5 CMO Steps to Customer-Centricity

Last week, I had a great chat with Donovan Neale-May, executive director at the CMO Council.  We mainly talked about their latest report "Giving the Customer Voice More Volume" (must read!) and I found our views and passions to be remarkably similar.  After all, while everyone seems to be "talking" about the need of businesses to focus on their customers, there seems to be a rather limited amount of "walking".

A few facts from the report (n= 500 senior marketers from around the world);

 

The Talk

• 59% of respondents claim that a CEO-driven culture of customer-centricity is embraced by their organisations.
• 83% think that the customer experience is (increasingly) important in determining brand advocacy and business performance.  

 

The Walk

• Three-quarters of these same respondents have not yet adopted a formal Voice-of-the-Customer Programme.  
• 56% of marketers have no programmes in place to track or propagate word-of-mouth among their customers.  
• Only 23% actually track the volume and nature of customer mail.

 

According to Donovan, many CMO's are missing the opportunity of truly connecting their companies to the customer.  Silo-based organisations ensure many have an opinion, but no one is really in charge of the customer experience.  Customer information is fragmented in various locations, depriving the average call centre employee of the integrated view they need to do their job.  Leads get dropped because departments and processes don't connect.  And in the end, the only conversations senior executives have with their customers, is in the business class lounge of their local airport.

 

So how do you then turn the corner?  I thought I'd give a shot at writing up a few "recommended steps" for CMO's wanting to make their business more customer-centric.  They are inspired by my conversations with Donovan as well as the customer experience and advocacy/NPS work I have been doing for MCE at places like Philips (click for case) and Lexus (click for case).  As always, any suggestions to improve on the thinking are very welcome.

 

STEP 1: START AT THE TOP

No matter what books or gurus may say, customer-focus is a top-down game.  From childhood we have learned to follow the example of those that lead us, and that means that customer-centricity should be mindset of all C-level executives.  Not in words, but in actions.  The management board needs to be seen talking to customers, allocating resources in the right places, balancing quick volume wins against long-term customer value.  If this commitment is not there, even the best intended customer-centricity projects will falter.  That is why CMO's should first turn their peers into customer evangelists.  Then they can move on the business.

 

STEP 2. SHOW THEM THE MONEY

Enthusiasm will get you part of the way, but no self-respecting CEO will reorganise a business around the customer without a solid business case.  After all, being nice to customers is good, but there's also that minor matter of shareholder value.  The CMO's second step on the customer-centricity ladder is therefore to demonstrate the financial benefits of "happy customers" to the organisation.  Happy customers are more profitable, so having many of them makes good business sense.  But while many customer initiatives are good at highlighting the investments they require, most forget to highlight the return.  CMO's should remedy this, by demonstrating the ROI on customer efforts.

 

STEP 3: START WITH THE PEOPLE

To really focus on the customer, companies will need to update their information systems and processes (remember the "one customer file"?).  But before getting too bogged down in flow-charts and project plans, CMO's should wire the people in the right way.  Tear up the detailed customer interaction and scripts.  Show staff and vendors how to listen and care.  Not only in the front lines, but at every level of the organisation.  Every department eventually affects the customer experience, and thus the profitability of the business.  Only when the people "get this", organisational changes have a fighting chance.  If only because they'll drive them.

 

STEP 4: HELP THEM DO THE RIGHT THING

Once a customer-focused mindset takes hold of the organisation, the people will start fixing the systems & processes themselves.  But they will encounter challenges.  Legacy implementations will limit what can be done.  Corporate politics and habits will slow down initiatives.  Unpopular, but needed budget cuts will impact morale.  Here, CMO's should step in to help the organisation get out of its people's way.  And, where needed, to roll up their sleeves and personally ensure that customers get what they deserve. Because if this support is not given, the most well-intentioned projects will get stuck at the initiative stage and in the end the customer won't notice.

 

STEP 5: MAKE IT CLEAR YOU MEAN BUSINESS

Customer-centricity doesn't always come naturally.  Reluctance and even resistance may arise.  Then, CMO's need to make it clear they mean business.  Once the financial case for customer-focus is made, dissent should not be an option.  CMO's should be supportive when possible, but firm when needed. Making customer advocacy a "hard" KPI and holding managers accountable to it, is imperative.  Publicly challenging customer toxic practices required.  But also ensuring the resources keep going to the right places, even in challenging times.  Rewarding people for getting it right.  This will require tough choices. But it is exactly from those choices that people will judge the resolve of their C-suite to be truly customer-centric.  

 

And those CMO's who believe the five step programme is a bit too ambitious, there is also a "step zero".  That is to stop reading this article, switch off their computer and go talk to a customer.  Any customer.  Now.

