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Notes From The Gartner CRM Summit September 14, 2008

Posted by Elana Anderson in Customer Experience, Marketing.
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Last week, I attended my first-ever Gartner event – the Gartner CRM Summit. After five years as a Forrester analyst, it was nice to get exposure to how the other half lives. According to Gartner over 600 attendees representing 25 countries attended the event held at the National Harbor Resort (a surreal manufactured enclave just outside of DC). I don’t know how other attendees felt but, I have to say, the venue was a bit reminiscent of that Jim Carrey movie The Truman Show

My favorite Gartner speaker was Ed Thompson who presented the opening keynote entitled “Improving the Customer Experience.” Ed warned the audience that he would speak quickly and accelerate as he went on and, that, he did.

Ed’s opening one-liner: “Why should you care about customer experience? The boss says you have to…” That certainly jives with my experience that “customer experience” is a top initiative in most companies these days. But, as Ed aptly pointed out, few companies have a clear and consistent definition for what they mean by “customer experience” (CXP). Often, depending upon which group you talk to within an organization, you get several different definitions. Different groups also measure customer experience in different ways. For instance, customer service groups might measure customer satisfaction, while marketing measures retention, and engineering measures quality. All that’s ok – in fact it’s a good thing. The key point? Before embarking on a CXP initiative bring all of the diverse people together clearly define your objectives, the tactics for achieving those objectives, and how you will measure success.

In fact, Ed says “lots of companies give up before they see the improvement.” Many companies have applied the model developed by Professor Noriaki Kano to CXP projects.

Ed’s pointers:

  • Get the basics right.
  • Focus on moving above average before, during, and after the experience. Plan to move some investment to setting customer expectations, getting more customer feedback, and reacting to the feedback.
  • Stay on top and avoid the middle ground by excelling in one of three dimensions: 
    1. Product leadership (e.g., Apple)
    2. Customer intimacy (e.g., USAA)
    3. Operational efficiency (e.g., Southwest Airlines)

To the investment point above, I was disappointed, although not terribly surprised, to hear the results of a Gartner study revealing that while 95% of firms survey customers to get feedback, a paltry 10% do anything with that feedback.

Ed also talked about the large numbers of companies creating executive level positions focused on customer experience (e.g., VP of Customer Experience). Unlike some industry pundits who espouse Customer Experience Officer C-level positions, I was happy (because it aligns with my own view) to hear Ed indicate that, in his experience, he typically sees this position reporting to the CMO. Is the CXP executive a fad role? “No,” says Ed, “if European companies are adopting it, it couldn’t just be a fad started in California” (this elicited another chuckle from me).

Finally, I was happy to hear Ed fire a few bullets at NetPromoter (NPS) saying (as I have also said) that the metric isn’t a silver bullet, that more than one question is necessary, and NPS doesn’t help companies with causal analysis. He further indicated that NPS is useful in some industries some of the time, but not in all channels, and isn’t a great metric across all company types (e.g., B2B firms). The best use of NPV? Give to your board of directors, but don’t stop analyzing and measuring lots of other things.

Customer Service Is A Crucial Marketing Channel May 20, 2008

Posted by Elana Anderson in Customer Experience, Database Marketing, Integrated Marketing, Marketing.
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I realize that the title of this post already has some customer service gurus cringing. No, my point is not to turn service interactions into one-way communication streams in which the customer’s needs are minimized while CSRs focus on pushy “retention,” cross-sell, or upsell efforts… And, if you are familiar with any of my prior writings then you know that I hold marketing responsible for customer experience. With that quick frame of reference, inbound service interactions are ideal for marketing because the customer:

  • Is engaged, by choice.
  • Actively provides information that points to problems or needs.
  • May have a need now that, if missed, becomes a lost opportunity.

