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Is Customer Experience the New Marketing in 2017? 

Sue Duris | Jun 22, 2017 945 views 12 Comments

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I’ve been reading a lot lately about how Customer Experience is the new Marketing.

Is it?

Customer Experience and Marketing are Different

The definition of Marketing, per Merriam-Webster, is:

“the process or technique of promoting, selling, and distributing a product or service”

Dr. Philip Kotler defines Marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential.”

In a nutshell, marketing is all about communicating with people to influence them to buy from you.

Wikipedia defines Customer Experience as “the interaction between an organization and a customer over the duration of their relationship. A good customer experience means the customer’s experience during all points of contact matches the individual’s perceptions.”

My favorite definition of customer experience – which comes from Forrester – is:

“every interaction, or touch point, your customer has with your brand. It not only includes the what’s (the interactions), but also the how’s (perceptions, feelings) the customer experiences.”

Thus, customer experience focuses on the entire customer journey. If done well, customer experience is in place before you even have initial contact with the customer and continues throughout the course of the relationship.

Here’s where things get murky…

Marketing isn’t involved in the entire customer journey.

Marketing directs the awareness and consideration phases. It has limited involvement in the purchase phase. Sales handles that. Marketing is typically not involved in the post-purchase phases of retention, loyalty, and advocacy. Sales and Customer Service tend to handle those touch points.

Marketing doesn’t onboard customers.

Onboarding can be the difference in whether a customer churns or not.

Some organizations bypass onboarding altogether and then wonder why that customer left.

Customer strategist Esteban Kolsky found in his research that 11% of customer churn can be avoided by simple company outreach.

It still surprises me that marketing departments still opt to focus more on acquisition than retention. It is clear that recurring revenue is the number one statistic companies should focus on (churn is a close number two). We know that it costs much more to get a new customer than it does to keep one. Eventually, the message will sink in. But the time that it takes to do so may harm both customer and brand.

In comparison, Customer Experience encompasses the entire customer journey.

Customer Experience can get siloed in Marketing.

When Marketing takes ownership of Customer Experience, things tend to go south fast. Marketing tends to place a stronger priority on acquisition than retention. As a result, customer experience can stall out and hurt customer and brand.

Customer experience occurs across an organization. Its goal is to provide the framework for an organization to be able to deliver a consistent, personalized experience across all channels and touchpoints.

The entire organization is supposed to ensure that customers receive the experience they want.

That means every employee – from leadership to the front lines – needs to understand what the company’s customer experience vision is, why it is important, and how their role fits into that vision. In essence, each employee has a role to fill in the customer experience vision and they must take ownership for customer experience to generate optimum results.

Those are big shoes for Marketing to fill.

Which is why, in a recent CMO Council and Deloitte study, only six percent of CMO respondents said they are defining routes to revenue across all facets of their business globally.

But, if functional groups aren’t aligned, how is the customer going to receive a consistent experience?

They won’t. And they aren’t.

According to a CEI Survey, 86% of buyers will pay more for a better customer experience. But only 1% of customers feel that vendors consistently meet their expectations.

As Michael Brenner, CEO at Marketing Insider Group, notes “…for too many marketers, improving customer experience means making the buying experience more ‘seamless’ or having ‘less friction.’” This is a very limited view of what customer experience is.

Unfortunately, until marketers start changing their mindset to realize that their role encompasses both the acquisition and retention sides of the customer, the organization’s customer experience initiative will fail.

So, how is Customer Experience the new Marketing, again?

It isn’t.

But I do understand why people think so.

Companies get that post-purchase phases drive customer growth. Having a strong customer experience effort is the reason for that. As the Temkin Group has shown through its research, customer experience leaders have more than a 16 percentage point advantage over customer experience laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend.

But even though customer experience leaders, when compared with customer experience laggards, enjoy stronger financial results, Temkin Group found that in its 2017 research, only eight percent of companies view themselves as industry leaders in customer experience today, 55 percent aspire to be leaders within three years.

There is a lot of work to do.

