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TCS CMO Study STAGE2 Conversion

 

Chief Marketing Officers have one of the riskiest roles in the C-suite, with most staying in office only 4.1 years on average.1 Diminishing budgets and higher performance expectations are compelling the visionary CMO to transform their organizations into high-value marketing engines that deliver an extraordinary brand experience at every stage of the customer journey.

This study shares fresh insights about how more than 500 enterprise CMOs in North America and Europe are creating impactful brand experiences for their audiences using digital technologies, now and in the future, with personalization that delivers customized, relevant messages for multichannel marketing campaigns.

Personalizing the Entire Brand Experience

Our CMO Study results are being released in four condensed reports to reveal top 5 insights about how senior marketers currently use, and plan to use, evolving digital technologies to personalize the brand experience at every stage of the customer journey.

Stage 1: Create market awareness
Stage 2: Convince and convert prospects to clients
Stage 3: Customer support following purchase
Stage 4: Customer retention to upsell and cross-sell

Each report highlights what leaders do differently from the followers including:

■ The channels they use (digital and non-digital), and the innovative ways they use those channels
■ The customer data they collect, and how they use it to personalize communications
■ The proficiency with analytics technologies used to identify prospects and personalize communications
■ The level of automation for key aspects of marketing, how much of that technology is in the cloud, and plans for the future
■ How adept they are at personalizing and up-leveling a dynamic brand experience

The Big Reveal: Marketing’s Involvement in the Conversion Stage Varies by Sector

The number of marketers creating communications drops from 100% in Awareness stage to 72% in Conversion stage but varies by sector.

In our Stage 1: Awareness report: Attracting the Digitally Distracted Prospect, all 516 chief marketing officers surveyed aid their marketing departments create communications to generate awareness of their company’s offerings with potential customers.

Consumer-oriented companies were far more active, with about 4 out of 5 of those marketers creating communications compared to half of B2B marketers.

Marketing Functions Creating Communications in Each Stage

■ Stage 1 Awareness: 100%
■ Stage 2 Prospect Conversion: 72%
■ Stage 3 Customer Support: 37%
■ Stage 4 Customer Retention: 47%
■ All stages: 19% of B2B marketers

What Leaders Do Differently

88% of leaders compared to 62% of followers personalized their messages in this stage by providing useful product/service information.

In the Conversion stage, how communications are personalized appears to differentiate leaders from followers more than what data they use to personalize those messages. More than twice as many leaders (34%) than followers (14%) provide videos that are relevant.

The following shows the percentages and industry segments of those companies using data to convert potential customers with timely personalized offers:

■ 70% of the insurance, retail and CPG companies
■ 62% of banking and financial services

“The credit card business is about identifying behavior-based signals as early as possible so you can be in front of the prospect with an appealing offer,” says a senior VP of a leading credit card issuer.

#1 Marketers Continue to Prefer Digital Communications Channels

As in the awareness-building stage, digital communications channels continue to dominate when companies seek to convert prospects to customers.

For those who produce communications for this stage, all use digital media advertising and company websites.

Companies are getting more scientific about assessing the impact of the marketing mix.

“Being able to see the touchpoints that prospects interact with has gone a long way toward demystifying the sales process. Now we better understand the role of marketing,” says a regional head of marketing of a global wealth management company.

#2 Person-To-Person Techniques Are Becoming Less Important in Consumer Industries

Comparing the marketing channels of conversion used in consumer industries (B2C and B2B2C) and B2B sectors shows big differences.

Leaders appear to be abandoning techniques that rely on real-time human interaction like deploying field sales teams. For example, about 33% of followers deploy a field sales force, only 21% of leaders do so.

Some 68% of B2B marketers use field sales forces to convert prospects to customers—almost five times the percentage of consumer marketers (14%).

Fewer than 2 out of 5 leaders (37%) use event marketing, while more than 3 out of 5 followers (62%) do so.

#3 Innovative Use of Digital Channels Continues to Distinguish Marketing Leaders

In the Conversion stage, 37% of leaders versus 21% of followers are more likely to buy ads on other companies’ e-commerce sites, such as Amazon.com and Walmart.com. Sectors leading this trend are automotive, insurance and CPG.

79% of leaders are more likely to use their mobile apps as a conversion channel compared to 67% of followers. Automotive, insurance, and media, entertainment & information rely more on mobile apps than other sectors.

#4 Leaders Value Print Media Advertising Over Email Marketing

Leaders surpass followers across the board in using digital channels such as social media and video sites, with one exception: email, where followers are marginally more active (95% vs. 92%).

In contrast to email, leaders maintain a higher regard for print advertising.

97% of leaders are more likely than followers (88%) to use print ads to persuade prospects to become customers.

#5 Demographic Data Is Most Frequently Used for Personalized Messages But Other Types Are Gaining Traction

Marketers that created messages in the Conversion stage most frequently depended on prospects’ demographic data for personalizing those messages.

47% said that the second most frequently used data for personalization was web traffic.

Geo-location data was used by 44% of all companies, with 41% using social media behavior data.