But, strategies to leverage customer service as a marketing channel will fail if we approach customer interactions with the traditional marketing mindset – let’s tell customers what we want him to hear. Many of us have been talking about this for years, but the time has come. Firms must shift communications strategies away from one-size fits all push marketing – to one that is responsive to individual customer behaviors. To make the shift successfully, marketing organizations must get beyond the old style campaign construct. The very term “campaign” conjures up the image of a bullhorn – marketers shouting out what they want their audience to hear. With the control and choice that consumers have today, marketing must be more flexible — more agile. Marketing and service organizations must align their strategies and:

  • Recognize that every service interaction has potential brand impact. Many customer service centers are measured purely by cost metrics and that result in processes that are internally focused, not customer-focused. Most consumers can recount nightmarish customer service experiences and, today, many are well publicized by jaded customers through vehicles like YouTube. I’m not purporting that cost metrics aren’t important. But, the cost of losing a customer due to a terrible service interaction or the word of mouth associated with broad exposure by disgruntled customers through today’s social channels must also be taken into consideration. And, yes, it is hard to account for all of these costs in an financial spreadsheet. At a minimum, firms can start by mapping and understanding processes from the outside in – that is the customer point of view – as well as the inside out.
  • Consider each interaction as an opportunity to establish an emotional connection. Years ago we talked about “delighting” the customer… The term always struck me as corny and I’ve noticed that I, as a consumer, am so jaded by my past customer service experiences that I am pleasantly surprised when I get a friendly voice on the other end of the phone that sounds genuinely eager to help me out or empathizes with me if I am upset. Again, it starts with the little things — like being human.
  • Only possibly, seek extend the financial relationship. As I’ve already indicated, customer service interactions present an opportunity in which customers will willingly provide information in exchange for value. This exchange may yield an opportunity but, it requires active listening and capturing information in real time relative to customer’s issues and needs. Using the interaction to push the product du jour — while it may work occasionally — is more likely to be rejected, potentially annoy your customer, and increase your call time.

As I write this, I admit that I have concerns that what I write will be misconstrued or misused. I’ve been talking in public forums about the intersection between marketing and service since 2002. Unfortunately, while companies in many industries have taken steps to turn their customer service centers into revenue generators, I believe that most have done so to the detriment of the customer experience. That is, they view inbound service interactions only from the perspective of the potential financial benefit that could result from selling something new, extending a contract, etc. These companies are still operating in one-way mode and failing to recognize that they have an opportunity to establish a dialog with their customer.

Technology’s Role In Differentiating Customer Experiences April 29, 2008

Posted by Elana Anderson in Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Technology, Online Marketing.
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Marketing organizations are contributing to customer experience initiatives by working to deliver more relevant content in both outbound and inbound channels. While technology is certainly no silver bullet, marketing organizations are turning to technology to help them:

  • Automate. As marketing organizations seek to deliver more relevant and individualized customer experiences they begin to change their marketing communications mix away from a pure outbound push model to incorporate messaging tactics driven by customer behaviors and actions. In addition to being very responsive to the customer, these tactics are ideal because they can be automated. Today’s campaign management solutions are maturing beyond support for the traditional push campaigns to facilitate campaign automation through functions like real-time data integration and event detection, multi-stage campaign process flows, and business-rule-driven automation.
  • Collaborate. Relevance is not just about the message. Relevance requires an equal focus on time and place. And, when considered from the customer’s perspective, relevance is inherently multichannel and integrated. As marketing organizations work to increase their relevance, become more customer-focused, and create differentiated customer experiences, they will need to collaborate more – a lot more – with other marketing teams and with other functional areas of the company (like customer service). Marketing resource management technology can help facilitate collaboration by providing a consolidated marketing calendar, establishing common work areas for virtual teams, and facilitating processes, as interdisciplinary teams work to design, build, and launch integrated programs.
  • Integrate. Integration is a fundamental requirement of relevant marketing. Whether it is integrating disparate data from various systems across the enterprise or integrating teams to streamline marketing processes, technology is required. Moreover, marketing application suites that are themselves integrated and support the entire marketing process – from planning through design, execution, and measurement – can dramatically simplify the complexity that marketers face as they work to become more relevant and customer-focused.

Marketing Organizations Must Increase Their Technology IQ

Just as technology is a critical enabler of relevant marketing, it can also be a major barrier. Why? Many marketing organizations don’t take enough ownership of technology. Marketers – and the technology groups that support them – must recognize that technology is a key component of marketing operations – that relevant marketing requires day-to-day access to data and iterative levels of analysis, needs not well-met by traditional project-focused IT organizations. Marketing organizations that want to differentiate customer experiences through customer-focused and relevant marketing communications and content delivery must bring technology expertise under the umbrella of the marketing organization – either internally or through a trusted services partner that behaves as an extension of the marketing team.

