HBR: Obsess Over Your Customers, Not Your Rivals

“The brands that remove obstacles and encourage progress along their customers’ journeys are the ones that win repeat visits, repeat purchases, and word-of-mouth referrals” Are you removing obstacles in your customers’ journeys? What are your customers’ decision traps, pitfalls, friction spots, and quit points that they frequently encounter on their journeys? Below is a blog from the Harvard Business Review by Tara-Nicholle Nelson.

Obsess Over Your Customers, Not Your Rivals

The starting point of most competitive analysis is a question: Who is your competition? That’s because most companies view their competition as another brand, product, or service. But smart leaders and organizations go broader.

The question is not who your competition is but what it is. And the answer is this: Your competition is any and every obstacle your customers encounter along their journeys to solving the human, high-level problems your company exists to solve.

When I led marketing at MyFitnessPal and was asked about our competition, I think people always expected me to rattle off a list of other nutrition-tracking smartphone apps and weight-loss programs.

What I actually said was that we were on a mission to make it easier to live a healthy life than an unhealthy one. So our chief competition was anything that makes it harder to live a healthy life. This included biology (fat tastes good, sugar is delicious, and our brains are wired to want more of both); mindless eating; and the billion-dollar advertising and marketing budgets of companies that make fast food, junk food, and processed food. Our competition was the fact that in many situations healthy food is actually more expensive and less convenient than unhealthy food is.

If we had viewed Weight Watchers as our competition, we probably would have spent a lot of time trying to do what it does, just a little better. Maybe we would have raised money to get more-famous celebrity spokespeople, or tried to come up with some sort of next-generation points system.

Sure, someone in your company needs to understand the marketplace: who your competition is, what other products are on the market, and how they are doing, at a basic level. But there’s a point at which paying attention to other companies and what they’re doing interferes with your team’s ability to immerse itself in the world of your consumer. Focusing on competitive products and companies often leads to “me-too” products, which purport to compete with or iterate on something that customers might not have liked much in the first place.

In my recent study of over 2,000 consumers, over 50% of them said that they use digital and real-world products and content at least three times a week in an effort to achieve their goals around living healthier, wealthier, and wiser. The brands that remove obstacles and encourage progress along their customers’ journeys are the ones that win repeat visits, repeat purchases, and word-of-mouth referrals.

Once you’ve redefined your competition as your customers’ obstacles, it’s relatively easy to stop propagandizing the war with another product or company. Stop setting goals by reference to other companies. Minimize how much meeting time is devoted to talking about rival companies and products. Discourage product design approaches that focus on assessing or iterating on what is already out there.

Instead, reinvest your team’s time and effort. Here’s how.

First, rethink what you sell. Most companies think they sell a product. To transcend strictly one-time, transactional relationships with your customers, your company must think about selling a transformation: a journey from a problematic status quo to the new levels and possibilities that will unfurl after the behavior change you help make happen.

A real-estate search engine might actually “sell” wise decision making, through the process of making the largest transaction their customers will ever make. CVS Health “sells,” well, health.

Next, rethink your customers. They are not just the people who have purchased your product or the people who follow you on Facebook. Your customers are all the people who grapple with the problem your business exists to solve.

Now, focus on their problems. Engage in customer research, online and in the real world, to understand and document their journeys. I don’t mean their customer life cycle with your brand. Map out your (redefined) customer’s journey from having the problem you exist to solve to no longer having that problem. That may be the journey from unhealthy to healthy living, or from being broke to being a good steward of their finances.

One of the most important takeaways from your customer insights research should be a deep understanding of the decision traps, pitfalls, friction spots, and quit points that people frequently encounter on their journeys. Look to user data, surveys, ethnographic research, online listening, subject matter experts, and even third-party data to discover roadblocks. Use this information to do a continuous “competitive analysis”:

  • Understand the obstacles your customers face
  • Learn how and where people get stuck
  • Solve those problems
  • Understand how people overcome the obstacles and get unstuck
  • Understand what stops others from achieving this success
  • Solve those problems
  • And so on

Here’s the “competition” rubric we operated under at MyFitnessPal:

Competition is: Everything that makes it harder for people to live a healthy life rather than an unhealthy one.

