It’s not an easy time to be a chief marketing officer. After all, just a year or two ago, marketers were seen as a cost, and their primary mandate from management was simply to “do more with less.” Short-term survival and long-term sustainability were everyone’s main concerns, and little thought was given to growth.
Partly as a result of the changing economic conditions, and partly as a result of significant changes in consumer attitudes and behavior, marketers now find themselves in a wildly different and largely uncharted landscape. Management’s focus has shifted, and the previous emphasis on reducing costs has given way to a new fixation on finding and retaining customers.
In this new business environment, marketers face three major problems. First, the ax-swinging budget cuts of previous years might have stopped, and those budgets often are not being replenished. Second, as mentioned, customer attitudes and behavior have changed--dramatically and permanently--but marketers don’t really understand what the new customer wants. Still, they must design correct messages and move the communications through the right channels, clearly aimed at specific customer segments.
Third, and closely related to problem No. 2, marketers don’t really know what marketing strategies and tactics work anymore. The old one-to-many communication models don’t work. Marketing’s return on investment is dropping sharply, and no one has developed a magic formula to reverse the trend.
Ironically, these problems have come to the fore just as marketing has taken center stage within organizations. The CMO might now be called the “chief collaboration officer,” charged with coordinating the efforts of sales, R&D, product development, and the supply chain to give the customer what he wants, when he wants it.
The challenges aren’t lost on chief marketers. When CMOs in Asia, Europe, and North America responded to a recent Accenture survey, only one in five marketers described themselves as “highly confident” that they had the skilled people, tools, and other resources needed to perform as expected. More than twice as many (43 percent) said they were not confident they had the people, tools and resources they needed to succeed, and fully half felt unprepared for the challenges they could see ahead.
We see at least one approach that offers CMOs a viable path to achieving profitable growth in this highly uncertain and continuously changing environment. That’s an intense focus on the customer experience--in our opinion, the best way to navigate this course. Customer experience--defined as the sum of all experiences a customer has with a provider of goods or services, through all touchpoints during their relationship--is the key to delivering the kind of overall experience that builds customer loyalty and leads to repeat purchases and referrals, whether by word of mouth or (more often) through social media.
The CMOs we spoke to recognize the importance of customer experience in responding to the challenge of delivering growth. Among the 141 top executives from large U.S. companies who participated in the Accenture study, 91 percent said customer experience is very important for their companies’ strategies in 2010, and 80 percent of these marketing leaders consider customer experience management as a way to differentiate their companies from their competitors and other industries. These executives understand that experience is the new marketing, and their key role is aligning the whole enterprise with the customer effort.
If that weren’t difficult enough, then add a highly dynamic environment in which customers not only receive information through multiple channels, but generate and transmit information through social media, as well.
While the importance of the customer experience is widely recognized, marketers are asking themselves the pivotal question: How do we get there from here? That is, how do we create an outstanding experience for customers, communicating the right messages in the right channels to the right audiences, and how do we shape their communications?
Most people don’t build houses without plans, and marketers shouldn’t take on such a major challenge without a blueprint. Instead, an effective, pragmatic customer experience blueprint should replace the old marketing plan, starting with three key elements:
1. Customer Value Analysis: Companies need to identify the engaged customers who can be converted into “best customers,” as well as the casual customers who can be converted into engaged customers. Segment-specific strategies must be developed to facilitate this conversion.
2. Moments Of Truth Analysis: The blueprint should map the importance of various touchpoints leading to the “moment of truth” when a buying decision is made, a disappointment is likely, or a relationship is created. Value propositions should be designed and delivered that capitalize on each moment of truth.
3. Digital Marketing Transformation: Companies need to revisit the relationship between audience and media, determining how customers with the most potential receive information, what channels are most effective in reaching them, and what messages make the strongest impressions on these individuals.
Building an effective marketing capability is more important than ever, but it is more complex and challenging, as well. Companies moving from a defensive posture to an aggressive, growth-seeking stance must make sure that scarce resources are spent wisely, and that “marketing” is properly redefined to encompass the entire customer experience. A carefully drawn blueprint is the first and maybe the most essential step in the redefinition process.