What To Do When the Status Quo is Your Friend

 A few weeks ago, I published a post that discussed how to weaken the grip of the status quo. When your objective is to acquire new customers, the status quo is often your toughest competitor because most potential buyers have an inherent preference for their existing methods and processes. In most cases, no sale can be made unless a potential buyer first becomes willing to change his or her status quo. My earlier post described one tactic for loosening the grip of the status quo.

The situation completely changes when your objective is to retain existing customers. In the customer retention contest, your company is the incumbent and part of the customer's status quo. Therefore, one key to customer retention success is to enhance or strengthen the status quo bias and use it to your advantage.

It should be obvious that customer acquisition and customer retention call for entirely different kinds of marketing content. For customer acquisition, marketing content needs to disrupt the status quo; for customer retention, marketing content needs to reinforce the status quo. Unfortunately, recent research indicates that most B2B marketers aren't making this critical distinction.

In a 2017 survey by Corporate Visions:

• Fifty-eight percent of respondents said they saw no need to use different content for customer acquisition vs. customer retention.
• Only about one-third of respondents said they were using customer retention content that is specifically designed to reinforce the status quo. Two-thirds of respondents said they use disruptive content or product-oriented cross-sell/upsell messaging for customer retention.

Other research by Corporate Visions has shown that content which focuses on reinforcing the status quo is more effective for customer retention that provocative/disruptive content or product-focused messaging.

Astute business leaders have long recognized the importance and value of building and sustaining strong relationships with existing customers, but two recent developments have made customer retention particularly important.

• As I wrote in an earlier post, the shift to subscription-based business models elevates the importance of customer retention because in a subscription-based business, customer profitability depends largely on the length of the customer relationship.
• The adoption of account-based marketing also raises the importance of customer retention. When business leaders implement ABM, they make a conscious decision to focus their marketing and sales efforts on a relatively small number of high-value prospects. Once these high-value prospects are acquired, it's obviously important to keep them for as long as possible.

In a future post, I'll discuss what causes the status quo bias and how to create content that reinforces it.

Image courtesy of Dave_S. via Flickr CC.

Why It's Hard to "Manage" the Customer Experience

Senior business leaders now recognize that providing outstanding customer experiences is a powerful driver of revenue growth and a critical component of competitive advantage.

In the 2017 Digital Trends report by Econsultancy and Adobe, which was based on a global survey of more than 14,000 digital marketing and ecommerce professionals, respondents said that optimizing the customer experience is their most exciting opportunity in 2017, and that customer experience is the primary way their company will seek to differentiate itself over the next five years.

In a 2015 survey of 1,350 B2B executives by Accenture, 79% of respondents said that a differentiated customer experience has a direct impact on business results, and 78% believe it produces a competitive advantage.

Several national consulting firms, such as McKinsey, Accenture, and Forrester, have made customer experience management a core part of their practice. And several professional societies, such as the Customer Experience Professionals Association, have been established to support the customer experience management discipline.

All of this demonstrates why customer experience (CX) management has become one of the most important and most widely-discussed topics in today's business world. I would suggest that CX management is also likely to be one of the most significant and persistent challenges facing companies for the foreseeable future.

CX management is difficult to master for several reasons. First of all, it is a complex, multi-faceted phenomenon. A recent article in the Journal of Marketing contains a detailed review of the academic literature relating to customer experience and provides an excellent introduction to the complexities of the customer experience "construct." If you have doubts about the complexity, just consider the definition of CX offered by the authors:  "Overall, we thus conclude that customer experience is a multidimensional construct focusing on a customer's cognitive, emotional, behavioral, sensorial, and social responses to a firm's offerings during the customer's entire purchase journey."

CX management is also difficult to master because no company can control all of the factors that produce customer experiences. At the most basic level, an "experience" has three components:

1. The environment - This is the thing that is experienced. It can be a product or a service or a website or a call center (or for that matter, a theme park or a movie or dinner at a restaurant).
2. The encounter - This is the interaction between an individual and a particular environment.
3. The effect - This is the perception formed and held by the individual that results from his or her encounter with the environment.

A company can control the attributes and characteristics of the environments presented to customers, and it has some control over what happens during an encounter. But a company has no control over the effect component of an experience. The effect is largely determined by the context of the encounter and by the customer's mental state, and these are the last things any company can control or "manage."

Companies can increase the odds of achieving a positive outcome by understanding what the customer is trying to accomplish in an encounter and the context in which an encounter occurs. But, that's a far cry from "managing" the customer experience.

Illustration courtesy of Ron Mader via Flickr CC.

A Blueprint for Successful Account-Based Marketing

With account-based marketing sweeping across the B2B marketing landscape like an out-of-control wildfire, it was only a matter of time until we started seeing full-length books on the topic. One of the best is A Practitioner's Guide to Account-Based Marketing by Bev Burgess with Dave Munn published earlier this year.

Bev Burgess is a Senior Vice President and the ABM Practice Lead at ITSMA, and Dave Munn is ITSMA's President and CEO. ITSMA pioneered the development of account-based marketing in the early 2000s, and for the past 10+ years, it has conducted numerous research studies and educational programs regarding the practice. So, ITSMA has been a leading source of thought leadership and research data on ABM for more than a decade, and the authors draw extensively on that data and expertise throughout the book.

