The path to 2020: Marketers seize the customer experience

 
A report from The Economist Intelligence Unit
                                                The path to 2020:
                                                  Marketers seize
                                                   the customer
                                                     experience

                                                      Sponsored by
The path to 2020:
    Marketers seize the customer experience

    CONTENTS

            About this report                                             2

            Executive summary                                             3

            Introduction                                                  5

            Be everywhere and be ready                                    7

                Case study 1: Co-creation for brands and customers        8

            Personalisation at scale                                     10

            Winning with customer experience                             13

                Case study 2: Helping people succeed with their health   14

            Conclusion                                                   17

1   © The Economist Intelligence Unit Limited 2016
The path to 2020:
    Marketers seize the customer experience

    ABOUT THIS REPORT

    The path to 2020: Marketers seize the customer    Interviewees
    experience is an Economist Intelligence Unit
    report, sponsored by Marketo. The Economist       Chris M Kormis, Associate Dean and
    Intelligence Unit bears sole responsibility for       CMO, McDonough School of Business,
    the content of this report. The findings do not       Georgetown University
    necessarily reflect the views of the sponsor.     Kristin Lemkau, CMO, JPMorgan Chase
       The report draws on two main sources for its
    research and findings:                            Jonathan Martin, CMO, Pure Storage

                                                      Hans Notenboom, Global Head of Digital,
    l A survey that included responses from 499
                                                         Philips
      chief marketing officers (CMOs) and senior
      marketing executives worldwide. More than       Keith Weed, CMO, Unilever
      50% of respondents hold the CMO title or
      top marketing position. Respondents are
                                                      We would like to thank all interviewees and
      located in North America (27%), Europe
                                                      survey respondents for their time and insights.
      (30%), Asia-Pacific (36%) and Rest of World
                                                      The report was written by John du Pre Gauntt
      (7%). More than 50% of survey respondents
                                                      and edited by Gilda Stahl.
      (52%) hail from companies with more than
      US$500m in revenue.

    l A series of in-depth interviews with senior
      executives.

2   © The Economist Intelligence Unit Limited 2016
The path to 2020:
    Marketers seize the customer experience

    EXECUTIVE SUMMARY

    The path to 2020: Marketers seize the customer      sponsored by Marketo. This year’s research
    experience is based on a global survey of           analysed the customer experience in terms
    499 CMOs and senior marketing executives,           of its role as a direct interface of a brand
    plus in-depth interviews with leading CMOs.         with its customer—everywhere, anytime
    The research explores which technologies            and across platforms.
    and customer trends are likely to change
    marketing organisations the most over the        2. But marketing complexity is growing
    next five years.                                    sharply. As customer experience overtakes
       Marketers have spent much of the                 mass advertising as a preferred channel to
    past decade working on perfecting their             the customer, CMOs must learn to manage
    ability to understand the customer through          staggering amounts of complexity.
    personalisation. What is different about 2016       More than half of respondents believe
    through 2020 is how CMOs are matching that          the accelerating pace of technology
    understanding with direct action that drives        change, mobile lifestyles and an explosion
    engagement—and doing so at scale. The               of potential marketing channels via
    survey data and interviews reveal that leading      connected objects and locations will
    CMOs are pioneering a new model that                change marketing the most by 2020,
    blends a deep understanding of a customer’s         driven by billions of possible interactions
    contextual situation with timely, tailored          they create between a company and its
    delivery of relevant content and marketing          customers.
    assets.
       To illustrate this process at work, the EIU   3. Top marketing channels are those that
    developed a framework—“The layers of                lend themselves to personalising the
    engagement”—that classifies the elements            customer experience. The top channels to
    that contribute to a personalised customer          the customer in 2020 will be social media
    experience, and how it creates value for a          (63% of respondents), the World Wide Web
    customer and for a marketing organisation.          (53%), mobile apps (47%) and mobile web
                                                        (46%). Publishing-centric channels like
    Other insights from the research include:           television, radio and print scored far lower.

    1. CMOs own the customer experience full         4. Customer experience drives brand
       stop. Eighty-six percent of CMOs and senior      equity more than ever. CMOs are
       marketing executives believe they will           betting that a personalised, efficient
       own the end-to-end customer experience           and consistent customer experience
       by 2020. The EIU explored this trend last        will translate into customer loyalty and
       year in The rise of the marketer: Driving        brand value. Marketers listed raising
       engagement, experience and revenue,              customer loyalty and better brand

3   © The Economist Intelligence Unit Limited 2016
The path to 2020:
    Marketers seize the customer experience

        perception as the two top benefits (both
        53%) they aim to realise through a more
        positive customer experience.

