This is the third post in the series of TrinityP3 Webinars.
Welcome everybody this afternoon to this one hour Webinar. As the title says we are going to focus on aligning digital marketing funnily enough to marketing, which is a hot topic that everyone is talking about in terms of digital marketing and what’s its role and when we talk to clients we actually say “it’s not about digital marketing, it’s about aligning digital to marketing”.
I’m going to take you through a series of examples and talk a little bit about some of the findings that we’ve had with specific clients.
So the digital big bang, we know the world’s gone digital, those of us that worked in marketing in the 90’s saw the rise of digital. We saw social media come on in 2005 and now it’s just exploding. I won’t go through this chart in detail but you know probably as well as I do that it’s very technology driven.
This is the landscape of marketing from the beginning of the year and as marketers it’s become so confusing to know whether it’s about mobile or if it’s about media or whether it’s about programmatic, whether it’s about e-commerce, end commerce etc, so, let’s just accept it’s confusing. I think that’s the point.
And to make it real in terms of stats, you may have seen this, it’s an IBM stat but 90% of the world’s data from all this digital footprint has been created in the last 2 years. Now that stat is actually 2 years old, and 2 years ago we had about 2.8, let’s round it to 3 zettabytes of data.
So zettabytes don’t mean too much to me, I’m sure they don’t mean too much to you unless we’ve got some programmers on the line. But to put it in perspective, one gigabyte is about the same volume as a coffee. So if we use one zettabyte to fill these coffees, we’d end up filling an area the size of The Great Wall of China.
Just imagine that’s one zettabyte, if we had about three zettabytes 2 years ago, we’ve got about 8 zettabytes today in 2015. It is projected to be 40 zettabytes by 2020. So when people talk big data, it’s just a big explosion of data that’s coming from this digital footprint.
No surprises but I guess the big challenge for all of us is there is a big digital divide that has been created, it’s almost a cavern, both within marketing departments and within discussion around this topic.
The 6 forces at play in regard to digital
I just want to highlight the six forces we see at play when we talk about digital. You can read with me but obviously the first one there is still competing business unit interests. We still have products, sales, marketing in many cases sitting in silos. All wanting digital reports, digital analysis etc, based on their specific needs. So you end up with this conflict and competition within businesses.
The second one, we have disjointed KPI’s and I’ll come back to KPI’s a little bit later but that’s a performance measurement. So digital activity is being measured in all sorts of different ways within an organisation, which poses a problem as to which KPI’s should you be aligning behind.
I love this one because it’s got a digital vernacular that we all speak and I’m sure we’re all guilty of it and I just released a blog post this week that’s had more than a hundred shares already around buzz words. Maybe you can type your favourite buzz word into that box as well.
But when we talk about digital within businesses whether you’re an agency or client side, we find that a lot of people actually misunderstand or don’t understand the definition of a specific term. Not just digital vernacular it can be things like objectives, goals, KPI’s, strategy.
Now what I think is a strategy you might think is not a strategy so, within organisations there’s obviously non-alignment happening around vernacular and it’s important to really overcome that. It’s driving a wedge between a lot of departments within businesses.
Innovation, yes that’s a good one. I wonder what innovation is these days. Talk on customer centricity, if I had a dollar for everyone talking about customer centricity I’d be rich, we’d probably all be rich. But it’s fine to say it but what’s the actual transformation to get there? So an organisation has to undergo a huge transformation, I’m going to talk about some of the key areas to look at to be customer centric. So without it, without a pathway, you can’t be customer centric.
There are all sorts of forces around technology, vendors and big data that I’ve just talked about, you can refer to that slide and map earlier on about the landscape. We see a lot of clients and agencies pushing technologies their aligned to. Or clients’ IT departments aligning to particular vendors or platforms.
It’s really not the best way to go because you’re being technology led as opposed to being ideally, customer centric and being of benefit to consumers and wrapping technology around it and utilising data around it. I’ll talk about that in a bit more detail in a few slides.
And then the whole area of trust, so when we talk about digital, do I trust the data? Do I trust the information that I’m getting reported? Do I trust, from a customer’s perspective, the business with my data? We’ve seen all sorts of hacks of databases and I won’t go into specific ones but you’re aware of it as much as I am. So this issue of transparency and trust is a big force that most clients are facing.
There are six big forces at play. It’s probably not a big surprise to you but when these forces are being talked about with clients, I have some themes and quotes that I’ve just pulled out from different projects.
Themes from a variety of projects
I might just stop and let you read some of those. So just picking up, some of those you’ve had a chance to read, things like not sure who’s responsible for our digital activity was a quote. Again, there’s no coherent plan or clear plan of who’s running the digital activity and how it’s aligning to marketing.
