In recent discussions with fellow CMOs, I’ve noticed a common theme about Marketing’s conflicting “Big Goal” priorities: Should we focus on customer revenue or customer experience? My opinion: We’re asking the wrong question.
Marketing obviously needs to deliver both. The right question (that’ll lead to the big wins): How do we infuse customer experience into our revenue-driving efforts?
CEOs expect Marketing to directly contribute to sales pipeline, new customers and revenue. These same executives – and your customers (the real bosses) – expect a personalized experience that makes it easy to interact and transact with your company, products and people.
Kevin Akeroyd, GM of Oracle Marketing Cloud, raises the question using the analogy, “How do we please Wall Street and Main Street?” Ideally, by delivering great customer experience we can drive more revenue. But how can we measure and attribute that experience to a specific revenue value?
According to Sirius Decisions, 71 percent of B2B purchases are based on customer experience. But 67 percent of marketers are only focused on new business, ignoring the all-important focus on customer retention and upsell. This incongruence in focus is often attributed to the rise of the data-driven marketer who measures all things that create new customers (more on this topic later).
Delightful Customer Experiences Lead To Business Growth
“You have to deliver both customer experience and revenue; they are inextricably linked,” says Rishi Dave, CMO of commercial data powerhouse Dun & Bradstreet. “A great experience leads to a more robust pipeline and repeat customers who trust and advocate your brand, products, and services.”
Dave notes the real business driver today is the need for Marketing to drive growth. Ultimately, growth happens by delivering a unique, beneficial experience across all customer touch points, and by factoring in growth drivers such as customer retention and value-upsell strategies.
“Many marketers can be short-sighted and focus on metrics that just measure pipeline creation or customer acquisition numbers. This looks good on a spreadsheet, but doesn’t tell the whole story and marketers can miss the big win – growth – for companies.”
Spreadsheet Marketing May Be Slowing Down Revenue Growth
Greg Ness, SVP of Marketing at CloudVelox, sees the shift with a slightly different filter: “For fast growing cloud companies like CloudVelox, revenue growth and new customers are very much a priority. What is changing is how we get there.”
Ness identifies the sometimes over reliance on technology and automation as a “crutch” that results in formulaic marketing processes. This “every person that does X action, gets Y” mentality is detracting from quality customer experiences. What’s missing is the human factor, using check-ins by solutions experts to generate conversations and answer questions. Customers expect more than just an inside sales qualification machine.
With CEOs rewarding marketers for generating pipeline and new customers, “spreadsheet marketing” and “pipeline math” has inevitably become a significant area of focus.
- Spreadsheet marketing is a simple way of stating that you are making decisions based on prospect pipeline and closed/won-like data. You are not necessarily accounting for the experience that helped you turn prospects into customers nor serving the best potential audience – your existing customers.
- Pipeline math can be summed up this way: if you generate 500 contacts to interact with your brand/content, 25 will become prospects and you close 5 as new customers.
These are very powerful approaches that have launched many marketing careers. However, they also can inadvertently overwhelm prospects and customers, pushing them away with endless, impersonal automated emails, phone calls and other less-than-desirable customer experiences (I have a folder dedicated to this “hall of shame”).
Just to avoid any confusion, most every marketing chief I talked with agrees that marketing’s contribution to revenue is very important and still a top priority. And, technology and automation are imperative to marketing’s success. But, something will have to change in the next few years or our ability to discover, engage, create and serve customers will gradually decline.
Let’s dive a bit deeper to identify 3 ways Marketing can better connect customer experience and customer revenue to drive growth.
1. Measure Customer Experience AND Customer Revenue Contribution
Today’s more informed buyers/customers know they have choices and want to interact and transact with companies that provide a good experience and fair value. Word of a bad experience spreads much faster and with more dire consequences – in large part to social media and networks. Or, worse, bad experiences are discussed with colleagues and peers, and by the time you hear about the problem, it’s too late to make a difference.
There are a few different tools and metrics marketers can use to measure customer experience and the resulting contribution to revenue. One of the most popular is the Net Promoter score. This metric provides a third-party view of a simple question: How likely would you recommend company or product x to a friend or colleague?
A twist to a common metric may also be useful. Lifetime Value (LTV) is another metric to measure a customer’s value over time. The nuance for today is looking at the breadth and depth of products and services a customer is consuming from you, measured in both dollars and in advocacy over the lifetime customer-company relationship.
Lastly, CMOs need to build consistent monitoring and feedback loops into all prospect and customer communications and touch points, during the sales and buyers’ journey as well as ongoing customer satisfaction indicators. These should be part of the CMO/Marketing dashboard, advises CMO Dave. These will provide a more complete picture of customer health and growth contribution.
2. Too Much Automation Can Hinder Revenue Growth
Marketing, sales and advertising technology is supposed to be marketing’s saving grace, using data to make customer creation and experiences more efficient. The shift to software, service and experience – filling the funnel with measured calls and emails – is missing the full picture. Left unchanged, this over-automation approach is or will soon run out of steam, especially if marketers do not include creating more personal, customer experiences. Ness underlines the point:
“Today, you download an interesting white paper and you are bombarded by emails and a machine gun of calls. Something has to change in the equation if Marketing delivers on the big goal of creating and keeping happy customers.”
The truth is if technology and automation are deployed properly, your talent is trained, and customer experience trumps all, your odds increase that you can deliver a killer experience while driving revenue and ultimately the growth you are looking for. This will require more focus on balancing automation and experience and putting metrics in place to monitor and measure.
3. Customer Experience Drives More Opportunity With Existing Customers
The third way to connect customer experience and revenue is to make sure to allocate time and resources on serving and delighting your existing customers. CMO Dave points out, “This may be one of the most obvious and, yet, most overlooked growth and company value creator.” Being more intelligent about how your customers are using your products and seeking feedback on their experience and requirements creates a meaningful dialog and often creates immediate up- or cross-sell opportunities.
Just as importantly, focusing on customer experience where customers become advocates generates formal and informal referrals, making it much easier – and cheaper – in the long run to create new customers and drive revenue.
Marketing’s mandate to create new customer revenue is well documented. There’s an emerging, important mandate to add to – or I would argue “blend into” – Marketing’s agenda: customer experience. Early signs for Marketing leaders blending “pipeline math” with measured customer experience may just be the new recipe for business growth.
This article was syndicated from Business 2 Community: Customer Experience: The New CMO Revenue Driver
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