Why It's Hard to "Manage" the Customer Experience

Senior business leaders now recognize that providing outstanding customer experiences is a powerful driver of revenue growth and a critical component of competitive advantage.

In the 2017 Digital Trends report by Econsultancy and Adobe, which was based on a global survey of more than 14,000 digital marketing and ecommerce professionals, respondents said that optimizing the customer experience is their most exciting opportunity in 2017, and that customer experience is the primary way their company will seek to differentiate itself over the next five years.

In a 2015 survey of 1,350 B2B executives by Accenture, 79% of respondents said that a differentiated customer experience has a direct impact on business results, and 78% believe it produces a competitive advantage.

Several national consulting firms, such as McKinsey, Accenture, and Forrester, have made customer experience management a core part of their practice. And several professional societies, such as the Customer Experience Professionals Association, have been established to support the customer experience management discipline.

All of this demonstrates why customer experience (CX) management has become one of the most important and most widely-discussed topics in today's business world. I would suggest that CX management is also likely to be one of the most significant and persistent challenges facing companies for the foreseeable future.

CX management is difficult to master for several reasons. First of all, it is a complex, multi-faceted phenomenon. A recent article in the Journal of Marketing contains a detailed review of the academic literature relating to customer experience and provides an excellent introduction to the complexities of the customer experience "construct." If you have doubts about the complexity, just consider the definition of CX offered by the authors:  "Overall, we thus conclude that customer experience is a multidimensional construct focusing on a customer's cognitive, emotional, behavioral, sensorial, and social responses to a firm's offerings during the customer's entire purchase journey."

CX management is also difficult to master because no company can control all of the factors that produce customer experiences. At the most basic level, an "experience" has three components:

1. The environment - This is the thing that is experienced. It can be a product or a service or a website or a call center (or for that matter, a theme park or a movie or dinner at a restaurant).
2. The encounter - This is the interaction between an individual and a particular environment.
3. The effect - This is the perception formed and held by the individual that results from his or her encounter with the environment.

A company can control the attributes and characteristics of the environments presented to customers, and it has some control over what happens during an encounter. But a company has no control over the effect component of an experience. The effect is largely determined by the context of the encounter and by the customer's mental state, and these are the last things any company can control or "manage."

Companies can increase the odds of achieving a positive outcome by understanding what the customer is trying to accomplish in an encounter and the context in which an encounter occurs. But, that's a far cry from "managing" the customer experience.

Illustration courtesy of Ron Mader via Flickr CC.

Share:

A Blueprint for Successful Account-Based Marketing

With account-based marketing sweeping across the B2B marketing landscape like an out-of-control wildfire, it was only a matter of time until we started seeing full-length books on the topic. One of the best is A Practitioner's Guide to Account-Based Marketing by Bev Burgess with Dave Munn published earlier this year.

Bev Burgess is a Senior Vice President and the ABM Practice Lead at ITSMA, and Dave Munn is ITSMA's President and CEO. ITSMA pioneered the development of account-based marketing in the early 2000s, and for the past 10+ years, it has conducted numerous research studies and educational programs regarding the practice. So, ITSMA has been a leading source of thought leadership and research data on ABM for more than a decade, and the authors draw extensively on that data and expertise throughout the book.

A Practitioner's Guide is designed for readers at all stages of the ABM journey, from those who have just heard about ABM and want to learn more about it, to those who have an ABM program in place and want to improve it.

The book is organized in three parts. Part One covers the basics of ABM, including how to determine which accounts should be included in your ABM program. Part One also describes a proven four-step process for implementing account-based marketing. Part Two of the book explains how to plan and execute an ABM program for an individual strategic account. Part Three focuses on the attributes and skills you need to be a good account-based marketer, and it provides advice on managing a career in ABM.

Throughout the book, Burgess and Munn emphasize the importance of treating ABM as a strategic revenue growth initiative, not just as a marketing or sales support initiative. The authors repeatedly state that successful ABM requires a high level of collaboration between marketing and sales, and can require the involvement of other business functions as well.

