Customer Experience Is A Matter Of Survival

By Michael Brenner, Published on October 24, 2013

We kicked off our customer experience interviews with the insights that real-time analyticshuman relationships, and scalable personalization will drive the future of customer experience.

But we also wanted to get the perspectives of the greatest minds on this topic from around the world. One of our top contributors on the subject is the Founder of RR Marketing Advisory and author of www.futuristCMO.comRamesh Ramakrishnan (@Ramesh_Ramki).

How do you define a customer-focused company these days?

Customer-focused companies are those where their customers perceive and experience the organizational orientation towards ‘satisfying their needs, wants’ and ‘creating extended/new value experiences’. The former focuses on ‘current customer experience’ (of say Nike products) and the latter focuses on ‘extended customer experience’ by enhancing how these products/service impacts the usage ecosystem (i.e., Nike +).

How do you balance the need for a better customer experience with the return on that investment?

To balance it, one has to be clear that customer experience (CX) is a path to achieve better business results and it’s not an isolated program to give a feel good experience to customers without a business benefit.  Also it’s critical to have top managements buy-in, especially the CFOs, in terms of the importance of customer experience for the company’s future and the long term nature of CX ROI, without this it will become a list of isolated customer experience programs with questionable returns.

It’s important to have a clear “customer experience” vision and road map, then go for a phase-wise transformation in order to get better adoption and self- / partial-funding situation for the next phase based on the returns from the previous phase(s), instead of a big-bang approach where course correction, adoption might be difficult. Starting with top-priority phases from the customer segments perspective (based on the business goals – market share etc.) will energize internal members and the management and create a pull effect for cross-departmental collaboration. Also building customer portfolio based P&Ls would be critical to have an enterprise view on current and potential value of a customer in order to allocate resources and achieve better customer experience levels.

We live in an increasingly networked age. At what point do the traditional ways of organizing companies to deliver customer experiences (headquarters, field, online, call centers, resellers, etc.) get rethought or replaced?

When the pace and relevance at which business value is consumed by customers changes faster than the intent and pace at which it is created/delivered, that’s the inflection point.  Also when technology enables people inside and outside the enterprise to do multiple things quickly through a single window, it will eliminate organizational/departmental overlaps forcing re-alignment.

We’re hearing that customers want to be part of the development process, especially for consumer products. But people are also lazy and pressed for time. Are they really going to get involved? Why and how?

Few decades back, people would retire in the same job, now people change jobs about 7 times, in future people will perhaps do 7 jobs at the same time. I’m sure there are many people today with great ideas of doing something new or improving something, but do not go down that path due to lack of funds, other skills required to run the business. Imagine customers just pooling in their ideas with an enterprise which has the resources to make it happen and once the best idea gets selected the customer gets something in return. Once it picks up, the contributing customer can turn into a sales/service personnel as well and also raise funds through kick start crowd-sourcing in their community.

What is the most extreme future that you could envision for the customer experience?

Right from ideation, to funding, to awareness to purchase to advocacy of the product / service a customer purchases, there is someone in social networks first circle to serve the value or receive their feedback/ideas and a system will create a customer experience index ( like Klout) based on the aggregation of data within ones social network. And the experience will be seamless and matching the expectations set within the social network, as if it was a shop down their street that they knew for decades.

The extended Enterprise is the new Enterprise and connected business is the new corner shop.

Will companies stop selling products and services and start selling experiences?

Yes and No. Yes, because ‘Experience’ will become the differentiator and this needs to be built by a network of stakeholders. No, because the concept of a company will erode, and transform into a network of stakeholders (just like a company being carried by shareholders buying/selling their stock or like customers / fans carrying the singer at a concert who is crowd-surfing) where they’ll start/stop their contribution to the core idea of a company, once this happens, it’s the network that passes and shares their experience within their network and a sale happens through a pull rather than a push.

If we go back to the 1950’s when companies like Procter and Gamble, General Foods developed the discipline of brand management and had to do so because the industry progressed to a level where most of the companies passed a level of quality standards, hence couldn’t differentiate, hence companies created a concept of branding to build an emotional connect to differentiate. Now after 60 plus years, we’ve graduated to the next level – customer experience. The only difference now is, it’s the network that’s going to contribute or to a certain level build the experience, product/service.

Research says that customers are going to want things extremely personalized and customized to them and that 3-D printers and distributed manufacturing will increase that urge. Do you agree?

