OCTOBER 2008: In this issue...

No matter which side of the sales and marketing divide you land, you are likely focused on a similar issue: customer experience. For some, customer experience typically translates into satisfaction. For others, customer experience translates into the journey. But what is customer experience from the perspective of the customer? And how are we, as sales and marketing executives, shifting and adjusting this experience to meet customer demand and expectation? Are we constantly assessing and monitoring this experience? Are we aware of the complete customer experience, or are we focused on individual engagements? Are we prepared to assess our own Variance in Customer Experience?

The CMO Council asked those questions and more as part of an expansive assessment of the customer experience specific to content. The recently released report, Variance in Customer Experience: Customer Affinity from Optimized Content Delivery, was not an assessment of shopping experience or customer satisfaction. Rather, it was a glimpse into the way companies build and develop a consistent, unified experience—or fail to—across all touch points.

From customer contact center to live events, and from web content on a corporate site to product information on a retailer’s site, independent auditors took on all that a consumer could experience. Some auditors were met with conflicting product information, outdated and incorrect sales materials at point of sale, frustrating contact center experiences and confusing and complicated web interfaces that made the experience difficult at best.

The reality is that we are moving into a time of complex customer engagement. There are so many opportunities to get experience wrong. So I challenge you to ask about the variance within your own company’s customer experience. Ask if you have met with sales/marketing to map the experience. Ask about when and where feedback loops cycle back the voice of the customer to ensure an optimal experience.

If you are looking for what you can actually DO specific to experience and loyalty, I recommend picking up the book, Answering the Ultimate Question, featured in this edition of the eJournal. It looks at how companies can actually optimize the experience, activate word of mouth and create loyal customers.

Until next month!

Liz Miller
Vice President
CMO Council
lmiller@cmocouncil.org

Aligning with the Customer: Transforming Organizations to Improve Customer Experience

By Deborah Eastman, CMO, Satmetrix

On paper, sales and marketing functions for most companies fall under the umbrella of one department or, at the very least, are tightly aligned to work together. But simply showing this on an organizational chart doesn’t make it a reality. For many businesses, the disconnect between sales and marketing can be vast, and in some cases, can turn into a contentious rivalry.

The CMO Council recently released a benchmark report on the global state of sales and marketing departments, Closing the Gap, that confirmed this lack of cooperation. The organization interviewed more than 500 global sales and marketing executives representing 30 industry sectors. They uncovered that only 16 percent of the respondents felt their sales and marketing functions were “extremely” collaborative.

This should be a concern for both departments since each needs the other to reach the common goal of growing revenue. It’s even more challenging when you throw service/support into the equation—a function that in most organizations is autonomous, but greatly impacts customer retention and growth.

So what’s the solution? Before we can answer that, I believe we must first understand the problem. The challenge is much deeper than the lack of cooperation between departments. The root of the problem is misalignment – not between departments, but with the customer. Many organizations lack a coordinated effort that focuses on the customer. Instead, decisions are made in silos devoid of any meaningful information about customers. Marketing is uniquely positioned to take a leadership role in defining the organization’s relationship with the customer. In fact, in today’s world of connected word of mouth, it is business critical for marketing to drive improvements in the customer experience and voice of the customer efforts.

It’s a simple concept, but often breaks down in translation. Consider these three top-line questions for your organization:

1. Do You Know What Makes Your Customers Loyal?

Peter Drucker once said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” But knowing your customer is more than identifying their age, sex, income, or their personality and values (i.e. psychographic variables) and even their behavior (i.e. usage, purchase, etc.). It’s also about understanding what makes them loyal. You may already conduct satisfaction surveys, but what creates loyal customers can differ from what merely makes them satisfied. This was no more evident than at this year’s North American Net Promoter conference where representatives from companies like Symantec, eBay and others talked about how they discovered the loyalty drivers of their customers, which they found to be different from their satisfaction drivers. Take HP for example. The company implemented a program called Relationship Assessment Process (RAP) to focus on and improve customer loyalty in their top accounts. The program includes a structured mechanism to gather customer feedback. By understanding what drives loyalty, the company has been able to focus on what their customers really want and as a result, build stronger, more valuable and profitable customer relationships. In a two year period, they were able to achieve an average revenue growth of 33 percent in the accounts that followed the RAP process.

