The CMO’s imperative in 2021: Customers over channels

As the calendar turns and every new year starts, thought leaders, analysts, and business journalists publish their predictions about business and the economy targeted at us, the CMOs. Which marketing trends, techs, and tactics are here to stay and which are falling by the wayside are always on our minds, but this year feels a bit different. It may be the same list of trends coming from the same pundits but it comes on the heels of a crazy and painful year; amidst the turmoil, 2020 put a rocketship on the trends that we already knew were reshaping consumers’ and employees’ lives, businesses’ and brands’ obligations, and the overall economy. 

After a year of transformation fueled by quarantining, Zoom-ing, and remote everything-ing, there’s more opportunity than ever to put newer and better systems and processes in place to help your teams be more effective and support marketing’s seat at the table of business transformation.

While we’re not trying to put Gartner to the task by using their marketing predictions as a framework for our thoughts, they do shape the thought leadership dialogue in the MarTech world, so we’ll start there.

Return to Hybrid/IRL from the virtual world

We’ve had plenty of time by ourselves to think about what we can do effectively in the digital world, and what we most miss about living our personal and professional lives IRL. We all hope to see a return to events, dining out, shopping and generally engaging with each other in-person, but like it or not, certain elements of daily life can be taken care of more efficiently online–and some consumers will undoubtedly continue to take advantage of the massive digital first buildout of 2020.

Brands are learning to go direct-to-consumer, reducing or even eliminating their reliance on resale channels. With the disappearance of third-party cookies on the horizon, they’ve increased their investment in gathering first-party data to understand their customers and serve up truly personalized content, marketing experiences, and even product recommendations. The shift from aggregating to leveraging customer data will only continue accelerating, and brands need the capability not only to collect first-party data but to analyze it, gain insights from it, and execute on those insights in real-time.

Your customer is not your marketing channel

In 2020, your consumers increasingly moved away from a reliance on a specific channel for their interactions with your business, the migration from retail shopping experiences for a blend of digital and IRL experiences being the most glaring. Gartner sees this channel-agnostic consumer behavior driving organizations away from channel-centric marketing organizational structures and marketing programs and towards embracing the orchestration and delivery of holistic, customer experience-focused programs–and rebuilding their organizational structure to support them. 

We’re all for this migration, but the fact is, this transition will take time for marketers. 2021 offers you an opportunity to emphasize the program management function in your teams. This will support cross-channel market analysis and the coordinated, multi-channel marketing programs you’ll invariably be trying this year. With process change introduced to the organization, your teams are going to (if they haven’t already) look for new tools that support and reinforce these processes.

But it’s really the mindset underlying these motions that matters the most. Marketers must start putting the individual customer first. Practically speaking, the only way to do that is to figure out how to deliver 1:1 personalization at scale. (We have some ideas about that too.)

As much as we’re all collectively rushing to embrace (and create) the future, many customers will want a return to the normal as we’ve understood it for our entire lives: physical interactions, shopping in stores, talking directly to product experts and brand representatives. All the more important, then, to understand customers as individuals and commit to delivering the experiences they’ve shown they want with their brand interactions. 

Subscription everything

Thinking back to the ancient, pre-Spotify past (in other words, back when I started at Yahoo! in 1998), consumers expected to “own” things like movies and music, and brands expected to create their digital experience as an extension of their offline business. The major advances of the internet happened with the support of the advertising business model, allowing the consumer access to meaningful content by allowing your customers to be monetized with, in many cases, a third party. 

As privacy regulations and consumers’ concerns about data change, more and more organizations are reducing access to their content and restricting third-party access to their customers’ data in turn. Instead they are offering products and services from entertainment, to groceries, dining, to transportation, to almost anything as a subscription service. The most important aspect of this shift is that when a business has ‘gone direct,’ they are explicitly changing their mindset towards building and deepening their customer relationships. That means shifting their focus to subscription health metrics and programs like subscriber retention, churn reduction, and customer lifetime value.

This shift in the mindset and subsequent business model is the natural evolution of the internet–and your responsibility in marketing is to evolve the customer experience. How can organizations, specifically in the roles of marketing and managing the customer experience, set themselves up for success? New techniques like Predictive Audiences allow marketers deploy artificial intelligence and machine learning to build lookalike models based on desirable customer traits. like high customer lifetime value, and undesirable ones, like high risk of churn–and then target those customers with appropriate marketing and CX interventions. They can craft journeys to move customers from unknown to known to purchaser to subscriber to brand advocate. And with omni-channel orchestration, they can ensure that customers receive a consistent experience and deliver the right message, at the right time, and in the right channel.

Embracing the customer experience revolution

Gartner goes so far as to predict that marketing, sales, and customer service functions will actually merge under a unified customer experience function in organizations. While I’m personally skeptical that companies will completely reconfigure their organizational structure, the underlying observation–that CX increasingly drives strategic decisions–is accurate. Organizations need the data and more importantly the insight into their customers to create and grow brand engagement.

How does this manifest? Given the scope of the challenge, the idea that individual marketers (or even teams of marketers) can determine or even intuit next best experiences for customers is not realistic. Marketers need technology to achieve the necessary scale. There are three technology capabilities necessary to gain these critical insights into customers: 

• The ability to gather first-party behavioral data with real predictive value across all your digital properties–website, emails, social, ads, mobile apps, etc.
• The ability to store data securely in a privacy-compliant data warehouse
• The ability to decode the signal from the noise in this data in what Lytics calls a decision engine, using machine learning and data science principles to determine appropriate customer experiences and push them out through marketing execution channels

Content is (still) in charge

At its heart, the internet is a marketplace of content competing for users’ attention. Effective content drives engagement. When you are focused on finding the exact content that will resonate with each individual customer, whether your audience is a business or a consumer or a consumer in a business, it’s imperative to know what your users want and deliver it to them. 

What other articles should we recommend to a given user to deepen brand engagement, encourage purchases, or achieve some other organizational goal? To do this, organizations must first understand their content corpus. What constellation of topics does a given article touch on? What other articles share those topics? Then they must understand their users’ content affinity. Which of these topics does a given user show interest in–through clicks, time on page, and conversion activities? 

Netflix’ success has been built on a number of innovations–from the logistics of delivering DVDs through subscription model, to building out an internet delivery pipeline, to producing content to rival physical studios–but the innovation that sustains and grows their user base is their recommendation engine. They extract relevant “topics” from their content, use first-party data to understand whom it appeals to, and then create real-time personalized recommendations that cross genres, content types (films, TV shows, documentaries, etc.), and geographic boundaries to deliver behavior-based recommendations–and to make decisions on where to invest their money in purchasing distribution rights and financing production. 

Creating a business engine built on AI, content, and first-party data works, as their subscriber base amply demonstrates–and it’s more broadly applicable than in just the media industry.

Satisfying customers in 2021

If we’ve been saying, “The world is changing” for a long time now, 2020 made it clear that the world has changed–and marketers have to adapt to it. Your customer expects a 1:1 relationship. They understand that technology gives you the ability to offer them personalized, relevant experiences. And most importantly, they deserve it. Brands like Spotify, Netflix, and Amazon have proven it’s possible, and consumers are disappointed when companies fail to deliver. You have to deliver great experiences, in person and in the digital realm, across the customer journey, from anonymous first-time engagements all the way through to long-term, engaged customers. 

Jascha

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I'm the President of Lytics have previously held executive positions at companies like BitTorrent, Webtrends, and Microsoft. I was most recently the CMO at Mozilla/Firefox. This article is a cross-published post from the Lytics Blog.