Not using data from all our touch points, so that’s a very clear finding and theme that we’ve had in all our projects, that a lot of loyalty programs, CRM programs, triggered automation programs have been set up however it’s not utilising all the data from multiple touch points.
Of course that plays into problems with single customer view and central databases and data marks as to what data you are actually capturing and then how you can use it. Scrambling back and looking at numbers, so again, paralysis, looking at numbers endlessly without actually using that to find some insight and drive the business forward. There’s lots of themes, I’m sure you can identify with them.
Four major trends
We’ve got these forces at play and some themes coming through. This is a reaction from marketers and what’s been happening globally. I call them the big four.
The first one is putting customers at the core, we’ve heard a lot about that, and hence the rise of the CCO, the Chief Customer Officer.
We’ve seen the need for consistency across channels like I’ve just talked about, we’ve had the rise of the Customer Experience Officer, the new CEO.
We’ve had this big need for a bridge between IT, data and marketing, and it’s been a massive challenge for marketers and driven a wedge between the IT departments and marketing, so hence the rise of the marketing technologist.
And then the fourth area is around this whole emotional connection. So a trend when clients are looking at putting customers at the core. It’s about how do we hack into an emotional connection with customers through their journey with our brand and products.
And hence that’s a big shift for a business that’s generally been driven off from a CEO and board level of hard numbers, very functional offering and must-do attitude. But it means you’d have to re-look at structures, processes and you have a cultural transformation within your business.
We’ll have this PDF available to you, I’m not going to read any of these, but you would’ve read, I’m sure, as I have in the press about these major companies and some of those new appointments. Richard Umbers over at Myer and what Tesco is doing with its CCO, how Westpac is restructuring and Macy’s, New Gap etc.
So it’s interesting because, two years ago everyone was just talking about it in Australia. Globally, they are actually doing transformation. And the feeling from us is that in the last 12 months, clients have actually started now to undertake the transformation and make these appointments.
How to align a business to achieve transformation
So I think we’ve moved from talking to actually doing and testing. However, the whole theme of this next thirty minutes is really about how to align the business to achieve that transformation.
I’m going to talk about four areas:
- Aligning strategies and some ideas on how to do that.
- Aligning structures and theories about how to do that, and some insights from work we’ve done.
- Aligning your processes, some things you can take away straight away and help implement into your business.
- Aligning suppliers, your suppliers are your agencies or your technology vendors or partners.
I should say here, if anyone’s read this and gone, “man, why are you putting ducks up?” because Seth Godin has said give the duck a break and stop getting your ducks in a row and that sort of stuff. So I’m sorry Seth, I’ve totally bastardised you in your thoughts, with the hopes of getting back to simplicity. Let’s get our ducks in a row.
1. Aligning Strategy
Now, let’s talk strategy. To align strategy, I like to think of it as getting back to mission vision and core values, and again, I challenge you, is your business mission very clear and do all your silos and divisions and staff buy into that mission?
Equally with your vision and equally with your core values. Now I don’t mean four or five core values that are written in a book and shoved into the bookshelf and never seen again. I’m talking about is it lived and breathed into the current conversation and discussion.
So basically a social sharing, content sharing platform. Another tagline is, a smarter way to share. And if you don’t know Buffer and you don’t know this point, they were very clear in publishing their employee salaries and management salaries.
The whole purpose of the business was to say we’re a smarter way to share content and you can set up your content deployment a bit like Hootsuite for example. But they wanted to be a company that itself was a smarter way to share and wanted to be open and transparent in sharing salaries and where their profit goes and what their costs are etc.
And that is taking their mission, vision and values to align to a purpose. You hear a lot about purpose in marketing, I don’t think retrofitting a purpose in is the way to go, before you spend time on a strategy, get alignment and agreement on what your mission, vision and values are, and have you got a clear purpose.
And then it’s about aligning objectives. Again, this is what I said about vernacular that there are business objectives, there are marketing objectives, there are digital and there are data objectives. And they all need to work together hence the overlapping circles and they should all ladder up to business.
I talk to a lot of clients, a lot of companies that talk in the digital space about technology and content and business intelligence and tracking and automation, and I just ask them what of that activity has actually shifted the business forward and if you tell me the areas that have worked well, let’s pinpoint those.
Often that draws a blank because the digital activity hasn’t been aligned back to business. But if you can be clear in objectives, you’ve probably got your business objectives which are for the business as a whole. Marketing objectives are generally about how you can deliver from a marketing perspective to the business and it might be things like entering a market, launching new products or services, capturing market share etc.
It should have something quantifiable, it should be a from or to or from x to y objective. And then I go down to goals or strategies.
A goal is a strategy, a goal, if I stick to that, is about how you achieve this marketing objective. And again you should ask, is this goal or strategy going to give you a clearer competitive advantage? Like to sell more you need to demonstrate innovation. So to start it off, if I use the words to improve relationships, become a thought leader etc, that’s the goal or strategy.