2. Are You Measuring & Managing the Relationship?

The Closing the Gap report says only 12 percent of sales and marketing professionals have access to a “well-integrated, real-time view of all customer interactions.” Traditional customer relationship management (CRM) models were supposed to be the key to improving customer experience, but they tend to focus more on customer activity, and less on customer sentiment and loyalty.

Perhaps your company measures and manages a specific customer interaction with your company, for example customers calling into the call center. This is important, but it doesn’t tell you about the overall relationship and loyalty of your customer. What if the customer has a bad experience with your service and/or billing department? What happens if they went to your Web site to purchase a product but were frustrated with the process? Understanding how all the touchpoints affect the relationship helps marketers create a targeted customer experience that increases loyalty.

Aggreko is a great example of this. They implemented a customer experience program to collect ongoing customer data across key touchpoints. With the ability to monitor the customer experience in real-time, Aggreko is now able to react to the data while it still matters to the customer. Says Simon Lyons, Global Head of Communications and Marketing at Aggreko, “Being able to respond to a customer trigger within hours and begin the recovery process has helped us keep customers and improve the overall relationship.”

3. Are You Interacting with Your Customers?

Advertising, PR, etc. are important marketing vehicles, but they are almost universally one-way communication. What determines loyalty are the experiences your customers have with your brand. As a result, we need to be able to maintain a dialogue with the customer. A 2006 report issued by the CMO Council, Select & Connect, found that many marketers admit to an astonishing lack of customer connection. Sales and service/support teams personally interact with the customers, and marketers can too.

A marketing strategy many of you may have seen, heard or even developed is an online community where you and your customers can connect with, listen to, and share with each other. Not only do these communities provide you invaluable customer feedback, but the level of interaction you have with them increases their loyalty. The key to success is on-going engagement and the actions you take. There are many communities that allow customers to submit comments and ideas, but the brand doesn’t interact with or respond to them. This is a missed opportunity.

MY M&M’S has successfully engaged with customers through their online community, Mbassador. The community, which currently has 38,000 registered members, provides a place for passionate fans to talk to and share ideas with MY M&M’S. Quick polls and Satmetrix Adaptive Conversation sessions bring members together to discuss, share and rate ideas. Essentially, the highly interactive Mbassador community engages and energizes customers around the brand.

Focusing on customer loyalty ultimately enhances cooperation between marketing, sales and service/support teams. It also has tremendous impact on revenue growth through retention, repurchase and referral behaviors. You can debate all you want about which department has a greater role, but in my opinion, marketing must play a critical role to drive transformation around the customer. After all, the brand is now defined by word of mouth, not by the advertising message.

Building Profitable Customer Relationships with Data Mining

By Herb Edelstein for SPSS.

You’ve built your customer information and marketing data warehouse—now how do you make good use of the data it contains?

Customer relationship management (CRM) helps companies improve the profitability of their interactions with customers, while at the same time, makes the interactions appear friendlier through individualization. To succeed with CRM, companies need to match products and campaigns to prospects and customers – in other words, to intelligently manage the customer life cycle.

Until recently, most CRM software focused on simplifying the organization and management of customer information. Such software, called operational CRM, focuses on creating a customer database that presents a consistent picture of the customer’s relationship with the company and providing that information in specific applications. These include sales force automation and customer service applications, in which the company “touches” the customer.

However, the sheer volume of customer information and increasingly complex interactions with customers have propelled data mining to the forefront of making customer relationships profitable. Data mining is a process that uses a variety of data analysis and modeling techniques to discover patterns and relationships in data that are used to understand what your customers want and predict what they will do. Data mining can help you select the right prospects on whom to focus, offer the right additional products to your existing customers and identify good customers who may be about to leave. This results in improved revenue because of a greatly improved ability to respond to each individual contact in the best way and reduced costs due to properly allocated resources. CRM applications that use data mining are called analytic CRM.

Data mining

The first and simplest analytical step in data mining is to describe the data. For example, you can summarize data’s statistical attributes (such as means and standard deviations), visually review data using charts and graphs and look at the distribution of field values in your data. But data description alone cannot provide an action plan. You must build a predictive model based on patterns determined from known results and then test that model on results outside the original sample. A good model should never be confused with reality (you know a road map isn’t a perfect representation of the actual road), but it can be a useful guide to understanding your business. Data mining can be used for both classification and regression problems. In classification problems you’re predicting what category something falls into – for example, whether or not a person is a good credit risk or which of several offers someone is most likely to accept. In regression problems, you’re predicting a number, such as the probability that a person will respond to an offer.

Read the full whitepaper at SPSS.com »

Designing Great Sales Presentations
An Interview with Dave Paradi of Think Outside the Slide™

Dave Paradi’s Think Outside the Slide™ approach helps presenters get results by showing them how to transform overloaded text slides into persuasive visuals. He is the author of “The Visual Slide Revolution” and co-author of two "Guide to PowerPoint" MBA-level textbooks, part of the Prentice Hall Series in Advanced Business Communication. Dave's ideas have been featured by the Wall Street Journal, the Globe and Mail, Financial Post, Hoovers online, Microsoft, Presentations magazine, SellingPower magazine, BusinessWorld India, Presenters University and Harvard University.

Tell us a little about your background. How does one get started as a presentation guru?

Well, of course as a little boy you don’t say, “Gee, when I grow up, I want to be a specialist in helping people present more effectively.” It was something I had to discover. Or rather, people discovered it for me. While working in the mutual funds industry, I developed a new standard for exchanging electronic information which I then promoted in a series of presentations around the country. People started coming up to me after I presented to say, “Wow, that was really effective. I wouldn’t have thought of doing it that way—why did you do it that way?” Though at the time I knew what made an engaging presentation, I hadn’t really given a lot of thought to why. This started me on a journey of research and study to figure out why certain things are effective when delivering presentations, and what types of visuals or slides work best.

What were you doing in those presentations that people responded to so enthusiastically?

I think what was unique compared to the typical presentation was that I didn’t stand there and read bullet points. I used visuals instead. In a survey I did last year of over 600 people, the number one thing that annoys audiences is when the presenter simply reads the slides.

What do you think are the most common mistakes that salespeople make when they are preparing and giving presentations?

I would say the biggest mistake is not taking enough time to prepare. If you don’t prepare well enough, a number of things happen. First of all, when time is an issue, people tend to simply do a “brain dump” onto their slides. I see this all the time when I am traveling—look in any airport lounge or on any plane and you will see people doing this. Very ineffective. When you don’t prepare, you don’t have time to develop visuals. Research tells us that visuals connect better with our audiences than text. But if you haven’t taken the time to prepare, you don’t have the opportunity to create the visuals that you need, so all you can do is “brain dump,” which causes you to end up with overly dense text slides.

What type of visuals do you feel are most engaging?

The best visuals are the ones that will enable you to have a conversation with the audience. A good presentation is not a one-sided lecture, though unfortunately this is the model that most of us saw in school: the professor simply lectures with visuals behind them. This is not the type of presentation you want in a sales situation—you want a conversation. When you put up a visual, it encourages conversation because you have to talk about what the visual shows. It also enables you to ask an audience questions, so that you aren’t just a talking head: What do they see? What do they feel about what you are saying? In sales, relationships are the most important thing, and you cannot build a relationship if you’re the only one speaking. You need feedback from the audience to make the presentation relevant to them and supply the information they need to make a buying decision.

Besides enabling conversation, what other key factors would you say make a great presentation?