Fully agree. “Mass customization” is the next wave, its already happening in few industries. Human beings like personalization and are keen to build/project a particular identity and when technology enables them to achieve high degrees of customization, then the products they use/wear will become an ‘extended self’ created by themselves instead of purchasing what someone else thought/created.

In the mid-term, I see 3-D printer businesses mushrooming in local areas just like how Internet cafes were coming up in late 1980′s and early 90′s. As the cost reduces and functionality diversifies, it would then move into the personal 3D printer category. On one end of the spectrum – its replacement solutions – 3D printing is disrupting the market and replacing traditional business models where companies like Protos Eyewear, use an algorithm to make glasses that suit individual customers and then print and ship it to their customers. If you extend this to a situation where there are 3D printers in your locality similar to Internet Café or personal 3D printers at home, then the value offered is the algorithm and customer co-creation. On the other end of the spectrum- it’s new solutions to problems – Layerwise, a Belgian metal parts manufacturer designed and built a 3D printed artificial jawbone for a 83 year old women and the operation was successful.

How important is customer experience for B2B companies?

My view is that B2B customer experience is equally critical, if not more, when compared to B2C companies. Reason being, in the connected world where change is happening at such a pace leaving B2B companies vulnerable (due to their complexity) as the market is not giving them the same time to respond as earlier. So it’s not only a matter of better customer satisfaction and experience, it’s also a matter of survival. I’d look at customer experience for B2B companies from 3 angles.

1) Customer mind-shift due to consumerization

B2B customers in their professional life are B2C customers in their personal life, so the B2C disruption in terms of ease of use, accessibility, responsiveness, relevance, reliability, seamlessness and frictionless experience will create a mind-shift where they’ll start expecting similar attributes in their professional life. Simply put it will be table stakes in few years from now and companies that don’t get it right will be fighting for their survival and the ones that crack this will take a lead.

2) Complex buyer-seller-competitor relationship – it’s as strong as the weakest link

B2B companies tend to have complex, long sales cycles where different departments from both sides have to come together to offer a good customer experience, which calls for better systems enabling better enterprise and extended-enterprise collaboration. Also sometimes the buyer also is the seller to the same company. For example, Lenova might buy Intel chips and also sell its finished products to Intel.

Or the seller and buyer might be competitors. For instance, Samsung sells key components such as flash memory, DRAM memory, and more to Apple for iPhone 4. (Apple is one of Samsung’s biggest customers for processors and memory chips.)But, they also compete in the B2C market. So when end value is built based on some value from multiple companies – if few companies in the value chain fall behind due to poor customer experience, lack of visibility, and hence lack of innovation and there are no replacements – then it slows down the entire chain. In B2B, a company is as strong as its weakest link.

3) And also the entry of Millennials

The entry of the Millennials will drive the new normal in B2B customer experience. Imagine a start-up B2B company run by Millennials serving other start-up companies run by Millennials. Will they engage using the traditional routes? Perhaps not. The traditional B2B companies not only have a technology legacy when it comes to technology that enables customer experience, they also have a structural and cultural legacy that might slow them down during their transformation to the new normal.

What technologies do you see as enabling better customer experience?

Right-data or real-time predictive analytics, in-memory computing, and data security, that help predictive relevance and bring reliability across the entire customer journey, will be key. All the other attributes – such as ease of use, accessibility, responsiveness, seamlessness, and frictionless experience – can be enabled using current CXM suites and integrating them with new or best-of-breed solutions. So as far as a customer is concerned, relevance and reliability will stand out a key differentiators given the number of other companies that are going to target a customer in this digital age.

What are your thoughts on the opportunity to use your purchase history to improve customer experience versus privacy concerns?

The digital revolution has given 2 key things to customers: 1) control and 2) options. The customer experience strategy of the company should make sure these two elements are not compromised by the company and their partner network, otherwise they lose customers trust. Using purchase history to offer better customer experience becomes acceptable when the customer has control and options to opt-in, opt-out, re-opt-in. There will be a customer segment which will be comfortable with this idea in order to receive relevant or good offers, so it’s a trading approach in a way. Another segment might be on the fence and once their awareness increases and are confident that the data won’t be misused, they might also join the opt-in program.

In terms of Millennials, purchase-data usage for receiving offers is “normal,” whereas it is the new normal for customers from the previous generations. Value should be based on how the customer sees it – not how the company wants their customers to see it in order to achieve their predetermined targets.

Regulation and reliability on the data usage will play a key role in shaping the privacy concern in future. Bad press about data misuse and theft won’t help the adoption phase.

