How many of our customer realise genuine value when they engage with the people, products, services, and experiences which constitute a brand?
Too few, according to CX guru and the Head of the Qualtrics XM Institute Bruce Temkin.
Bruce has recently revisited the case he originally made back in 2010 for organisations to focus on the value customers derive. He argues for a concept called Point of Value to be recognised as the next logical step after the traditional Point of Sale or transaction stage.
According to Bruce sales without customer value are like a Ponzi scheme. They feel good in the moment, but the long-term outcome is likely to be negative.
“Too many organizations overly focus on selling their products and services, keeping a tight eye on short term metrics like sales targets,” Bruce writes, “but sales are not necessarily an indication of long-term success. What’s missing from the picture? Value!”
“If customers don’t get value from their purchases, then they are likely to return them, stop using them, not renew them, and tell others to stay away. Does that sound like a sustainable blueprint?!? Of course not. However, most organizations have a hard time breaking their addiction to sales numbers.”
Bruce challenges companies to compare and contrast their focus on sales targets versus the usually secondary effort they devote to delivering value.
“It’s time for organizations to shift their focus from sales to value! If we see an economic downturn, then the focus on value will become even more critical as companies are pushed to target their limited resources at retaining customers.
According to Bruce a POV mindset would mean the following:
A clear measure of customer value that’s used as a critical KPI for the entire business, driving everything from sales commissions to bonuses for the product development teams.
Support for customers to help them envision and articulate their POV and match their purchases accordingly.
Cross-functional journey teams with responsibility for driving success during the engagement phase for key customer segments, and continuously monitoring any changes in how customers perceive the POV.
Product organizations adopting a focus on “designing for value” by prioritizing features and enablement that streamlines the path to POV over new capabilities. Rather than considering feature adoption as a customer success function, product teams are responsible for ensuring that it is as easy as possible for customers to reach the POV.
Disconnect and run: Netflix’s Social Dilemma. Conscientious defectors explain that addiction and privacy breaches are features not bugs in this compelling documentary. Vladimir Putin did not have to hack Facebook to intervene in the Brexit vote and the 2016 US election, he simply had to use it. And Netflix itself operates a supremely optimised algorithmic business model. Solutions anyone?
As most professionals know, dashboards are visualization tools used to communicate actionable information. Governments do appear to have them, in various iterations, but are they being effectively utilized, dynamically reflecting real-time data and transparently available to their citizens?
Seeing our leaders, from the Victorian State Premier, Daniel Andrews, here in Australia, to the UK’s Boris Johnson and the United States’ Donald Trump, repeatedly stand at their podiums with their paper notes, and little else, I cannot help but wonder are these guys analogue leaders adrift in our digital age?
Make your customer sentiment surveys better, don’t scale them back; and ask “is there anything we could have done to make your experience more exceptional?” Great insight from Net Promoter System (NPS) creator Fred Reichheld.
Fred also argues that our 2020 COVID-19 pandemic is a time for companies to pause and reflect on the future, “what will they stop doing? Were their old goals and aspirations enough?”
“The Net Promoter Score® helps companies improve their human footprint by clarifying how they affect the lives they touch, of both customers and employees,” Fred says.
At least two thirds of the Fortune 500 employ a Net Promoter Score program. It is, by far, the most popular sentiment measuring tool.
Fred says companies use NPS to try to establish how well they are treating their customers and employees.
“This moment presents an opportunity for all of us and all companies to reconsider our primary purpose, to get back to core principles. The pollution of ‘habit’ and the apparently ‘urgent’ has been cleared aside.”
Marketing today is the key to customer success. This mission has
never been more significant and more challenging. Today we marketers must have a
digital sense, a purpose sense and, most critically, a business sense as our
companies and institutions strive to balance shareholders and stakeholders,
profits and our planet.
Yet, how many of our colleagues will agree with us and proclaim
that marketing is the most important function? How many indeed? Not enough.
Especially not enough of our C-level and Board-level people, those legal and
financial leaders, who typically occupy those positions.
We need everyone engaged and committed, not simply compliant, if
we are to deliver the best end-to-end customer experiences across our
businesses, from operations, to customer service to sales, from multi-channel
to omni channel.
In attempting to make this customer first vision happen, how
many people will marketing have to interact with? Everyone, almost. Yet how
many of those people will report to marketing? Very few.
