Systems of Engagement
Consumerization is the reorientation of product, service and experience designs to focus on (and market to) the end user as an individual consumer. Although consumerization has existed for decades in retail industry, it’s now taking center-stage with digital across multiple industries as it enables a more acute focus on IWWIWWIWI or I Want What I Want When I Want It.
It is widely accepted that exceptional digital experiences attract customers. Superb engagement and interaction across consumer touchpoints builds relationships. Relationships build brands, sales and revenue.
The primary impact of consumerization is that it is forcing B2C, B2B and even B2B2C businesses, especially large enterprises, to rethink the way they can stay relevant. To enable “consumerization”, the critical strategic questions facing senior management are:
- What platforms and capabilities will help you create meaningful communication and individual relationships at scale?
- What platforms (systems of engagement) allow you to integrate around the customer lifecycle and engagement points?
- What data and analytics (systems of insights/intelligence) do you need to create the experiences and outcomes you want
- What about new “Systems that Learn” – Cognitive computing – that is powered by Machine Learning and AI? From bots and agents to voice and IoT interfaces, applied AI is transforming customer engagement using machine learning, NLP, Tensorflow, and more.
Transactions to engagement… There is continued shift away from transactional marketing, with a ‘click’ at the point of interaction to a new era of engagement marketing, where marketers focus on engaging people on a personal level, continuously over time, and across all channels and touchpoints.
Systems of Record to Systems of Engagement and Insights… The next generation of smart marketing, sales, commerce and service requires new platforms (“systems of engagement”) that includes a unified set of capabilities spanning a wide variety of channels, facilitates coherent targeted communications over time, and captures demographic and deep behavioral information about prospects and customers in “systems of record” to facilitate longitudinal relationship building.
Customer Journeys matter… Furthermore, the increasingly central role of customer lifecycle and journey management is leading organizations to demand marketing and sales software solutions that can accurately manage and analyze marketing and sales effectiveness, measure ROI in marketing and enable more efficient allocation of B2B and B2C marketing budgets.
Systems of Engagement Trends
The spend is staggering: marketing expenditures total $1 trillon globally. But three out of four CEOs agree: marketers “are always asking for more money, but can rarely explain how much incremental business this money will generate.” Just 18% of marketers have a single view of the customer…but it is considered a top priority for future investment. Less than 10% of marketers use their data in a systematic way.
The problem is getting worse. The growth of self-directed buyers, the need for organizations to effectively engage in dynamic, personalized interactions with prospects and customers, the inadequacies of existing marketing, sales and service software platforms, and data management tools have created a significant execution gap. This gap has created a massive opportunity for new Multi-Channel Systems of Engagement platforms to support the consumerization trend.
Some of drivers of this shift to new multi-channel “systems of engagement” platforms include:
- Consumerism – the rise of the self-directed, social and mobile buyer
- Millennial and digital natives –
- Integrated customer lifecycle management
- New Requirements of Digital Marketing
- Inadequacies of current CRM platforms
Consumerism – The Rise of the Self-Directed, Social and Mobile Buyer
People are not using Uber or Airbnb because of the technology. They are using it because it takes away the hassle.
The manner in which well-informed, independent consumers obtain information and make decisions about purchases of goods and services is undergoing a dramatic transformation. Today’s buyers are interacting with brands on-the-go on their mobile devices and communicating via many channels, it is critical that brands be where their customers are.
Buyers are increasingly self-directed in their purchase decision making. They spend more time gathering information across a number of digital channels, including search engines, company websites, blogs, online product reviews and social networks. At the same time, they can easily opt out of or ignore unwanted marketing communications. As a result, buyers today often form brand perceptions and make significant purchasing decisions based on online research and prior to or without any direct contact with a salesperson or evaluating a product in a retail setting.
The growing use of social networks and adoption of mobile devices is further accelerating the change in how people make purchase decisions. Social networks enable easy sharing of recommendations and solicitation of feedback from trusted sources. They also enable providers of goods and services to engage with buyers in an interactive dialog that can amplify marketing messages as people share information with others in their network. Mobile devices make information easy to access anytime and anywhere, expanding the ease and frequency with which consumers access online information.
These trends are transforming both B2C and B2B purchasing processes. For example, buying a house historically entailed the prospective buyer visiting various open houses to look at, learn about homes, neighborhoods before making a purchase decision. Today, consumers have access to incredible amount of online information that guides and influences their pre-purchase decisions. Similarly, business buyers evaluating prospective vendors turn to online resources and social media to help with their decisions. Even customers evaluating sophisticated multi-million dollar industrial equipment are likely to use social networks and blogs to seek information such as reviews, pricing and discount terms from other customers before negotiating a purchase contract.
In summary, the self-directed buyer expects to be able to access relevant information such as price, reviews, model numbers, configuration data and comparison charts across a diverse set of communications channels and from trusted third parties (e.g., key opinion leaders) well in advance of their actual purchase decision.
The consumer migration towards mobile and the response by retailers is shown below (source: BusinessInsider)
Integrated Customer Lifecycle Engagement – Personalization, 1:1 Targeting
As a result of the rise of the self-directed, well-informed, independent buyer, marketers are being pushed to change how they engage with customers across online and offline touchpoints and throughout the entire customer lifecycle.
In virtually every industry, it is the responsibility of the marketer to create, curate and publish information about their products and services. Moreover, the marketer is tasked with managing all digital and social channels that buyers use to find information about their products and services. Given this responsibility, marketing departments are being asked to take a much larger, more direct role in influencing and communicating with prospects and customers.
It is no longer sufficient for marketers to simply push static information to buyers in a mass advertising model. They must utilize new relationship-building strategies and tools to engage individually and personally with prospects and customers over the course of their self-directed decision making process; and, after the initial purchase is made, to foster retention, renewal, and maximum customer lifetime value.
Increasing usage of digital channels offers opportunities to aggregate a significant and ever growing amount of information about prospects and customers and their path to purchase. In addition to demographic data, this information includes unstructured and diverse behavioral data such as purchase history, website visits, video consumption, app and document downloads, telephonic and email inquiries and social network activity. This presents an opportunity to capture, analyze and leverage this information to deliver timely and relevant messages to their targeted audiences and to enable their salespeople to focus on their most promising opportunities.
The ability to effectively leverage behavioral data and engage with prospects and customers in a more personalized fashion over time can empower marketers to have a direct and measurable impact on revenue. Organizations are demanding that their marketers be more accountable for marketing spending and to be able to measure return on that spending. As a result, marketers are seeking tools that can help them keep track of expenditures across channels, campaigns and customer engagement lifecycles, and to measure, analyze and compare returns on that spending. As marketing measurement matures, organizations are increasingly able to move from thinking about “measuring marketing spending ” to thinking about “optimizing marketing investments in future revenue”.
New Requirements of Modern Digital Marketing
The rise of the self-directed buyer and the changing role of the marketer have led to the emergence of a modern approach to digital relationship marketing, which requires marketers to:
- Create and publish relevant and personalized content across multiple channels, including search engines, email, social media, online videos, and buying guides, to provide the information that buyers seek and expect in their decision making.
- Relevant real-time personalization to reduce people being blasted with generic content. Through innovations in real-time personalization, marketers are able to target and segment for a better user experience.
- Engage in a dialog with prospects and customers based on their actions and influence them throughout a long term relationship;
- Capture data about, analyze and respond to consumer behavior both online and offline to educate prospects, identify qualified buyers, and maximize customer lifetime value; and
- Closely integrate marketing activities, mobile and social listening capabilities and information with other parts of the organization, such as sales or call centers, to create a seamless experience for buyers.
When implemented effectively, modern relationship marketing can potentially enhance a firm’s ability to grow revenue, maximize return on investments in marketing and increase customer lifetime value.
Traditional CRM Tools Do Not Meet the Needs of Today’s Marketers
Traditional CRM tools are proving to be increasingly ineffective in meeting the demands of today’s marketers.
Many software tools have been developed to enable marketers to manage campaigns and communicate with prospects and customers. These tools include internally developed and commercial software for automation and management of certain marketing functions, such as email marketing and database marketing, as well as CRM software for sales professionals.
Current platform limitations include:
- Isolation by channel. Traditional marketing software tools have been designed to address single communication channels, such as mobile, social, email, or direct mail. Yet today’s buyers shift rapidly and continuously across different channels, engaging with email one moment, a web site the next and social media the next. As a result, existing software solutions cannot adequately address multi-channel customer engagement and do not comprehensively capture all the online and offline behavioral patterns that marketers need in order to know their customers.
- Ineffective use of data. Traditional marketing strategies and software tools primarily rely on targeting audiences based on demographics. However, demographic targeting alone ignores valuable information about immediate and historical buyer behavior that can be obtained by examining a buyer’s actions, or lack of actions, as they engage with content and trusted sources online and in social networks. As a result, with legacy tools marketers cannot build meaningful relationships with prospects and customers.
- Inability to allow dynamic and interactive one-to-one communication over time. Most commonly-used marketing software tools today primarily enable batch distribution of messages to defined populations of prospects and customers at a single point in time, such as an email or direct mail blast sent to a list of prospects or customers. They are not designed to establish and weave together evolving and customized two-way conversations between buyers and sellers over time and across channels. Legacy tools cannot adapt and respond to individual buyer actions in real time. As a result, marketers using traditional solutions are limited in their ability to have an interactive, dynamic and customized dialog with prospects and customers.
- Lack of effective integration with other enterprise systems and teams. Existing marketing software tools generally lack the ability to integrate seamlessly or affordably with other enterprise Thus, when buyer behavior changes, legacy systems do not effectively or in a timely manner trigger action in other parts of the organization such as sales or call centers. This often results in uncoordinated and less relevant communications with prospects and customers, and lost opportunities.
- Limited ability to measure results. Traditional marketing software tools have limited ability to track and measure over time the impact of marketing spending on revenue. Without a comprehensive, unified view of the impact of marketing spending across all of their channels and programs, marketers cannot compare relative effectiveness of their investments. As a result, marketers are challenged in how to allocate and re-allocate resources to the channels and methods that have the greatest positive impact on revenue.
- Difficult to implement and use. Traditional marketing software tools can be complex and difficult to learn, implement and use, requiring significant involvement of IT resources, extensive training and centralized expertise, thereby limiting the number of qualified users. This in turn constrains the productivity of marketing departments and delays time to value as marketers spend extra time managing technology tools instead of focusing on customer strategy and idea generation.
- Not addressed by CRM software. Traditional CRM systems have been designed primarily for the needs of salespeople and thus focus on sales execution workflow and the status of prospects at a point in time. These systems do not capture trends and changes in the behavior of prospects and customers over time, nor do they automate customer communication across various engagement channels. As a result, traditional CRM systems are not designed for marketers who need to engage with prospects and customers throughout their lifecycle.
Additional References and Notes
- The premise is universal…. Companies can leverage the power of the internet to improve the experience they deliver to their customers
- Systems of Engagement vs. Systems of Record