This may be the single most significant concept contained in A Practitioner's Guide because it constitutes the foundation that makes the other processes described in the book work effectively. What we now call account-based marketing is actually a business strategy that is built around maximizing revenue growth from a select group of target accounts. In retrospect, it would have been better if ITSMA had named this approach to revenue growth account-based demand generation instead of account-based marketing.

Another strength of A Practitioner's Guide is that it paints a realistic picture of the effort that's required to build a successful ABM program. Over the past couple of years, the hype surrounding ABM has been almost deafening. While much of the "positive press" about ABM is justified, the hype has also tended to obscure or minimize the work that's necessary to do ABM well. Burgess and Munn have brought a much-needed dose of reality to the ABM conversation.

If there is anything to criticize about A Practitioner's Guide, it would be that much of the material in the book appears to be based on the use of ABM by tech companies. For example, the book contains nine informative case studies, and eight of them are about companies that provide technology-related products or services.

The orientation of the book shouldn't be surprising, given that ITSMA is the Information Technology Services Marketing Association. Some readers may wonder whether the principles discussed in the book are equally applicable for companies that operate outside the tech sector. In my experience, the ABM principles laid out in A Practitioner's Guide are valid for any company where ABM itself is appropriate.

If you're thinking about adopting ABM, or if you're involved in developing an ABM program, you need to read this book.

Share:

Cracking the Code on Marketing Performance Management

A few days ago, VisionEdge Marketing, Hive9, and Valid USA published the results of the 2017 Marketing Performance Management (MPM) Benchmark study. The 2017 study consisted of an online survey that produced 418 qualified responses.

VisionEdge Marketing and various partners have conducted this study annually for the past 16 years. The primary goal of the research is (and has been) to identify the attributes and practices of marketing organizations that excel at measuring and demonstrating marketing's value and contribution to the business.

This is one of the annual research studies that I look forward to reviewing every year. Once again, this year's study provides valuable insights regarding a subject of vital importance to B2B marketers, and I encourage you to get a copy of the study report and read it carefully.

The 2017 study report is not currently available online. However, VisionEdge Marketing, Hive9, and Valid USA will be hosting a webinar regarding the study on June 14th, and all webinar attendees will be offered a copy of the study report. You can register for the webinar here.

Here are four key takeaways from the 2017 MPM study.

The Pressure is Still On

Marketing leaders are still under significant pressure to measure and demonstrate marketing's value and contribution to the business. Sixty-eight percent of the survey respondents said this pressure is actually increasing. Other recent studies have produced similar findings. For example, in the February 2017 edition of The CMO Survey (conducted by Dr. Christine Moorman with Duke University's Fuqua School of Business), 56.9% of CMOs reported pressure from their CEO and/or Board of Directors to prove the value of marketing.

A Select Few are Really Good

Only 23% of survey respondents said their C-suite would give marketing a grade of "A" (90 or more on a 100-point scale) on its ability to measure and demonstrate its value to the business. This indicates that most marketing organizations have significant work to do in this area to meet the needs of C-level executives.

Even the Best Can Get Better

The 2017 MPM study clearly shows that even best-in-class marketing organizations have significant room to improve. For example:

• Survey respondents gave BIC marketing organizations a score of 7.4 (on a 10-point scale) on their use of marketing metrics that link marketing results to business outcomes. Middle-of-the-pack organizations received a score of 7.3.
• Only 61% of BIC marketing organizations are using metrics chains, which the study found is one of the key components of an effective marketing performance management system.
• Most high-performing organizations need to expand their use of data. Only 45% of BIC marketing organizations use data to make strategic decisions, and only 32% use data to improve effectiveness.

MPM is Challenging

Perhaps most importantly, the 2017 study makes it clear that designing and building a comprehensive and meaningful marketing performance management system is not a simple or easy task. The study identifies six key "ingredients" of an effective MPM system, and all six are necessary to achieve best-in-class results.