Two Free Reports on the Brand Agency Disconnect

At best, the relationship between most brands and their communication agencies is "strained".  While exceptional agencies and executives exist (some of which writing for this blog), the industry as a whole tends to disappoint its customers.  This needs to change.  After all, while thousands of agency executives are gearing up for another dance on the Titanic in Cannes, clients are seeing billions go to waste.  Especially in our current climate, this is unacceptable.

But rather than join the choir of complaints, we decided to do something about it.  We want to initiate a global conversation on the renaissance of marketing as a whole (coming soon :-) and in specific on the ways brands and agencies interact.

We have bundled our thoughts in two reports we'd like to share with you (thanks to Management Centre Europe for the kind sponsorship!).  They analyse the disconnect that currently exists between brands and the agencies that service them.

• In Reconsidering the Advertising Industry we take the agency perspective, and compare the internal workings of agencies to what their clients need.  We then offer tactical suggestions and structural recommendations that allow agency executives to better equip their organisation for a challenging future.
• In Bridging the Brand-Agency Divide we look at the same data from a brand perspective.  We review what brands are looking for and what they feel agencies are not delivering.  For each disconnect we offer suggestions and tips brand leaders can apply to get their agencies to better deliver what they need.

Both reports, as well as a bonus slideshow are available as a free and instant download on our free publications page.  They're yours to read, use and abuse (cc 2.0 :-).  The only thing we would request is that if you find them of value, you engage in the conversation.

This can simply be done by forwarding them to others.  Or if you're more digitally active, blogging, twittering or commenting on them.  If you have a client-agency relationship which defies all we have written, share it.  If you have ways to make our recommendations better, build on them.  If you believe we've got it all wrong, write a counter-thesis. 

We want to start the debate, so at some point we can all come to conclusions.  This is our first - of many - steps. What is yours?

Uncomfortable Truths (Part Two)

Writing the second part of this post was hard. Not because I didn't know what I wanted to say, but because the need to summarize it into a readable blogpost meant leaving out important nuances...

Still, I've tried to highlight how marketing as a function can help organizations overcome the challenges described last week. And for the impatient ones wanting to impress their CEO still this quarter, I've also added a number of "quick fixes" ;-)

So while you won't find silver bullets, here are a few remedies to the "uncomfortable truths."

Truth #1: Most people in your organization haven't got a clue what you're on about.
Delivering on your brand's promise starts with making sure that the people in your organization understand what it is and how it affects their job.

Still, many marketing departments allocate insufficient time and budget to working with HR on making this happen. As a result, internal communication programs seldom get beyond employee newsletters, intranets and the occasional motivational speech.

Ask yourself this question: would you try and convince the consumer in the street of your strategy with the proverbial powerpoint presentation and an email? Well, as it stands that consumer may actually be working for your company, so maybe there is a lesson to be learned.

To stand a chance in the market, marketers should allocate a significant portion of their time and budget to support HR in putting together a communication and capability development plan that truly affects the organization. Only then, things will start moving.

Quick win: do a survey to check in how far the people in your organization actually understand your strategy and think it's a good idea. Turn it into a KPI and track it. Never point fingers when the figures turn out pretty dim, yet involve everyone who can influence the numbers into a supporter of your cause.

Truth #2: Many leaders in the organization behave against the best interest of the company.
But, as I said before, can you blame them? When facing their boards, most CEOs I ever met are prepared to go for the long run, yet simply don't get decent marketing ammunition to actually pull it off.

Marketing departments need to back up their leaders with 'hard number' based business cases. This means getting serious about customer (life-time) value and measuring the impact of different business initiatives. It means integrating with sales and using decent scenario planning and market prediction methods rather than hazy market research. It means talking the language of money rather than that of "propensity to buy."

Boards are greedy and will support a plan that makes them more money in the long run. Yet to be able to sell such a plan (and its quarterly sequels) leaders need ammunition. The marketing department needs to provide this.

Quick win: start building your credibility by connecting your various marketing initiatives to your sales line. If you're in B2C this will typically allow you to cut your budget by 20% or more without affecting sales. If you're in B2B, it will either increase your closing rate or give your sales people more leads. Win brownie points with this initiative and propose to use the money freed up to do "more of the same" working on a larger scale customer value project.

Truth #3: The people in the organization are often paid to do something else than what the strategy says.
Don't worry, I'm not going to propose that you need to go and challenge the pay grades in your organization (even though someone should). Yet what you can do is translate the promise of your company or brand into desired behavior at the "moments of truth" and then work with HR to devise non-financial reward and recognition systems to support each of them. These can be "employee of the month" programs, a mention in the company newsletter or simply a personal thank you. People respond to recognition and if you reward them for "getting it right" this can be a first step in offsetting salary inconsistencies with the strategy.

