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TCS 2019 CMO STUDY

 

How Leading CMOs Captivate and Convert Customers for Life

Sunil Karkera
Global Head, TCS Interactive
James Wheless
Global Managing Partner, Consulting & Services Integration, Tata Consultancy Services
Lakshmi Ramesh
Head, Media Center of Excellence, Cognitive Business Operations, TCS
Lisa Fairbanks
TCS Product Management Leader Customer Experience Strategist and Customer Analytics Innovator

Overview

The chief marketing officer job is in the midst of rapid evolution and unprecedented complexity. CMOs are being held to a higher standard, with demands to show tangible and high returns on their marketing investments. As a result, it’s not surprising that CMOs have one of shortest tenures in the C-suite, holding the job only 4.1 years on average, less than CEOs, CFOs, CIOs and heads of HR.1

CMO Challenges
CMOs are tasked with driving enterprise digital transformation, being smart about martech investments while keeping up with a faster pace of technological change and higher customer experience expectations—all with ever tightening budgets. This and other challenges factor into why CMOs have one of the shortest tenures in the C-suite.

Digital Marketing Spend Overtakes Nondigital

Customers expect more from companies than ever before, and they have more power to make their demands known and publicly vilify those who don’t meet them. Gone are the days of competing just on the “four Ps”: product, price, place and promotion.

Companies now must serve as partners to their customers, helping them achieve their objectives. Mass marketing is a relic of the past, relegated to the dustbin of marketing history by digital technologies that let companies personalize communications to each and every customer, even if there are millions of them.

Simplify the Martech Stack

Propelling all this change is a sweeping array of technologies—marketing automation, personalization, data analytics, AI, automation and robotics, Internet of Things (IoT) sensors embedded in products, customer data platforms, and content management systems. They have made the so-called martech stack—the often disparate technologies that enable digitally personalized marketing—highly complex, and in many companies unwieldy.

Diminishing budgets and higher performance expectations are compelling visionary CMOs to transform their marketing organizations into high-value marketing engines that deliver an extraordinary brand experience at every stage of the customer journey—long before and long after a customer becomes a customer.

Mass marketing that uses a “one-size-fits-all approach” is no longer effective in most cases. In fact, in 2019 digital ad spending is predicted to overtake nondigital (traditional) ad spending for the first time ever.
—Source: eMarketer “Digital Ad Spending 2019”

The TCS 2019 CMO Study

To help CMOs navigate this new terrain, in 2019 TCS conducted a comprehensive study of the state of the art in digital marketing.

We surveyed 516 senior marketing executives in North America and Europe and conducted in-depth interviews with a cross-sector sample of marketing executives at nine major companies: an asset management firm, airline, credit card division of a large bank, travel services company, chemical company, telco, consumer products company, pharmaceutical company, and a business services firm.

The study investigated their level of proficiency using digital technologies and how they use data to understand customer needs and do personalization. It assessed their views on how these technologies are enhancing the customer experience now and in the future--and the effectiveness of the marketing organization to attract and keep customers.

Study Methodology

A key objective of the 2019 CMO Study is to understand how large enterprises in all major industry sectors are using data to better understand their customer and to personalize messages.

The study findings are based on in-depth interviews and a comprehensive survey of:

■ 500+ senior marketing executives in North America and Europe
■ All major industry sectors and large B2B, B2C, and B2B2C enterprises

What Marketing Masters Do Differently

The study is intended to help Global 2000 CMOs make better decisions and develop their strategic plans for more effective digital marketing. We have added real-world scenarios from a variety of companies to the quantitative data to demonstrate what the best marketers are doing, and which practices are most effective.

All of this is to enable CMOs to build stronger partnerships with other members of the C-suite—especially their counterparts who run sales and customer service, each of whom today also runs operations that affect the customer experience.

Prior to this report, the big-picture findings from this study have been released in condensed reports based on four stages of the customer journey across the brand experience. This master report looks more closely at what marketing masters are doing—and plan to do—to continue enhancing the customer experience.

The goal of this study is to use the findings to help Global 2000 CMOs develop a more effective digital marketing strategy.

Best Practices in Action

These companies align with best practices of the best marketers as shown in the study findings.

■ Hyatt puts Marketing front and center of the brand experience

 

 

 

■ Awareness: Famous solid surface countertop manufacturer

 

 

 

■ Conversion: Large US-based airline

 

 

 

■ Support: Global asset management company

 

 

 

■ Retention: Pharmaceutical company

 

 

 

 

 

The Customer Journey: The 4 Stages of the Brand Experience

2019 CMO Study Results

Our previously published reports are based on findings from all companies surveyed for the 4 stages of the customer journey throughout the brand experience:

Stage 1 Create market awareness

 

 

 

Stage 2 Convert prospects to customers

 

 

 

 

Stage 3 Support customers after the sale

 

 

 

Stage 4 Retain, upsell and cross-sell to customers

 

 

 

The Brand Experience

The 2019 CMO Study findings are segmented into 4 stages of the customer journey throughout the brand experienced. In addition to this comprehensive master report, the results are shared in these condensed reports that correspond to each stage as defined by the study.

Stage 1 (Creating Awareness):
Attracting the digitally distracted prospect

Stage 2 (Prospect Conversion):
Personalizing content to turn prospects into customers

Stage 3 (Customer Support):
Interacting digitally to become invaluable customer advisors

Stage 4 (Customer Retention):
Using analytics to predict what customers neeed next

Master Report:
How leading CMOs captivate and convert customers for life

Missed Marketing Opportunities

We explore the lessons learned from each stage in detail in this final report. The major takeaway is that “master marketers”—the most successful digital marketers from the study—are reaping superior results from their marketing investments by personalizing communications throughout the brand experience, including the post-sale customer support and retention stages.

These marketers are playing a much bigger and more effective role in attracting, satisfying and retaining customers, thereby adding value across the business. However, our findings indicate that even the best marketers are missing golden opportunities to tap into new digital customer data sources to communicate and personalize messaging.

The study findings show that most marketers are not delivering a consistent brand experience across every stage through the use of personalized customer communications, as shown in this figure.

Leaders, Followers & Master Marketers

Analyzing the data from more than 500 respondents in the CMO study reveals characteristics of three distinct groups: leaders, master marketers, and followers.

Leaders were far more likely to have marketing metrics connected to revenue. These executives typically measured five metrics:
■ Revenue generated by marketing campaigns
■ Return on marketing investment
■ Sales generated from marketing
■ Lifetime value of a customer
■ Customer retention

In all five metrics, the majority of leaders performed well on these metrics (scoring at least a 4 on a scale of 1-5). Accurate measurements were another indicator of leadership: 88% of leaders said their performance on metrics connected to revenue were accurate.

Master marketers outperformed the leaders in most areas. These respondents said their marketing functions created customer communications in all four stages of the customer experience and brand experience.

 

 

 

Followers reported less success in their marketing efforts. Their use of metrics as a group was less consistent. Only a minority of followers used metrics such as lifetime value of a customer and customer retention. Just over half (51%) said they tracked revenue tied to marketing campaigns, while 71% measure return on marketing investments (ROMI). When scoring their performance, followers reported scores of 3.5 or less on a five-point scale. And while leaders cited the accuracy of their scores, only a minority of followers said their metrics were accurate.