    5. Future innovation will focus on small
       screens and no screens. Mobile devices
       and networks (59%), personalisation
       technologies (45%) and the Internet of
       Things (39%) are the three technology-
       specific trends that will have the biggest
       impact on marketing organisations by 2020.

4   © The Economist Intelligence Unit Limited 2016
The path to 2020:
                    Marketers seize the customer experience

                    INTRODUCTION

                    People conduct referendums on brands              based on how well they manage brands.
                    on a daily basis. They vote with their online     Consequently, the increased pressures on
                    searches. They vote with their transactions,      chief marketing officers to raise the value of
                    their social networking, plus a host of other     brands for this new competitive environment
❛❛                  interactions that enhance or degrade              are transforming how CMOs engage their
If you’re still     the value of brands. Armed with digital           customers.
thinking of the     technologies and social media, people                 “If you’re still thinking of the CMO as chief
CMO as chief        rapidly and inexpensively compare products,       megaphone officer, then you’re stuck in the
megaphone           services and ideas. Most important, they share    ’90s,” says Jonathan Martin, CMO of Pure
                    the results with one another through ratings,     Storage. “Today, the primary task of CMOs
officer, then
                    reviews and other means. With all of this         is to deeply understand customer buying
you’re stuck in     available choice, brands have never been          behaviour and intent; deeply understand the
the ’90s.           more important—or more easily tuned out by        context of where someone is in their decision
❜❜                  customers.                                        journey; be able to predict what they’re most
Jonathan Martin,       While the primary value of firms in the        likely primed to do next; and be ready to
CMO, Pure Storage
                    industrial age was derived from how well          influence them at the right moment.”
                    they managed hard assets such as factories,           To better understand which technologies
                    product lines and distribution channels, the      and customer trends are changing the CMO’s
                    information age rewards and punishes firms        charter per Mr Martin’s description, the EIU

                     What is a single, best version of customer truth?
                     A single, best version of customer truth is         Privacy: Do the data require a customer’s
                     derived from inputs such as demographics,        permission and/or consent?
                     psychographics, clickstream or purchase             Applicability: Do the data apply across
                     behaviour, customers’ devices or locations,      marketing and business processes?
                     the content they’re viewing, along with             Value: Do the data help a marketer meet
                     myriad other data points. These data streams     key performance or business goals?
                     are harmonised to portray a composite               Internally, CMOs use a single, best version
                     picture of the customer that provides the        of customer truth as a strategy for integrating
                     word “single” to the definition. However, for    marketing analysis, creative development
                     an image of a customer to become the             and marketing automation capabilities
                     “best” version of truth, analytic capabilities   with customer management and support.
                     constantly evaluate the data against the         Externally, this resource helps marketers be
                     following criteria:                              where the customer is in his or her journey to a
                         Uniqueness: Are the data specific to the     transaction, both literally and figuratively.
                     user or common to a target segment?

5                   © The Economist Intelligence Unit Limited 2016
The path to 2020:
                    Marketers seize the customer experience

Eighty-six          conducted a global survey of 499 CMOs and           Eighty-six percent of CMOs and senior
percent of          senior marketers, combined with in-depth         marketing executives believe they will own
                    interviews with leading CMOs. The survey data    the end-to-end customer experience by 2020.
CMOs and
                    and interviews reveal that from now through      Making the transition to a Big Capabilities
senior
                    2020, CMOs will reorganise their departments     model of owning the customer experience
marketing           around personalised customer experiences as      across any platform or context requires
executives          a core strategy for creating and growing the     a comprehensive understanding of the
believe they will   value of brands.                                 customer. IIncreasingly, this understanding of a
own the end-           This model for brand building is not based    customer’s context emerges from a synthesis
to-end              mainly on a “Big Idea”—a single, unifying        of data, technology and human analysis---a
                    creative concept around which all marketing      “single, best version of customer truth”.
customer
                    collateral is created and distributed across        A single, best version of customer truth
experience by       well-defined media and technology platforms      combines information about an individual’s
2020.               to millions of people. Instead, more leading     history, preferences and desires, with
                    CMOs are focused on data and analytics-          information about an individual’s present and
                    fuelled “Big Capabilities”, which allow them     potential value to a brand (see full definition,
                    to understand the immediate context of a         previous page). Only then can it become a
                    person and then personalise his or her end-to-   unified asset or resource to be used by multiple
                    end customer experience across platforms,        organisational units, not just the marketing
                    locations and physical objects.                  department.