A Practitioner's Guide is designed for readers at all stages of the ABM journey, from those who have just heard about ABM and want to learn more about it, to those who have an ABM program in place and want to improve it.

The book is organized in three parts. Part One covers the basics of ABM, including how to determine which accounts should be included in your ABM program. Part One also describes a proven four-step process for implementing account-based marketing. Part Two of the book explains how to plan and execute an ABM program for an individual strategic account. Part Three focuses on the attributes and skills you need to be a good account-based marketer, and it provides advice on managing a career in ABM.

Throughout the book, Burgess and Munn emphasize the importance of treating ABM as a strategic revenue growth initiative, not just as a marketing or sales support initiative. The authors repeatedly state that successful ABM requires a high level of collaboration between marketing and sales, and can require the involvement of other business functions as well.

This may be the single most significant concept contained in A Practitioner's Guide because it constitutes the foundation that makes the other processes described in the book work effectively. What we now call account-based marketing is actually a business strategy that is built around maximizing revenue growth from a select group of target accounts. In retrospect, it would have been better if ITSMA had named this approach to revenue growth account-based demand generation instead of account-based marketing.

Another strength of A Practitioner's Guide is that it paints a realistic picture of the effort that's required to build a successful ABM program. Over the past couple of years, the hype surrounding ABM has been almost deafening. While much of the "positive press" about ABM is justified, the hype has also tended to obscure or minimize the work that's necessary to do ABM well. Burgess and Munn have brought a much-needed dose of reality to the ABM conversation.

If there is anything to criticize about A Practitioner's Guide, it would be that much of the material in the book appears to be based on the use of ABM by tech companies. For example, the book contains nine informative case studies, and eight of them are about companies that provide technology-related products or services.

The orientation of the book shouldn't be surprising, given that ITSMA is the Information Technology Services Marketing Association. Some readers may wonder whether the principles discussed in the book are equally applicable for companies that operate outside the tech sector. In my experience, the ABM principles laid out in A Practitioner's Guide are valid for any company where ABM itself is appropriate.

If you're thinking about adopting ABM, or if you're involved in developing an ABM program, you need to read this book.

Cracking the Code on Marketing Performance Management

A few days ago, VisionEdge Marketing, Hive9, and Valid USA published the results of the 2017 Marketing Performance Management (MPM) Benchmark study. The 2017 study consisted of an online survey that produced 418 qualified responses.

VisionEdge Marketing and various partners have conducted this study annually for the past 16 years. The primary goal of the research is (and has been) to identify the attributes and practices of marketing organizations that excel at measuring and demonstrating marketing's value and contribution to the business.

This is one of the annual research studies that I look forward to reviewing every year. Once again, this year's study provides valuable insights regarding a subject of vital importance to B2B marketers, and I encourage you to get a copy of the study report and read it carefully.

The 2017 study report is not currently available online. However, VisionEdge Marketing, Hive9, and Valid USA will be hosting a webinar regarding the study on June 14th, and all webinar attendees will be offered a copy of the study report. You can register for the webinar here.

Here are four key takeaways from the 2017 MPM study.

The Pressure is Still On

Marketing leaders are still under significant pressure to measure and demonstrate marketing's value and contribution to the business. Sixty-eight percent of the survey respondents said this pressure is actually increasing. Other recent studies have produced similar findings. For example, in the February 2017 edition of The CMO Survey (conducted by Dr. Christine Moorman with Duke University's Fuqua School of Business), 56.9% of CMOs reported pressure from their CEO and/or Board of Directors to prove the value of marketing.

A Select Few are Really Good

Only 23% of survey respondents said their C-suite would give marketing a grade of "A" (90 or more on a 100-point scale) on its ability to measure and demonstrate its value to the business. This indicates that most marketing organizations have significant work to do in this area to meet the needs of C-level executives.

Even the Best Can Get Better

The 2017 MPM study clearly shows that even best-in-class marketing organizations have significant room to improve. For example:

• Survey respondents gave BIC marketing organizations a score of 7.4 (on a 10-point scale) on their use of marketing metrics that link marketing results to business outcomes. Middle-of-the-pack organizations received a score of 7.3.
• Only 61% of BIC marketing organizations are using metrics chains, which the study found is one of the key components of an effective marketing performance management system.
• Most high-performing organizations need to expand their use of data. Only 45% of BIC marketing organizations use data to make strategic decisions, and only 32% use data to improve effectiveness.

MPM is Challenging

Perhaps most importantly, the 2017 study makes it clear that designing and building a comprehensive and meaningful marketing performance management system is not a simple or easy task. The study identifies six key "ingredients" of an effective MPM system, and all six are necessary to achieve best-in-class results.

In addition, a comprehensive MPM system can easily become complex. For example, it's very common for a large or mid-size B2B company to have several strategic business outcomes that marketing has (or shares) responsibility for. In these circumstances, the performance management system will require more metrics, more performance targets, and multiple metrics chains.

Despite these challenges, it's vital to build an effective marketing performance management system because proving the value and impact of marketing is no longer optional for most marketing leaders.

Image courtesy of VisionEdge Marketing.