How do large companies optimize the customer experience across all the channels available today?

The first step is to keep business results in mind and understand the high priority-high impact customer experience scenarios (which could involve one or more channels), agree on which ones to focus on, and communicate it across the company to instill a sense of urgency or importance and then execute.

Customer experience is a complex optimization across people, process, policies, and technology and without top managements involvement and drive – cross-departmental issues will slow down the project.

Some CX examples include:

  • Solve break-downs that require expensive channel jumping and poor experiences:Fidelity’s experience improvement system in 2011 handled 160 projects, which totaled to an annual savings of more than $24 million. The team identified that customers were having problems logging into their accounts through an automated phone system, they spent $20,000 to fix it and saved about $4 million by averting calls to customer service.
  • Attack top issues that require cross-departmental collaboration to solve negative feedback and expensive solutions: Sprint looked into the root causes of customer complaints they worked out a solution with relevant departments. This reduced the number of calls to customer service and amount of customer credits both totaling to about $1.7 billion per year.

( This article originally appeared on SAP Business Innovation)

ramesh

Ramesh Ramakrishnan, a marketing and organisation culture enthusiast, is the Founder of RR Marketing Advisory and author of www.futuristCMO.com. He focuses on marketing/ad/social media technology, IT industry and emerging business models. He has held various leadership positions across EMEA marketing, 3rd party advisory and analyst relations in the enterprise information technology products and services sector. Follow Ramesh @Ramesh_Ramki on Twitter, LinkedInGoogle+

Brands, Businesses, People Don’t Get Social Media Because It Gets Them

Some brands, businesses, people not only love Social Media but they thrive in it and others sayI-socialmedia-ondemand they don’t get it or they don’t have time for it. The ones that thrive in Social media, enjoy and leverage the reach it gives whereas the ones that don’t get it, hate others’ reach into their space.

Space, focus and role are 3 critical parameters that can help companies get Social media

1.    Space: Social media is seamless, don’t create borders:

The Social media concept of openness, collaboration with a wide range of people is not staying outside the organisation, it has already reached inside few organisations, in the name of Enterprise Social networking tools such as SAP Jam, Yammer etc. These web based platforms help employees collaborate with each other across the enterprise, breaking all barriers, silos. According to ‘Research and Markets’ the Global Enterprise Social Networking Software market to grow at a CAGR of 51.94 percent over the period 2012-2016

Coca-cola: On New Year’s day 2010, three ambassadors in their 20’s set out on their Expedition 206 campaign and achieved the strongest global marketing integration ever. They visited 206 countries over 365 days to ‘generate happiness’ and published it on social networks. This enabled 3500 coca-cola marketers around the world to leverage and run local programs.

2.    Focus: Social media is timeless, don’t be short-sighted:

Issue is – Social media is the new email and much more! Think about building a brand, running a business, leading people and all this without using email -hard? Social media just made it harder or easier, depending on your position and intent. Social media programs cannot only be about interactions, it’s also about business and brand direction, validation and continuous value creation.

Companies such as coca cola turned their corporate webpage into a digital magazine with opinions, infographics, stories by people, thereby opening up their organisational boundaries on website to co-create content and customer programs.

3.    Role: Social media team members are your future customer behavior strategists, don’t make them work in isolation:

Frank Herbert once said ‘Without change, something sleeps inside us, and seldom awakens. The sleeper must awaken’. And Social media does precisely this; it awakens the company-customer ecosystem.

With the rise of Customer Experience Management, current social media team members can play a key role in customer behaviour programs. The experience of mobilising and leveraging masses outside and inside the company gives an edge to the social media team in terms of picking up new trends across opportunities, sale, service and customer satisfaction.

Culture has emerged as a core competitive differentiator as it has a multiplier effect in effectiveness and efficiency in todays’ socially connected world.  Companies that are really old fashioned with a command and control mindset can be exposed by aggressive campaigns from competitors, customers, arbitrators. And when such members get the companies, it’s difficult for companies to come up with a plan when they are in a panic mode.

Get social media, before it gets you – when it’s inevitable, why evade.

Follow @Ramesh_Ramki on Twitter, on Linkedin or Google+

[My new Blog] Why You Need A Strategy That Is Social and not a Social Media Strategy #Socialmedia

Why You Need A Strategy That Is Social and not a Social Media Strategy

Brands, big businesses, small businesses that are planning to move into the social media space have one big problem – they are already there! Customers, arbitrators, critics, detractors and others talk about brands, products, services and their experiences – the way they see it.

