If you were the CEO of a mid-sized company and revenue growth languished below $40 million after years of double-digit growth, what would you do?
At this technology services company (and several others like it), executives concluded a better marketing strategy was needed. Caught in the middle, the marketing department (which performed advertising, events, PR, and Web site functions) implemented an aggressive direct mail and advertising campaign and intensified its event efforts. After 18 months, however, the impact to the bottom line was minimal. In fact, the company experienced a decrease in customer retention during that time and was left bewildered by Marketing’s failure.
What was the problem with Marketing? Or was the problem really with Marketing to begin with?
When asked to investigate this situation and develop yet another marketing strategy for the company, we discovered a situation very similar to those found at other mid-sized organizations previously evaluated: Process and communications weaknesses, along with incorrect assumptions and expectations, were negatively impacting marketing success. These findings didn’t mean that Marketing was without fault. They did mean, however, that Marketing faced a lose/lose situation if these separate but related issues were not addressed.
Many business processes and methodologies operate beyond the control of Marketing, but undeniably affect Marketing’s success. For example, favorable marketing communications may conflict with the reality of back-end delivery, or claims about exceptional customer service may fail to materialize in daily customer encounters. Customer focus across the organization may be weak and misunderstood and the customer experience compartmentalized. From a functional perspective, a tactical marketing department may be overwhelmed by unrealistic expectations and incorrect assumptions about its strategic capabilities. Finally, the internal communications networks may be isolating Marketing from upstream discussions or relegating it to a task-fulfillment role when it could function more strategically.
While these issues seem to focus more on business process and management approaches, their relevance to successful marketing couldn’t be greater. In fact, we’ve listed five truths that growing organizations would do well to consider as they seek to maximize their marketing results.
Marketing is not “Magic Dust”
One of the first misconceptions that needs to be corrected is that marketing is the great cure-all for an organization’s revenue and growth problems. We have witnessed irrational pressure placed on tactical, production-oriented marketing departments — expectations for seasoned leadership to materialize and create innovative campaign strategies that are capable of pulling the company out of a business slump. This is the equivalent, however, of asking a talented violinist to manage and direct the symphony orchestra. Without experience in large-scale strategic planning or in developing successful alliances at a high level, the chance of success is limited.
But a greater problem than excessive expectations is misplaced assumptions. When revenue slows, attention often turns to Marketing to resolve the situation, without fully identifying the underlying causes of the slowdown. While intensified marketing efforts could prove successful, one of two things often happens when an organization already is experiencing growth challenges: The marketing efforts generate marginal results, or those efforts actually aggravate the underlying issues by turning up the heat.
Good Marketing Turns Up the Heat
Good marketing turns buying eyes toward the organization. It awakens interest in its products. It triggers inquiries into how it operates behind the scenes and if it conducts business with integrity and reliability. And it raises expectations about the solutions and services offered. In short, good marketing increases organizational scrutiny.
Considering these facts, can the company withstand the intense inspection that good marketing brings? Can it deliver the customer experience claimed in its marketing communications? If an organization has process or delivery issues that could create negative impressions and tarnish the customer experience, then it would be wise to correct those issues before good marketing causes the spotlight to shine too brightly (or too long).
New marketing campaigns involve more than external communications – they require the internal coordination, alignment, and readiness of customer-facing processes to ensure the best customer experience.
Back-End Processes Matter
Companies regularly make statements about themselves that have little to do with the products or services delivered but everything to do with the process interactions customers should have after the purchase. Here are some examples:
Expert account management
Not only do these statements quantify the type of service to be expected (expert, comprehensive, responsive), they also imply that a value exists in the interactions that extends beyond product purchase. Though Marketing must convey these claims and measure customer perceptions and responses, the quality and success of these interactions is well beyond the control of Marketing. Yet it is precisely these interactions that impact the customer experience and ultimately affect Marketing’s success in acquiring and retaining customers.
Unfortunately, too many companies go to market without aligning back-end processes to ensure a superior customer experience: Implementation teams are unprepared for an increase in projects; customer service is untrained for new product questions; and accounting is unaware of product price changes or module additions. When these things happen, customer confidence deteriorates and long-term marketing success is affected. Why? Because customers talk.
Existing Customers Share Their Experiences
Our customer research shows that peer recommendations and broader word-of-mouth referrals are by far the most influential purchasing factors, particularly when it comes to complex technology products. In today’s world of information overload, where all products begin to look the same and differentiation can be hard to establish, buyers rely more heavily on the trusted input of peer users. So while a company may publish numerous brochures, ads, and Web pages, in the long run it will win or lose based on how customers feel about its products and the experience they had with the company. More importantly, because key influencers, users, and buyers share those experiences with peer organizations, companies need to measure and manage the customer experience more attentively.
Customer Experience Counts
It’s not enough to provide a functionally adequate product. A product may function well, but the customer experience in getting it up and running may have been a nightmare of poor communications, delayed service, and clumsy implementation. Sure, it works, but the customer may never want to work with the vendor again — and will share that opinion freely.
According to the American Customer Satisfaction Index (ACSI), that’s the experience of many customers. Even as product quality generally has increased and prices have declined in the last decade, statistics show that customer satisfaction has been unstable and never reached its 1994 peak.
This is why companies absolutely must manage every customer touch point across the organization. In today’s hyper-competitive markets, business success is not just about what you sell but how you sell it. It’s not enough for Marketing to produce meaningful communications and initiate dynamic campaigns if customer-facing processes kill buyer confidence and spoil the customer experience.
Moving Toward a Larger View of Marketing
Marketing fulfills a simple production role for some organizations but ideally, Marketing has a strategic responsibility to create profitable customer exchange opportunities; therefore, it should have a legitimate interest in improving the overall customer experience. As the customer experience is affected by multiple interactions across the company, Marketing may be challenged to lead more significant team efforts and exert greater expertise and influence to achieve meaningful growth results.
Is Marketing ready to perform at this level? Better yet, is management ready to support a model that includes strategic-level marketing that demands more of the company as a whole? In an ideal world, the answers would be “yes.” Yet even today, with the pace of change, the intensity of competition, and the pressure of customer expectations, the need is rising for organizations to make the connection between back-end processes, the customer experience, and marketing success, and for Marketing itself to accept the challenge of operating more collaboratively and functioning more strategically. When this happens, both the company and customer will benefit.
ReThink Marketing can help your organization align marketing and business processes to improve the customer experience and drive business growth. Call us today.