4 things you need to do to be a more customer-centric business: Insight from MetLife, Lenovo and Restaurant.com
In this third extract from the forthcoming Incite Briefing - "The Accessible Consumer: Transforming Marketing and Communications to 2015" - I look in detail at customer centricity, the challenges it engenders for marketing departments and suggestions from leading corporations on how to overcome them.
When asked about customer-centricity, Claire Burns, who is responsible for driving customer-centric practice at financial giant MetLife, uses the phrase “transforming almost everything that we do to an outside-in perspective, from what today is very much inside-out.”
Fundamentally, the challenge is twofold:
Understand the customer better through more precise, extensive and detailed tracking, feedback and insights
Use this data to evolve the company in three main ways
Share information more effectively
Reformat internal models away from a product-based system to one based on consumer groups. Some have argued that the ‘product manager’ role should be replaced by a ‘customer manager’, for instance
Deliver products and experiences that are more closely linked to the customer
How will customer-centricity impact on your role as a marketing and communications executive?
Fundamentally, the key change for marcomms execs is a somewhat alarming one - a loss of control. No longer can one expect to broadcast messages based on products, not consumer groups. Existing levels of targetting and precision will no longer pass muster. Companies must be more responsive, more fluid, and far more engaged with customer demographic groups. Indeed, some argue that one must strive to deliver a marcomms function capable of engaging effectively with individual consumers. Jeff Shafer is the Vice-President of Corporate Communications at Lenovo, and agrees:
“Well, you certainly can’t be a control freak any more! I simply will not create the Lenovo brand by ensuring that USA Today and the Wall Street Journal get our message. People are going to create their own context for your brand, they’re going to be talking about it. Or at least you hope they’re going to talk about it, that you’re interesting, authentic and engaged enough for them to want to talk about it – and talk about it positively. Even when the conversation is less than positive, you also need to ensure that you’re in a position to respond to that – and hopefully change opinions or at least deal with some of the negativity that could be out there. It’s definitely a challenge!”
As one can see, the challenge of customer centricity is inextricably linked with the challenge of building a truly multi-channel external outreach function. This new, fragmented marketing and communications landscape - and how you as an executive should deal with it - will be discussed in chapter 2 of our forthcoming briefing. To prepare for customer centricity, one must follow a 6-step process
1. Recognise the scale of the change
The first challenge one must overcome is to get a sense of how significant a change to customer-centricity is. This move, while being not only beneficial, but almost mandated by your customer body, is nothing less than a root-and-branch examination of every aspect of your business.
It is based on the fact that, as Speichert, the CMO at L’Oreal USA has said, the relationship between the customer and the marketer/communicator has changed fundamentally.
And one must always keep this realisation, and the duration and challenge of the journey, front of mind. As Claire Burns said:
“Always bear in mind the notion that to be customer-centric requires a systematic retooling of almost everything that you do.
If you are designed and built around internal processes and internal systems, in pushing something to market that’s very complicated, as we are and a lot of financial services are, it requires a wholesale retooling of almost everything that you do. At Year One, starting this journey, you don’t necessarily realize the degree of difficulty involved.”
Chris Krohn, the Chief Marketing Officer at Restaurant.com agrees. He lays out the benefits - customer lifetime value, revenue per customer - both key metrics are up since they became a more customer-centric business. But “one has to bear in mind that there is a HUGE amount of work to do to get there.”
2. Gather all customer insight in one place - and extend your capacity to track relevant data
Currently, many companies have a fragmented customer insight function. That won’t work for a customer-centric business. To be successful, one must get rid of the separate silos of customer information and begin to assess all available data at one place, in one time.
L’Oreal have found this first hand. Previously, the company collated insight based on product. They had several insight departments, linked to the various customer purchase points - be they pharmaceutical stores, ‘mass market’, department stores etc. This meant that the company had a lot of very deep insight on individual areas of the business.
Once they gathered all insight into one department, they were able to spot a trend previously unseen.
“Moving towards a centralised insights function means that we’re now really able to follow our consumers whichever channel they move in”.
Speichert realised that customers do not simply shop in one of the ‘channels’ that the company had established. Because someone bought their shampoo in Wal-Mart did not preclude them buying makeup in Nordstrom. Without a centralised function, L’Oreal were unable to track this customer across several channels. Their picture of the customer is now far more complete.
As Chris Krohn at Restaurant.com says though - this centralisation and extension of customer insight is not without cost. One of the first big ticket purchases is a CRM system fit for purpose:
"You have to make major investment and commitment to do this. It’s not just something you can say “let’s try and see” - you’ve got to actually put in the data collection and the data management, data cleansing processes in place, you’ve got to have a system built where you can keep all that, a ‘data warehouse’ if you will (customer database) and then you’ve got to have campaign management tools on top of this - otherwise you can’t scale this.
"We’ve invested significantly over the last couple of years on a CRM infrastructure including a 360-degree customer database where we’re tracking all sorts of customer behaviours - whether that is email engagement or browser engagement, or mobile engagements or purchase behaviours or customer service contacts, or whatever the case may be. "We’re collecting a greater and greater amount of behavioural data, married with demographic data that’s either self-reported or third-party generated."
3. Determine which departments and functions must be involved in phase 1 - where typically, a ‘soft’ reorganisation’ of internal departments takes place
Of 293 marketing and communications executives, a full 95% believe that internal collaboration is currently not fit for purpose. To be a customer-centric company, internal organisation must change, and companies must deliver a more holistic experience for the customer on the outside.
The lines are certainly blurring between departments now. It is beholden on corporations to ensure that traditional departments are closely aligned with the newer social and digital functions to ensure adequate sharing of data, and a more sensible and engaging external function.
“There is an increasing bleeding together of departmental responsibilities and roles – the challenge in trying to provide an integrated marketing and communications functionality is who does what, evolving those job descriptions and ensuring people don’t revert back to outmoded roles and responsibilities.”
Obviously, this presents a challenge - friction is inherent in a change like this. One must decide which groups need to collaborate on a project, and who does what. There will be arguments. The challenge is to ensure that pre-existing silos do not get in the way of integrated campaigns. But executives will do well to bear in mind the opinion of Jennifer Dominiquini, CMO of Seasonal and Outdoor Living at KMart and Sears:
“From my point of view, I don’t care who does something, simply that it gets done. I don’t want the PR team to focus solely on pulling media impressions, but all impressions – even though that may represent a change to their previous role. After all, bloggers are today’s journalists. And for them to take on that additional responsibility, collaboration and integration are required.” JDS
It’s not simply the marketing and communications departments that must reduce friction and collaborate more. With an increased focus on tracking, and an increasing primacy of the CRM system, your IT department is increasingly key. Chris Krohn, CMO at Restaurant.com said:
“There’s a lot of overlap between the work that folks that are in what we’ll call ‘traditional marketing function’ and folks that are in IT function are doing.
"You look at areas like data analytics and CRM, and to have a successful CRM programme, you have to have a strong data integrity function, a strong ETL development capability, and the data governance functions in addition to the database management functions, and the campaign management functions. "So you’ve got a mix of programmers, data analysts, database architects, and marketers all in the scheme there”
“Our technology department is probably our core partner in this. Because we need to have the systems in place to gather data, to share that data, and use that data to then inform service interactions and purchase and cross-sell type interactions.”
4. Build consensus internally - you need to sell customer-centricity to your colleagues
There is significant internal engagement necessary to build acceptance of, and excitement in, customer centric business practices.
That involves the friction between individual departments highlighted by Dominiquini above, to a need to get the C-Suite on board. Without them, a shift to CC can take place - but it will be slower.
“One must recognize the degree of commitment that’s necessary from leaders in the organisation to affect the degree of change necessary to be successful. The more commitment you have from your top leadership, from your CEO, the quicker the path. I remember talking to American Express – who said that had they had that top-down commitment, they would have accelerated their path from what took ultimately 7 years to maybe 3.”
This concludes my third extract from the forthcoming Incite Briefing I'm writing, "The Accessible Consumer: Transforming Marketing and Communications to 2015". You can sign up to receive a complimentary copy when it's released here.