Customer Experience is not the new marketing. Customer Experience is the conduit to help Marketing change its mindset to enable its transformation. It can help Marketing understand the following:

 

Marketing is a spoke in the customer experience wheel that drives profitability and growth.

Customer experience happens across the organization. Thus, Marketing must understand its role in the overall customer experience vision and take ownership of it.

 

Customer acquisition is not the end-game.

There are a few things at play here.

First, Marketing needs to transform from a product focus to an experience focus.

Second, Marketing needs to understand that it sets the tone for the type of experience the customer will have. If Marketing can grasp this fact, it will be able to understand that it must focus on post-purchase activities as much as, and maybe more than, acquisition activities.

According to Gartner, customer experience is a leading driver to ensure a true omnichannel experience (consistent messaging across channels). And Marketing can help lead this effort.

Third, Marketing needs to shift so it focuses on customer lifetime value. Customer lifetime value should be the prime focus of every organization. Customer lifetime value is what drives growth. It is a very important metric, which is why more than 75% of North American executives deem customer lifetime value a vital indicator of success.

Which brings us back to customer experience. According to Econsultancy, 64% of companies rate customer experience as the best tactic for improving customer lifetime value.

We’re in the “age of the customer”, as Forrester calls it. The importance of customer experience on a company’s future growth trajectory is very clear.

So, while it is easy and comfortable to say Customer Experience is the new marketing, it isn’t. Customer Experience is the conduit to help Marketing transform so it is a valuable piece of the entire customer experience vision.

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12 Responses to Is Customer Experience the New Marketing in 2017?

  1. Michael Lowenstein June 23, 2017 at 6:13 am (1274 comments) #

    Agreed that customer experience isn’t the new marketing, and also agree with your three points about what Marketing, as a function and role within the enterprise, ‘needs’ to do. While Marketing doesn’t own the customer experience, it does actively contribute to the image and reputation, and promise and delivery, associated with experience. And, because customer lifetime value is so incredibly important, IMHO this should be viewed through a holistic marrketing lens, across the entire customer lifetime – prospecting, acquisition, onboarding, value-building, risk, churn, and recovery. This also largely meets the criteria of Professor Kotler’s long-established marketing definition.

  2. else-marie June 23, 2017 at 7:31 am (2 comments) #

    I totally agree that CX is not the new marketing to put it simple: in marketing the company is at the wheel. CX definitely the customer is at the wheel.
    The whole process through all the stages of the customer lifecycle from awareness to engagement and sharing experiences on social media the customer is the one sending the message.

    Marketing had to use the insights from the customer journey en CX to step up their game and improve their efforts to acquire and retain the customer throughout the customer life cycle. Handle entry and exit barriers and everything in between

  3. Greg Tucker June 23, 2017 at 9:25 am (2 comments) #

    Love this. Makes me crazy that Marketing “owns” CX at most companies – but struggles to impact 90% of the CX. Was I that ineffective when I was a CMO? Hope not! Well done Sue!

  4. Dennis Gershowitz June 23, 2017 at 10:30 am (6 comments) #

    Sue, I enjoyed your article, especially where you summarized the the three steps Marketing needs to take. So, perhaps your sequel can be used to wake up those Marketing personnel who still do not see the light and contribute to achieving Customer Success. Once again, a good read…thank you. Dennis

  5. Andrew Rudin June 23, 2017 at 12:42 pm (192 comments) #

    I think it’s more a catchy slogan than useful adage. Is logistics the new inventory control? Is staff development the new Human Resources? Is quantitative finance the new accounting? It’s remarkably easy to come up with these queries, but they’re similarly illogical. Besides, what changes – or should be changed – because of these statements? Nothing, really. I don’t see any company removing MARKETING from their org chart because this question was answered in the affirmative.

    Maybe the benefit is creating awareness that a new “shiny object” has made its way into the business parlance. We’ve been conditioned to look at such events as portentous of something else getting upended, disrupted, or replaced. In this case, it’s Marketing. Our business culture teaches us that when a new idea is discovered and promoted, by definition, an older idea gets elbowed aside. “Marketing seems so 1970’s. Let’s put it in the dumpster.”

