Marketing s Customer Experience Mandate

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1 Q&A ByJonathan Becher and Daniel Wellers NO. 72 Marketing s Customer Experience Mandate THE CMO S ROLE IS EVOLVING FROM ONE TRADITIONALLY FOCUSED ON EXECUTION OF CAMPAIGNS AND EVENTS TO A MUCH BROADER, MORE STRATEGIC ROLE FOCUSED ON THE TOTAL CUSTOMER EXPERIENCE. SAP Center for Business Insight Brief Q&A Case Study Inquiry E-Book 1

2 To be that partner, marketing must embrace five key responsibilities: Represent the voice of the market Synchronize the customer experience across all channels 5 Be the brand steward Capitalize on insights Be an integrator and force multiplier across the company We gathered a panel of experts to discuss the future of marketing in the context of these core responsibilities. Rebecca Carr, CMO, Foxwoods Resort Casino David Edelman, partner, Marketing & Sales Practice, McKinsey & Co. Tom Stephenson, director, McKinsey & Co. Thomas Stewart, chief marketing and knowledge officer, Booz & Co. Mark Wilson, CMO, Avaya 2 Q&A: Building the Business Network of the Future 2014 SAP AG or an SAP affiliate company. All rights reserved. NO. 72

3 Do employers have an obligation to train and develop their employees? Thomas Stewart: The voice of the market has become much more cacophonous than it used to be. But many employees don t see and hear the market at all or see only pieces of it they re in the plant or the back office. But more and more, we are asking every employee to take on more decision-making authority. That means they have to know how to connect the voice of the market to the strategy. Marketers are the ones who are able to put the pieces together in a way that resonates not only outside to the customer but also inside to the people who are creating value. Tom Stephenson: The prevalence of social media creates an enormous amount of information, and companies struggle with interpreting the themes coming out of that. Who s having the conversations that matter? There s a tremendous need to filter that information, focus it, and act upon it. Capturing these insights is uniquely marketing. What is marketing s role in defining the customer experience and ensuring a consistent experience across all channels? David Edelman: There s a whole set of experiences customers go through even before they buy your product. With digital channels, there are even more touch points along that journey, and those touch points need to be consistent in the way they present the brand. They also need to be integrated so that as you move from one point in time, such as doing research on a site, to then walking into a store, the associate in the store can consistently describe the same product that you were reading about online. It comes back to looking at it from the customer s point of view and making sure there s logic to how everything fits into their journey. Stewart: Channels rarely die, they simply multiply. There were catalogs, and then 800 numbers, and then the Internet. As the number of channels expands, somebody has to be able to connect them all in such a way so that I, the customer, recognize that I m dealing with the same bank, or the same bookstore, or the same clothing store wherever I approach it from. Channels rarely die, they simply multiply. There were catalogs, and then 800 numbers, and then the Internet. Somebody has to connect them all in such a way so that I, the customer, recognize that I m dealing with the same company in all channels. Thomas Stewart, chief marketing and knowledge officer, Booz & Co. NO SAP AG or an SAP affiliate company. All rights reserved. Q&A: Building the Business Network of the Future 3

