If it’s one thing that all executives understand now, is that businesses need to digitally transform to meet the discerning, shifting expectations of digital-first customers. But digital transformation, however you may define it, isn’t a guaranteed recipe for success in the post-pandemic economy. It’s now table stakes as everyone must “go digital.”
Among the many areas ripe for transformation, marketing is standing out as a keystone opportunity to re-organize the business and operations around customer experience (CX) innovation.
“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing is the distinguishing, unique function of the business.”
These are the words of business pioneer Peter Drucker.
He understood in the 1970s, and the 2020s are no different, that the ability to know, understand, and organize around the customer was the soul and source of any organization.
The pandemic not only accelerated digital transformation, it also accelerated the digital transformation of consumerism and how customers shop, expect to be sold to and served, and the values and cues that define brand relationships and loyalty in this new era. Customer behavior forever changed in 2020, and it only continues to evolve. The ability for any business to “create” or attract a customer and earn their business over time, is both paramount and an opportunity for differentiation.
As Drucker also emphasized in his work, the aim of marketing is to know and understand customers so well, the product or service organically (or intentionally) aligns with their known, unmet, and even unknown needs and aspirations.
By placing CX at the heart of the organization, marketing and innovation can lead to a business renaissance in a time that demands it.
As the World Transformed, Marketing Too, Must Transform
In a recent research report published by Harvard Business Revie”w Analytic Services, 58% of business executives listed “improving customer experience at the top of their priorities in 2021-2022.
Customer experience is defined as the sum of the experiences a customer has with any business, in each touch point, throughout their journey and lifecycle.
This accelerated digital era has created new ways for businesses to connect with audiences on a deeper level and deliver more seamless, personalized customer experiences at scale. As a result, the role of marketing must adapt beyond “marketing” and promotion to shape the experiences customers are seeking. Furthermore, the marketing organization must also unite every aspect of customer engagement that impacts their experiences, including brand, sales, commerce, service, and loyalty.
The rise of CX and the speed of digital adoption and new behaviors are reshaping the role of marketing, and that of the CMO. In a recent conversation with marketing luminary Seth Godin, he emphasized the importance of this shift and the need for the CMO to now own CX.
“If you’re not in charge of the customer experience, then you’re not the CMO,” he stressed. “I don’t know how to put it any simpler than that.”
A new report published by Salesforce only backs up this perspective. The seventh edition of its influential State of Marketing report found that 88% of CMOs agreed their marketing must transform to be competitive.
High performing marketing organizations are paving the way. Already, 80% of marketers say their organization leads customer experience initiatives across the business.
Digital-First Customers are the Source of Transformation and Marketing’s New Challenge
At the heart of CX transformation are digital-first customers.
Marketers reported that the need to innovate for rapidly changing customers — and interacting with them in real time — is at the top of the factors that are impacting their strategy forward. Behind it, technology, business model transformation, and competitive pressure represent some of the most pressing priorities and challenges.
Yet as customers shift in the channels they frequent, meeting customer expectations — let alone understanding them — became an even more challenging endeavor. Seventy-two percent of marketers say meeting customer expectations is more difficult than a year ago.
Customers did not just become digital-first during 2020 and 2021, digital behaviors are going to continue if and when we move into a post-pandemic economy. Sixty-one percent said that they will spend more time online after the pandemic than they did before.
Why? The reason is that they became more aware of the benefits, conveniences, and optimized experiences great digital execution has to offer them. This means that CX will not only have to upgrade and integrate digital touch points, but also physical experiences must become hybrid and personalized.
What’s important to note here is that these customer transformations weren’t tied to any one demographic, instead it created a significant, influential, and growing cross-generational market segment that I dubbed “Generation-Novel” or Gen-N.
Marketing Transformation and Customer Experience Innovation are Becoming One
Revisiting Drucker’s foundational pillars of marketing and innovation, marketers have a real opportunity to transform nearly every facet of their work and operations overall.
This in an era of consumerism where customer experience and cross-functional collaboration are becoming one, which means integration is instrumental in business transformation,
Accordingly, next-generation marketers are serving as growth drivers with 66% saying that they’re expected to drive revenue growth at their companies over the next 12 to 18 months. What’s more, marketers see themselves as playing a bigger role in that growth; 77% of marketers feel their work provides greater value now than it did a year ago.
Experience innovation is that driving force for growth.
Digitally enlightened customers expect the businesses they buy from to keep up with them. In addition to growth, innovation becomes paramount.
Eighty-eight percent now demand companies accelerate digital initiatives due to COVID-19. But expectations for innovative experiences extend beyond technology itself. Sixty-nine percent of customers say companies should also offer new ways to get products and services. Additionally, more than half also expect companies to offer new types of products and services.
