The other day I ran across an article on CMO.com from a few months ago entitled “Total Customer Value Trumps Simple Loyalty in Digital World”. It’s a great article, so I encourage you to go take a look, but the basic premise is that loyalty does not necessarily equal value in today’s complicated consumer environment.
Customers can be loyal for a variety of reasons as the author Samuel Greengard points out. One of which may be that they are stuck with a certain product or service because they believe there is no better alternative available. I know I can relate to this after a recent series of less-than-pleasant experiences with my bank. I’d like to change banks, but frankly they’re all about the same and it just isn’t worth the hassle. Therefore, I’m loyal to my unnamed bank, but definitely not an advocate.
The proverbial big fish in today’s digital world, according to the author, are customers who truly identify with the brand and who will buy the company’s products eagerly, even when viable alternatives exist. These are the customers who sing the brand’s praises to their friends and family online and in person. These are the customers who write reviews on Amazon and give your product 5 stars. These are the customers who will pay markedly more just because it sports your logo. And these are the customers whose voices hold weight with their peers because they are knowledgeable and passionate about the product. I’m sure we all have a brand or two that we’re truly passionate about.
Total Customer Value in the Pool
My 13 year old son is a competitive swimmer and will only use Speedo goggles – ever – hands down – no matter what. He wears Speedo t-shirts to show his support. He talks about how great his goggles are and encourages his teammates to try on his personal pair to show them how much better they are. He is a leader on his team, so when newbies come in and see him wearing these goggles and singing their praises, and finishing first, his advocacy holds weight. I’m sure we have owned well over 30 pair of Speedo goggles over the past 4 years at $20 a pop – and add in the T-Shirts and of course swimsuits – we probably have a historical value of over $1000 and a potential lifetime value of tens of thousands (ridiculous I know!). But if you add in the influence he’s had over others, his value is tremendously more – at least 5X.
This is why data is king!
I couldn’t agree more that total customer value, or even total partner or total supplier value, is absolutely the right approach, and is a much better indicator of value. But in this digital world of incredible data volumes and disparate data sources & systems, how can you really know what a customer’s value is?
The marketing applications you probably already use are great – there are so many great automation, web analytics, and CRM systems around. But what fuels these applications? Your data.
Most marketers think that data is the stuff that applications generate or consume. As if all data is pretty much the same. In truth, data is a raw ingredient. Data-driven marketers don’t just manage their marketing applications, they actively manage their data as a strategic asset.
How are you using data to analyze and identify your influential customers? Can you tell that a customer bought their fourth product from your website, and then promptly tweeted about the great deal they got on it? Even more interesting, can you tell that that five of their friends followed the link, 1 bought the same item, 1 looked at it but ended up buying a similar item, and 1 put it in their cart but didn’t buy it because it was cheaper on another website? And more importantly, how can you keep this person engaged so they continue their brand preference – so somebody else with a similar brand and product doesn’t swoop in and do it first? And the ultimate question… how can you scale this so that you’re doing this automatically within your marketing processes, with confidence, every time?
All marketers need to understand their data – what exists in your information ecosystem , whether it be internally or externally. Can you even get to the systems that hold the richest data? Do you leverage your internal customer support/call center records? Is your billing /financial system utilized as a key location for customer data? And the elephant in the room… can you incorporate the invaluable social media data that is ripe for marketers to leverage as an automated component of their marketing campaigns?
This is why marketers need to care about data integration…
Even if you do have access to all of the rich customer data that exists within and outside of your firewalls, how can you make sense of it? How can you pull it together to truly understand your customers… what they really buy, who they associate with, and who they influence. If you don’t, then you’re leaving dollars, and more importantly, potential advocacy and true customer value, on the table.
This is why marketers need to care about achieving a total view of their customers and prospects…
And none of this matters if the data you are leveraging is plain incorrect or incomplete. How often have you seen some analysis on an important topic, had that gut feeling that something must be wrong, and questioned the data that was used to pull the report? The obvious data quality errors are really only the tip of the iceberg. Most of the data quality issues that marketers face are either not glaringly obvious enough to catch and correct on the spot, or are baked into an automated process that nobody has the opportunity to catch. Making decisions based upon flawed data inevitably leads to poor decisions.
This is why marketers need to care about data quality.
So, as the article points out, don’t just look at loyalty, look at total customer value. But realize, that this is easier said than done without a focusing in on your data and ensuring you have all of the right data, at the right place, in the right format, right away.
Now… Brand advocates, step up! Share with us your favorite story. What brands do you love? Why? What makes you so loyal?
Citrix: You may not realize you know them, but chances are pretty good that you do. And chances are also good that we marketers can learn something about achieving fortune teller-like marketing from them!
Citrix is the company that brought you GoToMeeting and a whole host of other mobile workspace solutions that provide virtualization, networking and cloud services. Their goal is to give their 100 million users in 260,000 organizations across the globe “new ways to work better with seamless and secure access to the apps, files and services they need on any device, wherever they go.”
Citrix is a company that has been imagining and innovating for over 25 years, and over that time, has seen a complete transformation in their market – virtual solutions and cloud services didn’t even exist when they were founded. Now it’s the backbone of their business. Their corporate video proudly states that the only constant in this world is change, and that they strive to embrace the “yet to be discovered.”
Having worked with them quite a bit over the past few years, we have seen first-hand how Citrix has demonstrated their ability to embrace change.
Back in 2011, it became clear to Citrix that they had a data problem, and that they would have to make some changes to stay ahead in this hyper competitive market. Sales & Marketing had identified data as their #1 concern – their data was incomplete, inaccurate, and duplicated in their CRM system. And with so many different applications in the organization, it was quite difficult to know which application or data source had the most accurate and up-to-date information. They realized they needed a single source of the truth – one system of reference where all of their global data management practices could be centralized and consistent.
The marketing team realized that they needed to take control of the solution to their data concerns, as their success truly depended upon it. They brought together their IT department and their systems integration partner, Cognizant to determine a course of action. Together they forged an overall data governance strategy which would empower the marketing team to manage data centrally – to be responsible for their own success.
As a key element of that data governance / management strategy, they determined that they needed a Master Data Management (MDM) solution to serve as their Single Trusted Source of Customer & Prospect Data. They did a great deal of research into industry best practices and technology solutions, and decided to select Informatica as their MDM partner. As you can see, Citrix’s environment is not unlike most marketing organizations. The difference is that they are now able to capture and distribute better customer and prospect data to and from these systems to achieve even better results. They are leveraging internal data sources and systems like CRM (Salesforce) and marketing automation (Marketo). Their systems live all over the enterprise, both on premises and in the cloud. And they leverage analytical tools to analyze and dashboard their results.
Citrix strategized and implemented their Single Trusted Source of Customer & Prospect solution in a phased approach throughout 2013 and 2014, and we believe that what they’ve been able to accomplish during that short period of time has been nothing short of phenomenal. Here are the higlights:
- Used Informatica MDM to provide clean, consistent and connected channel partner, customer and prospect data and the relationships between them for use in operational applications (SFDC, BI Reporting and Predictive Analytics)
- Recognized 20% increase in lead-to-opportunity conversion rates
- Realized 20% increase in marketing team’s operational efficiency
- Achieved 50% increase in quality of data at the point of entry, and a 50% reduction in the rate of junk and duplicate data for prospects, existing accounts and contact
- Delivered a better channel partner and customer experience by renewing all of a customers’ user licenses across product lines at one time and making it easy to identify whitespace opportunities to up-sell more user licenses
That is huge! Can you imagine the impact on your own marketing organization of a 20% increase in lead-to-opportunity conversion? Can you imagine the impact of spending 20% less time questioning and manually massaging data to get the information you need? That’s game changing!
Because Citrix now has great data and great resulting insight, they have been able to take the next step and embark on new fortune teller-like marketing strategies. As Citrix’s Dagmar Garcia discussed during a recent webinar, “We monitor implicit and explicit behavior of transactional leads and accounts, and then we leverage these insights and previous behaviors to offer net new offers and campaigns to our customers and prospects… And it’s all based on the quality of data we have within our database.”
I encourage you to take a few minutes to listen to Dagmar discuss Citrix’s project on a recent webinar. In the webinar, she dives deeper into their project, the project scope and timeline, and to what she means by “fortune telling abilities”. Also, take a look at the customer story section of the Informatica.com website for the PDF case study. And, if you’re in the mood to learn more, you can download a complimentary copy of the 2014 Gartner Magic Quadrant for MDM of Customer Data Solutions.
Hat’s off to you Citrix, and we look forward to working with you to continue to change the game even more in the coming months and years!
I recently had the opportunity to have a very interesting discussion with Glenn Gow, the CEO of Crimson Marketing. I was impressed at what an interesting and smart guy he was, and with the tremendous insight he has into the marketing discipline. He consults with over 150 CMOs every year, and has a pretty solid understanding about the pains they are facing, the opportunities in front of them, and the approaches that the best-of-the-best are taking that are leading them towards new levels of success.
I asked Glenn if he would be willing to do a Q&A in order to share some of his insight. I hope you find his perspective as interesting as I did!
Q: What do you believe is the single biggest advantage that marketers have today?
A: Being able to use data in marketing is absolutely your single biggest competitive advantage as a marketer. And therefore your biggest challenge is capturing, leveraging and rationalizing that data. The marketers we speak with tend to fall into two buckets.
- Those who understand that the way they manage data is critical to their marketing success. These marketers use data to inform their decisions, and then rely on it to measure their effectiveness.
- Those who haven’t yet discovered that data is the key to their success. Often these people start with systems in mind – marketing automation, CRM, etc. But after implementing and beginning to use these systems, they almost always come to the realization that they have a data problem.
Q: How has this world of unprecedented data sources and volumes changed the marketing discipline?
A: In short… dramatically. The shift has really happened in the last two years. The big impetus for this change has really been the availability of data. You’ve probably heard this figure, but Google’s Eric Schmidt likes to say that every two days now, we create as much information as we did from the dawn of civilization until 2003.
We believe this is a massive opportunity for marketers. The question is, how do we leverage this data. How do we pull the golden nuggets out that will help us do our jobs better. Marketers now have access to information they’ve never had access to or even contemplated before. This gives them the ability to become a more effective marketer. And by the way… they have to! Customers expect them to!
For example, ad re-targeting. Customers expect to be shown ads that are relevant to them, and if marketers don’t successfully do this, they can actually damage their brand.
In addition, competitors are taking full advantage of data, and are getting better every day at winning the hearts and minds of their customers – so marketers need to act before their competitors do.
Marketers have a tremendous opportunity – rich data is available and the technology is available to harness it is now, so that they can win a war that they could never before.
Q: Where are the barriers they are up against in harnessing this data?
A: I’d say that barriers can really be broken down into 4 main buckets: existing architecture, skill sets, relationships, and governance.
- Existing Architecture: The way that data has historically been collected and stored doesn’t have the CMO’s needs in mind. The CMO has an abundance of data theoretically at their fingertips, but they cannot do what they want with it. The CMO needs to insist on, and work together with the CIO to build an overarching data strategy that meets their needs – both today and tomorrow because the marketing profession and tool sets are rapidly changing. That means the CMO and their team need to step into a conversation they’ve never had before with the CIO and his/her team. And it’s not about systems integration but it’s about data integration.
- Existing Skill Sets: The average marketer today is a right-brained individual. They entered the profession because they are naturally gifted at branding, communications, and outbound perspectives. And that requirement doesn’t go away – it’s still important. But today’s marketer now needs to grow their left-brained skills, so they can take advantage of inbound information, marketing technologies, data, etc. It’s hard to ask a right-brained person to suddenly be effective at managing this data. The CMO needs to fill this skillset gap primarily by bringing in people that understand it, but they cannot ignore it themselves. The CMO needs to understand how to manage a team of data scientists and operations people to dig through and analyze this data. Some CMOs have actually learned to love data analysis themselves (in fact your CMO at Informatica Marge Breya is one of them).
- Existing Relationships: In a data-driven marketing world, relationships with the CIO become paramount. They have historically determined what data is collected, where it is stored, what it is connected to, and how it is managed. Today’s CMO isn’t just going to the CIO with a simple task, as in asking them to build a new dashboard. They have to collectively work together to build a data strategy that will work for the organization as a whole. And marketing is the “new kid on the block” in this discussion – the CIO has been working with finance, manufacturing, etc. for years, so it takes some time (and great data points!) to build that kind of cohesive relationship. But most CIOs understand that it’s important, if for no other reason that they see budgets increasingly shifting to marketing and the rest of the Lines of Business.
- Governance: Who is ultimately responsible for the data that lives within an organization? It’s not an easy question to answer. And since marketing is a relatively new entrant into the data discussion, there are often a lot of questions left to answer. If marketing wants access to the customer data, what are we going to let them do with it? Read it? Append to it? How quickly does this happen? Who needs to author or approve changes to a data flow? Who manages opt ins/outs and regulatory black lists? And how does that impact our responsibility as an organization? This is a new set of conversations for the CMO – but they’re absolutely critical.
Q: Are the CMOs you speak with concerned with measuring marketing success?
A: Absolutely. CMOs are feeling tremendous pressure from the CEO to quantify their results. There was a recent Duke University study of CMOs that asked if they were feeling pressure from the CEO or board to justify what they’re doing. 64% of the respondents said that they do feel this pressure, and 63% say this pressure is increasing.
CMOs cannot ignore this. They need to have access to the right data that they can trust to track the effectiveness of their organizations. They need to quantitatively demonstrate the impact that their activities have had on corporate revenue – not just ROI or Marketing Qualified Leads. They need to track data points all the way through the sales cycle to close and revenue, and to show their actual impact on what the CEO really cares about.
Q: Do you think marketers who undertake marketing automation products without a solid handle on their data first are getting solid results?
A: That is a tricky one. Ideally, yes, they’d have their data in great shape before undertaking a marketing automation process. The vast majority of companies who have implemented the various marketing technology tools have encountered dramatic data quality issues, often coming to light during the process of implementing their systems. So data quality and data integration is the ideal first step.
But the truth is, solving a company’s data problem isn’t a simple, straight-forward challenge. It takes time and it’s not always obvious how to solve the problem. Marketers need to be part of this conversation. They need to drive how they’re going to be managing data moving forward. And they need to involve people who understand data well, whether they be internal (typically in IT), or external (consulting companies like Crimson, and technology providers like Informatica).
So the reality for a CMO, is that it has to be a parallel path. CMOs need to get involved in ensuring that data is managed in a way they can use effectively as a marketer, but in the meantime, they cannot stop doing their day-to-day job. So, sure, they may not be getting the most out of their investment in marketing automation, but it’s the beginning of a process that will see tremendous returns over the long term.
Q: Is anybody really getting it “right” yet?
A: This is the best part… yes! We are starting to see more and more forward-thinking organizations really harnessing their data for competitive advantage, and using technology in very smart ways to tie it all together and make sense of it. In fact, we are in the process of writing a book entitled “Moneyball for Marketing” that features eleven different companies who have marketing strategies and execution plans that we feel are leading their industries.
So readers, what do you think? Who do you think is getting it “right” by leveraging their data with smart technology and truly getting meaningful an impactful results?
I have been in marketing for over two decades. As I meet people in social situations, on airplanes, and on the sidelines at children’s soccer games, and they ask what it is I do, I get responses that constantly amuse me and lead me to the conclusion that the general public has absolutely no idea what a marketer does. I am often asked things like “have you created any commercials that I might have seen?” and peppered with questions that evoke visions of Mad Men-esque 1960’s style agency work and late night creative martini-filled pitch sessions.
I admit I do love to catch the occasional Mad Men episode, and a few weeks ago, I stumbled upon one that had me chuckling. You may remember the one that Don Draper is pitching a lipstick advertisement and after persuading the executive to see things his way, he says something along the lines of, “We’ll never know, will we? It’s not a science.”
How the times have changed. I would argue that in today’s data-driven world, marketing is no longer an art and is now squarely a science.
Sure, great marketers still understand their buyers at a gut level, but their hunches are no longer the impetus of a marketing campaign. Their hunches are now the impetus for a data-driven, fact-finding mission, and only after the analysis has been completed and confirms or contradicts this hunch, is the campaign designed and launched.
This is only possible because today, marketers have access to enormous amounts of data – not just the basic demographics of years past. Most marketers realize that there is great promise in all of that data, but it’s just too complicated, time-consuming, and costly to truly harness it. How can you really ever make sense of the hundreds of data sources and tens of thousands of variables within these sources? Social media, web analytics, geo-targeting, internal customer and financial systems, in house marketing automation systems, third party data augmentation in the cloud… the list goes on and on!
How can marketers harness the right data, in the right way, right away? The answer starts with making the commitment that your marketing team – and hopefully your organization as a whole – will think “data first”. In the coming weeks, I will focus on what exactly thinking data first means, and how it will pay dividends to marketers.
In the mean time, I will make the personal commitment to be more patient about answering the silly questions and comments about marketers.
Now, it’s your turn to comment…
What are some of the most amusing misconceptions about marketers that you’ve encountered?
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Do you agree? Is marketing an art? A science? Or somewhere in between?