4 How are you using data to develop a better understanding of customers and consumers? Rebecca Carr: A lot of companies think they have great insights and they re acting on them, but the problem is they re not looking at a full, 360-degree view and doing it in real time. Those are real challenges. In the past, companies looked at [customer experience] in a very siloed manner. But now, whether you re B2B or B2C or B2B2C, you have to look at every interaction with your customer throughout the lifecycle to have the full, 360-degree view. That s why the CMO s relationship with the CIO is so important. It s about really being able to tap into the data that s being [captured] across the myriad of mediums. Mark Wilson: I m a big believer that any information that you don t take action on is irrelevant. Marketers need to understand if they are actually using information to change something. Because if they re not, maybe the investment could be made someplace else. Stewart: The data has become table stakes. The difference in the value we create for customers and the value we as marketers deliver to our businesses is tied to how well we derive insights from the facts. A few months ago I was talking to Billy Beane, the moneyball general manager of the Oakland A s, and he said the irony is that while the importance of analytics and data was going up, it was also increasing the importance of seasoned judgment to recognize what patterns mean and how we might do something about it. If you have data and no insight, you are going to make huge mistakes but think that you re right, just as much as if you have insight and no data. How do you approach brand management in this era of the empowered customer? Carr: Too often companies spend a lot of money on brand messaging, but they neglect to make it real for the employees. First and foremost, you have to translate the brand promise across every interaction [customers] have with your company. And then, very tangibly, whether you re a software engineer or a sales rep, translating that brand promise into a commitment to the experience in a very specific and measurable way across the business. Stewart: As CMO, there s not a whole lot I can do with brand advertising that [has the same impact] as the things that happen every day when a partner makes a presentation to a client or when a senior associate talks with a client about progress on a project. The brand, therefore, must be carried in the DNA of every employee in the company. The essence of branding is why should you buy from us rather than the other guy? You have to work with employees to help them to understand the message but give them enough flexibility to adapt to the real job which is to solve the client s problem and not to promote our brand. 4 Q&A: Building the Business Network of the Future 2014 SAP AG or an SAP affiliate company. All rights reserved. NO. 72

5 How does marketing use customer insights as the glue to connect other parts of the business? What is its role as a force multiplier? Stephenson: Marketing can be a force multiplier by creating transparency around information, data, and the market. And that last one s the new one, because historically, that hasn t been marketing. What key metrics do you track? How is your approach to measurement evolving? Edelman: A very simple, top-line metric that marketing has to hold itself to is above-market growth. How much are they growing above the general market in which they are defined so that they re gaining share against their competitors? Are they really standing out in terms of gaining share? Above-market growth is where marketers should be focused first and foremost. Underneath that is the cost efficiency of doing that. Carr: Ultimately the most important metrics are revenue and profitability. I have a detailed scorecard of the metrics that marketing tracks: share of voice in the market, positioning in analyst briefings, Web site impressions, pay per click, click-through rates, open rates. But they re all just numbers they may be growing and may be really high relative to industry benchmarks, but ultimately if you re not making a revenue number, you know what you re doing is not working. Wilson: The one metric that I wish we could measure more effectively than we do is the return on our marketing investment. And that means the revenue that we re generating incrementally as a result of doing marketing. With understanding the effect that building brand equity has in terms of a dollar impact to the company and then consequently what that means in terms of shareholder value, I feel like some of that we re moving closer toward but we re not quite there yet in terms of a science. NO SAP AG or an SAP affiliate company. All rights reserved. Q&A: Building the Business Network of the Future 5

6 How do you balance the need for a better customer experience with the return on that investment? Becher: Many organizations say they want to reduce average call times. That s operationally efficient, but it s not really customer centric. Being customer centric is taking the extra time to ask Do you understand the information I just gave you? Is there anything else I can help you with? Instead of measuring how quickly you answer their question, maybe you want to optimize on how infrequently the customers call back. That s an example of total customer experience based on lifetime value, not transactions. Hildebrand: Ask yourself if you can afford to do nothing or lag behind your competition in terms of customer experience, or CX. Forrester has completed a compelling study comparing the market value of CX leaders to CX laggards. The result: the market value of CX laggards was cut in half within five years. Do you really want to risk becoming irrelevant? There s More. TO LEARN MORE ABOUT THE FUTURE OF MARKETING, DOWNLOAD THE IN-DEPTH REPORT MARKETING S NEW MANDATE: 5 CORE PRINCIPLES FOR DRIVING BUSINESS VALUE. Jonathan Becher is the chief marketing officer of SAP. Daniel Wellers is global lead for the SAP Center for Business Insight. The SAP Center for Business Insight is a program that supports the discovery and development of new research-based thinking to address the challenges of business and technology executives. 6 Q&A: Building the Business Network of the Future 2014 SAP AG or an SAP affiliate company. All rights reserved. NO. 72

7 2014 SAP AG or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP AG or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP AG or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP AG or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP AG s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP AG or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. SAP Center for Business Insight Brief Q&A Case Study Inquiry E-Book 7

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