    I have always thought of customer experience as the product of many activities a company performs, and also the result of forces and events that a company doesn’t – and often can’t – control. “Managing” customer experience by assigning a person or department to “own” it seems the wrong approach because it drives CX into a silo. Isn’t that how customer experience became so problematic in the first place? Other departments, like marketing, became their own kingdoms, and in so doing, the people who managed them lost sight of shared goals.

  6. Thomas Wieberneit June 24, 2017 at 10:15 am (226 comments) #

    Absolutely right. Customer Experience is not Marketing. It is so much more and basically all corporate functions and processes can contribute to an experience a customer has. As can lots of circumstances and situations outside the company.

    In my eyes customer experience cannot be managed by a company at all. It can be influenced, that’s about it.

    2 ct from Down Under
    Thomas
    @twieberneit

  7. Peter Strohkorb June 25, 2017 at 7:20 pm (24 comments) #

    Hello everyone,
    CX may not be the same as Marketing, so why are so many CMOs suddenly adding CX to their title ?
    I have been concerned for a while now that we are asking ever more of CMOs that ultimately must distract them from doing a thorough job.
    In one of my client organisations the CMO is also the Head of Innovation and the Chief Customer Officer.
    How is that going to work ?

  8. Thomas Wieberneit June 25, 2017 at 10:54 pm (226 comments) #

    Hi Peter,

    marketing has to do with CX, so it is a reasonable desire for Marketing to control this part, too. However, in my eyes CX is a cross function. Not only marketing but pretty much every part of the business needs to do its share. Considering that a CMO or Head of Sales, or Head of Service are particularly bad suited to take this job as they will look at it with their departmental lense.

    CMO being the Head of Innovation is giving me the shivers.

    Putting all these jobs into the hands int a marketeer is dangerous at best, unless the topic overall is a topic of the C-Suite with an appropriate governing board that supervises the CMO and keeps initiatives aligned to corporate strategy. It is similar to the topic of the Chief Digital Officer that was discussed a bit earlier.

  9. Peter Strohkorb June 26, 2017 at 12:30 am (24 comments) #

    I agree, IMHO it is too much for one person to handle and too diverse a distraction for them to be able to focus on doing anything well.

  10. Thomas Wieberneit June 27, 2017 at 12:59 am (226 comments) #

    Peter, it is probably not only too much – hopefully the CMO is not alone – but also, and mainly the wrong person, if not run tightly in a frame with a steering committee. The CMO, as every non service LoB head, needs to, and will, have a bias towards the own organization. This will lead to skewed results. CX is not equal to marketing but marketing has an influence on CX.

  11. Bob Thompson June 27, 2017 at 9:05 am (219 comments) #

    I have a different take on this…

    When people say “customer experience (or service) is the new marketing” they mean by improving experiences, you generate more loyal customers and thus need less marketing. Instead of telling (promoting) how good you are, show them!

    It doesn’t mean the service department is now in charge of marketing, or marketing owns the entire customer experience.

    As for who should “own” CX, the best answer is everyone, under the CEO’s leadership — if it’s ingrained in the company culture. But that’s rare, so companies are taking a variety of approaches to get the organization working together. Some appoint a Chief Customer/Experience Officer that reports to the CEO. Others give the job to another member of the c-suite with the charter to look beyond their fiefdom. Which approach is best is a factor of skills and politics.

  12. Thomas Wieberneit June 27, 2017 at 10:24 am (226 comments) #

    you are right with your take, Bob; I didn’t want to take it there as it appeared to me that the sentence was meant quite literally.

    And yeah, ultimately the CEO is responsible (and accountable to the board) for everything. That doesn’t mean that he also runs it. This, imo, should be headed by a service C-level with a cross-functional view. But then possibilities for implementations are manifold and as long as it is assured that things run aligned with the corporate strategy it is OK.

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