This reality means we must generate impact without direct
authority. It means we have got to be incredibly good at mobilizing. We can’t
just be doing marketing, we must be leading marketing.
Mobilising our boss
Mobilising our colleagues
Mobilising our team
Mobilising ourselves
Unfortunately, doing this, generating positive momentum, is typically difficult in most traditional, hierarchical, matrix-structured, geographically distributed organisations populated by silos.
In this complicated landscape marketing is often not truly
aligned with the business.
All too often there is a trust deficit, a credibility gap.
In marketing we are talking about the future, which is what we
must do. However, what we have claimed about the future often has not been
realized. Too often we have focused on our perceived need to build tomorrow’s
brand whilst not aligning with the business around the commercial imperative to
generate demand today. In contrast the people in Finance and Operations, are mostly
focused on the factual present and the past.
Too often we are not talking the business language of our
colleagues? What Chief Executive talks about Google analytics vanity metrics, or
is genuinely interested in our augmented reality trial campaign or gets
animated about our new Customer Data Platform. Maybe the CEO should get
interested in the CDP, but the other stuff?
What Sales leader gets excited about MQLs (Marketing Qualified
Leads)? Shouldn’t we be focused instead on SALs (Sales Accepted Leads), our marketing-sourced
leads that the sales team is agreeing to own and progress?
And don’t we understand why customer service gets irritated by
our shiny new brand campaign that promises a bright blue sky when they know the
reality for too many customers is thunder, lightning & gale-force winds?
To close this trust gap we must align with the Chief Executive and the organic growth goals, that critical intersection where customer and company needs meet. Marketing must balance the inevitable tension between shareholders and stakeholders.
This means we must first close the skills gap. Marketing leaders must build a team with the best mix of creative, analytical and leadership skills – and then foster trust and excellence.
Marketing must be important to everyone, especially the Chief
Executive. Marketing cannot be the discretionary operating expense budget
number that is the first to be sacrificed when the EBIT target, our profit
target, is threatened.
Fundamentally, we must inspire and credibly measure our impact. Profit and planet. Shareholders and stakeholders. This is how we ensure that we build a great marketing-driven, values-based, genuinely diverse company, that people want to work with not for, want to subscribe to rather than buy from. The marketing-led companies who get this right will out perform their peers, grow faster and deliver sustainable profits. And marketing will have a seat at the top table, recognized as the most important function.
It is supposed to be easy, but all too often completing an online form is an ordeal. English comedian Michael McIntyre explains the challenges and frustrations we typically experience when attempting to complete a form.
There’s got to be a better way. AI can and should make a difference. Here’s Salesforce’s take:
The smart chat bot application Drift has coined the phrase “onversational marketing”, which it claims is about meeting the buyer when they are ready, capturing, qualifying and connecting at double-digit conversion rates.
According to Forrester Research close to half of all CRM projects end in failure, usually in the form of a slow death of a thousand reluctant users.
The business case KPIs, built around new customer acquisition, retention and revenue growth, are never realized. And the blame game spirals in all directions.
Change management and training are recognized as essential drivers, but all too often they are starved of resources and focus. Here’s a tip: for every $ spent on the software’s annual subscription, commit $3 to change and training. And, of course, management has to lead by example.
Despite the incessant “transformation” drumbeat of the past decade, legacy companies are continuing to struggle to adapt to “digital gravity”. Management consultancy McKinsey, professional services firm KPMG and executive search specialists Egon Zehnder have all recently published global C-suite surveys which state that few companies have adapted their corporate strategies to meet new-generation competition or engaged in digital transformations at scale.
McKinsey’s global C-suite survey says legacy companies are facing “a major hit on revenue and profits”. And a jointKPMG-Egon Zehnder report focused on the automotive industry describes its transformation efforts as being “painfully slow”, and limited to superficial factors such as CEOs appearing at new model launches in jeans and locating innovation divisions in hip cities such as Berlin.
These consultants would say this, of course. Surveys such as these are classic tools to illustrate issues and drum up interest in the solutions these firms offer. Nevertheless, it is hard to argue with the conclusions.
The car industry “seems to be clinging
to its old ways,” according to the KPMG-Egon Zehnder researchers, who surveyed
more than 500 global industry executives. “Leaders recognize the unprecedented
challenge now facing them but have yet to establish the digital‐ready culture
needed to meet it.”