In addition to master marketers, we looked at the practices of “leaders”—85 marketers whose metrics were directly connected to revenue, who fared well on those metrics, and who vouched for their accuracy. (Note: The top 23 “marketing masters” are a subset of these “leaders.”)

We also assessed “followers”—95 marketers who used metrics that didn’t connect directly with revenue and who performed poorly on the metrics they used. Followers tended to stick to outdated approaches, focusing marketing resources on getting prospects to buy, rather than on improving customer retention and loyalty.

Overall, we found that the data-and-personalization revolution is well under way. It’s working, delivering substantial benefits to the companies that use technology wisely. But the number of marketers who are doing this throughout the customer experience is small—in fact, only 4% of all the companies we surveyed.

Key finding

Only 4% of companies are personalizing information throughout the customer experience.



The CMO View for 2020

The study results show that CMOs are well aware of the challenges and the possibilities inherent in digital marketing technology for the upcoming decade. Most have at least begun to capitalize on its opportunities and intend to do so more aggressively in the future.

Despite the progress being made, the path ahead for CMOs is long--and fraught with complexity. This report uncovers insights into what lies ahead for enterprise CMOs, including how they plan to more effectively leverage technology for an extraordinary customer experience, reap better returns on marketing investments, and ultimately, convert customers for life.

Key Findings at a Glance

1. Leaders engage more with customers throughout the four stages of the brand experience
These leaders capture data more aggressively and provide deep analytics on customers’ current and expected behaviors. (Most marketing departments are not organized to deliver a consistent brand experience across every stage of the customer journey.)

2. Most marketers do some personalization of customer communications, but almost all of them are failing to take advantage of newer data sources
Such sources include geolocation and product sensor data. Even master marketers are not fully leveraging all the available data sources at every stage of the customer experience.

3. Master marketers are more innovative in their use of digital channels, particularly in advertising on e-commerce sites
In contrast, most CMOs are ignoring opportunities to market on channels such as Amazon.com and Walmart.com, which can pinpoint potential customers for advertisers based on their actual purchases.

4. Too many marketers miss out on opportunities to digitally interact with customers and prospects in conversations via social media channels, other companies’ social media sites, and customer review sites like Yelp

5. Most companies underuse analytics across all four stages of the brand experience and are not capitalizing on the analytics insights (and benefits) from customer loyalty programs.
Master marketers are the exception.

6. To turn prospects into customers, most marketers recognize they need to act as helpful partners by personalizing messages that educate people about their products
Master marketers are acting on this need now; they are more dedicated to the concept of more help, less pitching.

7. Marketers who can digitally sense and respond to “moments of truth” are able to gain customers’ trust and their repeat business
Providing fast help, usually via mobile apps, when needed pays off in customer retention.

8. Most CMOs predict that in 2020 more marketing initiatives will be automated and cloud-based
“Intelligent” technologies will enable campaigns to be adjusted in real time. In addition to demonstrating creativity, marketing teams will require greater agility and technical proficiency to exploit responsiveness while reducing cost and complexity.

9. The chief marketing officer’s role is evolving into a chief experience officer (CXO)
The CXO will be responsible for deploying rich data, AI and robust analytics to add personalized value across all four stages of the brand experience.

Key Findings

Leaders engage more with customers throughout the four stages of the brand experience.

Marketing teams can greatly benefit from actively engaging customers in each of the four phases of the brand experience: awareness building, conversion (or sales), customer support and retention (cross-selling and upselling). Delivering consistent, high-quality messaging across all stages provides a seamless, robust experience that fosters loyalty, turning prospects and customers into long-term revenue sources. Ultimately, it can also enlist them as net promoters—the kind of customers who help market your products and services by recommending them online and in person.

In contrast, failing to engage at each stage can alienate customers and undermine the brand by delivering a fragmented, inconsistent experience. Within a company, it can also deepen siloes across business functions, impeding efforts to run an agile, responsive marketing organization.

The digital marketing leaders that we surveyed understand this well. They are more likely to establish long-term relationships with customers by making sure they are satisfied, even after the invoices have been paid. They do this by paying closer attention to how their products perform, by seeking to fulfill future needs, and effectively communicating with customers about these matters throughout the duration of the brand experience.

These leaders are in the minority, however. Most marketing departments are not organized to deliver a consistent brand experience across all four stages. Instead, they focus on creating communications in the awareness stage—where 100% of respondents create communications for customers—and in the conversion stage, where about 7 out of 10 are active. They are less engaged during the support stage (34% are active) and the retention stage (39%). See Figure 1 for details.

This lack of activity in the support and retention stages is what separates lackluster performers from successful marketing organizations. The many marketing teams that are not active in the latter stages of the brand experience are missing opportunities to detect when existing customers are dissatisfied or likely to defect to the competition. This means their firms leave revenue on the table—and miss out on opportunities to develop new revenue-generating opportunities.

Digging into the data, we discovered a significant discrepancy between the digital marketing practices of B2B and B2C companies. The latter (including B2B2C) are far more active across the four stages of the brand experience. As Figure 2 shows, only about half of B2B marketers are active in the conversion stage, compared with 80% of those selling consumer products.

Likewise, about one of five B2B marketers are active in retention, compared to three out of every five from the B2C and B2B2C group. Given the effectiveness of well-conceived sales communications and the advantages inherent in retaining relationships with hard-won customers, many B2B companies could improve their performance by being more active in these stages, like their B2C counterparts.

B2B Marketers vs B2B/B2B2C
■ Only 49% of B2B marketers are active in the conversion stage vs 80% of those in B2C/B2B2C
■ 1 in 5 B2B marketers are active in retention compared to 3 out of 5 B2C/B2B2C marketers

Today’s CMO Imperative
"Marketing must be integrated with all four stages in order for it to succeed. Due to the evolving role of marketing, more and more functions are increasingly under the marketing umbrella."
— CMO of a large European travel business

Some CMOs are beginning to recognize that engaging across the entire arc of the brand experience has become a competitive imperative. As the CMO of a large European travel business explains, “Marketing must be integrated with all four stages in order for it to succeed. Due to the evolving role of marketing, more and more functions are increasingly under the marketing umbrella.” Duties under his team’s purview include pricing, product positioning, collateral production, training and education, and even new product development. “The old handshake was between sales and marketing,” the CMO said. “Today’s handshake is between marketing and everybody else.”

Five years from now, the European travel CMO predicted that the marketing function will be distributed throughout the organization, with clusters of teams focusing externally and working directly with client segments. The CMO added: “Centralized marketing organizations are probably dying. The core marketing function will become much more about brand and strategy.”

Of course, winning in the competitive marketplace requires more than simply being active; marketers need to capitalize on the most effective tools available. Master marketers understand this. They collect data more aggressively, and use that data to produce deep analytics on customers’ current and expected behavior across the full range of the brand experience.

Our survey found that a similar portion of marketers use analytics in the awareness stage (42% of leaders do so, compared with 39% of followers). In the other three stages, however, leaders are far more likely to apply analytics, by a margin of 12 percentage points in conversion, 18 points in support, and 16 points in retention. (See Figure 3.)

Most marketers do some personalization of customer communications, but almost all of them are failing to take advantage of newer data sources.

