Know your audience……the customer knows more than you!
This is the first trick of the trade taught as a part of Marketing 101. Nothing much has changed over the years, except jargon becoming the norm of the day. To drive home this point, industry experts have been tossing around phrases such as “consumer experience management (CXM)”, “customer engagement”, “personalized services”, “customer value management” etc. Of course, explaining these phrases (especially CXM) entails several long-winded definitions, which leaves the audience completely bewildered.
So, how does one cut to the chase and define CXM without any buzzwords? How about this- CXM essentially entails understanding that every customer is different. A customer wants companies to recognize this by providing personalized content, services and attention at all available touch-points. Customers want to be valued by companies.
But isn’t valuing one’s customer and providing customized content a marketing thumb-rule? Of course it is and CXM is just one of the thousands of ways this can be achieved. Before CXM became an essential part of any marketing handbook, all eyes were on customer relationship management (CRM). CRM was the Holy Grail of marketing, especially when it came to understanding one’s target audience. This essentially involved concerted efforts across an organization’s sales and marketing teams to capture, store and process as much customer data as possible. Sometimes the mad rush to collect data took precedence over the purpose itself. While these were (and remain) essential tasks, marketing dynamics shifted. While the companies which realized this moved on with the new paradigm, others continued to just do what they did before-make better mousetraps. Eventually, the customer began to sit up and ask, “What’s in it for me?” And that’s when CXM emerged.
Without falling into the trap of using marketing jargon, I want to add another dimension to the definition of CXM. From an organization’s point of view, CXM makes providing great, personalized and on-time services to the individual customer central to a company’s strategy leveraging all products and services in its portfolio as opposed to just capturing data. Any effective CXM thus ensures and not just helps offering the right product, at the right time to the customer, using the right channel. With CXM, just hoping to sell better is no longer a strategy!
At this point, let me also pause and completely flip this argument. Does a completely customer centric approach kill innovation? Someone famously said, “The customer does not know what she wants, till I tell them”. Well, no. You may create a great product that the customer didn’t even imagine was possible…then what? How do you tell the customer, convince them that they need it? That’s CXM for you and that’s where the ‘X’ in CXM re-invents itself as Value in the Customer Value Management proposition.
Sounds good, but why has CXM suddenly stepped into the limelight? To sum up in a single word-competition. Take for example, the current face of India’s telecom space. It’s overcrowded, product differentiation is difficult and roughly every month, a price war breaks out. The challenges before every telecom operator are three-fold- finding new and innovative ways to net more customers, retaining existing ones and increasing revenues. In sum, the challenge is to give a reason to the Indian customer who has choice, to not only choose a provider over another but also continue with its services. To achieve this, launching various services and tariffs is a tried and tested method. However, at the heart of any successful marketing strategy are (and will remain) two fundamental questions-how does the company improve its interactions with the customer? How does it understand them and deliver tailored services? Can a marketing strategy just rely on the erstwhile ‘carpet bombing’ concept of communication and hope that there would be at least one customer who would relate to it and actually pay for the service on offer? This was true. No longer now.
In a nutshell, operators have to wage war on several fronts. Equations with the customer have to be built and retained in the face of stiff competition from both other operators and over the top players. CXM comes to their rescue, as it helps these players understand and maximize the value of each individual customer through ongoing, tailored interactions. It helps these companies make sense of an overcrowded, complex marketplace. It enables operators to think differently and see their customers from the “inside-out”. ‘I have a good product’ is not good enough anymore!
Here is where technology steps in. It helps the organization improve CXM by benchmarking it appropriately. Remember the saying, “If you can’t measure it, you can’t manage it?” That is what technology does. It collects, analyzes (and, in many cases, predicts) and aptly applies customer data, all of which are essential to make CXM work. In nerd-speak data streams can be harnessed to create a complete profile of the individual and match marketing offers and communications appropriately. From spend patterns and usage information to location, handset type and rate plan or contextual information such as balance information, details of a transaction that just happened, location and even the weather, operators are now able to add various dimensions to a customer’s profile while fine-tuning their own communication strategies.
For example, in a consumer poll conducted by Omnibus research, commissioned by customer service specialists Kana Software, it was revealed that over the past six months, the average consumer in the UK used more than seven electronic communication channels. Also, among 18-24 year olds in the UK, one in 20 checked their smartphones every minute each day. Such insights are like gold to operators-consider the data available for them to help decide what product or service to push!
Of course, there is a downside. Despite the potential, there still exist several factors inhibiting companies from effectively engaging customers. The primary factor is the product-centric approach adopted by a few players. The longer companies remain faithful to the belief that value is intrinsic in the product the more difficult it will be to achieve growth and an upward sales graph. Another important factor is data. Yes, you read that correctly, it isn’t a typo.
While companies may have access to vast realms of data, leveraging it effectively is the challenge. Industry experts believe that the data silos in certain organizations is responsible, because if data is siloed, then the company will have siloed insights. Most companies capture and store petabytes of data on their customers but the level of know-how to analyze that data for meaningful, actionable information is nascent.
To sum up, there is industry data to prove that companies with high levels of CXM typically grow at more than double the rate of their competitors. The inverse case is that the company can lose its competitive lead very quickly by focusing on the wrong things or by trying too hard to push things which were in vogue maybe even three years back, not today
CXM is here. There is no turning back. Know your audience.