Marketing Is More Than Coordinating Direct Mail, Email and SocialJune 3, 2014 By Naras Eechambadi
For the past 15 years, if not longer, marketers have aspired to gain a single view of their customers to better manage relationships and increase engagement. In that time, the technology to do so has improved in ways unimaginable even a few short years ago. Innovations from mobile to social have changed the way we work, live and interact with brands.
Just a decade ago, the Motorola RAZR was the most popular mobile phone, BlackBerry devices were catching on as a way for business folks to check emails on the go, Facebook was only available to Harvard students and Twitter wasn't even an embryo. Today, companies and their customers can interact through a variety of social media channels delivered on any device. And the data from these interactions can be captured easily to provide a great deal of detail and even nuance about customers and how they not only transact, but also how they feel about those transactions.
Given all that information, you might expect marketers to be in a state of Nirvana. Sadly, that's not the case; the torrent of data from ever-expanding sources has made it an even bigger challenge to integrate disparate sources, while identifying unique customers and prospects across multiple channels and devices. And while you might think the primary hurdle is a technological one, I'm here to tell you it's not. It is organizational.
The problem for many companies is that their eyes (aspirations) are often bigger than their stomachs (organizational capability). It is hard to control or even coordinate between different businesses, data feeds and channel silos so that the organization can be truly focused on the customer—whether for optimizing communications, enhancing the customer experience, maximizing customer engagement or improving the bottom line.
It is not unusual for fast-growing channels, such as mobile or social, to be assigned to relatively youthful teams who understand these media and are comfortable working at the fast pace that is often required to keep up with these technologies. In fact, more often than not, we see digital marketing being managed separately from traditional marketing. However, these young, digitally focused teams sometimes lack history with the brand and the context of the overall customer relationship or marketing strategy, remaining disconnected from the rest of the organization. While these teams can be very good at developing marketing programs that take advantage of a specific data stream (e.g., using location data from a mobile phone to provide an offer that is relevant to a customer at a particular location), they often don't take advantage of the customer's full history to provide better context and relevance. Without context, we can't know if the customer is responsive to a particular type of offer—or any offer, for that matter. Are the customers loyal? Would they buy, anyway? If so, then you've simply reduced your own margin by sending the offer. How has the individual reacted to similar offers through other channels? Is the preference for social channels as a medium of interaction?
This is not just a problem with new channels. We have seen companies struggle with coordinating between established channels, like email and direct mail. I had a conversation recently with a VP of marketing whose company used sophisticated segmentation solely for targeting direct mail customers because of the expense involved, but proceeded to blast the same email to everyone on its list because email was "free." The organization was very interested in further refining and optimizing its direct mail, because of the cost per piece, but was reluctant to consider even basic testing of different email treatments for different segments.
We see this phenomenon all too often. Senior executives will often talk a great game with regard to moving away from a "spray and pray" approach to marketing. Often, however, they fail to create and nurture an environment that is aligned around the customer. Why? Because they still focus, overwhelmingly, on maximizing revenue from each campaign, which means sending out more and more emails and offers, the domino effect of which results in over communication, message fatigue and both brand and margin erosion. This can be very counterproductive in terms of revenue and profitability. But the short-term pressures often overwhelm the long-term strategy.
So how do organizations become more customer-centric? Sure, data needs to be brought together in a single place. Even if the data volume and velocity of the data flow is high, today's technologies can manage that. The data also has to be clean, which is increasingly doable, as well. The data must also be accessible and usable and recent advances in business intelligence and visualization tools have made this much easier. Finally, the data must be analyzed so the insights are useful and usable. But, perhaps most importantly, organizations must shift to embrace the customer at the center of their marketing and operations rather than try to change customer behavior to align to their structures.
Real change requires leadership and long-term vision. Successful organizations appoint an executive sponsor who is senior enough to straddle the channels and silos, digital and offline in particular, to truly take an enterprise view from a financial standpoint. This individual knows that optimizing marketing (and other parts of the organization) from a customer standpoint can truly move the financial needle. The marketer will not only have the vision, but also the authority and drive to execute on that vision, even at the cost of breaking down some organizational barriers and bruising some egos. Not easy to do.
When it works, it can greatly benefit the company and its shareholders in the longer term. In the short term, the change can be wrenching. Existing folks, used to doing business the old way within their own worlds, need to learn new skills and to cooperate with people they previously may have been competing against. Training new people and building upon the vision takes time, which is not always easy to come by in corporate environments that are driven by the need for short-term results.
The short-term pain can be well worth it, if the change is properly designed and executed. We have seen firsthand how this organizational approach can impact a company for the better.
One of our clients is in an industry that is undergoing rapid change, driven by the transformation to digital delivery. The CMO was a long-term executive who had been with the organization a couple of decades and had grown up within the organization. Her staff kept slipping back into old patterns of behavior and she was unable to push change through. After repeated delays, failure and frustrations, the CEO finally decided to recruit a new CMO, who brought fresh thinking and was not weighed down by legacy considerations. Despite staff attrition, the company is poised to dramatically increase the effectiveness of its marketing programs.
At another client, a fast-growing company whose marketing was remarkably successful but very traditional, the new CMO is pushing through radical change integrating campaigns across channels, adopting a test-and-learn methodology and, in general, being focused on customers rather than on campaigns. The change is already starting to energize the teams and is leading to new and innovative marketing programs, positioning the company for continued growth and success.
With sufficient drive and conviction at the top, companies can make the shift to a truly customer-centric approach to business. Change is exhilarating for those who embrace it and terrifying for those who fear it.