My Latest Research: Marketing Beyond The Status Quo April 23, 2008

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Technology, Online Marketing.
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I am very excited to announce the launch of my latest research, “Marketing Beyond The Status Quo.” The research, sponsored by my friends at Responsys, seeks to help marketing organizations assess and address the barriers that prevent them from being more customer-focused, relevant, and integrated. The report unveils the Marketing Status Quo (MSQ) Model – backed by a diagnostic self-test and step-by-step program guide – to help marketers determine their relevance maturity and develop a realistic action plan to become more customer-focused.

The MSQ Model assesses the fundamental competencies required for marketing relevance:

  • Strategic: How customer-focused are your marketing efforts?
  • Analytical:How strategic and actionable is your customer insight?
  • Technical: How well-suited is your infrastructure to support customer-focused marketing?
  • Process: How collaborative, efficient and error-free are your marketing operations?

MSQ Model

Each competency is equally weighted and combined to yield an overall Relevance Maturity Score, which defines a MSQ Level ranging from 1 (broadcast) to 5 (integrated). Marketers can leverage the model in conjunction with the MSQ Self-Test to assess their status quo, as well as identify the steps they must take in order to successfully move to the next level. 

For a free copy of the full report, visit www.responsys.com/beyond. I hope that you will find the research interesting and the tools useful. If you have any feedback, please don’t hesitate to comment here or contact me directly.

See you in LA next week? April 1, 2008

Posted by Elana Anderson in Marketing Strategy, Online Marketing, Database Marketing, Customer Analytics, Marketing, Customer Experience, Marketing Technology, Integrated Marketing, Marketing Measurement.
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Busy, busy, busy! That’s the month of April for me. Sorry I haven’t been posting the last couple of weeks, but I have a ton of balls in the air at the moment. One of the major things I’ve been working on is a minor treatise aimed to help marketers systematically improve the relevance of their customer communications. My work on this whitepaper, “Marketing Beyond The Status Quo,” is sponsored by the good people at Responsys and we’re planning to unveil it together next week at Forrester’s Marketing Forum in Los Angeles.  Our session is Tuesday, April 8th at 2:25pm. I’ll be presenting along with Scott Olrich (Responsys’ CMO) and Randy Cuff (Director of CRM Development at Intrawest). Here’s the abstract for the session:

Few interactive marketers are ecstatic about their ability to deliver meaningful and timely marketing messages. In fact, most agree that more relevant and timely marketing communications will be better received by customers and increase response rates. However, when time is scarce, budgets are tight, and single channel campaign management solutions are already integrated and delivering ROI, marketers are hard pressed to change the status quo. In this thought-provoking session, Elana Anderson, former Vice President and Research Director leading Forrester’s marketing practice, and Scott Olrich, CMO of Responsys will unveil the findings from a first-ever study identifying the drivers of the “status quo” paradigm, and reveal the strategies and marketing technologies smart marketers are using to deliver superior marketing performance and ROI across channels.  

If you are attending the forum, please stop by our session. I’ll be there for the full two days, so drop me an email if you want to connect at some point during the event. Hope to see you there!

Recalibrating The Meaning of “Relevant” March 11, 2008

Posted by Elana Anderson in Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Measurement, Online Marketing.
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Have you ever refinanced your mortgage only to be bombarded by offers to lower your mortgage rate for six weeks after you closed on your new loan? This happens because financial services companies are purchasing “triggers” from credit bureaus that indicate you have had a recent loan approval. The problem with these triggers is that they are not timely. By the time the marketing communication gets to the customer, it’s too late.

Relevance = right message + right time + right place

Perhaps it is a cliché, but it’s a good one. Too many marketers focus entirely on the message component of relevance. For these marketers, “place” is typically an outbound channel and “time” is based on the internal campaign calendar – not the customer’s needs. To be relevant, marketers must step outside the confines of the functional silo that they are responsible for and think outside in – from the perspective of the customer. In addition to targeting the message itself based upon a customer’s stated or implied needs, relevance requires:  

