Frank, I’ve heard you say that companies are working hard to transition from product and channel-centricity to true customer-centricity. What does it take to make this transition?
This question cuts to the core of everything that we are doing at Harte Hanks. We listen carefully to forward-thinking people like Tony Ulwick and Clayton Christensen about outcome-driven marketing and jobs-to-be-done. Even though a company like us earns revenues from our clients, or we are paid by CMOs at our client companies, in reality we really work for their customers. What we are trying to do is define a customer-centric buyer’s journey that parses out the relevant personas and defines the ways customers want to buy. Then we help our clients market to them that way, because when you do, you make them really happy. So while our clients are a beneficiary if we do it right, we are really doing it on behalf of the buyer.
The real job we are signing up for is defined by our customer’s customers. They define the ways they want to buy. We are there to understand and articulate that, share it with our clients, and create buyer journeys that match what their customers want.
If you couple buyer-centricity with fractional attribution, it gets pretty interesting. While this is, in part, popular marketing lingo, we first need to realize that Frank Cespedes is right: “The customer escaped.” If you imagine a customer talking to a marketer, they would say: “It’s kind of cute that you think your website got me to buy, but I made my decision two or three interactions before I went to your website.”
So you get CEOs like Terry Lundgren at Macy’s saying that today’s buyer journey starts with research, often on the phone. Then they go into the store to do more tactile things like try on clothes, touch a handbag or apply the makeup. Then they might purchase it there in the store, or maybe they wait and buy it later online. These executives know that the winners will be those who pay attention to the full buyer journey. They can’t afford to let the purchase transaction define it. The decision of bricks and mortar versus online is just a transaction choice. All of the steps—from ads or mail drops that create the notion that they might want to buy something, to the online research, to the in-store shopping experience, to the purchase transaction—need to be included and assessed as part of the buyer’s journey.
Right now most marketers are channel-centric, not customer-centric. They are making the decision of how much they want to interact with customers by channel. They are making spend decisions on Google search versus email versus direct mail versus TV and other advertising. The average marketing program is looking at the average customer, even though according to Clayton Christensen, there are zero average customers. Nobody is the average.
If the marketer does not understand their customers’ buying personas, they are in trouble.
We had a group in here the other day claiming that the buyer persona at a big box home improvement chain is those who repaint their house every year. That’s not a buying persona; that’s a segmentation persona. There is a group of customers out there that paints every year and you want to sell them paint. That is a very valid customer segment, but it is not a buying persona. The buying persona would add: “and I buy paint this way. I go to Amazon and buy primer, I go to Angie’s List and read content on what the best paint is for a certain job before I make a decision to buy.”
Maybe some buyer personas include people who just walk into the home improvement store and that summarizes their methodology of buying. It can be hard for people to get their head around buyer personas. When you are customer-centric, it is not adequate to be customer segmented, because that just covers what I am going to sell to whom. To be customer-centric, you need to know how you are going to sell them. Yes, you need to understand the segment you are going after, the what I am going to sell and why they are going to buy it from me. That is your value proposition as a brand, and it is important. But the buyer persona covers how they are going to buy and how I am going to market to them. To be customer-centric, you must understand all of the nuances surrounding the buyer’s journey.
One of the major research agencies released a finding that the average B2C company today has nine channels, at least a third of which are completely out of their control. Something like Yelp or Angie’s List is a real, live channel that customers interact with. And while you don’t operate it, you have to worry about it and think about it contextually in your customer buyer journey. This clearly is nirvana because no one is really ready to say I fully understand all nine of my buying channels today, and I have my fractional attribution down, and I know exactly how much to spend where.
But what strikes me is how many people have not even started down this path and how much people are stuck in “e-commerce think” about the click. They want to get credit for the revenue, so that is where they want to spend their marketing dollars now because e-com is doing more selling than anyone else. But this completely misses the mark that e-com got the sale because the customer got a direct mail piece and they decided to go to the website as a result of that.
How do we find out about customer journeys, and once we have spotted them, are there steps we can take to do a better job of influencing these journeys?
This is why data is so important. Let’s say my buying persona is that I read the Williams-Sonoma catalog, then I self-educate online, and then I transact in the store. When I buy the copper pot, I’m buying it in the store. You can see all of this to varying degrees relative to how open the buyer is to sharing information about themselves. There is no doubt about this limitation. If I want to be a completely private buyer, your ability to track my buyer’s journey or customize your marketing efforts to me is mitigated. But this points to an important equation: If I am willing to share about myself with you, then my expectation back is that you use that information in a way that is beneficial to me, not just you. And, if I am not willing to share information about me, then I should not expect anything very targeted toward me.
So, when I check out, they always ask me for my email and I always give it to them. So Williams-Sonoma can easily say Frank Grillo just bought a $350 copper saute pan, so let’s look through the database and find out what other recent interactions we’ve had with Frank. And you would see that Frank visited the website two weeks ago and actually, wow, look at that he was on the copper pot pages. And you would see, wow, we dropped a catalog to him a week before that. So then you start to do prescriptive analytics and say: “I think I see a buyer’s journey there.” I see him visiting the website within a meaningful period of time from when the catalogue dropped, and then I clearly see him showing up and buying one of the items he searched for online.
I’ll tell you another thing that I do: I build a shopping cart sometimes just to see how much I am going to spend. I would not necessarily buy everything in the cart, but even the abandoned cart would tell you out of the three things in the abandoned cart, he actually bought one of them. Most enterprises have the ability to begin. I’m saying this is a journey, not a destination. But most companies can begin to correlate the touch points and even correlate the physical touch points that you can’t see real time.
Another retailer was in here the other day. If you know that I received one of your inserts on Sunday, and I visit your website on Sunday or Monday, you could start to build a good corollary that the physical insert got me there. Now maybe one piece of data is only enough to make a hypothesis, but then you test it and see if the same thing happens again. If it repeats, then you might have a valid buyer’s journey and we can start to tailor or market to it.
The benefits are two-fold. One, if you understand the buyer’s journey, then you can save money. Going back to me and Williams-Sonoma, you would say: “Just drop the dude a catalog and leave him alone!” There is no reason to spend another dime. Don’t email me, don’t even give me a coupon, because if you drop a catalog on me once a quarter you are likely to get a transaction. Now my buyer’s journey might be four weeks from catalog to transaction, but as long as you see me moving through the journey, then leave me alone.
The second benefit from knowing the buyer’s journey is that you can avoid pushing them away. I’ll give you an example of two marketing companies that I started to pay attention to on LinkedIn based on the content they put out. It was pure content-based marketing. It was not self-serving stuff. They both offer marketer workflow products, but they were publishing content that was much broader than their actual product offering to establish their voice as a true marketing thought-leader. I connected to both of them on LinkedIn, started downloading and reading their white papers, and was enjoying content from both. But then one of them pummeled me with email on top of email on top of email. They did this even though I was clearly downloading their materials but not replying to their emails or sales rep phone calls. They aggravated me so much that I unsubscribed from their email, unlinked them, and vowed they would never talk to me.
The other company, either by happenstance or deftness, emailed me once after the second white paper, but did not pummel me. Their approach with me was very minimalistic until the point that I opted in for something more, and that was for me to say yes to set an appointment. The first company understood my buyer’s journey. The second company should have seen that I was not responding to their emails so they should have left me alone. They not only lost money with their marketing efforts on me, they actually lost a potential customer by not understanding my journey. They so annoyed my buyer’s journey that it did not matter what they had to sell me; I never wanted to talk to them.
It is important for marketers to see that there are two benefits from knowing the buyer’s journey. You can spend your money more effectively, and you can avoid irritating or losing customers.
How does this tie back to the data that marketers need?
If you don’t have the data readily at hand, then you need to make hypotheses about what data you need about buyer journeys, and you need to begin collecting it. You need to begin your journey. As marketers we can sit down and think through all the likely touch points somebody might go through, which ones I do and do not have visibility to, and then how do I go get the missing data so that I can begin to build the buyer journeys.
Few marketers are sitting on piles of data with full visibility created by a group of data scientists. But our message here at Harte Hanks is that you need to get started down the path. You don’t need to be executing flawlessly with perfect customer-centricity. But if you are not building the infrastructure or partnering with somebody to build the data and analytics, you are going to get behind.
So gathering data related to customer touch points is clearly important. What else can be done to move down the path toward greater customer-centricity?
There are two other major areas for improvement as you move down the path toward greater customer-centricity. First there are prescriptive analytics. They need to be focused on buyer journeys. From there you can set up behavior models of what to expect, track whether customers are following the model, and then use machine learning to decide whether to validate and reinforce the model, or modify the approach if the buyer journey seems to be stalling.
The second involves supporting the formation of campaign strategies. This involves interpreting the prescriptive analytics to find the best ways to spend marketing dollars on buyer journeys.
Let’s spend more time on those two areas in our next few conversations.
I look forward to it.
Interview by Karl Hellman.