More specifically: Biology, food autopilot, the cost of healthy food, the tastiness and convenience of unhealthy food, and everything that makes it hard to build healthy habits such as food tracking and home cooking.

Innovations driven by obstacle-as-competition insight:

  • In-app bar code scanner to make it easy to track packaged foods
  • Massive food database, so users never have to enter nutritional data
  • Social features and challenges for support, accountability, and competition
  • Recipe-logging features for home-cooked meals
  • Content, marketing, and PR campaigns featuring user success stories, advice on making and breaking habits, cost-effective recipes and cooking tutorials, and other messages tailored to remove the frictions commonly encountered on the journey from unhealthy to healthy.

And it’s working. People who have even a single friend on MyFitnessPal lose twice as much weight as people who don’t use the app’s social features. MyFitnessPal users who log home-cooked recipes lose 40% more weight than those who don’t. The bar code scanner and food database are consistently mentioned by users who have lost weight despite having been unsuccessful with all manner of diets before. And over 120 million people worldwide now use the platform.

Amazon CEO Jeff Bezos once said, “If we can keep our competitors focused on us while we stay focused on the customer, ultimately we’ll turn out all right.” I take this one step further: If you can stay focused on eliminating the obstacles along your customers’ journeys, your company will turn out much more than all right.

HBR: What Most Companies Miss About Customer Lifetime Value

Are you measuring your customers’ lifetime value? Are you investing in and enabling customer capabilities? Below is a blog from the Harvard Business Review by Michael Schrage.

What Most Companies Miss About Customer Lifetime Value

For managers and marketers alike, the power to calculate what customers might be worth is alluring. That’s what makes customer lifetime value (CLV) so popular in so many industries. CLV brings both quantitative rigor and long-term perspective to customer acquisition and relationships.

“Rather than thinking about how you can acquire a lot of customers and how cheaply you can do so,” one marketing guide observes, “CLV helps you think about how to optimize your acquisition spending for maximum value rather than minimum cost.” By imposing economic discipline, ruthlessly prioritizing segmentation, retention, and monetization, the metric assures future customer profitability is top of mind.

For all its impressive strengths, however, CLV suffers from a crippling flaw that blurs its declared focus. The problem is far more insidious than those articulated in venture capitalist Bill Gurley’s thoughtful CLV vivisection. In fact, it subverts how customers truly become more valuable over time.

When my book Who Do You Want Your Customer To Become? was published, five years ago, its insight was that making customers better makes better customers. While delighting customers and meeting their needs remain important, they’re not enough for a lifetime. Innovation must be seen as an investment in the human capital and capabilities of customers.

Consequently, serious customer lifetime value metrics should measure how effectively innovation investment increases customer health and wealth. Successful innovations make customers more valuable. That’s as true for Amazon, Alibaba, and Apple as for Facebook, Google, and Netflix. No one would dare argue that these innovators don’t understand, appreciate, or practice a CLV sensibility.

Pushing organizations to rethink how they add value to their customers stimulates enormously productive discussion. A fast, cheap, and easy exercise for clarifying the innovation investment approach emerged when I operationalized my book’s principles. The simple but provocative tool generates actionable insights. Having facilitated scores of workshops around it worldwide, I know it gets results.

Ask people to complete this sentence: ”Our customers become much more valuable when…”

The immediate answers tend to be predictable and obvious. For example, customers become much more valuable when “they buy more of our stuff” or “they pay more” or “they reliably come back to us” or “they’re loyal to our brand.”

There are no prizes for recognizing that these initial responses reflect the variables that go into computing traditional CLVs. While everyone agrees these things are important, participants in the exercise quickly recognize how limited, and limiting, those instant answers are.