  • Timely reaction or response to customer actions. Although some marketers are experimenting with trigger-based communications and on-site customized messaging, the prominence of these tactics pales in comparison to the weekly or semi-weekly campaign pushes. The beauty of these tactics, however, is that they can be automated.
  • Cross-channel integration. Your customers don’t care that you are only responsible for email and not the website or direct mail and not the call center. When a potential customer clicks on a search result or an online ad and lands on your generic home page or receives an offer in the mail and calls customer service to inquire further, he expects a seamless handoff. Yet, creative elements often dominate conversations about integrated marketing rather than a focus on what the customer is trying to achieve as he traverses the channels. The result of this oversight? For the customer, it often means dead ends and unnecessary frustration. For the company, it means lost opportunities and, possibly, damage to the brand.
  • A programmatic approach. Did you know that maximizing individual campaign response might be to the detriment of overall program ROI? That’s right. Sending more messages may generate a higher response, but how many others are simply tuning out? The current industry standard in the retail sector is 1-2 email messages a week. Amazon differentiates itself in the inbox by not always being there. An email offer from Amazon might be, “A brand new Leonard Cohen CD is available. Since you have enjoyed Leonard Cohen in the past, we thought you might want to know…” This programmatic approach requires different metrics than the campaign-centric approach – for example, program engagement over time or revenue per customer (not campaign).

Walking In The Customer’s Shoes February 20, 2008

Posted by Elana Anderson in Customer Experience, Customer Experience Hall of Fame -- and Shame, Marketing.
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In 2004, a Forrester colleague (John Ragsdale) and I published a report which we notoriously titled, “Why Marketing Should Own The Contact Center.” Our chosen title was not aimed at changing reporting relationships. Rather, the emphasis and urgency we sought to establish was recognition of the fact that, for many companies, employees play an absolutely central and crucial role in establishing the customer’s perception of the business and the brand. Our position in the report (which is still absolutely valid today) was that the purely operational metrics – e.g., # calls handled, average call duration, etc. – by which many companies measure the performance on contact center personnel run counter to the objectives that many companies have established around improving customer experiences.

The report was focused on the contact center, but the concept extends easily to all employees that interact with a customer at any level. While books can (and have) been written on this subject, I want to focus on one element that I believe continues to be overlooked and underemphasized as the industry attempts to develop processes and technologies to facilitate customer interactions and improve customer experience. That is: empathy – specifically, encouraging and empowering employees to engage and relate with customers as people and fellow human beings.

Encourage Employees To Relate With Customers As Fellow Humans

While I firmly believe that no company can make every customer happy 100% of the time, the companies that have really made strides towards delivering differentiated customer experiences are taking steps to help employees better understand and relate to their customers. Some examples:

  • USAA makes customers personal for its employees. USAA, well known for its customer service leadership, caters to military families. To ensure employees empathize with its members, the company hires a high percentage of former military personnel, encourages employees to read personal letters from deployed service men and women, and incorporates aspects of military life into its new employee training program.
  • Cabela’s doesn’t draw a line between employees and customers. Cabela’s, a top direct marketer of specialty outdoor merchandise views it employees as be valued customers. The company encourages employees to take gear home and give it a try as long as they submit a review.
  • HP rewards employees that put customers first. In her recent article on CustomerThink, Liz Roche how HP encourages employees to participate in HP’s in store Demo Days. In addition, HP does a number of other things to help employees to better relate and empathize with customers. The company has established a formal customer experience training program to help employees experience interactions with HP from the customer perspective, it includes customer metrics in employee evaluations, it encourages employees to surface feedback from customers and provides tools to facilitate employee efforts to do so, and it awards employees that go above and beyond “customer hero” awards.
  • Four Seasons gives all employees a firsthand customer experience. Four Seasons, the luxury hotel and resort chain, provides all new employees – from chamber maid, to maintenance engineer, to kitchen staff – with an opportunity to stay at a property with a guest. This helps employees understand the customer experience from the customer’s point of view.
  • Fidelity Investments encourages all employees to interact with customers. My husband is a technology guy with Fidelity. All Fidelity employees are also customers. In addition, the company encourages employees, regardless of their role, to interact directly with customers. So, several times a year, my husband volunteers in the call center to take customer calls. These experiences help my husband take the customer into account when he and his team are designing products and interfaces that will eventually land in the customer’s hands.

Allocate Marketing Budget To Build Customer Empathy

Consider the billions of dollars that companies spend on marketing and advertising each year. Consider the number of scenarios when companies that you interact with as a customer don’t live up to the promise that the brand makes in its external messaging. If your company is not investing to help employees better relate to the customer, perhaps you should consider allocating some marketing budget to do so, eh?