Innovation is defined not by how marketing takes iterative steps toward improving legacy customer touch points, journeys, and methodologies. Innovation is measured by the new customer and market value created because of transformation.
Salesforce research found that customer-centered innovation is in fact, an essential pillar in marketing’s digital transformation.
Digitizing the Customer Journey is not the Same as Customer Experience Innovation
In 2020, a separate report found had 80% of business customers and consumers valued the experience a company provides as important as its products or services.
This raises the question, what experiences do customers expect and which do they value and why? The answers shape transformation and inform marketing and CX strategies.
The same report surfaced priority areas where marketers could start.
For instance, 66% of customers expected brands to understand their unique needs and expectations and 76% also expected consistent interactions across departments. But most customers say it seems like departments don’t share information. That’s because it’s true.
Innovative (and delightful) customer experience start with relevant customer engagement and the dynamic collaboration between marketers, strategy, and technology in key touch points.
From the overwhelmingly digital channels they use to engage customers to their internal workflows, the prize for marketers becomes awareness, availability, and relevance. The North Star for CMOs and marketing leaders and the heart of Drucker’s vision for marketing’s role in business growth.
It’s one thing to activate new digital channels in the customer journey. But when customer expectations have evolved and elevated for almost every customer, marketers must integrate real-time, personalized, dynamic customer-engagement across each channel.
For marketing innovators, touch points and customer journeys become the sandbox for rapid experience innovation, i.e. testing and learning.
Eighty-four percent of marketers say they are now adapting marketing strategy and tactics based on customer interactions while 78% of marketers say they engage customers in real time across one or more marketing channels. And, over two-thirds of marketers describe their cross-channel coordination as dynamic — meaning that messages are hyper-personalized based on customer actions.
The Digital Transformation of Marketing Requires Marketing Technologists and New Skill Sets
Digital-first customers expect digitally intuitive and meaningful customer engagement. This means that the new breed of marketers are also technologists and experience strategists. According to Salesforce’s research, 83% of marketers say their ability to meet customer expectations depends on their digital capabilities, and 83% say their work will be more technology-driven after the pandemic than before.
Artificial intelligence (AI) is now playing an important role in marketing with 60% of leading marketers already having a fully defined AI strategy. The top use cases for AI are also rapidly evolving to facilitate, not so ironically, more personal, and relevant customer engagement.
According to the Salesforce report, in 2021, AI is being used to more effectively to…
- Drive next best actions
- Personalize the overall customer journey
- Automate customer interactions
- Personalize individual channel experiences
- Process automation
Marketer’s Need Human- and Digital- Skills and Training
With new technologies and customer expectations also comes the need for digital literacy, data science and storytelling, and a new array of human-centered skill sets. As Salesforce research notes, marketers need a unique and evolving collection of knowledge that constantly shifts between right- and left-brain mentalities.
As customers transform so must marketers, their capabilities, and how they work.
To date, only 44% of marketers rate the employee training they receive as excellent. This is an area for immediate investment (and transformation.)
My idol, Sir Ken Robinson once said, “Creativity is as important in education as literacy.”
In this new world, research also find that creativity ranks atop the list of marketers who say their employers offer the necessary training to grow. Also on that list, content, communication, and collaboration are among the most common training offered by leading marketing organizations. However today, they are provided by only a minority of employers. And less common is training that prioritizes critical human and interpersonal skills such as emotional intelligence (EQ) and resiliency. Data science is also in need of escalation as it helps to humanize important customer shifts in behaviors and expectations.
Earlier, I asked, what experiences do customers expect and which do they value and why? This is where data science comes in and there’s a lot of room to grow here.
For instance, 78% of marketers say their customer engagement is data-driven. Yet, only 33% of marketers are completely satisfied in their ability to create more relevant experiences with customer data. Even among high performing marketing organizations, that number maxes out at 47%
But to truly become a customer 360 organization, insights must be centered, shared, and actionable, in real-time, across marketing, service, sales, commerce, and all customer-facing touch points and those that affect them.
Change Starts with You
One thing is for certain, leading organizations aren’t going back to the old way of engaging customers. They can’t.
If all we’re here to do is to maximize short-term value, then we’ll miss the opportunity to grow. Those that do not adapt will find themselves competing for irrelevance. Leaders who invest in the short- and long-term will unlock the potential ROI of investing in a new genre of customer experiences and relationships.
Marketing leaders must make change happen. That is the job of a transformer.
Start with the shift from promoting brands and products as your purpose to connecting to digital-first customers, their way.
In our conversation, Seth Godin said this about what separates marketers from the greats, “Every great marketer does one thing, they make change happen.”
Change, for everyone, including the C-Suite, begins with a mirror. When you look in the mirror, are you willing to see somebody who has the courage to take responsibility, to start the process of change?
For those that do, they will find more meaningful customer relationships and growth on the other side of transformation and innovation.