More Related Content Similar to Winterberry: Customer Experience Marketing: Realizing the Promise of Dynamic Interactions (20) Winterberry: Customer Experience Marketing: Realizing the Promise of Dynamic Interactions2. © 2011 Winterberry Group LLC.
2
Executive Summary
It has been a subject of intense study—and even more intense commentary—
for as long as marketers have been battling for the affections of consumers.
When the topic turns to “customer experience,” everyone has an opinion.
There is, for example, the “payoff” perspective, as echoed by the motivational
author Harvey Mackay: “There is place in the world for any business that
takes care of its customers—after the sale.”
Spiritual and existential themes often creep into the service discussion, too,
as in the case of an oft-quoted American Indian proverb: “To understand the
man, you must first walk a mile in his moccasin.”
Not to be outdone, modern executives are also stepping up to share their
insights on this most ancient of business challenges. Microsoft’s Bill Gates—
“Your most unhappy customers are your greatest source of learning”—
provides a silver lining to the dark cloud of missed opportunity. Whereas
Walmart’s late founder, Sam Walton—“The goal as a company is to have
customer service that is not just the best, but legendary”—sets out an
ambitious ideal befitting the world’s largest retailer.
What is it about “customer experience” that has so many eminent business
leaders (and quotation editors) working overtime? And why—in this era of
digital technology, social media and channel proliferation—does the ideal of
a successful customer interaction still seem so elusive to so many?
To address those questions, one must recognize a single essential truth:
Most companies do a poor job at leveraging their customer interactions for
anything more than basic service or fulfillment purposes. In fact, the gap
between what companies deliver and customers expect is vast; in 2005, Bain
& Company found that 80 percent of companies thought they were
delivering a “superior experience” to their customers. How many of them
agreed? A paltry 8 percent.
Not surprisingly, marketers are coming to recognize that gap—their inability
to leverage the customer experience as a marketing opportunity—as a major
liability, undermining the value of a customer and the effort (and expense)
invested in their acquisition. Over the last decade or so, their response to the
challenge has been captured in a maturing discipline, known as customer
experience marketing (CEM), that sets out a framework for how companies
ought to plan, resource and execute across their direct customer
touchpoints.
But CEM, despite its name, is about more than just marketing. It's the sum of
information, technology and process that allows a company to maximize the
value of its interactions—turning every email, phone call and point-of-sale
transaction into an opportunity to enrich a profitable long-term relationship.
CEM may, in fact, represent the ultimate blending of product and
promotional strategy, presenting marketers with a dynamic, integrated
approach to orchestrate their most critical efforts through the lens of
inbound, outbound, acquisition, retention and loyalty marketing.
CEM may, in fact,
represent the
ultimate blending of
product and
promotional
strategy—
presenting
companies a
dynamic approach
to orchestrate their
most critical
marketing efforts
3. © 2011 Winterberry Group LLC.
3
This white paper—produced with the cooperation and sponsorship of
Epsilon—sets out to describe how marketers are planning and activating real-
life CEM approaches in their businesses. Based on an intensive phone, in-
person and online survey effort, it will explore the broad opportunity
available to customer experience practitioners today and demonstrate five
fundamental trends shaping the potential of CEM in the future, including:
• Across vertical markets, senior executives say that improving the
quality of their multichannel customer experience is an increasingly
critical business priority. But relatively few have devised strategies
specifically for the purpose of enriching customer experience, and
even fewer have allotted the dedicated resources (or determined the
appropriate metrics) necessary to optimize their CEM efforts
• More than anything else, changing consumer expectations—nurtured
over nearly two decades of "digital accessibility"—are setting the
standard for what constitutes success in experience-driven marketing
• The proliferation of data—including demographic, psychographic,
technographic and transactional information—has become the “single
constant" in the perpetually changing marketing landscape.
Collecting, analyzing and making use of this information (in near-real-
time, and with a level of insight superior to the market at large) thus
presents the single most significant potential source of competitive
advantage in CEM execution
• Capturing candid customer feedback (and using it as the foundation
of a robust ongoing dialogue) is the tactical centerpiece of the CEM
approach. But that interaction can be exploited for more than just
deep-in-the-funnel marketing purposes. The most innovative CEM
practitioners will look to inform product development, resource
allocation and general go-to-market decisioning with the insights
gleaned from these interactions
• Though much of the inherent promise of CEM is linked to the
automation of sales, marketing and service interactions, marketers
and customers alike say that positive interactions still depend on an
effective blend of insight, speed, artfulness and sensibility—bridging
traditional distinctions between the "art" of sales and service with the
"science" of targeted marketing.
4. © 2011 Winterberry Group LLC.
4
Methodology
This white paper explores the many factors impacting the current application
of customer experience marketing (CEM) across both business-to-business
and business-to-consumer vertical sectors. Its conclusions are grounded in
an exhaustive research process that included over 100 in-person, telephone
and electronic surveys with leading marketers, service providers and other
knowledgeable industry sources.