Quick win: Rather than trying to take on the whole company, start with identifying for each department in the organization the "one thing" that would definitely need to go right to deliver on the promise to the customers. Partner with HR and then promote the hell out of this one thing + back it up with non-financial incentives which are visibly spread throughout the organization. Once you have established the principle of recognition, the following steps will be more easy.

Truth #4: Quite a few people in your organization are at a loss when it comes to the customer.
While many struggle with the concept of "customer insight," I typically find that whenever you hit upon a real one, it tends to be simple and straightforward. As marketing needs to uncover these insights, it's also its role to spread it to every person the company.

After all, understanding how the organization responds to very specific customer types and needs means that your people are able to come up with the right answers and solutions without the need for extensive processes, manuals or control mechanisms. This accellerates the appropriate service reaction and in turn increases customer satisfaction.

Quick win: Rather than taking on the whole company, pick the group which is currently most remote from the customer (e.g. R&D or engineering). Expose them to the insights you have uncovered and have them work through the implications for their job. Make them understand the customer. Then let them loose on the company again. It will work.

Final Thought
As I said, trying to cover all of this in one blogpost was probably chewing off too much. Still, the main message I wanted to give is that many of the disconnects in organizations can be resolved if marketing and HR work together on communicating and incentivizing people to act according to the strategy (staff and leaders alike).

And while you may say that this is also the job of other departments, marketing needs to take the lead. After all, it's not just marketing's job to "come up" with a value or brand proposition, but also to make sure it gets acted upon. This means addressing the above through communication programs, market insights, decision support systems and strong analysis.

And the good news is that these are all things marketing is good at. Right ? ;-)

In most companies I know the distance between the marketing and HR department is less than 10 minutes. Perhaps it's time for a walk …

Uncomfortable Truths (Part One)

These days, it’s very fashionable to talk about things like Net Promoter Scores, Touchpoint Marketing and Employees that Live the Brand….

After all, we’re — once again — finding out that it’s the employees of the organization that ultimately define the customer’s satisfaction with our products and services.

So after spending a few years of slashing their heads off, the people are once again “our most important asset” (irony intended)….That is why, today, I’d like to explore some uncomfortable truths about these “people.” Yet before you start gloating as you go along, remember there’s a stinger when I upload part two next week. Each of the areas discussed will lead straight back to the marketing department, and what it should be doing to be true to the business.

A big tip of the hat to my friends at MCE, who’s thinking on alignment inspired this post (to avoid confusion, the rants below are my own

Truth #1: Most people in your organization haven’t got a clue what you’re on about.
There is a saying that strategies are typically researched in 6 months, written in 6 weeks (by 6 people?) and communicated in 6 days. This leaves the people in the organization 6 hours to change their behavior before the next quarterly results.

The result – according to über-professors Nolan and Norton – is that only 5% of the people in any organization actually understand its strategy. So even if they have the best of intentions, it is quite probable and plausible they’ll go off and do something completely different than what you had intended when writing that PowerPoint.

Truth #2: Many leaders in the organization behave against the best interest of the company.
And frankly speaking, you can’t even blame them for it. Politics-free exceptions aside, building a corporate careers is 30% achieving results and 70% talking about them in the right places. If you have a kid in school, a mortgage to pay and a social status to uphold, you’re not going to stick your neck out on that daring innovation which may backfire, and you’re definitely going to go along when the long-term strategy gets hit by the quarterly numbers axe. This leadership behavior is, however, also seen by the troops and sends a stronger message than any corporate policy manual on the face of the planet.

Truth #3: The people in the organization are often paid to do something else than what the strategy says.
While some of us work for glory, most people’s behavior is still influenced by the performance bonuses at the end of the month. Yet comparing these against your brand’s objectives often gives interesting results.

This goes beyond the cliché of the sales team that is supposed to “help the customer,” yet is commissioned on volume. How about the researchers who are bonused on # patents, rather than customer insights. Or call-center agents who are on the clock when talking to customers. Or – back to truth#2 – managers who get stock options tied to quarterly results. If “what you say” and “what you pay” disconnect, what are you really saying?

Truth #4: Quite a few people in your organization are at a loss when it comes to the customer.
If you go for a walk to every part of your organization to ask them about your customers and their needs, you’d be amazed at how some of the answers differ from what’s in those expensive insight and market reports you ordered. This may say something about the reportsn, yet if different people go around the organization with different pictures of the customer and his needs, all talk about consistent touchpoint experiences remains just “talk.”

Next week – on this screen.
All the above can be resolved by connecting marketing (“the guys who spend money”) and HR (“the guys who shuffle payslips”) into a strong people management function focused on getting the brand’s employees truly aligned to its strategy.

If you already have some suggestions on how this could be done – don’t hesitate to hit that comments button.