Companies (not people) that suddenly step into this environment look out of place and out of pace – think about content, its frequency, context, intent, outcome, is it in line with that of the social media group members? No.

Jack Welch, the former long-time chairman and CEO of General Electric once said, ‘When the rate of change outside your organisation outpaces the rate of change inside your organisation, the end is near’.

Out of pace has a new cousin in social media now – out of place. In today’s setting when companies are consistently out of place, the end is near.

Why You Need A Strategy That Is Social not a Social Media StrategyIn a social media set-up when people are interacting with people, you suddenly have a situation of a brand (which is not a person) interacting with people. Again in a social media ecosystem where people and communities share, co-create, exchange ideas and modify user-generated content, brands tend to insert their own content, it looks out of place and out of pace.

If we go back in time to when the web was born, companies had to put their web-pages of products, services – content was still in their control and with a bit of initial struggle they managed to draw upon the lessons learnt in other mediums and execute their web strategy. With social media, brands do not and will not have complete control on content, so old rules of control or lessons learnt from other mediums (web, TV, radio) are not going to be relevant.

To address issues around being out-of-place, out-of-pace and brand to person interactions, here are 3 steps that brands, big businesses, small businesses could consider

Create an ecosystem of local brand ambassadors:

From the rise of brand managers in the mid 1950s to the rise of brand ambassadors in the 1990s, there has been a gradual movement (Inside-Out) towards the market. Building an ecosystem of local brand ambassadors in the social media age will only increase the ‘net’ positive engagement and branding. Of course sometimes there will have PR issues when there are personal, professional problems with the local brand ambassadors but the ecosystem will evolve.

Companies being passive will not stop self-appointed local brand ambassadors from taking the role, they will take it anyways, but being active will help enable them move in the right direction in a balanced way. Imagine something similar to the impact of Nike + (from 2 min onwards in the video) local brand ambassadors in their respective social communities.

Encourage employees to be the eyes, ears, voice:

In the age of pace and relevance, building an enterprise-wide culture of ‘Self-awareness’ is crucial. Customer engagement is not a front line issue alone; it should be an enterprise wide philosophy. Lead users can have corporate social media accounts/pages embedded with their personal identity to build a corporate/person fusion to make it more acceptable whereas other employees can use their personal id’s to interact.

Insights from lead users and other employees can then be shared within the organisation using collaboration tools such as yammer, chatter. Such insights gained makes change management easier when the company adopts a new strategy – else change resistance puts the hand brakes on.

Create a platform for crowd-sourcing:

We now have social shopping companies such as mylovebasket.com, enabling companies such as Kiosked, where users can tag products/price details to their photographs, share them on social media and get a commission when their followers make a purchase from the shared content. Similarly imagine the millennials and others with a particular fashion, product, service inclination creating and sharing photos and videos about their favourite brands.

From the days of 2007 Super Bowl where Doritos aired fan-made NFL ads, they’ve come a long way in creating a solid model – See 5 finalists for Doritos’ Crowsourced super bowl ads, other companies are embracing it.  Companies like American Express has Open Forum – to build user generated content, its more authentic, relevant and most importantly ‘social’. If brands don’t enable it, people will do it anyways, just like blogs.

Social media is not one more new medium like web, radio etc, it’s a way of life similar to one’s local community – parachuting-in with the only intention of business progress won’t work. Businesses cannot benefit from a social media strategy; it’s not an isolated path, businesses need a strategy that is social – driven by the social members and enabled by the business.

Keen to hear your views. You can reach me at Twitter @Ramesh_Ramki

Also published at Business Innovation from SAP,

Blog: When It Comes To Business Models, Retro Is The Future #Marketing #Business #Startup

Over centuries and decades, technological progress either built new businesses models or buried few. Earlier, starting a business meant high entry barriers and slow rate of change, now the market is becoming a level playing field and rate of change is very high.

Traditional enterprise models approached the market through cycles of forecast, production, sales, delivery, customer service and companies had some time to go through these steps as the major communication was between the company and its customers in a one to one or one to few basis.

Such models are facing a threat from the digital disruption due to tablet, smartphone proliferation as they snow-ball the interactions amongst customers, and companies are getting sidelined as they are unable to ‘sense’ and ‘serve’ the needs in time.