In addition, a comprehensive MPM system can easily become complex. For example, it's very common for a large or mid-size B2B company to have several strategic business outcomes that marketing has (or shares) responsibility for. In these circumstances, the performance management system will require more metrics, more performance targets, and multiple metrics chains.

Despite these challenges, it's vital to build an effective marketing performance management system because proving the value and impact of marketing is no longer optional for most marketing leaders.

Image courtesy of VisionEdge Marketing.

Share:

More Evidence Regarding Small Business Marketing Practices

A few weeks ago, I published a post that discussed some of the major findings of a survey conducted by Target Marketing magazine regarding the marketing practices of small and mid-size companies. Recently, Clutch (a B2B market research firm based in Washington, DC) published the results of its 2017 Small Business Digital Marketing Survey. Because these two studies addressed similar topics, I thought it would be interesting to compare and contrast their findings.

Both of these studies focused on smaller companies. In the Target Marketing survey - which produced 725 responses - 50% of the respondents were with companies having less than $5 million in annual revenue, and 22% were with companies having annual revenue of $5 million to $50 million.

In the Clutch survey - which produced 350 responses - 46% percent of the respondents were with companies having less than $1 million in annual revenue, and 26% were with companies having annual revenue of $1 million to $5 million.

Both studies indicate that marketing spending by most small companies will increase or hold steady in 2017. In the Target Marketing survey, 37% of respondents said their 2017 marketing budget would be higher than in 2016, and 40% said their budget would stay the same compared to 2016. In the Clutch survey, 49% of respondents said their marketing budget would increase in 2017, and 33% said it would remain flat.

Both surveys also asked participants how their spending on specific marketing methods would change in 2017. The following table shows the percentage of respondents in each survey who said they plan to increase spending on each identified method or channel. (Note:  The Clutch survey focused exclusively on digital marketing methods.)

The Clutch survey also provides a couple of additional data points regarding small business marketing practices:

• Over two-thirds of the survey respondents (68%) reported spending less than $100,000 on marketing and advertising in 2016, and 41% said they spent less than $10,000.
• About half of the respondents (49%) have 1 or 2 employees working on digital marketing activities, while 28% said they have 3 or 4 digital marketing employees.

Top image courtesy of Jax House via Flickr CC.

Share:

Marketing Best Practices Need Warning Labels

Business leaders of all kinds regard the identification and implementation of best practices as one of the most powerful management tools at their disposal. And why shouldn't they? It seems immanently reasonable to identify the practices of high-performing companies and then emulate those practices.

Marketing leaders are particularly enamored with best practices. After all, marketing success is difficult to achieve and even harder to sustain because the marketing landscape is always changing, and because it's incredibly hard to predict what marketing messages and methods will win the hearts and minds of potential customers. In these circumstances, it shouldn't be surprising that marketers are so fond of "proven" best practices.

Marketing best practices are often portrayed as effective and reliable tools for achieving marketing success, but the reality is somewhat more complicated. Best practices can be helpful when they are understood correctly and used appropriately. However, it's very easy for marketers to become enthralled with the purported benefits of best practices, and to forget about their limitations.

These days, many of the products we buy come with warning labels which highlight the bad things that can happen if we use the product incorrectly. Maybe marketing best practices should come with a set of warnings to remind marketers of their potential "dangers." I can think of several warnings that could be appropriate, but here are three that are particularly important.

Not Comprehensive

"WARNING:  Marketing success results from the interplay of numerous activities and conditions, not all of which are addressed in these best practices. Therefore, these practices may produce less-than-expected results if other factors required for success are absent."

Most marketing best practices are accompanied by an implicit or explicit claim:  Use these practices and your marketing performance will significantly improve. But here's the problem. Most collections of best practices relate to one aspect of marketing, while marketing success usually results from the combined effects of numerous factors, many of which the best practices don't address. Therefore, best practices never provide a truly comprehensive "formula" that will guarantee large-scale improvement in marketing performance.