But there were distinct differences between B2B and B2C companies in the data they use for personalized marketing messages in Stage 2.

■ Demographic data: 83% of B2C marketers use it vs. 59% of B2B marketers

■ Web traffic data: 51% of B2C marketers use it data vs. only 28% of B2B marketers

■ Geo-location data: 54% of B2C companies use it vs. only 1% of B2B marketers

Best Practices In Action: How Leaders Keep the Customer Satisfied

Leading US Airline Leverages Data to Land High-Value Passengers

Summary: This airline uses rich sources of data to identify the most desirable customers and determine the best ways and times to reach them.

Challenge: Gaining Brand Recognition
In 2018 this nationally known airline spent about $500 million on marketing to ensure that new customers choose and continue to choose it as their carrier of choice. To achieve this goal, the airline focused on attracting high-value passengers, a small group of frequent premium travelers, by creating awareness about the airline’s business products and attributes and building loyalty, so that the airline becomes their carrier of choice whenever they fly.

Harnessing data is vital to landing these passengers, which is plentiful from the travel booking process and from co-branded products and partners. This data includes personal information, flying preferences, booking channels, co-branded products (such as credit cards), travel partners (like Airbnb, Marriott, for example) and more.

Solution: Targeting High-Value Flyers
This airline uses data not only to identify prospects, but to understand them and to know when they’re ripe for marketing messages. In fact, this data allows them to create a dynamic “lifecycle map” that lets them know when a customer is convertible and when they are not.

It’s challenging to overcome a competitor’s frequent flyer program, so this airline focuses on a marketing strategy designed to establish and build relationships with new customers, like college students, who might seem to be a low-yield traveler at best. But the airline targets students enrolled in universities and studying topics that put them on a track to be high-value passengers in the future.

Outcome: Using Digital Data to Drive Incremental Business
To reach these largely young prospects, social media is essential. This particular airline rises above the digital noise by acting like a friend—a hip and generous one. For example, it has on occasion gifted its credit-card customers with free treats at various well-known chains to inspire its young social-media-obsessed customers to spread the word, even offering incentives for those who shared the experience the chance to win 50,000 miles.

When high-value passengers slip through the cracks, the previously mentioned customer lifecycle map identifies opportunities to win them back. For example, when there are disruptions due to weather or mechanical issues, booking agents for other air carriers will “re-accommodate” valuable customers on this airline. This rebooking process gives access to the customer information for thank-you emails and texts as well as for other incentives and offers to reel those customers back in.

When high-value passengers slip through the cracks, this airline’s dynamic customer lifecycle map leverages customer data and identifies opportunities to win them back based on this information.

About This Research

This short report is based on just a portion of a 45-question online survey to capture what CMOs do in the Conversion stage (Stage 2) in creating communications for prospects and customers. In forthcoming reports, we will publish our findings on how the same marketing organizations are using digital technologies to personalize communications in the other two stages; Stage 3 is customer support; and Stage 4 is customer retention).

Our first release gave an overview of the initial research findings and the final master report will be released later in 2019 with a comprehensive analysis into the CMO Study results. Read what CMOs do in our previously published Awareness (Stage 1) report “Attracting the Digitally Distracted Prospect”.

The CMOs we surveyed work in:

■ 11 industries
■ Companies with at least $500 million in annual revenue, with most in much larger companies
■ Firms with average revenue $10.6 billion and the average annual marketing budget was $392 million
■ About two-thirds (65%) were from consumer companies (both B2C and B2B2C firms), while 27% were from B2B companies
■ The remaining 8% worked in companies with a fairly balanced mix of B2C and B2B end customers
■ 60% work in North America, and 40% work in Europe

Research Goals & Methodology
Our research goals were to determine:

■ How technology-enabled personalized marketing content today is used throughout the brand experience for prospects and customers (in their marketing and sales campaigns, and customer support and retention initiatives)
■ The impact of such personalization and the key factors in making it effective
■ How CMOs and their organizations develop communications across all stages of the customer lifecycle

The research looks in depth at what marketers are doing in each of the four stages: what channels are being used by companies in different industries, different target end customers (consumers vs. organizations), and different countries; what data companies are using to personalize communications; how they are personalizing communications based on the data they possess on prospects and customers; and how the most successful marketers differ from the rest in channel usage, data for personalization, and types of personalization.

The study findings, based on a mix of B2C, B2B, and B2B2C, are segmented into key stages of the customer journey and will be released in 4 short reports, all of which will be found here: Innovating Brand Experiences Through Digital Transformation.

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 Advisers

Stage 4 (Customer Retention): Using Analytics to Predict What Customers Need Next

Master Report: How Leading CMOs Captivate and Convert Customers for Life
This comprehensive report to be released in late 2019 consolidates the findings and provides in-depth analysis and surprising new insights about how leading marketers differ from the rest in the innovative use of digital technologies, data, and analytics to personalize the brand experience—within, across and outside all four stages of the customer journey.

Do a deeper dive: Read the initial findings report now.

1Korn 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

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