Walmart & Amazon –

Let’s take an example – 50 plus year old Walmart, the largest retailer in the world with an online sales forecast for this year as 2% of its overall annual sales ($450Bn).  Amazon, a 19 year old e-commerce company, the biggest online retailer in the world, reported $61.1 Bn annual sales last year, which is approximately 7 times Walmart’s online forecast for this year. Facing increased competition from online retailers, Walmart uses delivery firms FedEx and also its own same-day delivery service called Walmart-To-Go.

Acknowledging the cost, scale-up and management issues with this model, Walmart is now toying with the idea of crowd-sourcing home delivery – the company is inviting in-store customers to deliver packages to others who made online purchases. Though there could be legal and customer satisfaction obstacles, with the crowd-sourced delivery members requiring personal liability insurance and sometimes delivery delays affecting the quality of some goods etc., it might be a step in the right direction to test and find a workable solution by leveraging the customer-to-customer ecosystem.

Community delivers again:

Prior to the days of large scale retail companies, when local shops were more prevalent people used to easily buy goods and those who couldn’t go to the shops due to time constraints or health issues would ask their neighbours, friends, family to buy/deliver the goods for them. Now with large stores being centralised in towns and with packed weekdays and other reasons, the whole concept of such community delivery has disappeared.

For today’s large and medium retail companies that have a growing home delivery customer market, having in-house employees and logistics partners to fulfil the opportunity may not be effective in the long run, hence companies have to go retro and leverage the old practices – community delivery.

Brand evolution is back:

Before the advent of modern branding, the (brand) promise would evolve from the products/services experience and marketing was more interactive (in-person), this was possible when the shop was local, it was a small customer group and there was a community connection.

Today, with the ‘web of voices’ brand managers are slowly losing control over the messages which are moving to the hands of the customer’s – back to how it was in the local shop situation. Brand managers are moving towards becoming enablers and aggregators of customers’ emotional perception and product messages.

Word of mouth transforms into web of voices:

Word of mouth was and is a very strong influencer and local community shops have a direct connection with their customers, hence pay attention to customer voice to immediately fix issues. Despite various efforts the large, centralised retail companies over years have somehow lost that direct touch of being in-sync with their customers’ voice.

Again technology, social networking and crowd-sourcing delivery can help large retailers to form local (and virtual) customer communities to get back to the starting-point of customer satisfaction – Know your customer. Web of voices is both offline and online.

The power of precision marketing:

In a local shop scenario because the shop owner knows the customer so well, they can make tailored offers only for that customer and they’d know whether they accept or reject it and the reasons. Also if they had stock imbalances they’d make a good deal for few customers and cut their losses. In the centralised model marketers run many campaigns, sometimes the advert shows up in the wrong time ( say 7 months before a car insurance renewal) or the coupons given are either irrelevant or people forget to bring it along to claim.

Similar to the local shop scenario, when a customer enters a retail store – by linking loyalty programs, shopping data, social to the power of mobile using geo-fencing, systems can configure relevant offers, present the offers when the customer is in a particular aisle and is using in-store mobile app to locate the products. Usage of mobile during check-out then shows the marketer the difference between the offers made and offers accepted, so that next time it’s more relevant (leveraging data just like in programmatic buying in the advertising industry).

Taking cues from the retro models, today’s marketers and businesses can re-start customer experience in four steps:

  1. Leverage customer community: Some customers tend to know more about a company’s strengths and weaknesses than some of the employees; companies need to listen more, tweak their approach and customers can contribute towards building or re-building the company when it is a win-win scenario. The early days of experimenting with social media programs are over; the focus now is not only about fans and followers but also about customers and advocates
  2. Leverage employee community: Just like the employees in a local shop, corporate employees tend to have rich information through various sources and can amplify, arbitrate messages within their spheres of influence (communities); with a strong internal program, marketers can leverage ‘web of positive voices’. Best buy trained 2500 tweeting employees to respond to simple customer queries online. In today’s fast and connected world, when there is a delay, a simple problem that quickly gets precipitated leads to negative customer experience despite best efforts by customer services agents.
  3. Think and act like a start-up: Successful start-ups continuously seek information and ‘external’ validation from their customers and do course-correction in order to start-up, stay relevant and grow. Unfortunately, large enterprises sometimes can slow-down due to various reasons including employees seeking information and validation in order to stay relevant ‘internally’ and grow within the organisation. George Foreman, Founder of Kodak, picked a new service on two occasions even though it cannibalized existing services but successive CEO’s didn’t.
  4. Do what you say and say what you do: In the age of ‘web of voices’, if you (businesses and marketers) don’t follow this simple rule, your customers (and communities) will say what you do, which might go viral, and your competitor might just do what you say, which might put you on the defensive. Imagine how life in the community would be for the local shop owner if there is a big gap between the brand promise and the product/service experience by customers.