It is URGENT that you give us a call… February 8, 2008

Posted by Elana Anderson in Customer Analytics, Customer Experience, Customer Experience Hall of Fame -- and Shame, Database Marketing, Marketing, Marketing Technology.
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Have you noticed an uptick in the number of robot marketing messages that you are getting? I have and it’s making me crazy! For the last several years I have worked from my home office 2-4 days a week. In recent months, the number of calls that I am getting with robot marketing messages has increased dramatically.

Some of the messages are “transactional.” For instance, we get calls from Blockbuster reminding us that we have an overdue movie. But most of the messages are pure marketing. Yes, my phone number is on the DNC list, but these calls are coming from firms with whom I have a “preexisting relationship.” The company I bought my car from, financial services firms I deal with, etc. The most egregious, from my perspective, are the messages that come from my credit card company which go something like this:

Hello, this is Amy from your credit card company! Now, nothing is wrong with your card, but it is URGENT that you contact us immediately to discuss how you can lower your monthly interest rate….

The first of these messages came just after my wallet was stolen last spring (see my post on that descent into customer experience hell). What did I hear? “URGENT that you contact us!” I like to think that I’m a reasonably intelligent person but I must admit that it took me a second to realize I was listening to a pitch, not a customer service call.

It may be legal, but it’s the worst kind of spam

As a marketer, perhaps you’re wondering what’s wrong with this. I’ll tell you. For me as an individual, these messages are highly interruptive, irrelevant, and unwanted — not to mention misleading. If this came to me as an email, I could delete it without a second thought. It would be a little annoying but not annoying enough to write this post. These calls require that I pick up the phone and listen. They take more of my time and attention and they make me mad! 

I am not debating that these calls reach some people that probably consider a lower interest rate to be a very good thing. But, if my credit company bothered to do a very easy query against its customer databsae before teeing up these calls, it would see that I pay off my bill every month and don’t pay finance charges. Therefore, the interest rate is totally meaningless to me. For a company that I know employs fleets of statisticians and has very sophisticated customer analysis, I find this absolutely inexcusable!

Be responsible with this technology

I’m not suggesting that you never use this tactic to reach your customers. I am suggesting that you recognize that the phone channel is one of the most interruptive of channels (just shy of door-to-door sales) and if you choose to implement these automated phone campaigns you need to make sure that you are properly targeting your calls. Some suggestions:

  • Don’t use “preexisting relationship” as carte blanche to call. While it may be legal, there are customers out there that just don’t want the calls, period. I recommend filtering contacts that have registered for the DNC list out of the call list particularly if your list isn’t well targeted to customers for whom the message is clearly relevant.
  • Use data to target the campaign. If you have good customer analysis and response modeling capabilities then, by all means, use them. Even if you don’t, use basic queries to filter the list in order to screen out those customers for whom the message is obviously irrelevant. If you don’t have this capability, then you should not be running these campaigns.
  • Be more genuine in the communication. If you are properly targeting the message, then you can make a more genuine appeal to your customer. Rather than, “it’s urgent that you contact us!” empathize with the customer by saying something like, “we notice that you have been paying high finance charges over the last few months and we want to offer you the opportunity to lower your rate for the next three months…” If I ever do get in a situation in which I am carrying a monthly balance, then this kind of offer would come in handy and I would feel like my credit card company was on my side.
  • Be transparent with Caller ID. I failed to mention above that the calls don’t even have proper Caller ID (most say “unidentified number”). Although the FTC requires that telemarketing calls have proper Caller ID, apparently the rule does not extend to marketing phone calls where a “prior relationship” exists. I believe marketers should take the high road nonetheless and give customers the opportunity to screen the calls.

Marketers, Welcome To 2008! January 8, 2008

Posted by Elana Anderson in Customer Experience, Integrated Marketing, Marketing, Marketing Strategy, Marketing Technology, Online Marketing, Web 2.0.
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I hope everyone had a wonderful Holiday Season! My 2008 is off and running at a fast clip and, once again, the blog had to wait while I dealt with matters related to my pocketbook. But, here I am and I simply couldn’t resist the urge for my first post of 2008 to be my own set of [perhaps wishful thinking] predictions for marketing in 2008. I mean, what kind of marketing blogger would I be if I didn’t throw my two cents into the discussion?…

Before the holidays, I shared some thoughts with Barney Beal over at TechTarget. He’s just released a podcast of our discussion. So, if you want to hear my voice (including a bunch of “ums”, “you knows”, and even a few giggles), please check it out. I’m also joined by my friend and former colleague, John Ragsdale, as well as Rob Bois from AMR. My lesson learned: don’t attempt to record a podcast on your mobile device while on the go!