Then the KPI is how to measure success. How are you going to measure that you actually are delivering? Just to keep it simple again this might sound really, really obvious but again the companies we’re talking to have not aligned their business, marketing, digital and data objectives and are not clear on this vernacular.
They use a mountain climbing analogy if it helps you. The objective is to get to the top of say Everest, you want to conquer Everest from bottom to top, from base camp to the summit. That’s our marketing objective. A goal or strategy is to assemble the world’s best team. You need a team that’s expert in health, expert in fitness, expert in weather and maybe a specialist in altitude.
Putting that team together we’re going to go through four stage gates to get to the summit. That’s our goal. A cracker team, and four stage gates on the western side let’s say of Everest. But how do we measure success?
You’d think the KPI would be just reaching those four stage gates, if you got there you achieved it. That’s one way of looking at it. But I challenge you to say well the KPI is really measuring things like energy expenditure. That’s probably a better KPI and if I was measuring it as a time, it’s how much time did it take me to get from the base camp to a first stage gate.
You can start to plot it out obviously, are you on track or off track in terms of time? Or energy use expenditure again are we using too much energy up at risk of not making our next stage gate? If that helps you, take that analogy through to your business.
Again it is about aligning your objectives in helping develop a strategy. If you’re not clear on that, you can’t do the strategy. And when developing a strategy I like to think about it as aligning to the customer needs, so solving need states and again if you are developing strategies that are customer centric, you need to be careful of vernacular because I like this pendulum of left to right where consumers are on the left hand side which are prospects, swinging it through to acquisition and out to the right hand side in terms of actual customer centricity.
Sometimes we talk about customer centricity being all sorts of customers or retail trade partners, for example, being our customer. But I just think of the end user, you and me, it’s consumers out on the left, our customers the ones who bought something out on the right and I switch left and right.
I think like this because traditionally people get you on a database and digitally get you into communities and contract you etc, and then implement all these CRM programs or automation or email programs or social content programs.
Not all of these consumers think like that. We buy a product, we like it, we want to buy another one, we’ll talk to friends about it or think about buying something else in a different category. So we switch from left to right and we have different needs.
It’s important to ground a strategy in needs states and align your business around needs states and to do that you should do some form of data analysis and segmentation obviously.
Now this has held through for decades of differential marketing but maybe a quick question to everyone out there so I can get a sense of how scientific you are or not, have you applied differential marketing to your actual strategy?
If you don’t know what I mean just look at the triangle, it’s taking a database of say 100,000 customers or 1,000,000 customers and there’s a small group at the top that deliver a huge amount of profit. So they’re super high, the next level down is high, then medium, then low. So a huge number of customers are generally low value or low in delivering profit to a business and may potentially be unprofitable.
If you can type in, yes or no, and I’ll just get a sense of what we’ve got. We’ve got some segments, no we don’t for some people, yes we focus on high value, great, and I wonder if that is profit or revenue, again it should be based on profit, so have you found your most profitable customers?
And if you have you can then go to the box or Boston matrix on the right hand side to start to go, I can find profitability high to the top, low at the bottom left hand side and then on the right hand side, if you go to the right hand side you can apply loyalty to what would typically be now an engagement score from low to left, high to the right.
So for highly profitable and highly engaged as a customer, I sit out in the top right quadrant, A. If I’m highly profitable but low in engagement I’d sit in the top left which is B. Low profit but highly engaged, C on the right bottom. And low profit and low engagement or loyalty, D. This is a really basic way of segmenting customers.
If you look at things like frequent flyer programs and repeat purchase programs and product-free type programs they don’t use this sort of methodology as much as potentially they could. Because the top right, A, they’re buying your brand and using your brand regularly, products and services so therefore they’re profitable and they’re highly interactive and engaged in your business, you don’t need to discount them.
I don’t know about today, but there is a huge debate around if I stopped offering them things like loyalty points and things like that, would they continue to be in that position. I’d argue probably yes. But again this should be a focus on the VIP, if they love you and they are engaged with you, give them the experience called the Oprah effect.
Give them the VIP Oprah feeling of special experiences, VIP access to your brand and make them feel special. A VIP hotline in the call centre, every call gets answered by two rings for example. It’s a good way of starting to break down some of your data and look at segments.
It doesn’t have to be the contact strategy. It’s just a way of looking at again, from a digital perspective, or any perspective, which customers are profitable, which ones are engaged and therefore should we treat them differently?
That’s a very quick ride through developing strategy. If I sum it up as making sure you’re aligning your mission, vision and values. Make sure you’re getting clear around vernacular of objectives and goals or strategies in your measures.
In developing your strategy focus on a customer in need and therefore you might need to do a fair bit of research or data analysis to unearth the needs and need states and look at it from a differential point of view and ideally apply some sort of engagement score by ranking engagement with different channels and touch points to see in digital landscapes who is engaged as in clicking on emails or joining social networks or interacting with content on your website, that will help you form your strategy.
We are always saying with transformation, develop strategy first then think of structures because there’s no point restructuring your business, putting a CCO in or a CEO, the customer experience officer, if you haven’t got a clear understanding of the strategy objectives.
I’m actually on a project at the moment where we’re talking about structures first and I’ve had to take the conversation back to we need to really understand the strategy before we talk structure.
Is anyone in the middle of a transformation to be customer centric to use one of my buzz words?
How far are you on? A three-year program and your first year in? You’ve been on the journey for 12 months and you feel like it’s starting to take some shape, just give me a sense as I’m talking with people undergoing the transformation.
2. Aligning structures
Although they’ll mean typically we’re built in silos, most of your businesses looking at who’s on here have been built into silos, you may have a data and website division, you might have an experience or innovation centre, you might have your brand and comms teams, you probably have a technology and delivery, or IT and delivery team, you’d have a digital and social team, there could be a community management team.
Then you’ve got your products and sales teams. You’re still in silos, Amy, it’s a challenge. Not everyone needs to put a note down there but there is a feeling yes, you’re still filling in silos, digital should really underpin all of those silos because we’ve gone from digital being the silo to everything is digital, hence all our data we’re capturing.
So I might talk to varying degrees of this, I’ll keep it really basic and down the front end of the transformation. I would challenge you to move away from having one digital department and thinking how could digital apply throughout all our marketing. That’s something that’s key in talking about aligning digital marketing to marketing but we don’t start to even talk about digital marketing or marketing as being separate things anymore.
We used to talk about marketing and how we could play through maybe digital channels or how consumers interact through digital channels.
So for moving from silo to centricity, Amy if you’re still in Silos, your mission is to go to centricity and we need to have a pathway which I will show you in a few slides of how to get there.
This hub and spoke model has been tested by quite a few clients and businesses overseas and is now taking hold in Australia and it’s saying you put the customer at the core, we wrap channels and touch point experiences around the customers to understand where the customer is interacting and marketing and technology is wrapped around that setting objectives, strategies and activities.
Marketing then becomes the hub to play out through the different divisions and marketing has to interact hence the arrows going back and forth with the divisions or silos in the company, so with products, with sales, with HR etc.
But they’re coming squarely from a customer centric perspective not, for example, here’s the product we’d like to launch, here are the features let’s go and launch it, now marketing do your stuff.
It gets into the bottom right of things, like we look a lot more at customer behaviour and data analysis to tell us what behaviours the customer is exhibiting and I pull out from digital channels and say whether it’s retail, physical store or digital usage in and around the store. Whether it’s a call centre or a contact centre and then through to social networks, apps, websites, logged content etc.
But if you look at the behaviour of where customers are going to search obviously. Then have performance metrics in place so this hub and spoke model marketing owned performance metrics because it’s all about delivering to specific metrics.
You’re very much grounded in insight and those strategies get developed without insight and their focus is more on advocacy which is almost on the top right of that matrix I showed you earlier, the high value high engaged, they’re the ones that love you and engage with you so they’ll happily advocate or share that content and talk until the cows come home about your product, service or brand. Again it’s about driving advocacy as a metric.
I’m not talking just about NPS. NPS love it or hate it, I’ve got a different view, I love it in some perspectives, and I hate it in others. Some businesses go “we have an NPS score, that’s fine we’ve kicked advocacy off the list” and it’s a big stick at one moment in time with all customers treated equally and it gives you a number.
It’s not very helpful if I look at my database of customers that have only been with me for a month. They might have a very high NPS and advocacy measure because they love you versus customers who have been with you for a year might be getting a bit jaded, or been with you for five or ten years on a database and either love you or are starting to get towards the point where they don’t see as much value, so hence, give you a low NPS.
So be very careful around advocacy and all that should deliver bottom line growth. I’ve talked about upfront, digital activity and this customer centricity structure is about delivering growth. You’re not in business to create great content that gets shared, that’s not the point. Yes, you can share it, but you should be able to track it and demonstrate whether it’s actually delivering for your business. I’m not saying it’s easy but that should be the mindset.
Here’s one model I’ve pulled out in terms of best practice, I like to think of next practice because there is really no best practice anymore, we’re all in the middle of transformations and seeing what’s working overseas and doing some of our own. But retail I feel is one of the best models and retailers have implemented a customer life cycle or cohort focus.
It’s a good way of thinking because it sets teams to explain this bowtie, I’m sure some of you have seen the bow tie. It’s a journey from the left, if the funnel was tipped on its head on the side, from brand reach and awareness and engagement at the left-hand side through to prospecting and lead nurturing, converting to sales in the middle and then getting to know my brand well, onboarding me, through the upsell, cross-sell and advocacy and retention out the right-hand side. That’s the bow tie if you’re not aware of it.
So retail has driven this in the sense of aligning teams around these particular cohorts or specific teams for brand reach and not just advertising, which used to be advertising which was awareness but engagement and they have clear goals and strategies and clear KPI’s and clear roles and responsibilities within the team.
So it’s a team of marketers with brand experience, marketers with customer engagement experience, marketers with digital and social experience, analytics team members all sitting in the one team.
The reason this works is you’re all heading towards one common goal. So going back to that climbing Everest analogy, they’re all just looking at the role of reaching customers, making them aware of the business, brand or product and then engaging them to a level.
Then it gets handed to over to an activity that team 2 can clearly focus on which is once they’re engaged in something, which generally means they’ve joined your database somehow or given you an email address and joined a newsletter program, maybe joined your social networks, LinkedIn groups, b2b, whatever it may be, you can start to then lead nurture.
Now it doesn’t mean a list of names and emails that you cold call and try and flog and convert to, unconvert. It is the world of sales in nurturing and understanding again needs and segmenting into need states and customer behaviours and journeys. But again that team is focused on exports in that team only in KPI’s.
Focus on lead nurture through to sale. Team 3 is often missed and team 3 when I talk to a lot of clients is missed but they’re doing just a welcome pack or a quick three series of emails that tell me welcome to our brand world. This is a whole team that’s actually developed to on-board to the brand world, help customers understand the products and services that are available and actually connect people into the brand world touch points as a thing.
Clear strategies of trying to get customers to understand what’s on offer here, what service aspects they can take advantage of and step them through a relationship and that relationship, there’s a good analogy as well to say, I don’t understand somebody straight away, it takes me a bit of time to get to know them, meet them, talk with them and understand them.
That’s the same with team 3 here to on-board me over a series of a hundred days or 6 months or 3 months and get me to know your brand well. Again it’s very clear that that team has responsibility.
I’ve got a question here from Divina, how can team 2 segment if they’re only receiving emails and other basic info for the nurturing process? I probably said that as a basic level, not to overcomplicate it. All engagement data is what they would utilise.
So again you might be using call centre data, so I’m aware of your brand somehow or have seen something and I’ve phoned this number. When people have called into a call centre or on the back of the brand engagement promotion, calling for some reason.
It could be a competition was run as part of a brand campaign, upload a photo or tell us something online. It could be download our app because you’ve launched a new app, again you’ve got them in the app and hence you can use push messaging through the app.
So it depends on again what the engagement metric was from the brand team, they’d be very clearly set out and they would hand that over to the engagement team 2 and based on all those engagement points would start a lead nurturing program either relevant by channel or relevant by customer need.
I’m just going to rush through quickly due to time. Price, sell or cross-sell is team 4. Very focused on financials and team 5 is about the advocacy that I was talking about a minute ago. But again, not that NPS, it’s about advocacy, identifying who are the advocates and who wants to talk about our brand and creating a strategy around that and again clear KPI’s.
That might help you if you’re not customer centric, you don’t have to restructure your whole business but think about maybe even within your teams who’s responsible throughout this life cycle and again aligning them to business and KPI’s.
And I’ll just use this example of Zappos and I’m sure some of you have read about holacracy as a new business model that they’ve applied. This is about power to the people, or power to the teams. So Google does it with their approach to teams and Zappos does it, an online shoe sales company.
Holacracy is just a thought, if you’re good at being customer centric and you’ve got those teams through the customer life cycle, delegate down the power to those teams or even the second-in-charge within the team. Again you don’t have the worries of management having to sign things on.
To get back to your silos, traditionally they had to get x person to sign it off and then the sales manager to sign it off and then someone else to sign it off and it all slows down so your speed to the market is slow. It’s a way of thinking being customer centric and getting to market quicker.
3. Aligning Processes and 4. Aligning Suppliers
Alright, the processes and suppliers are bundled as the last group. We’ve done strategy, we’ve done structures, here’s some ideas around aligning your digital processes and suppliers.
Using an old concept, the maturity curve. Again I talked upfront, if you wanted to be customer centric or you wanted to be innovative or whatever the word is, be clear in what that means. Actually set a fake process to work through to increase your level of maturity to get there.
So if you say customer centric, you can’t suddenly be customer centric with your next campaign because your processes haven’t been aligned. The data you’re capturing is in different systems so you can’t pull it together and analyse it. You might not have any governance structure so you don’t know who’s actually governing the process that is in control of it.
So this is a way of taking your process, for example, data governance and the role of data and the role of digital channels. Stepping up the level of digital knowledge through your business. Stage 1 very reactive, Stage 2 getting more preventative, Stage 3 having systems in place to be a bit more proactive and learning and then more advanced in 4 and 5.
The good thing about this is you can put, I’ve put there four boxes in the black, four things to do, to actually achieve that level of maturity. You can tick them off the list. I’ve prevented teams running away again, yes we’re suddenly customer centric.
You’ll go, well hold on, have we actually achieved those 4 points? Have we moved away from manual processes? Have we got a better IT infrastructure? Have we got this voucher system pulled together? Have we got roles and governance of data, and data usage written down? If no, we haven’t done it. If yes, move to the next level.
That’s one thing you could walk away with and start to populate when your breaking down silos and moving towards customer centricity, even just the use of digital in your business. How mature are you in the use of digital and look at all of your digital activity and data capture and put it into this maturity curve and start to get a sense of where you’re going on the transformation timeline.
I’m sorry there are quite a few frameworks to get your head around but again if I explain it, we’ll actually email the full document to you so you can take your time to go through these. This again is a nice way of thinking and we’ve come across this with a lot of clients, they focus on the bottom part of this diagram.
You might be thinking the same, we talk about let’s look at our media strategy, we need to talk about programmatic buying, can you help me? What’s our trading platform? What are we doing around media planning around the customer? Or what’s our digital strategy and how are we optimising our digital channels? What are we doing around automation?
Or, what’s our content strategy and what are we actually creating, are we being a thought leader? A lot of activity around finding suppliers, setting up teams and structures to deliver on that. When in reality, it’s what I’ve been saying before, you need to go back up to the top of this chart, to the top of this triangle and focus on concrete business objectives and plans, clear customer marketing objectives and then I’ve put an array of insights to data and behaviours.
No company is fully customer centric or fully utilising all the data that they’ve got at hand. That’s what I was saying earlier with the strategies, you need to really delve into your data, segment it somehow and look at the behaviours in those different segments. There’s no point segmenting if those segments really aren’t that different.
I’ve seen a lot of segmentation strategies of 20, 30, 40 plus segments or power of one in one segment. In reality, they’re all acting the same way and delivering x amount of profit. So there’s no differentiation, why do it? Might as well do mass targeting. And then look at the customer marketing plans and prioritise your planning.
We see a lot of work in progress with companies, a lot of plans, but there’s no official prioritisation when something changes in the market or the CEO comes in and says can you suddenly do this? We’ve suddenly got a sponsorship out the left side here of our business, can you throw it in and do something around it for marketing?
We can, or you can, but how are you going to reprioritise all the current activity and teams and processes to get it out and your suppliers. Think of it this way, it’s starting again from the top, getting alignment across your business to a plan. Use the hub and spoke model for that, everybody aligned to that plan. Your data teams, your brand teams, your digital teams, social teams etc, to then write a brief.
Then when you can write a brief, only then can you get it out through to your media partners, your digital partners and maybe content partners. Otherwise you’re inefficient and potentially wasting marketing dollars. And of course you should be learning, optimising either in campaign or post-campaign which delivers insights.
Again for me, an insight by definition is something that a consumer has done that shows a bit of a problem and hence you can change their behaviour to overcome that problem. Through a campaign you should be achieving learning. I challenge you all to go have a quick yes or no. Have you got three key learning things this year out of activity that you’ve done? And if so, have you applied those three learnings back into your strategy and changed your strategy?
Aligning the business to this process which improves your performance. I don’t like the word process but everyone needs a process and I challenge you to think about it in three stages. Think about this process as a three stage one for any campaign.
You should spend a lot of time in stage 1 which again was the top of the triangle and scoping out a brief and that can take a lot of data analytics, a lot of analysis, a lot of collaboration, a lot of workshopping, to actually get to a point where you can write that brief. The analytical process might be 6 steps for example to get to that stage.
Stage 2 is then the planning and ideation, so spend time, and I think there’s some creative agencies on the webinar as well who would hopefully agree with me, spend time in actually developing the right holistic idea. And for digital it’s really important, we see a lot of activity that people say “this is the big idea”, when really it’s just a little content play, or a little social media play, it’s not actually a full brand idea or customer led idea.
And once you’ve agreed to that idea it might be again step 7 to 11 for example, you’re only then ready to create all the assets whether that might be call centre scripts, it might be content, it might be an email program whatever it may be.
This takes you to stage 3 and this could be passing to different teams, it could be the execution team on the right hand side there and asking it to obviously create the activity and measure, go live and optimise. Getting your processes within your business, are they bogging you down, have you actually got a process that’s working for you?
Or, as with one of the clients I’m working with at the moment, they’ve got a very, very detailed process, it could be up to 20 steps like this, it’s actually more, but the process is holding them back and they’re all ticking boxes rather than actually looking at the output.
Are we really strategically relevant in stage 1 and ready to go? Have we got a really good idea that everyone’s bought into in stage 2 and then are we creating the right assets and setting up the tagging and set up the right measures? So just go back to look at your processes and see if they’re working for you and with your teams.
And these little boxes here are governance structures. So whether it’s RACI or some other governance structure, like a really simple one, do you own or do you influence it? And to explain this, the requirements down the left hand side from a strategy insight segmentation etc, point of view and those were the teams you saw in silos.
Who owns digital strategy? I’ve just made a couple of examples of a customer experience team, who owned writing the strategy. It doesn’t mean they don’t involve all the others and collaborate, it just means someone has to own the fact the strategy has actually been done.
That’s a simple grid you could use with your silos at the top there and requirements on the left hand side and just agree on the level of governance. Hopefully you’re not drowning in data, it really should be about meaningful statistics and insights.
Anyone know what the $2000 88% on the left hand side means? It’s actually Ritz-Carlton. The Ritz-Carlton gives it’s staff governor a free reign to spend up to $2000 on their guests to satisfy them and it’s ingrained in their induction and their training and it’s all about guest satisfaction. They are completely customer centric or guest centric in their world and they have been the number 1 in employee training for years now.
The 88% is the guest satisfaction level. Again if you start to use measures, you can start to say well guest satisfaction is our measurement. Ritz-Carlton, sorry, that they’ve cut out, but then they’re asked which company. Ritz-Carlton so from a hotel it makes sense, from a hotel perspective they’re things they might have cut out. I’ll just say again, this is Ritz-Carlton, they give employees the power to spend $2000 on expenses to satisfy a guest and the guest satisfaction level is 88%.
So there’s nothing to sign up, there’s no process to get all that paperwork signed off to spend up to $2000, it’s staff have the ability to go and spend the money and it’s all about a singular focus within an objective and a KPI. The objective being the satisfied guest and the measure, satisfaction, 88%.
Zappos I talked about, and if you know a lot about Zappos they are really trying to be customer centric and the longest phone call to their call centre has been 10 hours and 29 minutes. They don’t look at a measure of call management time, which typically call centres focus on, about getting customers off quickly. They allow call centre staff to talk for as long as customers want to talk. I have no idea why this person spoke for 10 hours and 29 minutes, but apparently they did.
Just moving on to the last slides and when we’re talking about process and suppliers, there’s two different points here. In doing a process and managing either internally or out through agencies, you need to think of a fast track, slow track.
If everything is the one process, you can get bogged down and certainly in digital channels the risk is everything is fast track because you want to be very reactive. Again if you’re aligning it back to marketing, digital is just a part of the overall marketing mix. Some projects need to go through fast track and others need to go through the standard slow track.
You should think about stop go. So rather than pouring more and more projects into the funnel and doing more as a business, who’s governing which projects we’re going to stop. It’s ok if the market moves and there’s an opportunity through data or digital channels to do something but you’re going to burn out teams if you don’t stop some activity.
Again in your governance structure have a think about who has the ability to stop and go, make projects stop and go. And I would challenge you like we challenge all our clients when they’re talking about work with their agencies or internal departments is to look at your work in progress.
The best number I’ve had so far is a client was doing 800 projects a month and we looked at the effectiveness of them all and then, I can’t give you other stats but the point is, do less and accomplish more. There’s the potential to cut maybe 10% of the projects you’re doing, or maybe even 20%, if you’re not actually achieving anything. Worse still if you’re not measuring them you don’t even know if they’re working. Again I challenge you to do less.
So look that’s just on time so hopefully that’s given you a quick wild ride through ideas on how to align your strategies, how to align on your structures to be more customer centric and move away from these silos, thinking about your processes because if you get the strategy right and look at structure that’s really just moving chairs around on the Titanic.
You’ve got to have some processes to be the best business, whether it’s fast track, slow track, stop go, some governance structure.
Use your suppliers, use your agencies, your digital experts, your technology vendors. Use them in your process. So again it’s not a silo and the reason I banded process and suppliers together was to say use them collaboratively within your business to feed in insights for the planning process.
There’s plenty of examples of what’s specific, a client I’m looking at in terms of their pyramid, their differential pyramid and again we started to look at customers that have claimed a cash back and again just doing that simple pyramid you could start to see who was profitable and the majority had 1, 2 or 3 product claims for cash back on product purchase.
But there was a small group who had done 25 or more cash back claims with the highest being something like over 100, I think it was about 115 products. So there’s a small number of people that were highly, highly profitable and again, just focussing a strategy around those small group of people, who were only a couple of percent of the database, would be far more effective from a marketing perspective.
Again this would be out through digital channels. Yeah I think if you go back to those examples I’ve showed on the retail slides, retailers really are the ones that are getting it right.
Good examples to follow
If you look at what those companies are doing, and I’ve put a couple of Australian ones on, Westpac is on there and there are a couple of people maybe on the line. It’s an ability to move your business to understand consumers or customers first.
I think that’s the first step, Zappos for example have said we are focused on satisfying customers. We sell stuff, but we’re focused on the purpose of satisfying customers. You can go do a tour around the Zappos precinct over in the States and understand what they do.
They have therefore ingrained that throughout their business, that’s their mission, vision, values and purpose and they live and breathe it. I would say firstly drop digital out of that question. I think the quicker we can stop talking about a digital marketer and a marketer and I’m sorry for the headline title of this Webinar but the point of this was all to say let’s stop talking digital and specific digital objectives, let’s align it to marketing.
I think we’re all marketers and again if you look at organisations I would argue that the best marketers are all the staff, not the marketing department. The marketing department is one part, but really all the staff, all of the staff in your business are the advocates of the business.
So, why not harness a strategy through HR or corporate comms that focuses on helping and change your policies and guidelines around social usage, and get them talking about your business. Whether it’s brand, experiences, solutions etc.
Again when I start thinking about advocates, let’s start as marketers and I won’t say digital marketers, thinking inside out. Inside your business to market out. Then start to look at your customers and customer databases to find who are the other advocates like I talked about.
I guess there’s one answer, I think I’ll throw a second one in which is simplify everything, we’ve all become too complex, all this vernacular is confusing people, so get back to basics which are set objectives, agree objectives, agree on where you’re going. Align within marketing and the role of digital within your business.
And sorry my third thing was, measure an ROI, or start measuring success of what you’re doing and if you can’t do an ROI you’re probably not doing the right, I dare say digital marketing. Or find a vendor or supplier who can help put the measurement in place.
Absolutely, this gap is not only technical knowledge it’s between your marketing department and the IT division. So, again you need to collaborate and bring in IT into your planning structure like I talked about earlier. So aligning of the silo, aligning them more into the planning process at the top of that triangle.
You don’t need to have everybody technically in the trip. Again I was talking with a client yesterday in a session, you don’t need everybody to be digital literate. What you do need to understand of the business is who are the people that are digitally literate and more knowledgeable and how do you use them as a knowledge hub so they can be the training hub and help train out through your business.
Now the risk in that is they’re too digitally literate and they can’t actually bring it back to basics and commonality. So you’ve got to be a little be careful but I would challenge you to use your digital teams to help increase people’s knowledge and here’s another thought but maybe split your digital teams into two.
There’s a capability team which is all about capability, platforms, technologies and development. And there’s an execution digital team, and that’s where you can separate. The full technology silo can stay and that’s the capability team which can have SEO experts in there, platform specialists, third party vendors, technology suppliers, agencies helping out etc.
But the execution team which are digital literate would be a part of brand and comms or your actual digital execution team. That’s an interesting thought to how you split digital even further. I guess I reference that as an example to say most frequent flyer programs and loyalty programs and frequent purchase programs either globally or certainly in Australia, have been built around that.
There are some good examples of companies trying to change, you would have seen Telstra for example in the telco space, launched a thanks program that’s all about rewards, surprise rewards. So that’s again trying to move away from hard physical discounts and loyalty to be more emotional and create experiences.
You’ll see some of the coffee chains like Starbucks, for example, and others doing much more around experiences. They still have their loyalty program which is buy x amount of product and earn points and discounts. But they’re adding now customer experience milestones into their program. That’s two examples.
I would challenge you all to say it’s not about the card and I dare say loyalty it’s a dead word, I don’t think anyone is really loyal anymore. I don’t really believe and have never, I’ve been in loyalty for 25 years, I still don’t really believe in it. I think you create great experiences for people and they’re happy and if they’re not happy they call in or tweet in or send a message off the website, you’ve got to solve them and if you solve it they’ll be happy.
Take care everyone, hope you enjoyed it and just if you’re interested we have a couple more in the series that are coming up, November 11, Chris Sewell talking about the challenges for marketers in a carbon constrained future. He’s a big specialist in environmental marketing so that will be an interesting session and Darren Woolley is on the 25th of November talking about supercharging your agency with incentive based remuneration. Big in the States but it hasn’t really taken off here in Australia. He wants to open the discussion around does incentive based remuneration for agencies help tie them to the client’s success and is it a better way of going than charging a retainer or fee.
So thanks again, have a lovely day and back into the challenges of the digital world. Thanks again.
There are more webinars in this series to come. Look out for webinars on the latest trends in agency remuneration, creating transparency and trust in media, transforming and production for the 21st century, so all about your roster management. Next up is how to supercharge your agency with incentive based remuneration. And the challenges for marketers in the carbon constrained future so all about sustainability.
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