Keen to hear your views. Follow me on Twitter @Ramesh_Ramki

Innovation is not a differentiator any more: My comments on Forrester’s Business model & Brand for Innovation

Forrester’s article

Here are my thoughts –

Business model:

There are 3 aspects to business mode – create, capture & deliver value. Lot of companies seem to be thinking mostly about the ‘delivery levers’ of value creation within the business model context, and they are leaving out value creation and capture from their customer experience strategy. There was so much talk about omni-channel and seamless experience etc, which is fine, but for continuous Innovation, companies need to focus on the create/capture phase as well.
My blog: 5 Steps To Success on the Customer Experience Management Journey –http://blogs.sap.com/innovation/sales-marketing/5-steps-to-success-on-th…

Innovation is no longer a differentiator, Innovation stickiness is – Time to market has a younger cousin now – Time-in-market
http://scn.sap.com/community/business-trends/blog/2013/05/20/innovation-…

Brand:
Brand managers have to move from message ‘communicators’ to message ‘interaction enablers’ and/or aggregators, which means giving up control. This bring market insight into the company instead of going into the market and searching for it. The intersection of intellect and insight is what triggers the Innovation spark.
My Blog: Social CRM Transformation And The Path Ahead http://blogs.sap.com/innovation/sales-marketing/social-crm-transformatio…

 

My Blog: Programmatic Buying And Its Impact On Marketing

Programmatic Buying

Programmatic Buying And Its Impact On MarketingThe future is bright, loud and fast! We know that the global audience is spending more time connected to digital media, hyper-communicating their likes, dislikes leading to too much information.

With media buyers now moving their budgets to new areas such as display, standard pre-roll etc, media buying is increasingly happening in an automated fashion through digital platforms (eg. exchanges, trading desks, DSPs), replacing traditional routes of RFPs, negotiations, insertion orders.

In today’s SoLoMo(social-local-mobile) context and emergence of interactive media, data is gold as it’s associated with audience, ad delivery, commerce and must be available in near real-time to enable dynamically informed buying decisions, this means for large scale operations In-memory computing, Big data analytics, Cloud can make a significant difference.

Positive digital interactions with customers, prospects can propel company growth and this brings the focus onto four major parameters such as ROMI (Return on Marketing Investment), Data compliance & Analytics, Technology advancement, Company culture (shown in the diagram ) that can influence the maturity of Programmatic buying (PB). Here is some background reading on Programmatic advertising.

Impact of programmatic buying on marketing operations and Media holding company model

Marketing operations will become more efficient and can build a strong foundation based on metrics, best practices for campaign optimization, funds (forecast, reconcile and reallocate), performance reporting. There is a good chance of better campaign ROI not only because of media performance or better targeting but also because of the price squeeze, man power reduction due to better tools. Positive experience and results from the digital media will, overtime, influence marketing operations team to increase their expectations from traditional marketing channels.

Large media holding companies have been buying-out leading digital media agencies to keep up with the trend of budgets swinging towards the digital wave. With increasing transparencies and a shorter value chain, a considerable portion of the media industry is set to become a high-volume, low-margin business model (similar to supermarkets) with pricing models moving towards ROI basis instead of activity based pricing.

Customers could end up expecting similar transparencies, ROI in traditional media channels. Also with better customer platforms (DSPs), this industry will witness something (rollback buying etc in-house) similar to what happened to the publishing industry in the 80’s when desktop publishing came, lot of publishing was rolled back in-house.

Positives and negatives of programmatic buying for marketing organizations and CIO’s

Positives

Programmatic buying increases the effectiveness, efficiencies of marketing organizations and increases the probability of bringing the right message to the right audience at the right time.  Today’s CMOs and CIOs have a vital role to play as enablers by leveraging integrated customer information to make consistent customer interactions across channels a reality. Similar to MDM, CDI (Customer data Integration) projects, programmatic buying could trigger data integration across first, second, third party online and offline sources in a unified manner.

Negatives

Targeting precision, ad relevance can bring a creepy feeling to customers who think they are being followed and publishers are trying to keep premium inventory in private exchanges to protect margins and brand. Non-compliance of cookie legislation could attract a penalties (this of course is evolving globally with governments getting involved) and lawsuits, giving more problems for the CIOs and their legal colleagues which could in turn slowdown data integration projects.