And even if you assembled a comprehensive list of the marketing best practices that are relevant to your business, you still wouldn't have the magic formula because marketing success is affected by factors that are beyond the scope and control of marketing. These factors include activities in other areas of the business, economic conditions, the actions of competitors, and the unpredictable responses of potential customers. The bottom line is that best practices may be necessary for improving marketing performance, but they aren't sufficient to guarantee marketing success.

Widespread Use Reduces Effectiveness

"WARNING:  The widespread adoption and use of these best practices will reduce their effectiveness."

One of the most paradoxical characteristics of marketing best practices is that the more widely they are used, the less effective they become. Marketing best practices derive their effectiveness from several sources. A practice can be effective because it is based on sound business principles, or because it resonates with how potential customers make decisions, or because it leverages the capabilities of a particular medium of communication.

But best practices are also highly effective because they are usually exceptional. When a best practice is new, it tends to be used by a relatively small number of companies. Therefore, the practice stands out in the marketplace and more effectively captures the attention of potential customers. The distinctiveness also serves to differentiate the company using the practice from its competitors.

Unfortunately, as more and more companies adopt and use a best practice, it loses the distinctiveness that made it highly effective. Content marketing is a great example of a marketing practice that is now more challenging because it is so widely used.

Based on Hindsight

"WARNING:  These best practices have been identified by evaluating past results, and they may be less effective in the future. Past performance is not a reliable indicator of future results."

Best practices are always based on hindsight. We don't identify a principle or technique as a best practice until we have a fairly significant track record of performance. But as we all know, the marketing environment is constantly evolving. New technologies are appearing at a breathtaking pace, and many of those technologies enable marketing practices that were previously unheard of. Meanwhile, customer expectations are also rapidly changing.

Under these circumstances, marketers should view all best practices as "temporary" and always be alert for developments that may require a change of marketing methods or techniques. It's an overstatement to say that all best practices are obsolete by the time they are recognized as "best." But it's equally wrong to assume that today's best practices will remain unchanged for very long.

Use With Caution

Marketing best practices can help you improve marketing performance and achieve marketing success. But they must be used with caution.

Image courtesy of Travis Wise via Flickr CC.

Share:

Getting Started With Customer Journey Maps

Delivering great experiences to existing and potential customers is rapidly becoming a vital source of competitive advantage for many B2B companies. Recent research indicates that most B2B companies expect to be competing primarily on the basis of customer experience in the very near future.

The starting point for improving customer experiences is understanding what interactions are occurring with customers and potential customers, and how useful and satisfying those interactions are from the customer's perspective. A growing number of companies are using customer journey maps to create a visual representation of the interactions that affect customer experiences.

Customer journey maps can serve many purposes, and as a result, they come in a wide variety of forms. If you want to get a feeling for how much variety exists, just run a Google image search for "customer journey map."

There's a wealth of information about building customer journey maps. Over the past few years, customer journey mapping has been the topic of dozens, if not hundreds, of books, articles, white papers, and blog posts. These content resources often take different approaches to customer journey mapping, and that, combined with the many uses of customer journey maps, can make the process seem extremely intimidating.

There are, however, several things you can do to make the process more manageable, especially if you're just getting started with customer journey mapping.

First, it's important to remember that the mapping process - when it's done the right way - is actually more valuable than the maps themselves. Dwight Eisenhower made this point about military plans when he said, "Plans are worthless, but planning is everything." To create accurate customer journey maps, it's essential to gather and use customer input, and this gives you the opportunity to see your business through the eyes of your customers.

Second, customers will actually have several journeys over the course of their relationship with your company. Don't attempt to address all of these journeys in one mapping project. Work on one journey at a time, and focus on getting that one right.