It doesn’t take long before the answers start to incorporate an investment ethos that sees customers more as value-creating partners than as value-extraction targets. For example:

Our customers become much more valuable when…

  • they give us good ideas
  • they evangelize for us on social media
  • they reduce our costs
  • they collaborate with us
  • they try our new products
  • they introduce us to their customers
  • they share their data with us

Almost without exception, these follow-on answers are disconnected from how the firm calculates customer lifetime value. But, almost without exception, these responses push people to revisit and rethink how customer value should be measured. At one company the immediate response was to look for correlations between CLV and net promoter score. At another, the conversation led to discovering a core group of top-quintile CLV clients, who served as essential references for closing deals with firms identified as top-decile CLV clients. Those reference firms instantly won renewed attention and special treatment.

The more diverse and detailed the answers, the more innovative and insightful the customer investment. The most-productive conversations came from cross-functional, collaborative interaction — not just from marketing, R&D, or business unit leaderships.

For example, for a global industrial equipment provider, customers became more valuable when they performed more self-service diagnostics and shared that information with the firm. That led directly to the firm’s technical services teams offering cloud-connecting APIs and SDKs that let customers customize remote diagnostic gateways for their equipment. Customers embracing self-diagnostics inherently boosted their CLV. Not incidentally, information access swiftly redefined how the company qualified prospects and computed lifetime customer value.

By investing in and enabling new customer capabilities, firms create new ways for customers to increase their lifetime value. Making customers better truly does make for better customers.

But in keeping with the segmentation spirit of CLV, the question can easily be edited and modified to produce targeted insights. For example, at one workshop we used two versions of the sentence: “Our best customers become much more valuable when…” and “Our typical customers become much more valuable when…”

The innovation investment insights for one’s best customers proved qualitatively and quantitatively different from those for one’s typical customers. Forcing people to rigorously define the distinctions between typical and best frequently leads to even greater creativity around customer value.

My favorite CLV vignette emerged from a session at a global financial services giant in London. As the responses grew longer, richer, and more detailed, one of the participants called attention to an interesting fact. Some of the answers, he observed, began with “we,” as in, “Our customers become much more valuable when we do something.” The others, however, began with “they,” as in, “Our customers become much more valuable when they do something.”

“What is the difference between the potential customer lifetime value when we do something versus when they do it?” he asked. After a few moments of silence, the conversation went to a whole other level of engagement, around how the firm wanted to engage with and invest in its customers.

The best investment you can make in measuring customer lifetime value is to make sure you’re investing in your customers’ lifetime value.

HBR: What Creativity in Marketing Looks Like Today

“The changes happening in consumer behavior, technology, and media are redefining the nature of creativity in marketing. Do these changing roles require a new way of thinking about creativity in marketing?” Below is a blog from the Harvard Business Review by Mark Bonchek and Cara France:

What Creativity in Marketing Looks Like Today

What makes marketing creative? Is it more imagination or innovation? Is a creative marketer more artist or entrepreneur? Historically, the term “marketing creative” has been associated with the words and pictures that go into ad campaigns. But marketing, like other corporate functions, has become more complex and rigorous. Marketers need to master data analytics, customer experience, and product design. Do these changing roles require a new way of thinking about creativity in marketing?

To explore this question, we interviewed senior marketing executives across dozens of top brands. We asked them for examples of creativity in marketing that go beyond ad campaigns and deliver tangible value to the business. Their stories — and the five wider trends they reflect — help illustrate what it means to be a creative marketer today.

  1. Create with the customer, not just for the customer

Everyone likes to talk about being “customer-centric.” But too often this means taking better aim with targeted campaigns. Customers today are not just consumers; they are also creators, developing content and ideas — and encountering challenges — right along with you. Creativity in marketing requires working with customers right from the start to weave their experiences with your efforts to expand your company’s reach.

For example, Intuit’s marketing team spends time with self-employed people in their homes and offices to immerse themselves in the customer’s world. Through this research, they identified a pain point of tracking vehicle gas mileage. Based on these marketing insights, Intuit created a new feature within its app that combines location data, Google maps, and the user’s calendar to automatically track mileage and simplify year-end tax planning.

Brocade, a data and network solutions provider, created a “customer first” program by identifying their top 200 customers, who account for 80% of their sales. They worked with these customers to understand their sources of satisfaction and identify areas of strengths and weakness. Brocade then worked with sales teams to create and deliver customized packages outlining what Brocade heard is working or not working, and what they would do about those findings. Later, Brocade followed up with these customers to report on progress against these objectives. The results? Brocade’s Net Promoter Score went from 50 (already a best in class score) to 62 (one of the highest B2B scores on record) within 18 months.

  1. Invest in the end-to-end experience

Every marketer believes the customer experience is important. But most marketers only focus on the parts of that experience under their direct control. Creative marketers take a broader view and pay attention to the entire customer experience from end to end. This includes the product, the buying process, the ability to provide support, and customer relationships over time. That takes time and resources – and it also requires bringing creative thinking to unfamiliar problems.

Kaiser Permanente believes that as health care becomes more consumer-oriented, the digital experience becomes a key differentiator. The marketing team instituted a welcome program to help improve the experience for new plan members. Members are guided on how to register for an online member portal, which provides access to email your doctor, refill prescriptions, make appointments, and more. The welcome program required coordination with many areas of the business. As a result of this program, about 60% of new members register within the first six months. These members are 2.6 times more likely to stay with Kaiser Permanente two years later.

Like many retailers, Macy’s has traditionally spent 85% of its marketing budget on driving sales. Each outbound communication is measured individually for immediate ROI. However, recently they began to take a more holistic approach, focusing on lifetime value and their most profitable segment, the “fashionable spender.” This group looks across the business to gather behind-the-scenes information on the runway, newest clothing lines, and aspirational fashion content. The metrics also changed. Macy’s started evaluating engagement per customer across time and platform instead of per marketing message per day. The results? In the last year, customers in the top decile segment increased digital engagement by 15%, cross shopping by 11% and sales by 8%.

  1. Turn everyone into an advocate

In a fragmented media and social landscape, marketers can no longer reach their goals for awareness and reputation just through paid media and PR. People are the new channel. The way to amplify impact is by inspiring creativity in others. Treat everyone as an extension of your marketing team: employees, partners, and even customers.

Plum Organics gives each employee business cards with coupons attached. While shopping, all employees are encouraged to observe consumers shopping the baby category. When appropriate, they ask a few questions about shoppers’ baby food preferences and share business cards with coupons for free products as a gesture of appreciation.

For Equinix, surveys revealed that a third of employees were not confident explaining its company story. The company introduced an internal ambassador program for its more than 6,000 employees. This program gives employees across all disciplines and levels tools to educate them on the company, its culture, products and services, and how they solve its customer’s needs. More than 20% of employees took the training online or in workshops in the first few months of the program, and employee submissions to its sales lead and job candidate referral programs were up 43% and 19% respectively.

Old Navy has traditionally dedicated their media budget to TV, particularly around back to school. However, over the past few years, they’ve focused on digital content to engage kids around positive life experiences and giving back. Through this approach, the 2016 #MySquadContest led to 32,000 kids sharing their “squads” of friends for a chance to win an epic day with their favorite influencer, creating 3 million video views, a 60% increase in social conversation about @OldNavy, and a 600% increased likelihood of recommending Old Navy to a friend (versus those that viewed TV ads only). In addition, the program led to record breaking donations for their partner, The Boys & Girls Club.

  1. Bring creativity to measurement

The measurability of digital engagement means we can now know exactly what’s working and not working. This gives marketing an opportunity to measure and manage itself in new ways. In the past, marketing measured success by sticking to budgets and winning creative awards. Today, the ability to measure data and adjust strategies in real-time enables marketing to prove its value to the business in entirely new ways.

Cisco has created a real-time, online dashboard where the entire marketing organization can look at performance. The leadership team conducts a weekly evaluation to assess, “Is what we’re doing working?” This analysis can be done across different digital initiatives, geographies, channels, or even individual pieces of content. The result is an ability to quickly adjust and re-allocate resources.

Zscaler, a cloud-based security platform for businesses, created a Value Management Office. The Office helps each client define, quantify, and track their unique business goals associated with Zscaler implementation. Zscaler and their clients hold each other accountable to specific, measurable, time-based results.

OpenTable recently launched a companion app just for restaurants to make better use of the data they’ve been collecting through their reservation system. Restauranteurs can now get a handle on their business right from their smartphone, allowing them to easily answer questions like “How did your last shift perform?” The app can tell them if they are running light on bookings, and soon they’ll be able to activate marketing campaigns to increase same day reservations. More than 50% of restaurant customers on OpenTable’s cloud-based service are already using the app, visiting an average of 9 times a day, 7 days a week.

  1. Think like a startup

In the past, marketers needed to be effective managers, setting goals well in advance and then working within budget to achieve those goals. Today, creative marketers need to operate more like entrepreneurs, continuously adjusting to sustain “product/market fit.”

The start-up Checkr represents a trend we are seeing more of in the Bay Area in particular. Marketers are adopting the business practices of entrepreneurs such as lean startup and agile development. For its background check solution, Checkr wasn’t getting the results it wanted from traditional sales and marketing tactics as it expanded into new market segments. They realized they had to think beyond marketing as promoting an existing product. Adopting an agile method of customer testing and rapid iteration, they worked with engineering to rethink the product and bring a “minimum viable product” to market for these new buyers. As a result of this integrated, agile approach, the company easily hit some early 2017 revenue targets with conversion rates that are four times what is traditionally seen in the industry.

 

The changes happening in consumer behavior, technology, and media are redefining the nature of creativity in marketing. The measure of marketing success isn’t the input, whether that’s the quality of a piece of content or a campaign, but rather the value of the output, whether that’s revenue, loyalty, or advocacy. Marketers of the past thought like artists, managers, and promoters. Today’s marketers need to push themselves to think more like innovators and entrepreneurs — creating enterprise value by engaging the whole organization, looking out for the entire customer experience, using data to make decisions, and measuring effectiveness based on business results.

 

 

Original Page: https://hbr.org/2017/03/what-creativity-in-marketing-looks-like-today

 

 

HBR: The Value in Wowing Your Customers

Are you using the Net Promoter system? I would like to hear about your “WOW!” moment. Below is a blog from the Harvard Business Review by Fred Reichheld.

The Value in Wowing Your Customers

A friend of mine in Dallas loves the local Chick-fil-A restaurant. The reason? An employee named Jose once asked my friend’s three-year-old to help with the mopping — and proceeded to give the boy a ride around the restaurant on the mop. For my friend, this was a “wow!” experience, the kind of out-of-the-ordinary event that you want to tell people about — and that inspires you to recommend the business that provided it.

One of my favorite examples of this happened at Rackspace, the managed hosting and cloud computing company. An employee on the phone with a customer during a marathon troubleshooting session heard the customer tell someone in the background that they were getting hungry. As she tells it, “So I put them on hold, and I ordered them a pizza. About 30 minutes later we were still on the phone, and there was a knock on their door. I told them to go answer it because it was pizza! They were so excited.”

I’d have been pretty excited, too, if I were that hungry customer. Another “wow!” moment.

Maybe you noticed something about these wows: They don’t cost much. I call them “frugal wows.” A company that brings a smile to the face of its customers in this manner builds a huge reservoir of goodwill and positive word of mouth at very little expense.

Why would an employee make that kind of a gesture? No doubt the individuals involved are good-hearted folks. Doing well by others makes them happy. But there are plenty of equally good-hearted people in other companies who would never think to offer something extra to a customer. It just wouldn’t occur to them to go beyond their usual duties.

What distinguishes Chick-fil-A and Rackspace is that both companies have created what might be called a “Golden Rule” culture. Employees treat customers as they would like to be treated if they were in the customers’ shoes. Rackspace calls it “Fanatical Support” and views it as a cornerstone of the company’s competitive advantage. As I mentioned in an earlier post, Chick-fil-A CEO Dan Cathy says, “We strive to deliver something for which there is unlimited demand — being treated with honor and respect.”

Both companies regularly survey customers using the Net Promoter system. They disseminate the scores and responses throughout the organization. They follow up with unhappy customers, and they make a point of acting on the feedback they receive. In other words, they take their commitment seriously.

So it’s hardly surprising that employees of these companies would come up with imaginative ways to wow the people they serve. It isn’t only their own good-heartedness or their personal commitment to the Golden Rule — they know that’s what their employer values as well. And they know that their actions will ripple outward through the recommendations their customers provide.

Barbara Talbott, the retired head of marketing for the Four Seasons, tells the story of acts of intelligent kindness: a pot of tea delivered gratis to the room of a guest with a bad cold, a vaporizer for a mother with a croupy child, and so on.

Her point is that if you hire good employees, they will seek out opportunities to be kind. They know that when the line at the front desk is five deep, then they must be intelligent and move the line expeditiously, but if there is no crowd, then that is the time to add a little flare and conversation.

All this sheds light on the ongoing conversation about employee happiness. Most people are happiest when they get a chance to do something that others truly value — when they can act according to their best instincts. More and more companies are making sure that they support those instincts with the right team structures, leaders, tools, and training. And they put in place systems that give employees immediate feedback about how they have enriched a customer’s life — or why they fell short and how to fix it.

For an employee, that support is likely to mean a chance to make a real difference in the life of a customer. How fitting that the employee’s company gains from this as well.

 

Detroit Hustle

 

This memoir is a quick read; Detroit Hustle: A Memoir of Love, Life & Home by Amy Haimerl. She writes about her dad’s advice on contractors. Below is an excerpt from the book:

Detroit HustleDetroit Hustle.jpg

Contractors, he said, have a right to feed their families. Don’t look for cheap; seek quality work at a fair price. That is so important that Dad had this bit of philosophy inscribed on the back of his Bear Excavating business cards: “The bitterness of poor quality and workmanship remains long after the sweetness of the low bid is forgotten.” I remember reading that as a kid, and it’s always stuck with me. Be direct and decisive, he added. Know your budget and be honest about it. Pay on time. Look for someone who is a partner, who asks good questions and seems to care about the answers. Look for someone who can make suggestions and offer alternatives. Go with your gut and understand that your contractor is worth every dime because that’s the person who will make the project either a dream or a nightmare. You’re going to be more married to them, he tells me, than to Karl. Finally, make sure they are bonded and insured

HBR: Know the Job Your Product Was Hired for (with Help from Customer Selfies)

Are you focusing on the wrong thing? Are you creating customer stories from what your customers are designing and building? Below is a blog from the Harvard Business Review by Clayton M. Christensen and Bob Moesta.

Know the Job Your Product Was Hired for (with Help from Customer Selfies)


In what world is a Snickers bar competing with a kale salad?

When a healthy fast food chain recently asked customers to share selfies of them posing with healthy, on-the-go snacks, it received some unexpected pictures – including ones of customers holding Snickers bars. “We focus on organics and cool new macronutrients, and our consumers are into quinoa and kale and bean sprouts,” Alex Blair, who owns four franchises of Freshii, a Toronto-based chain of healthy fast-food outlets, told the New York Times. “But some of these photos were so far from that wavelength, it’s really helping us kind of realign with the mass market.”

True customer insights – the kind that can drive breakthrough innovations — come from these kinds of surprising individual stories. Classic market research would tell us that most of us aspire to make healthier eating choices – but the subtleties of when and why we actually do (or don’t) tell a far more important story to marketers. A Snickers bar might be a perfectly acceptable (even preferable) alternative to a kale salad when you’re running through the airport trying to catch your plane. Or you’re about to jump into a game of pickup basketball and your stomach is growling. Those kinds of use cases can even frustrate sophisticated data-mining techniques.

Over the past two decades, we’ve watched great companies fail time and again with innovation – and waste billions on go-nowhere R&D efforts — because they’re focusing on the wrong things. Rather than looking at specific customer use-cases, they chase the false sense of security offered sophisticated algorithms or market surveys, or they focus on technical improvements rather than customer needs.

Yet customers make the choices they make to bring a product or service into their lives not because they’re dying to purchase something, but because they have what we call a “Job to Be Done” that arises in their lives. They’re struggling to make progress with something – in particular circumstances.

Jobs to Be Done are, like customer stories, complex, and nuanced. To create products and services that customers want to pull into their lives, you have to identify not only the functional, but also the social and emotional dimensions of the progress your customers are trying to make. This means both drilling deep and looking wide; even the most experienced innovators can miss rich opportunities that are buried in the context of understanding a job if their focus is too narrow.

Great customer insights reveal the unexpected. Though it’s a nascent practice, the use of customer selfies is an attempt to get at the real “job” customers are hiring products to do. The idea is that selfies provide clues that bridge the gap between what customers say and what they actually do. Customers might unknowingly reveal something authentic and true about themselves through the simplicity of the choices they make in a selfie – and even provide insight into how they perceive the product and its potential competitors.

Of course, a selfie is far from a candid ethnographic moment. It’s a specific picture, with a specific composition, that the subject has chosen not only to take, but to share. By its very nature, it depicts how that person wants to be seen by others. But that, too, can provide valuable clues for piecing together a full picture of a customer’s Job to be Done. Both business strategies and academic theories are built – and made stronger – by our ability to recognize things that we cannot yet explain.

Many of these surprising or even anomalous use-cases can serve as a useful wake-up call — to an overlooked opportunity or a flawed assumption. When a consumer shows us an image of how they might hire kale in one circumstance and Snickers in another, it challenges us to think differently about how our products help customers make the progress they seek – not just what we expect them to seek — in their lives.

 

HBR: Getting More-Granular Data on Customer Journeys

Does your company have customer journey maps (CJM)? Are you following the Yellow Brick Road to the finish line?  Below is a blog from the Harvard Business Review by Deren Baker.

Getting More-Granular Data on Customer Journeys

Dating site Zoosk boasts 35 million users, but that number doesn’t tell the whole story — its members are playing the field with Zoosk as much as they are with their suitors. My company analyzed the online habits of people on popular dating sites, and while Zoosk users tend to be younger and fitter, they’re also 11.4 times more likely to search for other dating sites.

For Zoosk, that’s not just trivia or fodder for ad placements. It’s crucial insight into who the site’s customers are, what they do on other sites, and — most importantly — the journey they’re taking to Zoosk’s front door.

Companies typically build customer journey maps (CJMs) based on surveys, in-store activity, and users’ interactions on the brand website and app. But if you’re only watching users reach the finish line, you’re missing most of the race. To effectively target customers, you need to know what they’re doing before, during, and after their interactions with you.

While brands’ CJMs rely heavily on customer satisfaction surveys, surveys are notoriously unreliable, skewed by low participation rates, biased questions, and unreliable responses. In fact, high customer satisfaction scores may be the proverbial calm before the storm: Research shows 60-80 percent of customers claim to be satisfied with their banks right before they defect — a trend that holds across industries.

Even if surveys were useful, they couldn’t help you create meaningful customer personas. Nor can traditional site analytics, the other tool in most brands’ CJM tool kits. And without a holistic view of customers’ activities, it’s easy to make embarrassing assumptions.

Take a 2014 faux pas committed by Pinterest. Based on users’ pins, it sent congratulatory emails to individuals who had recently gotten engaged. In reality, it turned out many weren’t even in relationships, and they blasted Pinterest’s presumptuousness on social media. It was a real pie- (or wedding cake) in-the-face moment for the social media brand.

Had Pinterest not relied exclusively on its own site data, it might have deduced that these weren’t brides-to-be. As it learned the hard way, fragmented snapshots of customers’ online activities are just that: snapshots.

Mapping a customer journey is much like storyboarding. No single frame can make characters come alive; only a deep understanding of your customers can lead you from board to board, sketching out the adventure they take to your brand.

But what happens when your characters jump out of the frame and into a competitor’s world? Studies show that brands’ best customers routinely flirt with competitors. Even in the DIY home improvement industry — a sector with outstanding loyalty rates — companies’ top customers spend nearly 25 percent of their budget with other DIY businesses.

Traditional approaches to CJM are too limited to be effective, but you can build more meaningful maps:

Reverse-engineer social media remarketing. Customer matching services, such as those offered by Twitter and Facebook, enable you to create lookalike audiences that tell ad platforms which customers to target. Use these to determine whether — and how — social media plays a part in customers’ journeys.

Perhaps you’ve defined “people who’ve visited my website via mobile” as a group that should receive remarketing ads from Facebook and Twitter. Let’s say mobile users continuously land on your product page from Facebook, but not from Twitter. Facebook is an essential stop along your customers’ journeys, but Twitter isn’t. As a result, you might scrap your Twitter campaign and focus on Facebook.

Recruit some brand detectives. Consumers’ trust in brands is at an all-time low, which is a big reason survey feedback isn’t useful. But there’s another tool at your disposal that makes the most of consumers’ trust in their peers: social media influencers. People let their guard down around personalities they trust, and tools such as BuzzSumo and Klout can identify bloggers who’ll go underground for your brand.

Choose influencers in spheres where followers are likely to be familiar with your company. If you’re a restaurant brand, for instance, look to food and beverage influencers. Ask followers’ opinions: Have they bought from you in the past? Did they order online or go to a physical store? What led them to choose you over a competitor?

Follow the Yellow Click Road. Clickstream analysis indicates where people were before they arrived on a site, what they did on that site, and where they’re headed after they leave. Some offer audience features that lend insight into site visitors’ geographic location, age, sex, and education level. Others get even more granular and offer entire path-to-purchase data and behavioral segmentation based on click activity.

Couple demographic insights with information gleaned from clickstreams — such as customers’ interests, social media habits, and purchase behavior — to create a truer “typical customer” persona. With a broad view of your customers’ lives, you can create more relevant messaging.

Hitch a ride with ad retargeting. When we analyzed back-to-school shopping activity, we learned that consumers click through an average of five websites per Google search before they buy. To determine which competitors your customers are befriending, integrate cookies or tracking pixels into your ads.

If Staples, for instance, wanted to know where its customers searched for laptops, so it could retarget laptop ads to follow customers elsewhere online. Some users — say, on Best Buy’s or Target’s site — will click, returning to Staples’ website from competitors’ pages. Taken in aggregate, this tells Staples which brands are its top competitors.

Customer journey mapping was once a simple endeavor — a customer might see your TV ad and drive to your store. Since e-commerce has reached its zenith, however, the customer journey is no longer a straight road: It’s a circuitous web, taking customers from social media to your site to competitors’ sites and back again.

To truly connect with customers, you can’t rely on survey data or back-end web analytics. If your brand wants to be their final destination, it needs a new storyboard that includes every part of the story.