Data and digital channels have radically changed marketing, but the survey reveals evidence that the revolution—particularly concerning data analysis—has only just begun. Marketers can now know more about their prospects and customers than ever before, by harnessing the enormous quantities of data that have become available in recent years through a proliferating range of sources, particularly from mobile devices.

In a granular way, you can understand where your customers are located, how they’re using your products, or even what they’ve been shopping for on e-commerce sites. “Digital signals have completely changed the marketing equation over the past five years,” a marketing executive at a major bank’s credit card division told us. In the past, the use of data required qualitative brand-awareness studies that asked people questions like, “Is our brand on par with a BMW or a Kia?”

Now, the ability to harness customer and partner data from today’s digital ecosystems, the credit card division can gain more precise insights, such as understanding when a customer is in the market for a refrigerator.

"Digital signals have completely changed the marketing equation over the past five years, says a marketing executive at a major bank’s credit card division."

Using this enhanced knowledge, companies can communicate in a personalized way, creating specific, relevant messages. They can also take advantage of the power of 24/7 omnichannel digital communications to reach customers anytime, anywhere. When the credit card issuer finds out you’re in the market for a refrigerator, for instance, it can serve you an offer in near-real time. Now that the buying cycle has been compressed from weeks to days or hours, speed is an essential competitive differentiator. With the ability to communicate to customers close to the point of sale, marketers can exercise greater influence over their buying decisions. Later, in the support and retention stages, they can leverage mobile apps, further enhancing data-collection and personalization opportunities.

Our survey found that about 95% of respondents said they personalize communications in the stages in which they are active. However, the following four figures identify channels that are being underused in each stage and are missed marketing opportunities.

To deliver personalized messages, marketers are using—and underusing—a wide variety of channels, depending on the stage of the brand experience as shown in Figures 4, 5, 6 and 7.

■ Awareness: Nearly all companies (greater than 95%) use the company website, digital advertising, email marketing and online video sites.

 

 

■ Conversion: All companies deploy digital advertising and their own website, followed closely by online video sites (97%)

 

 

 

* Includes paid search ads, banner ads, social media ads ** Includes advertorials

■ Support: The company website and email support center dominate. Interestingly, 68% deliver support via social media, eclipsing the traditional call center channel, used by 65% of respondents.

■ Retention: All respondents active in this stage use the company website and digital media advertising as communication channels.

 

 

 

* Includes paid search ads, banner ads, social media ads ** Includes advertorials

Nearly all companies may be personalizing their communications, but robust personalization depends on the astute use of data. This is where the data-and-personalization marketing revolution still has a long way to go. We found that companies are just beginning to capitalize on the power of new data sources such as geolocation and sensors embedded in products. (See Best Practices in Action: “A Major Airline Leverages Data to Land High-Value Passengers.”)

B2B companies are particularly lagging in using these data sources. Of 139 B2B respondents surveyed, only one reported using geolocation data for awareness, one for conversion, 10 for customer support, and none for retention. In contrast, at least 53% of B2C companies use geolocation data to personalize their communications at some stage of the brand experience.

Geolocation Data
Out of 139 B2B companies
■ Only 1 uses it for awareness and conversion
■ Only 10 use it for customer support
■ None use for retention
Compared to
■ 53% of B2C companies use it at some stage of the brand experience

It’s important to note that these new data sources appear to be gaining momentum; most companies weren’t using them a decade ago. Yet in three of the four stages (awareness, conversion and retention) a traditional data type—demographics—still dominates data use. This may signal that while companies are exploring the newer sources, they have not abandoned important older methods that have long guided them.

B2C companies use these data sources for personalization across all stages of the brand experience:
■ 22% product sensor data
■ 14% customer-service usage data from in-store sensors
■ 53% geolocation data

As for leaders, we found that most have yet to exploit the newer sources, but as a group they are more likely to be seizing the opportunity. In the customer support stage, for instance, leaders are more likely to use customers’ real-time geolocation data than followers (27% compared to just 9%) and service-usage data captured by sensors embedded in their products (16% vs. 6%). We found a similar albeit smaller trend in customer retention, where leaders were seven percentage points more likely to use customer’s geolocation data (31% vs. 24%) and three percentage points more likely to use sensor data (6% vs. 3%).

Leaders vs Followers Using Customer Geolocation Data
■ 27% of leaders compared to 9% of followers in support stage
■ 31% of leaders compared to 24% of followers in retention stage

Data use in the customer support stage is different from the other three stages. In this stage, buying behavior is among the most frequently used sources, deployed by slightly over half of all respondents. This is an obvious choice, given the nature of customer support. In fact, we found it surprising that nearly half of companies are not using buying-behavior data from existing customers.

Another frequently used data source for customer support is customer social-media behavior, used by 38% of leaders and 34% of followers. Companies analyze social media activity for a variety of purposes, including to gather useful intelligence about their products, to proactively help customers, or to protect their reputation from comments on social media.

Key finding
Companies with high-value products and services are more likely to use social media data.

Healthcare 57%
Insurance 53%
Telecommunications 53%
Automotive 50%

Interestingly, we found significant variance among sectors on this front. Companies with high-value products and services are more likely to use social media data. These include healthcare (57%), insurance (53%), telecommunications (53%) and automotive (50%) companies. In retail, where a product’s reputation online can drive or curb sales, only 30% of companies are using social media data. Given the power of viral social media, we believe this represents a missed opportunity, or even a glaring vulnerability, for those who aren’t active in this space.

Missed Opportunity
■ Only 30% of retail (B2C/B2B2C) companies are using social media data

Master marketers are more innovative in their use of digital channels, particularly in marketing on e-commerce sites.

Personalized ads on e-commerce sites such as Amazon.com and Walmart.com have emerged as a formidable medium for digital marketing. These ads—sometimes referred to as targeted or interest-based ads—allow marketers to reach customers at the online point of sale, letting them influence their buying decision in real time, at the optimal moment. They also provide a powerful opportunity for understanding customers, enabling marketers to gather data about their preferences, their search and purchase habits (if the e-commerce site shares this data with its advertisers). Data from these sites can even help marketers understand competitors vying for their prospects’ business.

Yet we found that many marketers are not taking advantage of this channel. Only about a quarter of companies (26%) advertise on e-commerce sites in the awareness stage, while 27% do so in the conversion stage. B2B companies are particularly far behind. Despite estimates that global B2B e-commerce could reach $1.2 trillion to $6.6 trillion annually by the early 2020s,2 only 7% advertise on e-commerce sites in the awareness and conversion stages, compared to about a third of B2C and B2B2C companies.

There’s a good chance that this is hurting them. In fact, the most successful marketers are much more likely to be using ads on e-commerce sites. Fifty-two percent of master marketers use ads on e-commerce sites in the awareness stage, twice the rate of all marketers and 2.5 times the rate of the least effective marketers (19%). Likewise, nearly half (48%) do so in the conversion stage, compared with 27% of all marketers and 21% of followers. (See Figure 8.)

Personalized ads on e-commerce sites:
■ Reach customers at the moment of sale, giving the ability to influence buying decisions in real time
■ Provide a powerful opportunity to understand customer preferences, search and buying behavior

Did You Know?
Global B2B e-commerce could reach $1.2 trillion to $6.6 trillion annually by the early 2020s.2
But only 7% of B2B respondents advertise on e-commerce sites in the awareness and conversion stages, compared to about a third of B2C and B2B2C companies.


Too many marketers miss out on opportunities to digitally interact with customers and prospects in conversations via social media channels, other companies’ social media sites, and review forums like Yelp.

We found that many marketers—across each stage and in every sector—are not taking full advantage of social media to engage with their customers and prospects. In some cases, they are truly dropping the ball.

Of course, most companies have social media pages they post to, on major platforms such as Facebook, Twitter and Instagram. We found that most (71%) use such outlets to build awareness, and about half (48%) use it to communicate with prospects in the conversion stage. Likewise, most marketing teams involved in the support stage capitalize on social media as a communications channel: 58% respond to social media messages seeking support, and 68% post support content to their company’s social media pages; the latter number puts social media on par with call centers, the traditional channel for delivering support. Leaders are even more likely to use these channels, with 76% posting support messages to the company’s social media pages (vs. 59% of followers) and 65% responding to social media messages (vs. 50% of followers).

Use of Social Media to Personalize Communications

Engagement on company’s social media pages


 76% of leaders vs 59% of followers

Response to social media conversations

 65% of leaders vs 50% of followers

Only 15% of those surveyed use social media behavior data

Overall, these may sound like high engagement rates, until you put them in perspective. Facebook, for instance, has arguably reached middle age. It opened its network to the world 13 years ago—an eternity on the Internet—and now claims about 2.4 billion active monthly users. Nearly 2 billion people are also active each month on YouTube (1.9 billion) and Instagram (1 billion); the latter enjoys deep penetration among affluent and difficult-to-reach Millennials.3 Linked-In, Reddit and Twitter also exceed 300 million monthly users.4

The CMO study shows surprisingly low engagement in these channels. When you consider the numbers of active monthly users, it is definitely a missed opportunity to better understand and connect with customers:

Active Monthly Users
■ Facebook 2.4 billion people
■ YouTube 2 billion people
■ Instagram 1 billion people

Not only are these audiences large, they are active and they matter for marketers. About four out of five people (81%) say social media posts from their friends directly influence purchase decisions.5 And social media is also undeniably a critical tool for building communities and long-term relationships. In other words, the 29% of marketers not using social media to build awareness or the 52% who aren’t using it to convert prospects into customers ought to have strong reasons for neglecting to engage.

About four out of five people (81%) say social media posts from their friends directly influence purchase decisions.5

Missed Marketing Opportunities
■ 29% of marketers are not using social media to build awareness
■ 52% are not using it to convert prospects into customers

Some companies in certain sectors may believe that social media is not appropriate for their business, perhaps because their products or services are too specialized to be of interest to social-media audiences. On the contrary, leading marketers say social media can be particularly effective in reaching these niche audiences. For instance, we interviewed the CMO of a leading manufacturer of countertops and other solid-surface materials—a product, it’s safe to say, probably is not frequently featured in Kim Kardashian’s instagram or Justin Bieber’s tweets. Yet the CMO and chief sales officer told us that in seeking to rejuvenate their brand, they relied heavily on social media influencers to reach key decision makers and build a community. The strategy worked. In the first six months of 2018 the company broke sales records. (See Best Practices in Action: “A Leading Manufacturer’s Digital Renaissance.”)

Similarly, a major airline CMO told us that to reward its loyal customers and to entice Millennials to engage with the brand, his company offers special “flash” deals such as free food at popular establishments in major cities, time-sensitive offers promoted via social media. The airline seeks to capture high-value customers early, when they’re still in college and haven’t yet established loyalties with other airlines. “The only way to reach these customers is via social media,” the CMO said.

To entice Millennials to engage with the brand, this major airline offers special “flash” deals such as free food at popular establishments in major cities, timesensitive real-time offers promoted via social media. The airline seeks to capture high-value customers early, when they’re still in college and haven’t yet established loyalties with other airlines.

Building loyalty and creating a community around the brand is, of course, a key pillar of retention (stage 4) marketing. It’s also a natural fit for social media, where like-minded people from around the world gather without the encumbrances of distance and time. Yet the vast majority of marketers who are active in stage 4 are giving it a pass. Only 8% create messages on their company social media pages aimed at retaining existing customers, and 5% use social media data to personalize retention communications.

Even though the retention stage is a natural fit for social media, the majority of marketers are not active in this stage.
■ Only 8% create messages on their company social media pages aimed at retaining existing customers
■ Only 5% use social media data to personalize retention communications

The study also found that many companies are thinking too narrowly about social media, ignoring the need to communicate on online review sites such as Yelp and Google Reviews. According to independent research, as many as four-in-five consumers read online reviews when considering a purchase.6 Yet respondents to our survey indicated that only 10% advertise on review sites during the awareness stage, and 9% when seeking to convert prospects to customers.

Use of Review Sites (Yelp, Google Reviews)
■ Only 10% of all respondents during awareness stage
■ Only 9% of all respondents during the conversion stage

Most companies underuse analytics across all four stages of the brand experience and are not capitalizing on the analytics insights (and benefits) from customer loyalty programs.

We found that most marketing departments use customer analytics software to understand why customers buy, not why they leave or stay loyal, or whether awareness campaigns are working. More than two-thirds of marketers use customer analytics software in the conversion stage, but only about a third do so for awareness building and support, and half for retention.

Again, this is an area that distinguishes master marketers. The majority of master marketers use software to analyze customer behavior in all four stages: 52% in awareness, 100% in conversion, 83% in support and 87% retention. (See Figure 9.)

In the awareness stage, analytics software can provide valuable intelligence about a multitude of factors, such as which advertising channels are working. A senior marketing official for a European telecom company told us that analytics software prompted his company to reconsider how it spends its advertising budget.

The company had long preferred print advertising and had been skeptical of digital display ads, given low click-through and conversion rates. But using analytics software, his team learned that digital touchpoints were more influential than previously believed, with lower customer acquisition costs.

Master marketers use analytics software in all 4 stages:

The failure of many marketers to leverage analytics in the support and retention phases is a missed opportunity. In the support stage, analytics can help marketers identify product, service or support issues, enabling the company to address these early, before customers get frustrated or post negative reviews online. For retention, analytics software helps marketers understand customers’ unmet needs. This drives additional sales, and can even help companies identify new product ideas. (See Best Practices in Action: “A Pharmaceutical Company Uses Sensors to Provide Personalized Customer Advice.”)

Missed Marketing Opportunities
The majority of marketers fail to fully leverage the power of analytics in every stage, particularly the post-sales customer support and retention phases.

The 54% of respondents choosing not to use customer analytics in the retention stage are also forgetting that retaining and nurturing existing customers is less costly than acquiring new ones. Marketers know that their existing customers are willing to spend on the products or services their company offers, and are often willing to share feedback. Understanding these customers and keeping them satisfied can go a long way toward maximizing your return on customer acquisition.

More broadly, analytics software can offer insights on the market landscape, including competitors’ strengths and weaknesses. Staying on top of these issues is essential to building long-term loyalty. Not using analytics software to build loyalty can be costly, particularly for B2B companies that serve a limited pool of high-value customers.

Customer loyalty programs help marketers reap the maximum benefit from customer analytics software. In addition to rewarding regular customers, loyalty programs can tie anonymous data to actual customers, and can provide opportunities to gather rich information about them. This enables marketers to better understand and serve their best customers, which is key to keeping them loyal.

Keep the Current Customer Satisfied

Starwood Hotels and Resorts dug into its data and found that 2% of its customers accounted for 30% of revenues, and that members of its platinum loyalty-program were far more profitable than other customers.

Starwood Hotels and Resorts, for instance, dug into its data and found that 2% of its customers accounted for 30% of revenues, and that members of its platinum loyalty-program were far more profitable than other customers. “Analyzing the data was eye opening, and really pushed us to reexamine how we think about loyalty and benefits,” wrote Mark R. Vondrasek, who headed the company’s loyalty program at the time.7 (See Best Practices in Action: “Hyatt Hotels Puts Marketing at the Center of the Brand Experience.”)

Despite the benefits of customer loyalty programs, we found most companies (55%) do not offer them. However, 78% of master marketers do have customer loyalty programs (Figure 10), while only 20% of B2B companies do (Figure 10a).

Missed Marketing Opportunities
■ 55% of companies surveyed do not offer loyalty programs
■ 78% of master marketers do have loyalty programs

To turn prospects into customers, most marketers recognize they need to act as helpful partners by personalizing messages that educate people about their products.

In the digital era, marketers have many ways to cultivate stronger relationships with their customers. Meanwhile, customers expect brands to deliver not just good products and services, but also an excellent overall experience in buying and using those products and services. To achieve this, the best marketers have largely abandoned old-school practices—such as thinking of their customers in terms of transactions and persuading them with sales promotions.

Instead, savvy marketers lead with valuable information rather than price. They act as trusted partners, not only selling products and services, but educating customers with information they find helpful for achieving their goals. This leads to higher-value relationships and better long-term outcomes for both the company and its customers. (See Best Practices in Action: “Bringing the Personal Touch to an Asset Manager’s Clients.”)

On average, most marketers who are active in the awareness, conversion and retention stages have embraced this ethos. Overall, 71% lead with useful information on their products or services (excluding prices). This is slightly higher than those who offer price-based special deals, provided by 66% overall in awareness, 67% in conversion and 73% in retention.

But digging into the data, we found that master marketers and leaders are far more committed than followers to partnering with customers and offering valuable information rather than special deals. In the customer support stage, fewer than a third (29%) of master marketers pitch special offers, while 90% focus on providing information to help customers get more value from their purchases. In contrast, a slight majority (52%) of the least effective marketers in the support stage pitch special deals and other offers, and only a third (34%) provide non-promotional but useful information. (See Figures 11 and 11a.)

As new technologies become ever more powerful and accessible, companies are finding remarkably innovative ways to deploy them to serve as better partners to their customers. A major veterinary pharmaceutical manufacturer, for instance, is offering customers sensors that can be worn by livestock. By monitoring data on biometrics and behavior (such as scratching motions), the sensors alert the farmer when an ailment afflicts the herd.

With the help of artificial intelligence, the technology is beginning to offer diagnoses in some cases. This helps the farmer with a difficult and time-consuming task previously carried out manually, and helps marketers by signaling when the farmer may need to purchase medications. (See Best Practices in Action: “A Pharmaceutical Company Uses Sensors to Provide Personalized Customer Advice.”)

What Master Marketers Do Differently in the Support Stage

Master Marketers
■ Only 29% pitch special offers
■ 90% focus on providing value-based information

Followers
■ 52% in the support stage pitch special deals and other offers
■ Only 34% provide useful information

Marketers who can digitally sense and respond to customers are able to gain their trust and repeat business.

The Internet has brought unprecedented transparency to the marketplace. The prices of many products and services are readily available at everyone’s fingertips, for immediate comparison. With free, fast delivery, companies are competing against one another across vast geographic regions.

Meanwhile, online reviews like Yelp and TripAdvisor, and product-comparison sites like NerdWallet and Wirecutter, provide brutally clear (if not always accurate) assessments of companies’ relative strengths and weaknesses. Such third-party communications channels help a small number of the strongest companies thrive. For their competitors, it raises the stakes of positive or negative feedback, and can even pose an existential threat.

Working in this environment changes the dynamics of a company’s relationship with its customers. It means that providing an exceptional customer experience across the entire customer lifecycle is of paramount importance. In the past, companies could get away with front-loading their goodwill; the goal was to get the customer to spend, and once she did the company and customer generally went their own separate ways. If a customer had a problem, a product could be returned for a refund, and as long as the bulk of customers didn’t return products a business could thrive, even with merely satisfactory products.

In today’s digital, real-time environment, providing an exceptional experience for the customer, every step of the way, is essential to staying competitive.

These days, the balance of post-transaction power has tilted dramatically in favor of customers. A small number of vocal, unsatisfied customers can tarnish a company and cause sales to plummet. Marketers, therefore, need to keep close tabs on their customers, to ensure that they are happy. But delivering a great after-sales experience isn’t only about defending the brand. Committing to engage with customers in every stage enables companies to show that they really care. Following through on the commitment builds loyalty.

The most astute marketers recognize this. More than six-in-ten master marketers (61%) believe that by 2020 the most important stages will be those that occur after the transaction: support (22%) and retention (39%). Forty-two percent of leaders believe that these later stages would dominate, compared to only 20% of followers. (See Figure 12.)

Naturally, awareness and conversion remain important. If no one knows about your products or no one buys them, there won’t be much need for support or retention. For growing companies and those launching new products, awareness and conversion could carry greater importance than the later stages.

In 2020 Customer Support and Retention Will Pay Off Most

The majority of master marketers predict that in 2020 and beyond, the most important stages will be those following the purchase transaction:
■ 22% Stage 3 Support
■ 39% Stage 4 Retention
■ 42% of leaders predict that these later stages will dominate vs 20% of followers

Support and retention, however, are even more critical in high-value service industries, and progressive companies are using data to ensure that customers are happy even when they don’t complain. Asset managers, for example, collect fees long after the initial relationship is formed, as long as the client’s money remains under the firm’s management. A European marketing executive for a mid-sized asset manager told us that it is critical to know when a large client may be dissatisfied before the client raises issues. The firm, therefore, mines its website data to see who is visiting which pages, and tries to glean insights from this. In the future, the firm is planning to apply AI to help with this process.

A European marketing executive for a mid-sized asset manager says it is critical to know when a large client may be dissatisfied before they raise any issues. The firm, therefore, mines its website data to see who is visiting which pages, and tries to glean insights from this. In the future, the firm is planning to apply AI to help with this process.

Most CMOs predict that in 2020, more marketing initiatives will be automated and cloud-based.

The ongoing effort to deliver a personalized brand experience to every customer poses a major logistical challenge for marketing teams. Obviously, companies have too many customers, and their needs are too complex, to handle manually. This speaks to the urgent need to boost automation and capitalize on advanced technology. Companies need AI and predictive analytics to understand customer behavior, and to anticipate and respond in near-real time to problems at every stage of the customer experience.

Companies need AI and predictive analytics to understand customer behavior, and to anticipate and respond in near-real time to problems at every stage of the customer experience.

Marketers understand this. They feel the urgency. The survey found that 94% of all marketers expect automation for data and analytics solutions to increase by 2020 compared with 73% of it automated today. (See Figure 13.) All of the activities we asked about—ranging from content and customer experience to data and analytics solutions—are expected to experience substantial additional automation in the coming year.