So, here’s my outlook on marketing in 2008:

  • No sea change events will rock the marketing world in 2008. What kind of prediction is this!?! I don’t think I’m copping out here… I recently looked back at my predictions for 2005. Short of adding more focus to social computing and Web 2.0, I could republish that document now and call it a day (of course I’m biased, but I think it’s good stuff). My point is: marketers (and industry pundits) need to avoid the urge (and thrill) to seek out the next trend to turn into hype. While it’s certainly important to keep an eye on what’s on the horizon, don’t jump into the next new thing without a clear business hypothesis regarding its potential value. And, by all means, measure against your hypothesis.
  • The Web 2.0 hype will moderate and we’ll get down to business. I’m bullish that we’re past the days when all marketers seemed convinced that they needed start a blog or spend money in Second Life. While these tactics (yes, they are tactics – i.e., not strategy) make sense for some firms, for most they don’t. There’s no doubt that social computing behavior is having a tremendous impact on the way business gets done but it’s no excuse for taking the cart (tactics) before the horse (strategy).Ok, so what is important here? Ever since I joined the industry (late 80’s), I’ve heard statements like “customer is king” and “listen to your customers.” But in those days, marketers had the bullhorn. Today, social technologies give customers a platform and a bullhorn of their own. Companies that aren’t listening run the risk of being caught unprepared (and that costs money). There’s no question that there is tremendous potential to leverage social communities, but we’re still in the early days. In 2008, we’ll start sort it out. For many companies this means sitting on the sidelines and keeping an eye on the developments. For early adopters, be clear about the objectives behind what you are doing and establish how you will measure against those objectives.
  • Marketing organizations will get a social conscience. In line with my previous comments, firms need to recognize that today’s consumers are really good at sniffing out and publicizing inconsistencies between what corporations and their brands say and how they act. In 2008 companies must take this bull by the horns – or risk getting trampled. Specifically, I mean walk the talk and align your brands and your behavior in the marketplace with what you say. Whether you are a cataloger of outdoor living that happens to send up to 40 catalogs a year to some customers on your file, a consumer goods brand that purports to promote inner beauty and self-confidence among young women while marketing other brands that paint women as objects, or a financial services firm that invests in companies with business interests in areas rife with genocide – you need to get on top of this.

  • Significant emergence of on demand marketing technology. Tired of dealing with internal technology groups? Well, some good news for marketers on the technology front. The on-demand marketing technology sector is heating up and more viable (yet still not comprehensive) software-as-a-service options are emerging to help marketers plan and organize their activities more effectively, design and launch multichannel campaigns, and measure results. For more insight on this one, see The “On Demand Marketing Suite” Is Becoming A Reality.

  • More focus on behavioral targeting. “Behavioral targeting” is definitely a term that is generating an increasing amount of interest in the online marketing sectors. But, I also find that the term means different things depending on who you are talking to. I take a broad view. Specifically, I define behavioral targeting as:

    Leveraging aggregated and individual behavior data to deliver targeted and customized content to an individual — through online ad networks, on site messaging, as well as other online and offline direct communication channels.

    If companies would only define it this way, they’d recognize that they may very well have behavioral analysis experts sitting in one part of their company while individuals in another group are struggling to figure out the basics and complaining that they don’t have the right skills or tools. I’ll focus more on this one in future posts, but I want to say here and now that it is high time to get those cool spec wearing web data gurus together with the database marketing quant jocks.

  • Companies will start to sort out the role of the CMO. OK, I couldn’t resist. I know that this is one that tends to turn up every year and maybe it’s wishful thinking on my part but, we’ve all seen the stats about the CMO revolving door and I think it’s time for marketing to step up and take ownership. As I said in my recent post about the role of the CMO, I fervently believe that the role of the CMO is to “define and lead a customer-focused marketing strategy that crosses product, channel, geographic, and even functional boundaries.” If marketing fails to transform itself into this role, I believe that the CMO title will eventually die out and marketing will succumb to a future as a tactical, services-oriented role within the enterprise. As a related aside, I was heartened today to see the news that David Norton who has accomplished so much great stuff heading up relationship marketing at Harrah’s Entertainment has been promoted into the CMO role. We need more CEOs that think along the lines of Harrah’s CEO, Gary Loveman:

“In today’s complex multi-channel marketplace, we must continue to strengthen customer relationships and deliver high-quality brand experiences across our entire portfolio.”

