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Eric DePaul

Executive sponsorship is the key to creating a customer-centric strategy. Actions, not words, dictate how people will react. When company leaders say that the customer is number one but act in a contradictory way, their directive loses credibility. How many times are we faced in our work environments with the dilemma of deciding between two different goals? Are we supposed to produce more, spend less, or make sure that the customer is happy? How does our performance get measured? I know my performance goals have nothing about customer satisfaction in them. What should I do when a choice between hitting a production target and ensuring that a customer is happy needs to be made? Also, I see organizations that do not respond to customer needs until a complaint is made. What about finding out what the customer thinks about your product or service before things get to that point?

Andrew Hally

This week and next, I'll dive in-depth in to customer-centric marketing. I'll probably start by sharing the seven or so "prerequisites" for success, at least according to the companies we at Unica have worked with. You've nailed two of the seven, "Executive-level decision to adopt a customer-centric business strategy" and "Create scorecards and metrics; compensate accordingly." Since customer-centric marketing (CCM? technology marketers love three-letter acronyms, aka TLAs) requires plowing across traditional product and channel silos, it takes enduring executive sponsorship. Last night, at the cocktail reception for Unica's Marketing Innovation Summit (MIS, or "customer conference" for everyone else), one of large financial service customers explained how they think it will take TWO YEARS to really change the organization. And compensation, the primary management lever, is one of the things that separates the walk from the talk. Until people get paid based on customer metric instead of product metrics, it's unlikely CCM will be meaningfully adopted. Of course, Eric points out that there are limits to CCM based on the needs of companies to grow and be profitable. These may conflict at times, but I believe that for most companies, becoming more customer-centric will benefit both customers AND profitability, because today many organizations are optimized too narrowly, around product and channel metrics.

Chris Kenton

This is a great area of discussion, and it highlights some of the areas in which marketing still needs to evolve. There was a study just a couple of years ago that convincingly showed that among a sample of very large companies, a 1% increase in customer satisfaction led to a $55M increase in cash flow. Great. But how do you create a 1% increase in customer satisfaction? More money on branding? More money on product development? More money on sales training? Cut prices? And how much will these initiatives cost?

Many of the areas that have a strong impact on customer experience are not in the management domain of marketing at many companies today (sales, customer support, R&D), and until marketing can articulate an argument to organize cohesive strategies that extend beyond the siloed domain of marketing communications, we're not going to be in a position to really effect corporate strategies like a move toward customer-centricity.

Andrew Hally

The ability to impact customer contact points outside the direct control of marketing differs from industry to industry. Usually, consumer marketing-driven industries like retail seem to have an easier time of it than sales-driven industries like B2B and financial services. Marketing will probably never "own" the operational aspect of call center and other channels, but should have a role in the defining the best customer treatment stragies that get carried out across channels. Some call this "analytical CRM" as opposed to operational CRM. Certainly it takes a shift in management perspective. Kim Collins of Gartner spoke to this in her session today at the Unica Marketing Innovation Summit titled "EMM: Making Marketing a Profit Center."

Chris' comment could spawn another interesting thread about the link between customer satisfaction and financial results. Increasingly marketers are looking beyond customer satisfaction and customer loyalty metrics to "net promoter" score (see www.netpromoter.com), which many feel has a more direct link to improving business results. Others focus on customer engagement more than customer loyalty, assuming that loyalty is going the way of the dinosaur in today's customer-empowered economy.

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