A traveler arrives in a foreign country and attempts to use his credit card to make a purchase. It is the same card he used to buy the plane ticket and book the hotel. While this would seem sufficient to alert the bank to his impending trip abroad, “transaction denied” flashes across the terminal screen, leaving this longtime customer stranded, fuming, and no longer so loyal.
This all-too-familiar story illustrates the challenge facing companies — especially customer-facing companies. Customer journeys today are a complex series of interactions across multiple channels and platforms, where each point of contact has the potential to encourage the sale or derail it entirely. Coordinating the infrastructure, technology, and messaging in a way that appears seamless and fluid to the customer is, to be blunt, a logistical nightmare.
But getting it right pays off. Delivering great journeys can boost revenues 10 to 15 percent, lower service costs 10 to 20 percent, and increase employee engagement 20 to 30 percent. (For further convincing, see the HBR article, “The Truth About Customer Experience.”) Delivering a consistent experience on the most common customer journeys is an important predictor of overall customer experience and loyalty. We have also found that improving customer experience from average to “wow” is worth a 30 to 50 percent improvement in “likelihood to remain/renew” and “likelihood to buy another product.”
Despite these opportunities, companies have been slow to respond to the customer journey imperative in an organized way. Executives focus on optimizing discrete touchpoints rather than improving the complete customer experience. This is like treating a symptom without bothering to find the cure.
The CMO and COO are the natural partners for turning this around. As Jo Coombs, Managing Director at OgilvyOne, London, observes, “I don’t think it can just be one or the other. If it’s all about the operations then you lose sight of the customer. If it’s all about the customer, then you may not have the infrastructure and back-end to support what you’re trying to do.”
While the CMO and COO have a good track record of collaborating in certain areas, a certain tension has long defined the relationship. Here are our recommendations for how CMOs and COOs can develop a more collaborative working relationship:
1. Develop a shared vocabulary and shared metrics.
When CMOs and COOs talk about the customer decision journey, that language needs to be translated into metrics and key performance indicators (KPIs) that more accurately measure progress. For example, a call center may pride itself on completing X percentage of service calls within 30 seconds, but that’s not a valuable metric for determining overall customer satisfaction – or what the customer then does after that service interaction. The better metric would measure the percentage of calls that were made and required no additional follow up.
Rather than measuring marketing KPIs or operations KPIs, focus instead on the more customer-oriented journey KPIs, such as lifetime margin. On the operations side, metrics should not focus on how quickly the call center can address customer issues, but rather on how successful the call center is at eliminating follow-up calls or how successfully it isolates the root causes of customer complaints.
Once the drivers of the costs of the journey are understood, marketing can work with operations to address them. For instance, at a major bank, the operations group reviewed data on the cost to serve customers and found that certain types of customer acquisition efforts yielded less profitable customers. Based on this data, operations recommended marketing cease actively trying to acquire these customers. This required a change in the media buy metrics to focus on “likely margin” versus “likely sales.”
2. Build a structure for collaboration.
Moving towards a more collaborative approach represents a new way of doing things, which will at first feel strange. The CMO and COO can wield a lot of influence by setting up a regular call, for example, devoted to a specific customer journey, such as the onboarding process. They can also take deliberate actions to involve the other in processes where generally the “other function” has little to no involvement. The CMO can bring the COO into the marketing planning process early on, for example, to help ensure that the company can in fact deliver on the marketing promises it is making to its customers. This as approach helps both CMO and COO become invested in the successful implementation of the plan.
For any change to stick, the CMO and COO need to have joint accountability and create incentives that reward collaboration. Consider how Dutch energy company Essent is redesigning the customer experience. Marketing takes the lead on defining how best to serve customer needs and what sort of service this requires. They then set the initial minimum cost that operations can work with to deliver it. Operations and marketing meet, discuss, and iterate what the final budget will be and what the ultimate goal will be. What makes this process work is that they share both the responsibility and the rewards for meeting the targets. In fact, between 30 and 50 percent of their bonus compensation is based on reaching their joint targets.
3. Work together on a few customer journeys that matter.
Complex analytics can reveal often hundreds of opportunities to improve customer journeys, but the CMO and COO can help prioritize them based on impact. To do that, there is no substitute for a team of marketing and operations people physically walking through a specific journey.
That happened at a car rental company, which had identified the need to get their customers from the front desk to the front seat faster. When sales managers saw a rush of customers, they could put more people on the front desk. But the crews responsible for prepping the cars had no contact with the front desk. Whether it was slow or busy out front, it was always business as usual back in the garage. When the marketing/operations team walked through each of the stages of this particular journey, they quickly developed a greater appreciation for the entire process. They also were able to identify critical changes, one of which was to install a simple system — a light in the garage activated by a switch at the front desk that signaled surges in demand — so that prep crews could respond accordingly.
Importantly, fixing customer journeys is about a mentality rather than a one-off solution. And that means setting up processes to respond rapidly. The CMO and COO should work together to develop, in advance, processes and protocols for addressing negative feedback quickly. The insurance company E-surance, for example, uses a “control tower” system to monitor what is happening in real time. When looking at quote and bind ratios (i.e. the percentage of people who commit once they’ve received a rate quote), they could see those segments where the ratios were poor and immediately shut down the digital advertising in those markets. Operations set up the analytics and marketing was right there to act on what those analytics revealed.
It’s worth bearing in mind that this is more than a “marketing and operations” show. Delivering on journeys requires many different parts of the organization to come together, such as working with the CIO on the technology implications of developing journeys, and providing the CFO with hard ROI data on customer journey investments.
4. See the customer journey all the way through.
Marketing people are good at shaping emotions for customers, but operations folks, not so much. Yet that’s the department that typically takes over once marketing gets customers in the door. That post-purchase onboarding process, often designed to be low cost/high volume, has the potential to reinforce the connection with the product – or conversely, foster buyer’s remorse. Operations plays a key role in making sure those new customers stay loyal.
For example, one financial services company applies a marketing lens to its customer onboarding for many months after signing up a new customer. A personal welcome letter is sent with the goal of both deepening the relationship while still getting necessary paperwork completed. Similarly, bills and call center script guidelines reinforce the same personal tone that’s been established. This focus on solidifying a personal relationship with customers has become a key differentiator for the company and a great asset for marketing and sales.
At its most fundamental, mastering the customer journey is about doing what’s best for your customers, which includes being there whenever they happen to need you. Doing what is best for the customer, as it turns out, is also often what is best for the company. We recognize that the recommendations we are making here represent a real shift in the traditional roles and responsibilities of marketing and operations. But there is tremendous upside for those CMOs and COOs who pool their talents and resources to focus on the customer journey, adjusting systems, processes and, most importantly, mindset, to ensure that each and every customer journey is a rewarding one.
This article originally appeared on the Harvard Business Review (HBR) Blog Network website