In case you are interested to have an overview of the Programmatic buying landscape , here it is:

Functionality and trend Benefits
Supply Side Platform (SSP) – enables publishers
  • Options across proprietary optimization algorithms (Admel) vs manual or own optimization technology (ApNexus)-
  • Increasing breadth across ad format acceptance( from basic banner formats to mobile)-
  • New features such as private exchange, variable price floor controls, anonymous participation, advertiser-level bid reporting, audience data management
  • Better packaging, positioning of media to buyers-
  • Increased monetization, operational efficiencies, multi-channel optimization-
  • Gives better control and protection to publishers worried about premium inventory or brand association with certain advertisers.
Ad exchanges – facilitates bidded buying/selling connecting multiple ad networks
  • Self-service, backend platforms enables log-in, set-up, manage campaigns, run analytics and optimize without even talking to a sales person-
  • Verification systems validate and stop an ad loading if content is not as per advertisers preference( avoid violent, competitor content etc)-
  • Some allow buyers, sellers to participate, some allow only ad networks-
  • Advertisers have visibility on the site, ad unit and publishers have visibility on which advertisers are buying their inventory and what they are willing to pay-
  • Some exchanges allow floor price settings, offering a risk free proposition for publishers ( ad networks don’t tend to offer this)
  • Encourages competition and drives up ad space price per impression, as each impression is valued-
  • Ad exchanges are different from ad networks that often sell at a lower eCPM to close high volume sales or may not be in a position to quantitatively compare different ad buy offers.-
  • Visibility for publishers help them control what advertisers and creative’s they want to encourage on their sites.-
  • Few intermediaries in the value chain offer ad budget savings
Demand Side Platform (DSP) – enables buyers
  • Advancements in expertise across algorithmic optimization, knowledge of audience management, breadth of media access, unified campaign tracking and reporting-
  • Leading vendors have more than 50% of the impression volume RTB enabled.
  • Buyers prefer a single platform  that is operationally efficient to access, manage and report inventory supply and campaigns across display, mobile and video
Real-time bidding (RTB) – enables real-time selling/buying one ad impression at a time
  • 2009 onwards, ad exchanges and SSP’s announced RTB support bringing a surge in activity from DSP’s, ad networks, agency trading desks and other media intermediaries.-
  • The EU cookie directive which came into effect in May 2011 can bring some challenges to data collection, usage and in turn affect RTB growth.
  • RTB’s have cut inefficiencies in the media buying process, offers de-duplicated reach and can cap the number of impressions that audiences would see in a particular campaign-
  • RTB is an efficient way to buy impressions in real time, having an engine that calculates real time prices can really transform results for advertisers.
Data management platform (DMP) – the audience intelligence engine
  • DMP creates a single view of the user by aggregating data across first, second, third party online and offline sources in a unified manner, including segmenting and tagging.-
  • Leading organizations are building rich user information as a differentiator in an increasingly crowded online advertising area
  • Interactive marketers now have an opportunity to leverage DMPs and run audience based marketing campaigns more effectively than ever before, however, for DMP initiatives, the time and effort required to pull various departments together, such as IT, legal, CRM cannot be underestimated.

 You can follow me on Twitter @Ramesh_Ramki

Social CRM Transformation And The Path Ahead

The early days of experimenting with social media programs are over; the focus now is not only about fans and followers but also about customers and advocates. Leading companies are now embracing Social CRM to leverage social media and not only gain customer insight but to also gain market insight, increase sales, improve cross-selling/up-selling, improve pre/post sale customer experience and carry out  strategy, operations course correction, build trust,  to name a few.

A starting point in the Social CRM journey is to get the social media basics right – the ‘Monitoring andEngagement platform’, but if a company is struggling to make this work, it might make very little progress across the points mentioned above.

Social CRM programs have more to do with the intent of the company; the openness of its employees to agree when there is a problem and leverage internal information, processes to engage with the customer instead of turning a blind eye or blaming different departments. To understand the impact of the monitoring and engagement platform as mentioned above, let’s go through an example.

Nestle – On March 17th 2010, Greenpeace posted a video on youtube showing an office worker finding a bloody finger of an orang-utan in his kit-kat (The background was, Nestle bought palm oil for the Kitkat candy bars and other products from a local vendor in Indonesia that had allegedly cleared rain forests to establish palm plantations, which affects oragutans.) On the same day, Nestle managed to remove the video citing copyright infringement.