When companies are just beginning their journey mapping efforts, I usually recommend that they focus on post-purchase journeys. There's a lot of buzz these days about using journey maps to support marketing and sales efforts. These kinds of maps cat certainly be valuable, but post-purchase journeys tend to be more concrete and thus easier to map. Plus, it's usually easier to obtain input from existing customers.

Finally, it's important to clearly define your objectives before you begin to create a customer journey map. To improve customer experiences, the most important thing to understand is what your customers are trying to accomplish when they interact with your company. Therefore, it's important to describe each journey in terms of the customer's objective. In other words, define your customers' journeys by asking:  What jobs are our customers trying to get done when they interact with our company?

Once you've answered this question, you can begin the process of improving customer experiences by answering a second question:  How can we make it easier, faster, and/or cheaper for customers to get these jobs done?

One final thought. Mapping customer journeys is not a one-time job. You will need to validate and possibly update your customer journey maps on a regular basis, at least once a year.

Illustration courtesy of Jenny Cham via Flickr CC.

Share:

Why Marketing Leaders Must Connect the Dots

In a recent article for dmnews.com, Mike Colombo, the CMO of Cloudwords, argued that many CMOs aren't ready for a seat at the C-suite table. According to Mr. Colombo, many CMOs aren't winning a seat at the "grown-up" table because they're still relying on performance metrics that are inconsequential to company leaders.

Recent research has confirmed that many marketers aren't doing a great job of communicating the value that marketing contributes to the business. In the 2016 Marketing Performance Management Benchmark Study by VisionEdge Marketing and Demand Metric, only 23% of survey respondents said their CEO would give marketing a grade of "A" on its ability to demonstrate its value and contribution to the business.

A disconnect between marketing and the rest of the C-suite can exist if CMOs don't clearly communicate the relationship between marketing programs and the business outcomes that matter to other C-suite executives. Most marketing leaders tend to focus on the programs they're running and the direct results of those programs (response rates, downloads, pageviews, etc.). The problem arises when these direct program results aren't linked to the high-level objectives that C-level executives really care about.

The ultimate mission of marketing is to drive revenue growth. Virtually all companies have a revenue growth goal as one of their top-line strategic business objectives. Many companies also have specific goals for new customer acquisition, customer retention and growth, and market share, but these objectives are all directly related to revenue growth. Therefore, every marketing activity is (or should be) designed to generate (or contribute to the production of) revenue.

To effectively communicate the connection between marketing activities and revenue, marketing leaders must develop a revenue growth strategy, which, at its most basic level, is a hypothesis that describes how the company will grow revenue. A revenue growth strategy is essentially a big if-then statement that says, "If we execute these specific marketing programs, then we will meet our revenue growth objectives."

However, many marketing activities don't directly produce revenue. Some marketing activities are several steps removed from the realization of revenue, but they are essential components of the revenue generation process. Therefore, a revenue growth strategy is a set of if-then statements, each of which describes a specific marketing activity and the anticipated results of that activity. These individual if-then statements are then combined to create chains of cause-and-effect relationships that connect individual marketing activities to the realization of revenue.

A simplified version of one of these cause-and-effect chains might look something like this:

• If we publish a blog that offers readers access to compelling content resources, then more potential buyers will identify themselves and consume our content.
• If more potential buyers identify themselves and consume our content, then we will generate more qualified sales leads.
• If we generate more qualified sales leads, then we will create more legitimate sales opportunities.
• If we increase the number of legitimate sales opportunities, then we will close more sales.
• If we close more sales, then we will produce more revenue, and that will help us reach our revenue growth objectives.

In short, CMOs can fail to earn a seat at the C-suite table if they don't "connect the dots" between marketing programs and revenue growth. To create and sustain credibility with other senior company leaders, CMOs must understand the links between individual marketing activities and revenue growth, and they must make those links visible to the CEO and other members of the C-suite.

For more on this topic, take a look at Laura Patterson's recent article at MarketingProfs. 

Illustration courtesy of Lisa Plummer via Flickr CC.

Share: