Does Marketing Automation Hurt or Help Customer Intimacy?

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In 1993, Michael Treacy and Fred Wiersma published their seminal article in the Harvard Business Review about the three value disciplines (operational excellence, customer intimacy, product leadership) that outstanding companies practice. The decades-long argument about whether or not a given company can only optimize on one or two disciplines at the expense of the others (or one other) is now academic. The fact that Treacy and Wiersma identified and popularized these critical disciplines allowed companies to improve performance by narrowing and sharpening their focus. Whether or not an enterprise can excel at one, two or all three disciplines is irrelevant except in relative terms against its competition.

Customer intimacy is most closely tied to marketing; and within that, tied closely to demand generation and marketing automation. Do our current best practices hurt customer intimacy or enhance it? Or is it a wash?

To answer that question, it’s important to understand what customer intimacy means. It might take different forms, depending on the industry, B2B or B2C, company size, and so forth. We understand it this way:

  • Knowing customer needs to ensure high levels of satisfaction;
  • Maintaining a single, unified view of a customer’s interactions across all types of interactive media and communication channels; and
  • Anticipating a customer’s changing needs to maintain satisfaction.

In today’s economy, companies are especially motivated to retain customers and deepen relationships, as opposed to simply focusing on customer acquisition. This is especially true for the software-as-a-service model (SaaS), where switching costs and subscription fees are relatively low. Marketing automation can play a key role in the retention process: It improves customer data quality, provides location intelligence and consolidates data from multiple sources to a single view. It nurtures and deepens customer relationships by customizing communications. The benefits are obvious:

  • Better customer retention, resulting in more predictable and continuing revenue streams;
  • Increased loyalty, which can yield cross-sell and upsell opportunities; and
  • More referrals.

At the same time, the other side of that coin has some negative implications. Marketers are sometimes criticized for automating all interactions, including email, social networking, chat and even phone calls. Critics say this approach undermines customer intimacy by reducing trust. They raise other concerns as well:

  • The lack of real-time human involvement creates an emotional barrier between the customer and the vendor.
  • The computerized approach – even when based on accurate underlying customer data – makes people feel like very small fish in a very large pond.
  • Intrusive events based on algorithms and data sometimes make people feel as if their privacy has been violated.

But taken together, we feel the benefits outweigh the negatives. The ability to assess customer needs is the foundation of marketing, and marketing automation enhances that process immeasurably. Understanding purchase cycle behavior on a large scale and reacting to it in meaningful ways is one of the most powerful capabilities at a marketer’s disposal.

And finally, marketing automation provides us with a capability we never had before: personalization. When you are managing relationships with thousands or millions of potential customers, it’s not humanly possible to have one-to-one interactions with everyone. But with marketing automation you can tailor every automatic communication to show potential customers that you care enough about them to create relevant messages.

Republished with author's permission from original post.

Shreesha Ramdas
Shreesha Ramdas is SVP and GM at Medallia. Previously he was CEO and Co-founder of Strikedeck. Prior to Strikedeck, Shreesha was GM of the Marketing Cloud at CallidusCloud, Co-founder at LeadFormix (acquired by CallidusCloud) & OuterJoin, and GM at Yodlee. Shreesha has led teams in sales and marketing at Catalytic Software, MW2 Consulting, and Tata. Shreesha also advises startups on marketing and growth hacking.

1 COMMENT

  1. Pretty much wrong, wrong, wrong.

    The title of your piece is about intimacy – a personal attribute.

    The meat of your piece is about customized targeting– an impersonal attribute.

    The conclusion of your piece is about caring – back to personal attributes.

    In effect, you are using a non-personal attribute–slicing, dicing, targeting, segmenting, rifle-shot needs-and-message tuning – to suggest that you’re accomplishing something personal.

    I can’t imagine a better demonstration of the flaws in this approach than this piece itself. The fact that Amazon or Pandora can develop an algorithm that accurately predicts my preferences is a wonderful thing. I love it and depend on it.

    And I would never in a million years confuse that with the notion that Amazon “cares” about me. Are you serious? Cares? As in gives a damn? Even thinks about me? Has my best interests at heart? Even knows who the hell I am?

    Only PR-fuddled self-deluding marketers can confuse data-mining with caring, and I hope it doesn’t actually carry over into your own personal life. CRM systems don’t care; targeted messaging doesn’t care; caring is a whole ‘nother thing, that will always belong in the realm of the personal.

    “Show potential customers that you care enough about them to create relevant messages?” To paraphrase John McEnroe – you can’t be serious.

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