Web Analytics Needs To Grow Up (Web analytics series, Part 1) December 11, 2007

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Integrated Marketing, Marketing, Marketing Measurement, Marketing Technology, Online Marketing, Web Analytics.
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Last week I was privileged to spend the day in the company of several thought leaders in the field of Web Analytics. Dr. Alan Hall, Avinash Kaushik, Judah Phillips, and I participated in several taped panel sessions that focused on how to best leverage web data to improve marketing effectiveness and how to effectively leverage investments in web analytics technology. We were joined by, Steve O’Brien, Akin Arikan, and Karen Hudgins from Unica which sponsored the get together. What struck me most about our conversations (on camera and off) is how committed each of us is to moving Web analytics beyond what today is largely a passive, report-centric discipline towards one that:

  • Improves the effectiveness of individual customer interactions
  • Actively contributes to the understanding of the customer
  • Is a key part of improving marketing’s ability to measure across channels

Five key stages of web analytics maturity

One of the bits of original thinking that I contributed to the discussion was a framework that breaks down five stages of Web Analytics maturity.

Web Analytics Maturity Framework

Don’t pay attention to the stages for the moment… This is not a new picture (I pulled the base graphic from a from a client deck I presented in 1998). And, few would disagree. If a marketer is not leveraging any data to drive marketing communications, just adding a little bit of filtering or segmentation will have a tremendous positive impact on results. But, at some point, our ability to continuously improve results through segmentation levels off. At that point, the way to get the next hockey stick impact on results is to use individual customer data. Definitely not new thinking, but I think it helps level set us that is what “1:1″ or “customer-centric” (you pick the cliché) marketing is all about – using knowledge about the individual customer to drive interactions that, at the end of the day, benefit both parties.

This framework can also help us think about how we are using the mountains of web data that we’re collecting to help us move up and right on the chart. I break the role and the progression of web analytics down into five stages:

  • Stage 1 – Site analysis: When we get started, we’re really just trying to get our arms around the data and the traffic on our site. The focus is to understand how visitors are getting to the site and what they’re doing there. But you also need understand why they’re there and whether they were able to accomplish what they set out to do. How do you do that? Avinash suggests that’s quite simple, ask.
  • Stage 2 – Site optimization: The goal, of course, is to avoid analysis paralysis and look for ways to leverage the insight we are gaining about how visitors access and use the site to drive more visitors to the site, to optimize the experience of visitors once they are on the site, and to help more visitors accomplish what they were trying to do.
  • Stage 3 – Segment targeting: As we continue to focus on improving customer experience, we inevitably start to look for ways to segment visitors into different groups either through data explicitly provided by the visitor or through insight inferred from the session and prior interaction data. We then apply the segmentation to customize visit experiences and target content.
  • Stage 4 – Individual customization: At some point, our ability to continually apply finer segmentation and impact results levels off. That’s when we start to apply individual-level web interaction data to customize online interactions.
  • Stage 5 – Integrated marketing: Of course, the holy grail of all of this is fully integrated and customer-centric marketing in which we seek to integrate insight from online behavior with what we know of an individual across other channels. And, we do this in order to inform and optimize all interactions – regardless of channel – with the individual.

The sad part of all of this is that few companies have matured their Web analytics capabilities beyond Stage 3. In fact, I’d estimate that 80% (not based on a quantitative study!) of firms are at Stage 1 or 2. Why? Well, it’s darn hard! There’s tons of data to wade through, the industry is learning as it goes, and the technologies that help marketers move up the curve are still pretty immature and poorly integrated.

So, how will this framework help?

Use the framework to understand where you are today and what you want to work towards and over what time frame. Each stage of maturity focuses on unique business objectives, requires a different level of analytical savvy, and demands different functional capabilities from your supporting marketing technology.

Over the next several weeks, I will continue to drill down on this topic with additional posts. Please add to the discussion by commenting and providing feedback on the blog or feel free to contact me directly.

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