Charts and tables presented in this white paper are based primarily on the
online survey component of the research panel. Totals may not add up to
100 percent due to rounding.
Source: Winterberry Group survey
Research Survey Respondents: Current Professional Role
“C‐suite” Executive
(e.g. CEO, CFO, COO)
7.8%
Vice President‐
Level Marketing
Executive
14.7%
Other Senior‐Level
Executive
(Marketer/Service
Provider)
18.6%
n = 102
Director‐Level
Marketing
Executive
25.5%
Brand, Channel or
Functional Manager
26.5%
Other
6.9%
Source: Winterberry Group survey
Research Survey Respondents: Current Professional Role
“C‐suite” Executive
(e.g. CEO, CFO, COO)
7.8%
Vice President‐
Level Marketing
Executive
14.7%
Other Senior‐Level
Executive
(Marketer/Service
Provider)
18.6%
n = 102
Director‐Level
Marketing
Executive
25.5%
Brand, Channel or
Functional Manager
26.5%
Other
6.9%
To all those industry
leaders who took the
time to share their
thoughts and insights
—thus making this
white paper possible
—we thank you
5. © 2011 Winterberry Group LLC.
5
What is “CEM,” Anyway?
It’s not CRM (customer relationship management). It’s not ERP (enterprise
resource planning). Nor is it MRM (marketing resource management), MAM
(marketing asset management), DMP (data management platform) or DSP
(demand-side platform).
It’s not even that other CEM: customer experience management.
So, in this acronym-crazy marketing world, what exactly is customer
experience marketing?
Put simply: CEM is an approach to managing integrated, multichannel
customer interactions with the same level of targeted precision—and with the
same objective of maximizing customer value—that companies have been
applying to their acquisition, retention and loyalty marketing efforts for many
years. It’s about leveraging the marketing function as the centerpiece of an
interdisciplinary effort that weaves together data, technology, promotional
channels, strategy and process in a manner designed to maximize the value
of a company’s most precious asset: its relationships.
That’s the long answer. When survey panelists were asked to describe how
they interpret CEM, answers varied:
• “Delivering what the customer wants, when the customer wants and
in the format they prefer”
• “A discipline and process for leveraging customer information to
build profitable relationships through the delivery of highly
targeted and relevant interactions at key touchpoints across the
lifecycle”
• “Delivering on the complete vision of what a consumer wants/needs
when interacting with a brand”
• “Correlate and connect data collected at each customer interaction
across channel and media to create a relevant dialogue that enhances
customer experience and drives incremental lifetime value”
• “Listening to client needs, problems and experiences and using that
information to improve products or services”
• “Empowering customers to define and refine communication,
product and service preferences to improve perceived value”
• “Analyzing data to derive insights regarding a customer's
preferences which can be utilized in a marketing function”
• “Making marketing decisions based on past customer experience
and behavior”
• “Delivering overall customer satisfaction throughout a transaction,
from customer service, ordering functionality, delivery of goods, price
and quality”
• “Extending the concept of ‘customer service’ into the marketing
function in an effort to provide value to customers.”
6. © 2011 Winterberry Group LLC.
6
Toward Informed Interactions:
Five Trends Driving the CEM Opportunity
Across vertical markets, senior executives say that improving the quality
of their multichannel customer experience is an increasingly critical
business priority. But relatively few have devised strategies specifically
for the purpose of enriching customer experience, and even fewer have
allotted the dedicated resources (or determined the appropriate metrics)
necessary to optimize their CEM efforts.
No matter what the vertical market; no matter what the management
function—sales, marketing, IT or executive leadership—business leaders are
united in one perspective: The experience they deliver to customers is a
critical factor in determining the long-term value of those relationships. And,
in almost all regards, companies are failing to maximize that potential.
In some cases, the customer experience performance gap is easy to
recognize: Bulky e-commerce sites, long customer service wait times and
cluttered retail stores are all indicators that a company is failing to grasp the
basic needs of its market. But many respondents said that experience
challenges, ironically, are most costly when it comes to priorities and action
items that customers will rarely recognize.
5%
12%
19%
24%
36%
5%
0% 10% 20% 30% 40% 50%
Other
We have a cohesive, unified strategy that governs
customer marketing interactions across all lines of
businesses and marketing efforts
We do not currently have an enterprise strategy for
maximizing the marketing benefits of our customer
interactions, nor do we attempt to leverage such
interactions for those purposes
We have a general set of guidelines for how we
leverage customer experiences for marketing
purposes, but no unifying strategy or approach
We employ marketing tactics in the course of regular
interaction with our customers, but these are not
tied to any given strategy
We employ marketing tactics in the course of regular
interaction with our customers, but these vary based
on line of business, function or prevailing marketing
effort
Which of the following best describes the CURRENT role of
CEM in your organization?
Source: Winterberry Group survey
5%
12%
19%
24%
36%
5%
0% 10% 20% 30% 40% 50%
Other
We have a cohesive, unified strategy that governs
customer marketing interactions across all lines of
businesses and marketing efforts
We do not currently have an enterprise strategy for
maximizing the marketing benefits of our customer
interactions, nor do we attempt to leverage such
interactions for those purposes
We have a general set of guidelines for how we
leverage customer experiences for marketing
purposes, but no unifying strategy or approach
We employ marketing tactics in the course of regular
interaction with our customers, but these are not
tied to any given strategy
We employ marketing tactics in the course of regular
interaction with our customers, but these vary based
on line of business, function or prevailing marketing
effort
Which of the following best describes the CURRENT role of
CEM in your organization?
Source: Winterberry Group survey
7. © 2011 Winterberry Group LLC.
7
Does a company make an effort, for example, to capture the right kind of
customer feedback to inform product development, pricing and downstream
promotion?
Does it provide a choice of communication channels—and allow the customer
input in determining the frequency, tenor and cadence of that dialogue?
Does the company’s internal infrastructure allow for rapid deployment of
new marketing channels… or support the integration of partner-driven
offers… or provide a mechanism for aligning product, offer and message—as
well as the data underlying all three—to an individual customer’s tastes?
In almost all these regards, companies say they can do substantially better.
But execution challenges here can’t be blamed on a failure to recognize the
problem at hand. Indeed, more than two-thirds of respondents said that
improving their customer experience performance is “important” or a “critical
priority” right now. “This is absolutely a top-10 issue for us,” said Peter
Goodnough, director of multimedia and market research at QVC. “To give you
some idea of how fast things are changing, it was not a top-10 issue one year
ago.”
Rather, the challenge is rooted largely in the organizational structures
common to large multichannel marketers. While many recognize the danger
of delivering a poor customer experience, few are empowered to address the
issue head-on.
Source: Winterberry Group survey
Think about the marketing strategy your organization has
outlined to govern its activities over the next two to
three years. Which of the following best describes your
expected approach to CEM over that time?
A Consideration
in Our
Marketing Effort
9%
A Critical Priority
27%
Important
41%
On Our Agenda,
But Not Foremost
Among Priorities
21%
Not A Meaningful
Priority
3%
Source: Winterberry Group survey
Think about the marketing strategy your organization has
outlined to govern its activities over the next two to
three years. Which of the following best describes your
expected approach to CEM over that time?
A Consideration
in Our
Marketing Effort
9%
A Critical Priority
27%
Important
41%
On Our Agenda,
But Not Foremost
Among Priorities
21%
Not A Meaningful
Priority
3%
8. © 2011 Winterberry Group LLC.
8
That’s because, overwhelmingly, “customer experience” is a discipline that
bridges marketing, sales, information technology, product development and
virtually all other major corporate functions. Few companies have built the
cross-disciplinary platforms (or established the shared resource pools)
necessary to support the information, technology and process needs of
flexible CEM infrastructures. And even where companies are making some
move to bring these disparate approaches under a single umbrella—through
the identification of “chief customer officers,” as an example—these efforts
can easily play second fiddle to business-as-usual priorities.
“It’s a challenge to make sure [CEM] priorities are well understood across the
company,” explained Bob Soukup, senior director of loyalty at Best Buy.
“Everyone is trying to do the right thing, but without infinite dollars, you have
to make choices about where you are going to spend your money.”
Other respondents said, as well, that the issue is particularly acute in older
(and larger) marketing organizations, where legacy systems and more deeply
entrenched management norms have the effect of slowing down sweeping
efforts to proactively advance the customer experience. But realigning those
roles—and budgets—will be critical if CEM is ever to achieve the priority that
its potential would seem to demand.
“Sponsorship from the top down is absolutely critical for the success of CEM,”
noted one survey respondent. “Governance, objectives and incentives must
be aligned in order to successfully implement a cohesive customer
experience strategy for the organization. It has to become part of a
company's DNA.”
5%
10%
12%
14%
14%
45%
0% 10% 20% 30% 40% 50%
Other
Brand, channel or functional manager
Vice President‐level marketing executive
C‐Suite executive (e.g., CEO, CFO, COO)
Director‐level marketing executive
Senior‐level marketing executive (e.g.,
CMO or SVP Marketing/Sales)
Within your organization, who holds primary responsibility
for your CEM efforts?
Source: Winterberry Group survey
5%
10%
12%
14%
14%
45%
0% 10% 20% 30% 40% 50%
Other
Brand, channel or functional manager
Vice President‐level marketing executive
C‐Suite executive (e.g., CEO, CFO, COO)
Director‐level marketing executive
Senior‐level marketing executive (e.g.,
CMO or SVP Marketing/Sales)
Within your organization, who holds primary responsibility
for your CEM efforts?
Source: Winterberry Group survey
9. © 2011 Winterberry Group LLC.
9
More than anything else, changing consumer expectations—nurtured
over nearly two decades of "digital accessibility"—are setting the
standard for what constitutes success in experience-driven marketing.
Once upon a time, our “customer experience” expectations were quite a bit
different than they are today.
When we visited department stores, we expected to encounter an army of
salespeople, well-manicured displays and elegant in-store restaurants. At the
gas station, “full-service” meant that the windows would be washed, the oil
checked and someone else would actually be filling up the tank. And getting
on an airplane meant we’d encounter cheerful flight attendants, a full meal
and maybe—just maybe—an empty seat to our side.
With apologies to Bob Dylan: Times, they have a’changed.
Cultural shifts, macroeconomic developments and fundamentally new
business approaches—favoring the compartmentalization and
commoditization of virtually all customer service functions—have served to
undermine a great many aspects of what we once took for granted in our
everyday consumer world. But even as so much of the live customer
experience deteriorated before our eyes, another development was unfolding
that has armed consumers with unprecedented access to information,
perspective and influence over how companies market products.
That development, of course, is the Internet.
Now, nearly two decades since the World Wide Web first emerged as an
accessible consumer platform, digital customer expectations are higher than
ever before. When we log onto the Web, we want—and expect—seamless,
visually engaging platforms that present information and features in
precisely the manner we prescribe.
We want—and expect—access to granular product comparison data, so that
we may make informed purchase decisions.
We want—and expect—commerce platforms to function flawlessly, with the
speed and efficiency of the very best machine (and the personality and
product recommendation insight of the very best sales clerk).
We want—and expect—to access our accounts without having to enter (and
re-enter, and re-enter, and re-enter) a dizzying array of secure passwords.
We want—and expect—the opportunity to provide product or service
feedback that will be embraced by the marketer and shared with other
consumers, so as to enrich their own buying experiences.
Most importantly, though: We want—and expect—the very same kind of
dynamic experience when we pick up the phone, scroll through mobile sites,
open up our postal mailbox, visit a retail store or engage in an online chat.
Keeping up with that expectation (which grows exponentially with the
development of every new mobile device, tablet platform and social media
application) may ultimately prove leagues more complicated and expensive
“Marketers must
constantly evaluate
what level of
engagement
drives what volume of
incremental sales.
Everyone wants to
provide a great
customer
experience—
but at what cost?”
— DRTV Marketer
10. © 2011 Winterberry Group LLC.
10
than restoring all of the department store dining salons, gas station oil
changes and inflight meals that we once equated with superior customer
experience. “Marketers must constantly evaluate what level of engagement
drives what volume of incremental sales,” said the senior vice president of
marketing at one large direct response television (DRTV) marketer. “Everyone
wants to provide a great customer experience—but at what cost?”
Margin considerations will not soon vanish from the minds of top executives.
But going above-and-beyond to meet consumer expectations may also pay
dividends. “Given the new economic climate and Internet empowerment of
customers, in-depth discussions with both customers and prospects are now
essential,” said Ernan Roman, founder and principal of Ernan Roman Direct
Marketing and author of Voice of the Customer Marketing. “In our
experience, when marketers gain an in-depth understanding of the
expectations of customers and re-engineer their marketing per these
expectations, double-digit increases in response and revenue are the norm.”
2.3
2.6
2.4
2.6
3.6
3.9
3.4
3.2
3.8
3.7
3.9
4.4
2.2
2.5
2.5
2.5
2.7
2.9
3.0
3.1
3.1
3.4
3.4
3.9
4.1
3.3
1 2 3 4 5
Place‐Based Media
(Outdoor, In‐Store, etc.)
Print Advertising
(Newspapers/Magazines)
Broadcast Advertising
(TV/Radio)
Teleservices (Outbound
Calling)
Mobile
Online Display
Advertising
Social Media
Surveys / Market
Research
Teleservices (Inbound
Call Centers)
Search (Page
Optimization)
Search (Keyword
Analysis/Buying)
Direct Mail
Email
In the Future Currently
To what extent do you expect to leverage each of the following
channels as FUTURE components of your CEM effort?
Not Likely to Be Part
of Our CEM Approach
Likely Critical Driver
of Our CEM Approach
Source: Winterberry Group survey
2.3
2.6
2.4
2.6
3.6
3.9
3.4
3.2
3.8
3.7
3.9
4.4
2.2
2.5
2.5
2.5
2.7
2.9
3.0
3.1
3.1
3.4
3.4
3.9
4.1
3.3
1 2 3 4 5
Place‐Based Media
(Outdoor, In‐Store, etc.)
Print Advertising
(Newspapers/Magazines)
Broadcast Advertising
(TV/Radio)
Teleservices (Outbound
Calling)
Mobile
Online Display
Advertising
Social Media
Surveys / Market
Research
Teleservices (Inbound
Call Centers)
Search (Page
Optimization)
Search (Keyword
Analysis/Buying)
Direct Mail
Email
In the Future Currently
To what extent do you expect to leverage each of the following
channels as FUTURE components of your CEM effort?
Not Likely to Be Part
of Our CEM Approach
Likely Critical Driver
of Our CEM Approach
Source: Winterberry Group survey
11. © 2011 Winterberry Group LLC.
11
The proliferation of data—including demographic, psychographic,
technographic and transactional information—has become the “single
constant” in the perpetually changing marketing landscape. Collecting,
analyzing and making use of this information (in near-real-time, and with
a level of insight superior to the market at large) thus presents the
single most significant potential source of competitive advantage in CEM
execution.
There is a lot of data out there.
No, really. A lot of data.
From a marketing perspective, in fact, there is almost certainly more data
available to drive promotional efforts today than can even conceivably be
managed by existing storage technologies or deployed by targeting tools. To
the extent that we can even relate to this vast sea of information, consider
the following:
• According to IDC, the so-called “digital data universe” will grow from
0.8 zettabytes of capacity (in 2009) to 35 zettabytes (in 2020). What’s
a zettabyte, you ask? One trillion gigabytes—the equivalent memory
of 31.25 billion high-capacity iPhone 4s
• In February 2011, Science Magazine reported that, “We have recently
passed the point where more data is being collected than we can
physically store”
• Google’s executive chairman, Eric Schmidt, recently estimated that
the sum of all business, scientific and personal activities worldwide
will generate more than five exebytes of data every two days in 2011.
That’s equivalent to all the information produced by all mankind from
earliest recorded times (more than 200,000 years ago) through 2003.
Fortunately, making effective use of data for the purposes of improving
sales, marketing or customer experiences doesn’t require tapping into a
200,000-year database of human interactions. But as more and more key
customer activities take place via digital channels—where data can be readily
produced, stored and analyzed—the importance of data access and usability
is growing to command top priority among companies across vertical
markets.
The nature of that data is changing, too. Whereas “marketing data” was once
synonymous with “name-and-address,” the proliferation of digital information
has given rise to an entirely new array of sources, deployment opportunities
and potential inhibitors. Marketers looking to customize an individual
customer’s online experience, for example, can now lean on a deep well of
transactional history, customer-provided preferences and demo- or
psychographic background data to drive a fundamentally custom interface.
But the same marketers must also be mindful of new inherent challenges:
Safeguarding online data, maintaining the personal anonymity of “unknown”
Web visitors and recognizing the “expiration date” of real-time information
are all challenges that even the first generation of online marketers could not
have anticipated.
“It’s hard to justify [a
significant new data
infrastructure] from a
capital perspective
unless we can
demonstrate a very
compelling use case.
At the same time, by
focusing on use cases,
you’re limiting the
potential of the data”
— Darren Stoll,
GVP Marketing
Ops./Analytics,
Macy’s Inc.
12. © 2011 Winterberry Group LLC.
12
Overwhelmingly, marketer respondents said that their appetite for newer,
deeper and more actionable data sources is virtually insatiable. But just
getting data is only the first piece of a larger and more complex data puzzle
that is likely to challenge companies over the coming years. Processing this
information rapidly, standardizing disparate sources according to a useful
taxonomy and accessing the right data points (at the right times, for
deployment across the right channels) are all significant outstanding issues
for which, at the moment, there are no one-size-fits-all solutions.
Increasingly, though, the market is awakening to this critical need and the
implications that successful data deployment may have for customer
experience optimization, product management and general marketing.
Witness the growing investment in digital marketing data sources—for which
U.S. marketers will nearly triple their investment over four years, from $300
million in 2008 to $870 million in 2010—and the burgeoning data
management platform (DMP) industry as just two indicators of the market’s
intense need for integrated data solutions.
Still, marketers say that pulling together the right data—and, first, gaining
the internal buy-in necessary to even make that possible—is no easy task.
“It’s hard to justify [a significant new data infrastructure] from a capital
perspective unless we can demonstrate a very compelling use case,” said
Darren Stoll, group vice president for marketing operations and analytics at
Macy’s. “At the same time, by focusing on use cases, you’re limiting the
potential of the data. Maintaining a long-term view as opposed to a ‘use case’
view of IT needs and marketing goals is necessary to ensure scalability and
flexibility.”
2.5
3.0
3.1
3.2
3.4
3.5
3.5
3.9
1 2 3 4 5
Costs
Lack of Internal Awareness of CEM or Its
Benefits
Lack of Data / Data Integration Tools
Lack of Internal Expertise
Lack of Appropriate Delivery / Outbound
Marketing Channels
Lack of Expertise Among the Supply Chain
Lack of Appropriate Response Channels
Regulatory Threat
To what extent are the following obstacles actively
hindering your CEM efforts?
Source: Winterberry Group survey
Significant Hindrance
to Our CEM Effort
Little/No Hindrance
to Our CEM effort
2.5
3.0
3.1
3.2
3.4
3.5
3.5
3.9
1 2 3 4 5
Costs
Lack of Internal Awareness of CEM or Its
Benefits
Lack of Data / Data Integration Tools
Lack of Internal Expertise
Lack of Appropriate Delivery / Outbound
Marketing Channels
Lack of Expertise Among the Supply Chain
Lack of Appropriate Response Channels
Regulatory Threat
To what extent are the following obstacles actively
hindering your CEM efforts?
Source: Winterberry Group survey
Significant Hindrance
to Our CEM Effort
Little/No Hindrance
to Our CEM effort
13. © 2011 Winterberry Group LLC.
13
Capturing candid customer feedback (and using it as the foundation of a
robust ongoing dialogue) is the tactical centerpiece of the CEM approach.
But that interaction can be exploited for more than just deep-in-the-
funnel marketing purposes. The most innovative CEM practitioners will
look to inform product development, resource allocation and general go-
to-market decisioning with the insights gleaned from these interactions.
Capturing and responding to the “voice of the customer” has long been
considered the hallmark of the customer-friendly marketing effort.
But the approach by which companies go about that task has changed
significantly over a short span of time. The suggestion boxes and toll-free
customer comment lines of yesteryear, for example, seem almost as quaint
as the idea of a written complaint letter. It’s no great stretch to assume that
email may soon join these approaches in the annals of “backup” response
platforms given rapid consumer adoption of mobile messaging, social media
and other “instant gratification” interaction channels.
Today, technology has provided the means for consumers to provide a
wealth of feedback on products, customer service, purchase experiences and,
quite frankly, anything else that comes to mind. So much user-generated
commentary is available via these platforms, in fact, as to create a
fundamental new public relations issue for socially “savvy” marketers. A
glance at the Facebook page of any major consumer brand—in this case, the
five largest U.S. companies, as ranked by the 2010 Fortune 500—will give
you an idea of the marketing challenge at hand.
2.8
3.6
3.8
3.8
3.8
3.8
4.0
3.8
1 2 3 4 5
Improving the performance of existing loyalty
programs
Reinforcing our brand’s presence/importance to
our customers
Enhancing customer loyalty to our brand/company
Maintaining an ongoing dialogue with our
customers
Driving sales of new products/services
Ensuring we represent our brand/products well
Cross‐selling different products/services to existing
customers
Driving expanded sales of existing products/services
Think about your company’s high‐level approach to its
customer interactions (including both consumers and “B2B”
clients). How would you rank the following as independent
customer experience priorities?
Least Critical Priority Most Critical Priority
Source: Winterberry Group survey
2.8
3.6
3.8
3.8
3.8
3.8
4.0
3.8
1 2 3 4 5
Improving the performance of existing loyalty
programs
Reinforcing our brand’s presence/importance to
our customers
Enhancing customer loyalty to our brand/company
Maintaining an ongoing dialogue with our
customers
Driving sales of new products/services
Ensuring we represent our brand/products well
Cross‐selling different products/services to existing
customers
Driving expanded sales of existing products/services
Think about your company’s high‐level approach to its
customer interactions (including both consumers and “B2B”
clients). How would you rank the following as independent
customer experience priorities?
Least Critical Priority Most Critical Priority
Source: Winterberry Group survey
14. © 2011 Winterberry Group LLC.
14
Marketer/First Published Offer
or Message
First Page of Facebook “Wall”
Feedback Includes…
“Welcome your new puppy home.
We’ve got everything you need for the
newest member of your family…”
i did not say I like walmart. don't know why this is here
My dog is too big for these items. :)
if you need doggie pads walgreens is a lots cheaper
No consumer-accessible “wall.” The first page of
ExxonMobil search results brings up “Exxonsecrets,” a
protest page managed by the environmental group
Greenpeace
Quote of the week: “I'm proud we
produce energy. Energy helps people
lead more productive lives.”
not if you price it so high it totally distroys an entire country
hire me.! :P ima call right now.(: & my background check
better be in. :P puuhhh leaaase. ♥
We aree that Chevron should pay out the billions it owes after
LOSING its 18 year court battle with the people of Ecuador
who rightfully sued and won. The first time EVER people in a
developing country successfully sued a major intl
corporation. Chevron is now officially the worlds largest
corporate criminal. Pay to clean up your mess - THAT would
be putting your "profits to good use". Instead you spend
them on lawyers and PR firms to try to avoid your
responsibility.
No consumer-accessible “wall.” The first three
“Discussions” topics include “GE faulty fridge” and
“Rotting Dishwasher”
Company page exists, but is not
populated with any Company-
provided content. Consumer “wall”
posts include:
Why do you tell your mortgage customers to miss payments
when trying to get a loan modification?? Just to make it easier
for BOA to foreclose on your customers?? Nothing in the
qualifications for HAMP does it say you have to be miss 3
payments. You just want all those late fees to pile up so we
cannot pay the mortgage even if we would qualify for a loan
modification. I will be contacting my state attorney general &
an advocate.
So, my bank account with you guys just got wiped out by the
IRS. I knew it was coming, but what I didn't see coming was
YOUR $100 fee for "processing" some numbers electronically.
Really?? I just lost all my money and you want to kick a
customer when they're down?? Nice.
This bank makes me ill. Has anybody tried dealing with them
to refinance a mortgage through them? You get 17 different
answers from 10 different people, some of who contradict
THEMSELVES on the phone.
15. © 2011 Winterberry Group LLC.
15
Clearly, this brand of social media-age commentary can provoke any number
of reactions (a great many of which, if nothing else, are wildly entertaining).
But reducing the customer feedback challenge to a simple question of
managing complaints doesn’t recognize other important dynamics at work.
In fact, the mere existence of potentially disruptive messages isn’t the most
significant social challenge confronting experience-minded marketers.
Instead: How to capture, process and reply to each piece of feedback?
As companies grow their social management capabilities (and expand their
focus from simple “listening” to active “engagement”), we may see a higher
level of productive, actionable civility emerge in online feedback forums. But
ultimately, that will happen only when companies begin to “feed-forward” the
insights of their customers (as provided through formal surveys, focus
groups and panels—as well as social media platforms) to inform product
development, pricing and other important marketing functions.
Survey respondents were mixed on the prospect of such an approach
delivering value over the next few years. But many said that improving their
multichannel customer dialogue is a leading priority. “We use Facebook and
Twitter, however currently, they aren’t generating high levels of engagement
in our loyalty program,” said Craig Lawrence, manager of loyalty and
retention marketing at Charter Communications. “Polling and research within
our membership indicates that members use social media personally, but
don’t generally care to be contacted for commercial purposes.”
3.3
3.5
3.7
3.8
4.2
3.8
4.0
1 2 3 4 5
Supplement loyalty marketing/loyalty
program efforts
Supplement broader direct marketing
efforts
Obtain real‐time customer feedback
Create and deliver targeted offers
Identify unmet customer needs
Identify trends in customer behavior
Deepen customer relationships
Think about the many ways your company benefits from its
current customer interactions. To what extent do you
believe that your ability to achieve each of the following
would improve given the implementation of a well designed
CEM strategy?
Minimal Improvement
Opportunity
Significant Improvement
Opportunity
Source: Winterberry Group survey
3.3
3.5
3.7
3.8
4.2
3.8
4.0
1 2 3 4 5
Supplement loyalty marketing/loyalty
program efforts
Supplement broader direct marketing
efforts
Obtain real‐time customer feedback
Create and deliver targeted offers
Identify unmet customer needs
Identify trends in customer behavior
Deepen customer relationships
Think about the many ways your company benefits from its
current customer interactions. To what extent do you
believe that your ability to achieve each of the following
would improve given the implementation of a well designed
CEM strategy?
Minimal Improvement
Opportunity
Significant Improvement
Opportunity
Source: Winterberry Group survey
16. © 2011 Winterberry Group LLC.
16
Though much of the inherent promise of CEM is linked to the automation
of sales, marketing and service interactions, marketers and customers
alike say that positive interactions still depend on an effective blend of
insight, speed, artfulness and sensibility—effectively bridging traditional
distinctions between the "art" of sales and service with the "science" of
targeted marketing.
Data. Technology. Process optimization.
These are the three pillars of the CEM effort that will drive lasting customer
value in an increasingly complex, fast-moving marketing environment. But as
we rush to deploy the resources necessary to put those elements in their
proper place—effectively reducing much of the customer engagement to a
series of “ones-and-zeroes”—it would be wise for marketers to consider a few
guidelines as equally critical elements of their experiential approach:
Customers, after all, are people. People who want to be treated like people—
with empathy, respect and an outreach effort that is relevant and valuable,
but not necessarily robotic.
Insightfulness—into an individual’s wants, needs and habits—has the
potential to be tremendously impactful. But, unexplained and unqualified, it
can also serve as a destructive force, alienating an otherwise enthusiastic
customer who may not be comfortable with the “Big Brother” characteristics
of some targeting approaches.
Experiences, to a customer, are about more than just marketing—they must
deliver value that exceeds the promotional impact. In return, they offer the
potential to pay back for years in the form of a customer who is loyal, price-
insensitive and a real advocate for your brand and value proposition.
When companies fail in their existing customer experience approach, it is
commonly because they have failed to recognize—or have underestimated—
the importance of the above. Panelists echoed that theme, saying that the
most successful CEM practitioners share two common characteristics: They
are willing to sacrifice short-term efficiencies for the sake of long-term
customer engagement, and they are often considered among the market
leaders in their respective verticals.
When panelists were asked to name the enterprise marketer they most
associated with a productive customer experience, the most-often cited
brand—by a substantial margin—was Zappos.com. “What strikes me about
them,” said Peter Goodnough, “Is how transparent they are about the
tracking, as well as the tenor of their online advertising—the artful way they
handle automated marketing makes the competition appear ham-handed.”
Perhaps it should be no surprise that so many peers recognize Zappos as a
leader in the CEM space; the company’s mission—“to provide the best
customer service possible”—is personified within even simple customer
functions. The e-retailer offers free shipping and return shipping, a no-
questions-asked 365-day return window and displays a toll-free customer
service number on every page of its website. CEO Tony Hsieh, in fact, often
sums up the spirit of CEM better than any other senior executive, saying:
“Customer service is not just a department!”
Successful CEM
practitioners are
willing to sacrifice
short‐term efficiencies
for the sake of long‐
term customer
engagement—
and are often
considered among
the leaders in their
respective markets
17. © 2011 Winterberry Group LLC.
17
In Conclusion
Marketers looking to benefit from true multichannel interactions (and grow
their value of their customer dialogue so as to inform better marketing
execution) will be well served to consider CEM as an independent pillar of
their enterprise strategy.
But simply identifying CEM as a new priority (or dedicating independent
customer experience resources, for that matter) will not go far enough to
meet the substantial need for deeper customer engagement. Alignment with
the customer requires understanding an ever-changing array of needs,
demands and marketplace dynamics—further calling for dexterity and
scalability in channel selection, cadence and messaging.
The pathway to CEM success will also require careful coordination by the
various constituencies tied to the customer. The effort binding all together
should be a focus on the various elements—data, technology, people,
process, delivery channels and customer input—that will ultimately enable
profitable, long-lasting relationships.
The results of that transformation, in the end, should be significant. But
change is not likely to come easily.
“The speed [issue] is the one constant,” said John Zell, vice president of
global solutions/customer relationship marketing at Razorfish. “The paradox
is that it will take quite a while to figure it all out.”
18. © 2011 Winterberry Group LLC.
18
Epsilon is the industry’s leading marketing services firm, specializing in
Customer Experience Marketing (CEM) that includes a broad array of data-
driven, multichannel marketing solutions to leverage consumer insight and
help brands deepen their relationships with customers.
Services include strategic consulting, acquisition and customer database
technologies, loyalty management, proprietary data, predictive modeling and
a full range of direct and digital agency services, including creative,
interactive Web design, email deployment, search engine optimization and
direct mail production. In addition, Epsilon is the world’s largest permission-
based email marketer, employs over 2,300 associates worldwide and works
with over 2,500 clients, including seven of the Fortune 10 who trust Epsilon
to build and host their customer databases.
Epsilon has won over 100 awards across the Web, email, direct mail, mobile,
social and other emerging media channels and is recognized as a leader by
industry analysts for its marketing databases and related technology
services. Epsilon is an Alliance Data company.
For more information, visit www.epsilon.com or call (800) 309-0505.
19. © 2011 Winterberry Group LLC.
19
Winterberry Group is a unique strategic
consulting firm that helps advertising and
marketing companies build shareholder
value. Our services include:
Corporate Strategy
The Opportunity Mapping strategic
development process prioritizes customer,
channel and capabilities growth strategies,
informed by a synthesis of market insights
and the core competencies of a company.
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Comprehensive industry trend, vertical
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analysis of customers, market developments
and potential opportunities as a precursor to any growth or transaction
strategy.
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Process mapping, marketplace benchmarking and holistic marketing system
re-engineering efforts are grounded in deep supply chain insights.
Mergers & Acquisitions Due Diligence Support Services
Company assessments and industry landscape reports provide insight into
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informed investment decisions and lay the foundation for value-focused
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Winterberry Group’s impact is further enhanced through its affiliation with
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Winterberry Group’s clients represent all segments and constituencies of the
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www.winterberrygroup.com
20. © 2011 Winterberry Group LLC.
20
Notice
This report has contained brief, selected information pertaining to advertising, marketing and
digital media practices and has been prepared by Winterberry Group LLC with the sponsorship of
Epsilon Data Management, LLC.
It does not purport to be all-inclusive or to contain all of the information which a prospective
investor or lender may require. Projections and opinions in this report have been prepared based
on information provided by third parties. Winterberry Group makes no representations or
assurances that this information is complete or completely accurate, as it relies on self-reported
data from industry leaders, marketers and agencies. Neither Winterberry Group nor any of its
officers, employees, representatives or controlling persons make any representation as to the
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