent are going beyond domain-specific expertise (ex. an Instagram expert) in favour of people who can think in systems terms across any number of platforms towards a business-related outcome.
- Full ownership of customer experience by the CMO’s office affects many organisational decisions: Nearly 90% of respondents believe marketing departments will exercise significant influence over business strategy by 2020; Nearly 80% believe marketing departments will exercise significant influence over technology strategy by 2020; CMOs will need this additional clout as their role expands beyond planning and executing marketing campaigns to include multiple departmental agendas. However, if they persevere and succeed, marketing departments stand poised to become the "go-to" customer intelligence resource for the entire organisation. Other departments such as R&D, distribution, customer support can draw from and contribute to a single version of the truth about what drives people to engage with a brand or given product.
- 18
- CMOs no longer live in a world where they only need to engage the mainstream and the counter-culture. As CMOs adopt new innovations in marketing technology and best practice, they speed up the adoption rate of other innovations, as if in a chemical reaction. Only the volatile compounds being mixed are mobile & broadband technology, data, analytics and other technologies coming down the pike. Navigating such change requires a robust but flexible model of the customer so that various departments may stand ready with contextually relevant, personalised experiences to engage him or her --- everywhere and anytime. That is the new cost of marketing rather than finding the best online CPM.
- 20
- PRESSURE: The first trend is that healthcare is moving away from hospitals into the home and daily life. This is especially important for treating chronic conditions like diabetes, the cost of which has increased in the US from US$174bn in 2007 to US$245bn in 2012, according to the American Diabetes Association. The migration of healthcare outside of traditional hospital and clinic settings feeds into a second trend, which focuses on greater personal responsibility for health. SINGLE V. of TRUTH: Exchanging personal data effectively and securely across a continuum of health professionals, patients, families and caregivers is crucial for next-generation healthcare. Nowhere else is a single, best version of patient truth more sorely needed, but more difficult to achieve. PERSONALISATION: “The key is connecting the different pieces of the puzzle and ensuring that the right data are exchanged at the right point,” says Hans Notenboom, global head of digital for Philips. WINNING CX: the primary healthcare marketing goal is to help a patient make a lifestyle change. As such, healthcare marketers are taking more holistic approaches for engaging patients across a range of medical, nutritional, physical fitness and community-oriented contexts. VALUE: “Engagement is having a meaningful, long-term relationship with all the stakeholders. Our direct buyers are only a small fraction of the ecosystem. But our solutions must create value for each and every member of the healthcare ecosystem if we’re to be successful.”
- CMOs no longer live in a world where they only need to engage the mainstream and the counter-culture. As CMOs adopt new innovations in marketing technology and best practice, they speed up the adoption rate of other innovations, as if in a chemical reaction. Only the volatile compounds being mixed are mobile & broadband technology, data, analytics and other technologies coming down the pike. Navigating such change requires a robust but flexible model of the customer so that various departments may stand ready with contextually relevant, personalised experiences to engage him or her --- everywhere and anytime. That is the new cost of marketing rather than finding the best online CPM.
- To wrap us up, I want to end on a quote shared by Jonathan Martin, CMO of Pure Storage who rightly said: if you’re still thinking of your CMO role as “chief megaphone officer”, you’re stuck in the 1990s…
- The connected customer means customer experience is increasingly the basis of our customer advantage. The CMOs we spoke with – like Jonathan – are rapidly adjusting to meet this new reality. As they look toward 2020, top CMOs: Create a single best version of customer truth Shift from monolog to dialog Drive toward personalize everywhere All to meet the need to deliver deeper relationships, more meaningful interactions, and never leave their customers’ side.