All great presenters do a thorough job of analyzing who their audience is and what that audience needs to hear from the presentation. Too often a salesperson will take a standard deck from marketing and simply run through it in a way that says, “I am here to present our brochure, which you could have read, but I will nonetheless show you in slide format.” The prospect then feels that the presentation didn’t address their questions and their issues. But if the sales professional did not take the time to analyze the audience and situation beforehand, they cannot customize the presentation.

How can salespeople collaborate with marketing departments to create better presentations?

Since it’s unrealistic for marketing to create customized materials for every sales presentation, what I suggest is that sales professionals work with marketing departments to create a library of visual slides which they can select from. The library will contain probably 70-80% of the slides you would need and cover the main messages you would want to deliver across a variety of different situations.

When you have a library as a sales professional, it allows you to do three things. First of all, it cuts your preparation time dramatically, because instead of creating everything from scratch, you simply pick and chose visuals so that 80 percent of the presentation can be done in a few minutes. Secondly, it allows the sales professional to really focus on what a particular audience needs, because they have the time to develop that 20 percent of the presentation that will be customized to their specific audience. Lastly, it allows salespeople to present using primarily visuals instead of text, because they’ve invested the time with the marketing department upfront to create the visual slides they need. And ultimately, you have a consistent message being delivered that is also customized for your audience.

The survey results referenced in this interview are available online at: http://www.thinkoutsidetheslide.com/survey2007.htm

Sign up for Dave’s PowerPoint Tips e-newsletter at http://www.thinkoutsidetheslide.com

New Study of Channel Chiefs Suggests Strategic Shift Toward Sales Effectiveness Needed in 2009

A new survey released by BLUEROADS and SiriusDecisions has demonstrated a clear link between the types of partner programs that top channel executives emphasize and their impact on revenue growth in the indirect channel. Of those executives surveyed who said they focused on sales effectiveness strategic activities such as lead management and deal registration, 62 percent reported an increase in revenue in 2008.

Paradoxically, 80 percent of the channel investments by the vendors that were surveyed focused around tactical issues such as training, partner portals, and partner communication tools--all activities that simply automate the relationship with partners. Of those who focused investment on these types of efficiency programs, only 40 percent reported an increase in channel revenue in 2008.

The Channel Survey: 2009 Priorities, which polled an audience of over 1,000 high ranking vendor channel leaders, also indicates that vendors are seeking to drive revenues, but do not always know how, and often resorted to brute force tactics including channel partner recruitment in their existing markets rather than focusing on programs that increase the productivity and yield of their current resellers and partners. The survey covered a variety of channel-dependent industries--including software, telecommunications, computer hardware, and information services--on their channel plans, investments, and expectations.

“Too many channel chiefs are engaged in low-risk, low-return activities,” said Charles Watson, Senior Vice President of Marketing and Sales for BLUEROADS. “Too few are ready to drive fundamental changes that help them achieve greater equality with direct sales and enable increased visibility, empowerment and accountability in the channel.”

Nearly 60 percent of respondents recognize they need to spend more on sales effectiveness programs in 2009. However, their intended actions don’t necessarily support that goal. For example, training and partner content portals were among the top technology investments, yet these are often simply easy-to-implement infrastructure investments with limited return.

Several other data points from the survey point to the need for a change in focus away from efficiency initiatives for channel chiefs in 2009:

• Most are not measuring and monitoring the performance of leads or sales opportunities effectively
• Required reporting from the channel focuses merely on tactical pipeline and deal status, rather than on strategic issues such as lead acceptance and deal registration, which hampers the opportunity for vendor staff to provide high value sales support to the partner community.

BLUEROADS points to several key recommended investment areas that will help channel chiefs to boost effectiveness:

• Measurement of every partner, lead and opportunity KPI
• Generate high quality leads for the channel
• Rapid delivery of leads to channel
• Get each lead to the right partner every time
• Lead and opportunity accountability on the part of channel partners
• Protection from channel conflict
• Bi-directional accountability and benefit for all revenue generating programs
• Selling guidance and coaching to help partners accelerate sales cycles

Download the presentation of survey results »