The need to understand customer behavior will drive increase need for automation

94% of all marketers expect automation for data and analytics solutions to increase by 2020
vs

 

 

 

73% of automation happening today

The trend toward marketing automation is also fueled by the need to minimize repetitive and low-value-added tasks, freeing up the marketing team for greater “strategic creativity” as the travel company CMO said in an interview. So far, his team has automated two key functions: content management (which used to be a major challenge because the company produces so much content) and A-B testing (which helps the firm explore the effects of even minute changes in email marketing). “We’re trying to determine the effect in various geographies of matters such as signing an email, adding a question mark to a subject line, and using certain color shades.”

Along with this move toward automation, CMOs face a pressing need to simplify their martech stacks in order to streamline operations. Most marketing departments are tangled in tech complexity. They are working with a wide variety of tools—including SaaS, shrink-wrapped software and legacy systems—that take countless hours to master and manage, and that rarely speak with one another. Rather than supporting a grand vision or strategy, the stack frequently reflects piecemeal tactical needs that have evolved over time.

The Need to Simplify the Martech Stack
Most marketing departments are tangled in tech complexity. They are working with a wide variety of disparate tools—including SaaS, shrink-wrapped software and legacy systems—that take countless hours to master and manage. This stack often reflects a piecemeal approach that does not support a larger marketing strategy.

This tangle of technology needs to be replaced by a modern, more nimble and efficient cloud-based stack. Again, CMOs get the message. On average, survey respondents said that currently about half (51%) of their martech infrastructure runs via on-premises systems. In 2020, they expect that portion to shrink to 30%, with the remainder shifting to the cloud. (See figure 14.) If cloud-based data is accessible via a customer data platform (CDP) or a common layer of customer data, marketing can shape key messages to protect and safeguard the brand while continually enhancing the customer experience at every stage of their journey.

Marketing masters predict that in 2020 their martech stack will increase from 60/40 to:
■ 80% cloud and 20% on-premises

Finally, all these needs—to automate, update the martech stack, and fully harness modern technology—coupled with the evolving role of the marketing department, mean that marketing teams need new skill sets.

In the past, respondents say the skills most needed by marketing teams were:
■ 67% IT
■ 57% Ability to develop and lead campaigns
■ 56% Media production, communication and dissemination methods
■ 53% Creativity and writing
■ 53% Planning and directing sales promotions

In current and future marketing departments, respondents chose a different set of skills, with a greater emphasis on technology:
■ 65% IT
■ 60% Understanding how to leverage AI, machine learning and big data/analytics
■ 53% General data skills
■ 52% Ability to develop and lead campaigns
■ 50% Customer-experience personalization knowledge

What this says is that in the new world of marketing, tech skills are in huge demand. AI, data and personalization skills have pushed media, creative and promotional skills out of the top five most highly sought-after competencies.

The chief marketing officer’s role is evolving into a chief experience officer (CXO).

Creating competitive marketing strategies for the 2020s means CMOs must understand marketing’s place within a larger digital, complex ecosystem. It will require building on traditional relationships to include new digital partnerships (new digital media channels, external agencies, new data sources and types of data, and new digital platforms).

The customer data harnessed from within this vast ecosystem should be leveraged across the entire business. Access to this data can position the chief marketer with the ability to break down the typical silos of marketing, sales and support and help create a universal layer of customer information. This calls for the transformation of the CMO to get ready to step into a new, more comprehensive and collaborative role: whether it’s an evolution from chief marketer to chief experience officer (CXO)—or even to chief brand officer, chief growth officer or chief commercial officer.

Key finding

Overall, only 4% of all marketers surveyed have developed the ability to interact with customers in real time across all four stages—when, where and how they choose.

Some companies have already begun this transformation by ensuring the CMO has responsibilities for the entire brand experience and in some cases, by formally renaming the CMO as CXO.

For instance, the CMO of a major US airline says that his responsibilities span the entire spectrum of the brand experience, from prospecting for the next generation of frequent business travelers at top MBA programs to monitoring customer feedback to ensure that premium customers get the kind of service that will keep them loyal. Likewise, in seeking to replicate the high levels of customer loyalty achieved by Starwood Hotels and Resorts, Hyatt Hotels Corp. hired the executive who ran Starwood’s loyalty program and named him chief commercial officer. The result for Hyatt? A dramatic increase in new members to the customer loyalty program. (For more information, see Best Practices in Action: “Hyatt Puts Marketing at the Center of the Brand Experience.”) Other companies that have up-leveled the role of CMO include PepsiCo8 and Uber9.

What CXOs Will Do Differently in 2020
Delivering an extraordinary customer experience remains an imperative for 2020—and will require a balanced mix of real-time customer data, a robust analytics platform, automation and AI, creativity and the required digital skill set.

Implications of the Study Findings

CMOs are under intensifying pressure to demonstrate return on investment and greater value to the entire business. But to achieve these goals, global marketers need to change the way they think about the customer experience.

Most marketers are missing numerous opportunities to improve the customer experience and strengthen business performance. They are adept at using digital technologies to personalize messages in the awareness and conversion stages. But in all stages they need to more aggressively use and analyze the broad spectrum of available customer data. Armed with this information, they can better align marketing with sales, customer support and finance, with the shared goal of improving the customer experience and strengthening cross-functional business performance.

The most successful marketers personalize communications throughout the brand experience—including during the customer support and retention stages. Master marketers are playing a bigger, more effective role in attracting10, converting11, satisfying12, and retaining13 customers, and especially in interacting with current customers. Yet all CMOs, including master marketers, can more aggressively seize untapped opportunities to leverage customer data and personalize communications.

Master marketer CMOs are embedding their companies into customers’ lives. They do this by continually anticipating and providing valuable, personalized help in getting maximum value from their offerings. Overall, only 4% of all marketers surveyed have developed the ability to interact with customers in real time across all four stages—when, where and how they choose. Developing this capability builds engagement, loyalty, and trust—the qualities of a strong relationship. This ensures a superior customer experience, along with new opportunities to build on the relationship and to cross-sell products. Ultimately, this means higher revenue and business success.

“Sense-and-respond” marketing requires engaging, educating and enlightening prospects and customers with personalized, relevant messages in real-time throughout every moment of their experience. To do so requires access to customer data fueled by advanced analytics, AI, automation, and machine learning. The benefits include a continuous loop that ensures an optimal customer experience and builds long-term loyalty.

Three Takeaways for 2020 and Beyond

A future focus on existing customers

Survey respondents predict focusing on customers during the support and retention stages will pay off the most in 2020.

 

 

Robust personalization depends on the astute use of data

The data-and-personalization marketing revolution still has a long way to go. The study findings show that most companies are just beginning to understand the need to capitalize on the power of new data sources and the larger digital ecosystem.

 

Real-time customer engagement is everything

If today’s CMOs are to be transformed into master marketers that deliver an extraordinary customer experience, they and their organizations must be able to digitally sense and respond to, and engage with, customers at every moment of their journey.

CMO Essentials: A Roadmap to Digitally Engage at Every Stage

Digitally Engage with Customers at Every Stage

Sense-and-respond marketing requires the ability for marketers to engage, educate, and enlighten prospects and existing customers with personalized, relevant messages in real time throughout every moment of the customer experience. The benefits include the creation of a loop of continually refined data that ensures an optimal customer experience and builds long-term loyalty. This means that the CMO and the marketing organization will likely have expanded scope and requires participation within a digital ecosystem that enables access to customer data fueled by advanced analytics, AI, automation, machine learning, and blockchain.