McKinsey says digitization is having a
significant negative impact on the profits of incumbents through two loop
effects: digital entrants competing with incumbents through disruptive models,
and incumbents responding to disruption and creating more intense competition
with each other.
“While
90% of companies indicated that they are engaged in some form of digitization,
only 16% said their companies have responded with a bold strategy and at scale.
Likewise, only 30% of companies are focusing on new ways to bundle demand or re-segment
their market. The good news is if your company has yet to fully and adequately
engage with digital disruption or has begun going down a path that is not
yielding positive results, it’s not alone. Thus, leaders in most industries
still have a window for putting a bold digital strategy in place. But it may
not stay open long.”
The KPMG-Egon Zehnder report says that automotive “leaders clearly perceive a new force pulling the automotive industry towards unfamiliar ground – we call this force ‘digital gravity. But the industry seems to be clinging to its old ways. Our research has found that despite an awareness of the challenge facing it, the automotive industry has still not undertaken the work that will enable it to respond to this new force”.
In contrast to the old-school auto firms, Tesla is an obvious, emblematic, game-changing disruptor. You can question Elon Musk’s mercurial behavior, his history of over-promising (will theTesla Semi happen?), the company’s debt burden, the cult-like hype from the fans, and whether the business will become a global high-volume player with a fully autonomous fleet of “robotaxis“, but Tesla is leading the electric vehicle revolution. Its legacy rivals have only recently started acknowledging that the internal combustion engine (ICE) has entered the twilight zone.
And whilst the technology story is compelling, what is also remarkable is that the holistic Tesla experience is a genuine differentiator. For example, unlike the traditional industry, prices are fixed. Influential automotive journalists who buy Tesla cars comment that they are refused discounts. Everybody pays the same in-market price (although Tesla’s pricing can shift, it is universally applied). Picture the peace of mind this statement provides, “nobody has paid less than I did”. No need to engage in the games the conventional car dealers, their financiers and distributors play, with deceptive tactics such as low-interest finance deals still common.
The Internet is awash with positive Tesla stories (and some negatives, of course). Check out this onefrom a fan claiming that the true cost of ownership is close to negligible, especially when compared to conventional ICE cars sold and maintained by the old-school legacy auto companies and their dealer networks who must move metal at all costs (including ethics) to stay viable. Of course, the traditional players question if Tesla can remain somewhat pure as it transitions from a premium niche actor to a volume seller. For now, however, the Tesla ownership experience is superior and a significant factor in the building of what has become an iconic global brand without mainstream advertising. As a blogger wrote:
“Tesla does not spend millions of dollars in a traditional ad campaign. They let you and I discuss it, rave about it, hate on it, or rejoice in the spirit of going electric in a Tesla, be the catalyst to a viral and brilliant marketing campaign. At the end of the day, Tesla advertising is free.”
Recently owners told Musk, via Twitter, that they wanted to be able to leave their dogs safely in their cars. So, Tesla delivered an over-the-air update that made available “dog mode”. This news has been amplified online by the Tesla fans, industry analysts and self-appointed YouTube commentators who track the company’s every move. Tesla’s simple 27-second video promoting the feature has had has several million views:
McKinsey summarizes its survey findings by explaining that “taking both the intensity of the response and the degree of integration into account, we find that barely 8% (of companies) have both responded offensively and integrated their digital strategy fully into the corporate strategy. This is a huge missed opportunity: Our analysis suggests that only a successful response that is both bold and integrated fully can yield revenue and profit trajectories that are higher post-digitization than pre-digitization”.
The KPMG-Egon Zehnder report emphasizes the need to “pursue and foster a new culture … at all levels of the organization (not IT alone) – a top-down approach alone will not work.
“Let
culture play a major role throughout the organization. Without a spirit of
openness, curiosity and learning, companies will struggle to create a blend of
the old and the new.
“Leaders
must also change their own mindset. These steps are impossible without a
serving, inquisitive and humble leadership style that extends to the very top
of the organization. Although strong executional direction is still needed,
establishing a new culture of openness, curiosity and the power to connect is
essential. The spirit of collaborative leadership must prevail – and can
ultimately enable an organization to accomplish something new and better.”
