Blog Posts By: Niall Budds

With so much discussion about the importance of an effective online interaction strategy, it's surprising how many companies have yet to fully embrace the power of digital strategies and tactics.  Many are "digital capable", meaning that they have the ability to plan and execute isolated digital tactics.  However comparatively few have yet been able to fully integrate and leverage the power of digital customer interaction, that is, the ability to market, sell, fulfill, service and support customers via a mixture of offline and online methods.  At Quaero we have developed a six-dimensional framework for planning and executing an effective digital interaction strategy which combines all of the key elements you will need to make this critical shift:

Those of you who have read my occasional blogs will be familiar with my ongoing frustration with my mortgage lender.  I wrote in the past how little they seemed to know and appreciate me for my many years of business, and seemed unprepared or unable to reward that loyalty in any tangible way (i.e. with money!).  Well I finally broke free from them about a month ago.  I used a broker and found a new lender who was prepared to give me a much better deal, saving me thousands of dollars in the process.  But wait … fast forward to a couple of weeks ago as I prepared to send my first payment to the new mortgage holder.  I got a letter in the mail explaining that my mortgage had been sold to … you guessed it … my previous lender.  Small world!  The irony is that not only did they lose my business before, but they had to pay to get it back again.  How hard would it have been to give me a slightly better rate and keep my business in the first place?

At the recent Forrester Customer Experience Forum, Principal Analyst Dave Frankland spoke about the four tenets of breakthrough marketing accountability: organizational alignment, cross-functional business processes, value-based metrics, and communicating results. In addition to these core components, here there are some other things which are also critical to establishing marketing accountability:

As a frequent flyer one of my pet peeves is the presentation of credit card offers by flight attendants on behalf of their financial services partners.  I feel bad for the flight attendants having to sell this stuff, presumably to get commission to supplement their incomes.  However what really irritates me is the assumption that I am willing to listen to or am even remotely interested in hearing yet another credit card offer, especially when they know I am a captive audience.  

So I want to start a “do not solicit” list for frequent flyers (I am only half kidding) which would prohibit this annoying interruption.  It seems like the worst form of untargeted marketing.  Surely the airlines and their partners have learned the lesson of the past several years that the more relevant and timely your offer, and the more personalized its presentation, the better your chances of conversion. 

At Quaero we are often asked to help marketing organizations that feel like they are “inefficient”.  Sometimes what I find is that they are, in fact, fairly efficient, but that their marketing investments are not “effective”.  In other words they execute well but do not get good outcomes.  By the same token, I work with companies who are effective – they get good marketing results – but who collectively tear their hair out every time they work together on a marketing program because they are so inefficient and it’s therefore so hard to get things done. 

One of the things that struck me most at the recent Unica MIS conference was how far some of the participating organizations have gone to create a progressive and expansive approach to marketing.  They have consciously and deliberately invested in strategies, analytics, processes and technology that move them away from broad-based outbound marketing to a more real-time and interactive mode of customer engagement.  That contrast between “marketing” and “engagement” came across very clearly to me and I believe is something that all organizations should be thinking about. 

Marketing Operations is a term that has been in common use for several years now.  It has become synonymous with improving and automating direct marketing processes to achieve maximum throughput at minimum cost.  Given the tough economic conditions that have prevailed over the last few years, the focus for work in the marketing operations area has naturally been on being more “efficient," meaning doing more with the same resources or less.  As the economy slowly recovers however, marketers are beginning to think beyond the efficiency of the next campaign or branding initiative and are focusing in two related areas – (i) the changing nature of the marketing they are doing (or should be doing), and (ii) redefining or enhancing marketing operations to support those changes.

I recently worked with the marketing team in a large global organization.  They engaged us to help them to become (in their words) more “efficient”.  Their hypothesis was that both the efficiency problem and its solution lay somewhere at the intersection between their processes and their marketing systems.  However we quickly discovered that people had very different definitions of “efficiency.”

Many of the senior marketers I talk with are worried because they feel like they are losing control over their customers. They are right to be worried; but let's be clear, the "control" they felt they possessed was largely an illusion. Consumers of the past essentially were sitting targets for a brand's outbound communications, but that situation has changed dramatically.

Loyalty is often simplistically defined as an emotional connection with a brand; a continued preference for something that meets a person's needs in a given category. 

In that same vein, attrition is viewed as a point in time "defection" by a customer that consciously and visibly switches to another brand.  In my experience, companies that adopt this crude definition often miss the fact that customers rarely (expect perhaps in membership or subscription oriented business models) think of themselves as having a "relationship" with a company.  Instead they tend to think in a much more pragmatic and transactional way about how your company meets their needs and whether your products deliver value for money.  Viewed from that perspective, attrition is a much more complex and subtle issue and the right measure is "engagement," which is a composite measure of the many individual actions a customer takes on an ongoing basis that touch your brands in ways that lead to purchase. 

I work in the business of Customer Relationship Management and have seen many companies achieve considerable success in finding and keeping profitable customers.  However some of my own personal experiences make me wonder whether companies are too focused on the forest and not spending enough time on the trees.  Or, to put it another way, focusing on a concept as grand as the "Customer Relationship" assumes that there are customers out there who think of how they deal with large companies or brands in the same way as they think of their personal relationships.  That is often not the case.  From a customer's perspective, the "relationship" with their bank, say, is often viewed as just a series of individual experiences of specific transactions or events.  There is very little true "loyalty" present, and what little there is can easily be eroded or destroyed by a bad experience.

Let me illustrate using a recent example ...

In a tough economy, companies are increasingly looking to marketing - either as a defensive play, to protect market and customer share - or as an offensive asset to win business from their competitors.  Either way, this puts more pressure on marketing to deliver compelling offers with maximum efficiency.  The good news is that this economy has been a catalyst for ever more innovative ways to go to market.  The bad news, for marketers at least, is that this dramatically increases the number and complexity of the choices they face. 

I recently had an experience with my car which perfectly illustrates the challenges that companies face in coordinating their actions to maintain loyal customer relationships. 

Here's my story ...

My lease was about to expire and I decided that since I had been very happy with my car, I would enquire as to the buyout price on the lease.  So I called the brand's financial services company and asked for the buyout amount.  When I heard the figure I tried to negotiate a little and asked if maybe they would give me a loyalty discount for sticking with their brand.  The answer I got was a robotic "I'm sorry sir that price is non-negotiable".

Think about the world before the industrial revolution. There were no factories, no organized labor and therefore no systematic ways of producing goods and services. Instead there were a myriad of individuals or small workshops working in isolation, sometimes producing masterpieces of craft and art that we admire to this day.

I think the analogy applies very directly to the state of customer intelligence today where, despite all of the advances in data, technology and the stated objective of most companies to embrace “analytics” or “customer intelligence”, this still remains an area which in my opinion is at best a cottage industry within most large organizations.