Best Practices In Action

How Leaders Keep Customers Satisfied

This section brings to life the concepts covered in this report and is based on interviews conducted during the CMO Study research.

Hyatt Puts Marketing at the Center of the Brand

Challenge: Executives at Hyatt Hotels faced a challenge. They sought to boost customer loyalty and grow the company’s top line. Instead, revenues were trending flat. Meanwhile, at competitor Starwood Hotels, the top 2% of its Starwood Preferred Guests program accounted for an astounding 30% of the company’s profits.

Solution: Hyatt’s executives needed to take action. In late 2017, they hired Mark Vondrasek—who ran Starwood’s rewards program—with the goal of “[deepening] loyalty engagement and [advancing] brand growth beyond traditional hotel stays. Data and personalization underpinned this goal. At Starwood, Vondrasek said that the personalization strategy was about “truly understanding our guests so well that they don’t want to unplug from the infrastructure we’ve built for them.” Hyatt CEO Mark S. Hoplamazian commented that Vondrasek brought a “tremendous depth of experience in taking consumer info and data and translating that into initiatives that really add value to the program.”

A key next step occurred three months later, when Hyatt eliminated the CMO role and elevated Vondrasek to a newly created position: “chief commercial officer, overseeing marketing, sales, contact centers, loyalty program, and IT.” In fact, loyalty program members accounted for 41% of all bookings during the quarter, helping Hyatt to increase global market share. In other words, the company put Vondrasek in charge of all four stages of the brand experience, a responsibility that he had held at Starwood as well.

Outcome: The program has yielded results. In the second quarter of 2019, Hyatt reported that loyalty program enrollment rose 37% over the same quarter in 2018. Loyalty program members accounted for 41% of all bookings during the quarter. “One of the drivers of our performance is the delivery of revenue from the World of Hyatt loyalty program,” said Hoplamazian on the quarterly earnings call. Despite a difficult environment for the hotel industry, the company’s stock is up more than 20% in the two years since Vondrasek was hired.

A Leading Manufacturer’s Digital Marketing Renaissance

Summary: To revive its brand, boost sales and overcome price-based competition, a leading manufacturer of solid-surface countertops undertook a rebranding and revamped marketing strategy, empowered by digital technology. The initiative focused on updating the product and introducing it to a new generation of customers, its chief marketing and sales officers said in an interview.

Challenge: The company was challenged to reinvigorate its perceived “low-cost” product to better compete against suppliers of popular alternatives—including granite and “engineered stone” materials (such as quartz countertops)—which had gained significant market share.

Solution: The team worked with an ad agency to develop a new positioning and logo, and to create new brand messaging intended to help customers achieve their project goals. A key change was reimagining the target audience for its marketing. In the past, it prioritized print advertisements in specialty publications to convince distributors and fabricators to push the product to consumers and businesses. Instead, the company shifted to a pull strategy: it buys almost exclusively digital media, targeting the ultimate decision makers: architects, designers, consumers and building owners—key influencers who decide the look, feel and function of the spaces being created.

It personalizes each click-through according to the potential customer’s interests and needs. These include very focused messages in high-traffic sites that key influencers visit. With digital marketing, the company can reach new audiences in a way that would have been impossible in the past. The team has also cultivated about 60 design influencers globally to blog, post on social media and otherwise promote the brand.

Using the viewership data from its website, the company is able to determine which touchpoints—influencers, banners and short videos—are getting the most traction and dedicate additional resources to them.

Outcome: The personalization and rebranding initiative has created an exponential impact, with a dramatic increase in digital impressions and high-quality sales leads. In the first six months of 2018, the company broke records in selling its product in North America, its biggest market.

A Major US Airline Leverages Data to Land High-Value Passengers

Summary: A major airline uses rich data sources to identify the most desirable customers and determine the best ways and optimal moments to reach them.

Challenge: Frequent premium travelers are extremely lucrative. Yet the cost of acquiring these travelers is high, particularly if they have already established loyalty to a competitor. The airline, therefore, sought a strategy for identifying them and determining when and how to win them over, said the CMO in an interview.

Solution: Data is vital to finding and landing these passengers. Fortunately, data is plentiful for airlines, due to the nature of the business. The booking process yields rich personal information, as well as flying preferences and booking channels. The airline also capitalizes on additional information acquired through co-branded products (such as credit cards) and partnerships with hotels and even app-based businesses serving the travel industry.

The airline uses data not only to identify prospects, but to understand them and know when they’re ripe for personalized marketing propositions. In fact, using data, the marketing team creates a dynamic “lifecycle map” that lets them know when a customer is convertible and when they are not.

To overcome the hurdles posed by competitors’ frequent flyer programs, the airline seeks to build relationships early. College students, for instance, don’t normally have a lot of disposable income, so they would seem to be low-yield travelers at best. Nonetheless, the airline targets students enrolled in universities and studying topics that put them on a track to be high-value passengers in the future.

To reach these largely young prospects, social media is essential. The airline rises above the digital noise by acting like a friend—a hip and generous one. On occasion, it has gifted holders of its co-branded credit card with free treats at various well-known chains. And to stoke its young social-media-obsessed customers, it has offered those who spread the word the chance to win 50,000 miles.

Another optimal opportunity comes when competitors’ high-value customers experience disruptions, due to weather or mechanical issues. When this happens, premium customers are generally rebooked onto other airlines’ flights. The rebooking process provides this airline with a valuable lead—a prospect whose usual airline has disappointed her. The airline, therefore, capitalizes on the opportunity to offer incentives and reel in its competitors’ premium customers.

Outcome: Premium travelers account for an outsized portion of the airline’s profits.

Bringing the Personal Touch to an Asset Manager’s Clients

Summary: Maintaining a strong relationship with existing clients is important for any company. It is absolutely essential for wealth management companies, where customer support—stage 3 in the brand experience—is as important as winning new business.

Challenge: Why is customer support so important in this sector? The regional marketing head of a global asset management firm explains that institutional asset owners such as endowments, insurers and pension funds that are satisfied with a fund can park large sums of money with it for years or even decades. For the fund, such a relationship yields recurring annual fees that exceed the incremental cost of managing the assets. The result of nurturing a strong relationship with these customers? Higher margins and greater stability for the fund.

The benefit of this approach is even greater when you consider that new client acquisition is particularly competitive, costly and uncertain. Clients can vary greatly in size, needs and approach. Each sales journey is unique and complex, involving numerous touchpoints: email, direct mail, face-to-face meetings, events and web-based thought leadership content. So when a firm brings a new client on board, it makes sense to make an extra effort to keep them.

In addition, the competition is increasingly fierce in the asset management industry. In recent years, active investment firms have faced a mounting threat from passive, index-based exchange-traded funds (ETFs) that cost less and frequently offer competitive performance. Globally, institutional assets in such passive funds have grown more than five-fold since the financial crisis of 2008-2009.