On March 18th, Greenpeace hosted the video on Vimeo generating about 80,000 in the first hour, on the same day Nestle’s facebook received negative comments and the community manager engaged in a vicious argument. March 19th, Nestle’s facebook response goes into mainstream media as ‘anti-social’.

March 20th, Greenpeace uses Google ad words to drive traffic to their site and encourages people to share the orang-utan video on their social networks. March 21st, Nestle shares the original orang-utan video on youtube, 180,000 views! March 22nd, Nestle issues a press release about suspension of sourcing with the vendor in question.

Nestle then starts discussions with Greenpeace, joined a roundtable on Sustainable Palm oil and has a team that monitors social sentiments regularly. Nestle now has moved from Global RepTrakTM(a Global Reputation pulse score) of 20 in 2010 to 10 in 2013.

Marketing is going through a transformation and for Social CRM to work, the idea behind integrating social media deep into the company has to be understood by employees; customer service is no longer a front line issue only. Employees and departments need come together to serve the customers, as delays and poor engagement due to internal hurdles will only exasperate the problem externally.  It’s not only an organisational culture transformation but is also about revisiting goals and the ways in which relevant roles should be performed in future. Here are 5 steps:

1.) Instill a sense of urgency, importance, and empathy

Social networking being 24/7, customers have a sense of urgency or expectation for an immediate or real-time response. Also emotional and sentimental aspects of customers or influencers (ie Nestle example above) need to be taken into consideration, whilst setting up the ‘Working group’ for Social CRM.

Depending upon the organisations internal collaboration mechanisms, a rapid action team can initially support the social CRM team (till a Centre of Excellence takes shape), through internal co-ordination, when sensitive issues go viral. It is important for the social media team and other employees to also think about what their own expectations would be if they were in the position of a customer, prospect or influencer in touch with them.

2.) Select the right Social media product and partner for flexibility and integration with enterprise processes

This industry has grown at such a pace that today there are many sub-categories; some companies are trying to be end-to-end players by taking an organic, inorganic route or both, leading to important integration decisions and intense competition. Here are 5 major categories,

Social Monitoring (listening) – Lithium, Radian 6 etc

Social Engagement (conversation) – Sprinklr, Spredfast etc

Social media marketing (media management) – Buddymedia, Shoutlet etc

Social analytics (measuring) – Simply measured, Adobe/Omniture etc

Social Influencer (level of influence of participants) – Klout, Kred etc.

Here is a more detailed landscape of social media software which of course is evolving.

3.) Company culture that promotes better customer experience through continuous learning

Companies that tend to control communications need to realise that in social media it’s the customer who is controlling the conversation, so companies need to engage not manage, if handled badly it could go viral.

Solving issues require managerial support, corporate will to acknowledge that the elephant is in the room, and to find a solution together. Sharing both success and failures internally will promote an atmosphere of encouragement and collaboration to repeat successes and learn from failures.

The negatives and the positives from social media programs should be used to improve the performance and effectiveness of members within the company, not to use it to blame or show a department or team in poor light

4.) Governance to make it work

A critical step in enterprise wide corporate initiatives touching customer, influencer communities is to start with a clear communication on expectations, execution and measuring mechanisms. Best Buys, execution mechanism has a matrix model for Social CRM which is similar to the IT industry, where horizontal initiatives (such as various technologies, services) cut across verticals (industry functions).

In this model, Best Buy has formed a Centre of Excellence with members representing different departments or programs. The corporate guidelines are owned by the Community team, whereas each group manages its own initiative but works under a common strategy. Overtime this has improved internal knowledge sharing, networking and morale across the company.

5.)  Design KPI’s by looking into the holistic customer experience

The pace and transparency of social media networking will expose broken or inefficient processes due to KPI gaps between departments.

Imagine you are discussing about alternative cable tv providers with a friend on facebook, then you get a cable TV advert and using their site you locate a sales stall in a nearby mall. When you visit the stall, the sales person whose KPI is to secure signed service order forms talks to you and gets you to sign the form with some basic details. Because the sales person is typically measured based on number of signings and not on the installation customer experience, he is not incentivised to correctly record all relevant information from the customer that would help the technical team. Installation problems due to technical teams lack of customer information which was already discussed with the sales person leads to re-scheduling, delays and a bad customer experience.

KPI’s should be built based on the overall customer experience standpoint, the impact of each role on Customer experience and seamless handover across roles instead of a fragmented one.

You can follow me @Ramesh_Ramki

%d bloggers like this: