About five months ago, I “broke up” with T-Mobile in favor of AT&T. I was a T-Mobile customer for six years on a very competitive service plan. But none of that mattered; I wanted an iPhone, and T-Mobile couldn’t give it to me. It was a clean but cruel breakup: AT&T cancelled my T-Mobile contract on my behalf, the equivalent of getting dumped by your girlfriend’s new boyfriend.
I bring this up because it reminds me of the saying: “If we don’t take care of our customers, someone else will.” This is particularly important to remember in “The Age Of The Customer” where technology-led disruption is eroding traditional competitive barriers across all industries. Empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.
This is affecting your IT just as much as your business: As an indicator, Forrester finds that 48% of information workers already buy whatever smartphone they want and use it for work purposes. In the new era, it is easier than ever for empowered employees and App Developers to circumvent traditional IT procurement and provisioning to take advantage of new desktop, mobile, and tablet devices as well as cloud-based software and infrastructure you don’t support. They’re “cheating” on you to get their jobs done better, faster, and cheaper.
To become more desirable to your customer – be it your Application Developers, workforce, or end buyers – IT Infrastructure and Operations leaders must become more customer-obsessed, which I talk about in this video:
Two weeks have passed since our successful AD&D and BP Forums in Boston. I’m still struck by conversations we held there and continue to hold now with many of you on how your teams can help deliver to your firm’s ever-important customer experience outcomes. Following one tip can help you either get ahead of this issue or catch up to the expectations of your stakeholders…act more like an interactive agency!
Note I didn’t say “transform” into an interactive agency. No, at the end of the day you have responsibilities to your organization the agencies your business peers use often don’t – you have to manage, operate, and maintain what’s been delivered. What I did say was “act” like one, and in doing so you’ll need to:
Revisit your talent. For those of you that haven’t outsourced big portions of development, make sure you have great, creative developers, build a high-performance development team, and up-skill your business analysts by putting personas and customer journey maps into their tool kit. Why? The agencies your peers use have and cultivate these skills. At minimum, you'll be in a better position to manage and maintain what they’ve put in place if you have complementary skills of your own. If you have outsourced development, we can help you make the case to bring back the right pieces.
Recently my colleague Sharyn Leaver and I had the opportunity to meet with Robert Mead and Michael Mathias, the CMO and CIO, respectively, at Aetna. They will be speaking at our upcoming CIO-CMO Forum on September 22, 2011, in Boston, so this serves as a bit of a preview to what should be an eye-opening presentation. Enjoy!
David Cooperstein: What external changes drove you to build a deeper partnership with your technology peers?
Robert Mead, senior vice president, Aetna marketing, product and communications: The US healthcare system is fragmented and well behind the curve in terms of price transparency and consumer-friendly products and services. The deep partnership between technology and marketing at Aetna lets us put leading-edge technologies and powerful tools and applications directly into the hands of people so that they can be confident consumers and informed patients. Our close collaboration with our colleagues in technology is driven by a few external factors:
The increasing cost of care and the corresponding changes in employer-based insurance — consumers are being asked to take more ownership of their health and wellness and their healthcare spending.
The introduction and rapid adoption of technology empowers consumers (and patients) to engage in the healthcare system where they are in life and in the way they want to be connected.
Healthcare reform aims to bring millions of previously uninsured Americans into the marketplace as consumers.
Marketing planning has changed little in the past century. It's essentially a linear process built on the development of rigid 12-month plans built around brand and channel metrics. This approach is coming increasingly under strain as the combined effects of the growth of digital marketing platforms and a volatile economy demand marketing plans that deliver clear business outcomes and can adapt and improve to meet evolving market dynamics.
Over the past 12-18 months, we have come across several marketing organizations that have decided to do something about this situation and look for new ways to improve their approach to marketing planning by adopting some principles borrowed from a relatively new methodology originally conceived for software development efforts: agile development.
From the interviews that we did with marketers that are experimenting with this new approach, several of the key principles of "agile" development looked particularly relevant to innovating their approach to marketing planning:
A clear definition of business outcomes and associated business metrics
The competitive challenge that companies face today is driven by new issues that transcend classic distribution, brand, and product challenges. In the world we live in today, which Forrester defines as the Age of the Customer, firms need to look at how they deliver marketing and technology solutions that have visible impact on the customer.
Just the other day I was reminded of that when, sitting with a client, he described their competitive threat as coming from software products. That would be normal were it a tech company, but this was an airline! Yes, an airline that required technology and marketing to come together to define a customer experience that would differentiate them beyond seat configuration and route system. This highlighted to me the challenge that many companies face in this new era of disruption (for another view of how to think about this product challenge, see my colleague James McQuivey's recent report "Innovating the Adjacent Possible").
Charles Rutstein, Forrester's COO, sat down with my CIO Practice Leader peer Sharyn Leaver and me to discuss the role that CIOs and CMOs play in this customer-obsessed new world. See what we had to say here:
Several recent Forrester reports home in on what we call “The Age Of The Customer” in which firms must seek to become customer-obsessed to build differentiation and loyalty. Those firms that embrace this will ramp up investment in four priority areas: 1) real-time customer intelligence; 2) customer experience and customer service; 3) sales channels that deliver customer intelligence; and 4) useful content and interactive marketing. All these needs are technology-infused – wholly dependent on technology and in categories where technology is evolving rapidly. Underlying these investments is the need to master the flow of data about customers: capturing/collecting data about them, analyzing it, distributing to those points of engagement, and, finally, integrating the insights into the customer experience.
Companies can’t succeed at doing this without a close partnership between the business areas leading the charge and IT. The rate of change of your customers, markets, business opportunities, and technology is simply too fast. Forrester is exploring this theme in our first CIO/CMO joint forum.
The reality, though, is companies flounder at this marketing-IT partnership. They flounder because of:
More ideas than capacity. A plethora of desired initiatives are constantly being surfaced – beyond the limits of available budget and with no mechanism to sort them into an achievable plan that IT can deliver on.
If you read my last research report and previous blog post, you’ll know that I’m working with Luca Paderni on a series of research reports examining the IT and marketing relationship. In particular, we’re examining what IT and marketing are doing to master the customer data flow (see Figure 1).
At the upcoming CIO and CMO forum, Luca and I will be presenting a keynote examining the readiness of IT and marketing teams in today’s organizations to master the customer data flow. The really cool thing is that you can help shape the outcome by participating in a very short survey we are conducting in conjunction with Forbes. The survey asks a number of questions around the interaction between IT and marketing and can be answered by either IT or marketing professionals.
I had the good fortune to work with Josh Bernoff, co-author of Groundswell and Empowered, on a groundbreaking new report. Along with colleagues from across Forrester, he has raised the red flag on a new era of competitive advantage that ties together what technology has brought us — information — with the end goal in mind — the customer — to define a new strategic focal point for companies that he and we now call the age of the customer. See his initial blog post here, or watch this video about the report:
Why is this so important? Because many companies have maximized the value of information that has dominated technology investment and decision-making since the early 1990s when the Internet boom began, computers got substantially cheaper and more powerful, and connectedness began to change the dynamic between people and companies. Over the next decade or more, the only way companies will truly stand apart from their competition will be a devotion to combining information, technology, and decision-making into a defensible and fundamentally stronger position — obsessing about the best customers that they have and demonstrating that value in terms of products, marketing, and service.
Do you think your company is customer obsessed already? Look at your customer systems and ask yourself some key questions:
Do you know the share of wallet you maintain with customers?
Do you engage customers when they are not in the buying cycle?