Solution: Having humans at the helm is a key differentiator for active funds. It’s something that ETFs, by definition, don’t offer. Having those humans deliver strong customer service raises the value even higher. The asset management world is characterized by uncertainty and high stakes, so institutional investors want to feel that they have a close personal connection with the people who manage their money. They want to know that they have immediate access to the decision makers, particularly when markets are volatile.

But how do you satisfy these expectations?

In an ideal world, money managers might simply share their cell phone numbers with their clients. But that’s not practical. Portfolio managers are busy. They need to travel and keep their eyes on the market. They may have hundreds of clients, many voicing similar concerns at the same time, depending on the market’s temperament and the fund’s strategy. Fund managers tend to be technocrats, who may be better at choosing investments than communicating with clients. And the industry is heavily regulated, so what managers say is subject to rigorous compliance review.

In one firm we spoke with, when a client has a concern, a relationship manager typically acts as the first line of contact. A reply is crafted with an investment professional’s input and delivered by email within 48 hours. But the goal for their marketers is to match the speed and near real-time responsiveness that people have grown to expect in the consumer marketplace and do it in a way that feels personalized.

To achieve this, the company is looking to develop the capability to respond via personalized video message. The system is envisioned to work like this: An investor voices a concern privately via the fund’s portal (e.g., “I’m concerned about exposure to China ...”). The fund manager then records a bespoke video in the form of conversation (“Hi Amanda. Thanks for your question, and for being a great client. As for China...”).

The manager clicks a button on the portal, and from there the process is as automated as possible. The relationship manager is looped in. The compliance department signs off digitally. There is minimal administration, the whole chain is recorded, and the video is sent to the client within hours. In the event that multiple clients have similar concerns or market conditions raise specific issues, a video can be crafted to reach a broader audience, boosting efficiencies and anticipating client concerns.

Next steps: This marketing organization plans to launch a pilot within the next 18 to 24 months. In the meantime, there are hurdles to overcome in bringing the idea to market. The technology and process are complex, in part because of compliance requirements. The organization is running tests to ensure a smooth rollout.

To get buy-in for this idea, the marketing team needs to help other stakeholders understand how it will reduce the workload, boost client relations and improve the company’s performance. If the fund succeeds in delivering this level of customer service, the company’s regional marketing leader believes it will provide significant customer-retention benefits.

A Pharmaceutical Company Uses Sensors to Provide Personalized Customer Advice

Summary: Wearable sensors address a challenge every animal owner faces: how to know when your pet or livestock is in need of care. For the pharmaceutical manufacturer, it provides an early indicator that a customer could benefit from its products.

Challenge: Imagine the marketing challenge you would face if the end users of your product were incapable of speaking effectively with humans, ever. That’s the problem experienced by a large pharmaceutical company’s veterinary division. It’s also a problem that digital sensors, machine learning and artificial intelligence are now tackling, says a marketing leader of the division. The initiative could have revolutionary implications for marketers of many types of products.

Solution: The company offers small digital sensors, roughly akin to Fitbits, worn in the ear of a livestock, around a pet’s neck or elsewhere. The sensors may signal that an animal’s behavior has changed, that its activity level has decreased, that it is scratching or running a fever. This data is then used to try to identify specific health issues. The diagnostic capabilities are powered by machine learning, and are expected to improve, pinpointing a growing variety of diseases.

Already, the company’s automated, sensor-based approach is reducing farmers’ labor costs, and minimizing human error associated with manually inspecting a herd. But it offers numerous additional benefits. By improving heat detection, sensors can optimize insemination timing and reduce disruption to the animals’ routine. By detecting disease early, it lets farmers use less expensive drugs and fewer doses than they would need once symptoms become obvious.

The sensors can also track how effective treatments are across the herd. The result for the animal owner: lower costs, greater efficiency, better animal health and enhanced output.

Results: The pharma company’s marketing executive said the firm’s use of the technology is still in its early stages. However, the executive believes it will open a world of possibilities. When animal owners opt-in to share their data, the company can see that a herd or a pet is in need of care. It can then send personalized educational materials to the owner to add value and strengthen its relationship with the customer. It can also upsell or cross-sell remedies (and it can do this directly in regions of the world where such pharmaceutical marketing is allowed). The advantages to this approach over mass-marketing are profound. “We anticipate better quality relationships with our customers because we are pinpointing their unique pain points,” the executive said.

1 Korn Ferry Institute study of the 1,000 largest U.S. companies by revenue, conducted in late 2016. https://www.kornferry.com/press/age-and-tenure-in-the-c-suite-korn-ferry-institute-study-reveals-trends-by-title-and-industry

2 “The B2B Ecommerce Trends Report: Millennial Buyers, Payment Options and a Maturing Market,” By Rachel Genson, BigCommerce.com, Accessed at https://www.bigcommerce.com/blog/b2b-ecommerce-trends/#the-b2b-buyer-is-changing

3 “17 Instagram stats marketers need to know for 2019” By Chloe West, Sprout Social. Accessed at https://sproutsocial.com/insights/instagram-stats

4 “The 7 Biggest Social Media Sites in 2019” By Kristi Kellogg, Search Engine Journal, Accessed at https://www.searchenginejournal.com/biggest-social-media-sites/308897/#close

5 “Are Brands Wielding More Influence in Social Media Than We Thought?” By Steve Olenski, MarketShare, Forbes.com May 7, 2012. Accessed at https://www.forbes.com/sites/marketshare/2012/05/07/are-brands-wielding-more-influence-in-social-media-than-we-thought/#111c093471e1

6 “The growing power of consumers” Deloitte.com. Accessed at https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumer-business/consumer-review-8-the-growing-power-of-consumers.pdf

7 “Redefining service innovation at Starwood,” by Mark R. Vondrasek, McKinsey.com. February 2015. Accessed at https://www.mckinsey.com/business-functions/operations/our-insights/redefining-service-innovation-at-starwood

8 “PepsiCo creates global chief commercial officer role,” Campaign Live, March 5, 2019, accessed at: https://www.campaignlive.com/article/pepsico-creates-global-chief-commercial-officer-role/1577913

9 “Is This the Woman Who Will Save Uber?” by Sheila Marikar, New York Times, July 22, 2017, accessed at: https://www.nytimes.com/2017/07/22/style/uber-bozoma-saint-john.html

10 “TCS 2019 Chief Marketing Officer Study, Stage 1: Awareness; Attracting the Digitally Distracted Prospect,” accessed at: https://sites.tcs.com/bts/wp-content/uploads/2019/08/TCS_2019_CMO_Study-STAGE_1.pdf

11 “TCS 2019 Chief Marketing Officer Study, Stage 2: Conversion; Personalizing Content to Turn Prospects into Customers,” accessed at: https://sites.tcs.com/bts/wp-content/uploads/2019/08/TCS-2019-CMO-Study-STAGE-2-Conversion.pdf

12 “TCS 2019 Chief Marketing Officer Study, Stage 3: Support; Interacting Digitally to Become Invaluable Customer Advisers,” accessed at: https://sites.tcs.com/bts/wp-content/uploads/2019/08/TCS-2019-CMO-Study-STAGE_3-Support.pdf

13 “TCS 2019 Chief Marketing Officer Study, Stage 4: Retention; Using Analytics to Predict What Customers Need Next,” accessed at: https://sites.tcs.com/bts/wp-content/uploads/2019/08/TCS_2019_CMO_Study-STAGE-4.pdf

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