6                   © The Economist Intelligence Unit Limited 2016
The path to 2020:
    Marketers seize the customer experience

    BE EVERYWHERE AND BE READY

    The survey and interviews show that a greater              Starting at the base of the model, CMOs
    portion of a CMO’s success is starting to              are under pressure to acquire, grow and keep
    hinge on developing and maintaining a                  customers who are technically and socially
    single, best version of customer truth for the         connected with one another. The core asset
    entire organisation to use. At the same time,          required for CMOs to conduct a contextually
    CMOs are in the midst of reorganising their            relevant dialogue and/or two-way relationship
    departments around data and analytics as               is a single, best version of customer truth.
    much as content and media channels.                    This model of the customer and his or her
        This transition has numerous moving parts.         world enables brands to create personalised
    For this reason the EIU developed a descriptive        experiences that ultimately lead to value being
    framework called “The layers of engagement”            exchanged between a customer and a brand.
    (see chart, below), to illustrate some of the              It is no accident that the framework
    linkages between competitive pressures and             looks like a technology diagram. Already,
    the response by CMOs. Admittedly, ours is a            marketing has become an intense data- and
    crude model of a complex process. However,             technology-driven discipline in highly digitised
    the schematic attempts to classify the various         industries such as media & entertainment,
    layers that contribute to a personalised               automotive, or travel & leisure. Simultaneously,
    customer experience, then map how those                a data- and technology-centric view of
    components deliver value to a customer and             marketing is taking over in sectors such as
    an organisation.                                       education, consumer packaged goods and

     The layers of engagement
                                                      IN
                                                     LTS

                                                                            Value for
                                                   SU
                                                 RE

                                                                          customers &
                                                                          organisations
                                           TES

                                                                        Winning customer
                                         EA

                                                                           experience
                                       CR
                                     LES

                                                                   Personalisation everywhere
                                   AB
                                 EN

                                                              A single, best version of customer truth
                                 S
                              IRE

                                                            reaching across any marketing touchpoint,
                            QU

                                                                     anywhere in the journey
                          RE
                         RE

                                                                 Find, win, grow, retain customers
                       SU
                     ES
                   PR

7   © The Economist Intelligence Unit Limited 2016
The path to 2020:
                    Marketers seize the customer experience

                     CASE STUDY 1      Co-creation for brands and customers

                     An example of a data-first marketing                 brand, Chef Wendy converses with customers
                     mentality at work is All Things Hair1 by Unilever.   who text a list of the current ingredients they
                     The consumer goods firm partnered with               have at home to the system. Chef Wendy
                     Google to analyse over 11bn global online            then returns suggested recipes based on
                     searches happening each year related to              ingredients the customer already has. The
                     salon styling and hair care. According to            system creates a unique customer profile
                     Unilever’s CMO Keith Weed, the company               to continually learn about their individual
                     used the anonymous search data to develop            preferences and/or dietary requirements.
                     specific content for an online video channel             All Things Hair and Chef Wendy illustrate
                     called All Things Hair.                              how more CMOs are using technology,
                        “We worked with Google to derive the              data and design to co-create a branded
                     hair-related questions people wanted to ask,”        experience with the individual customer
                     Mr Weed says. “From there, we developed              rather than try to expose them repeatedly to
                     the native content to reach and engage               a branded message. Providing direct utility to
                     them. People can now find tutorials and the          customers in lieu of broadcasting messages to
                     products they need to make the newest                them offers new opportunities for marketers.
                     hairstyles on a bespoke YouTube channel.             But it also requires them to balance short- and
                     That’s a new type of utility content.”               longer-term time horizons more than ever.
                        Another example is Chef Wendy, a fully            “It’s where I think a CMO’s job has changed
                     automated recipe system that engages                 quite a lot,” says Mr Weed. “The ability to be
                     people in natural language conversations             external- and future-oriented is no longer
                     via SMS. Launched by Unilever’s Knorr food           optional. You’ve got to have a point of view
                                                                          about the future if you’re going to be where
                     1
                         www.allthingshair.com                            it’s headed.”

                    healthcare, among others.                             changing as she moves through her day. In
                       The evolving role of data from just recording      this new environment, the core challenge for
                    what happens in a relationship between a              brands is to be everywhere and to be ready
                    customer and a brand to actually making               for however the customer chooses to interact.
                    things happen in that relationship comes                 The survey data suggest there is not a lot
❛❛                  courtesy of mobile phones and social media.           of time for CMOs to get things right. Survey
The ability to be   More than just tools through which people             respondents agree that marketing complexity
external- and       access content or communicate with each               has picked up speed and scale. When asked
future-oriented     other, smartphones and social media have              to compare which trends in the business
is no longer        become extensions through which a growing             environment will change marketing practice
                    number of people participate and create               the most by 2020, respondents listed the
optional.
                    modern life and culture.                              accelerating pace of technology change,
❜❜                     This potent combination of powerful                mobile lifestyles and the explosion of potential
Keith Weed,
CMO, Unilever
                    technology and new behaviours will evolve             marketing channels as their top three choices.
                    even more rapidly as trillions of sensors, tags       The specific technology trends that are
                    and beacons spread into physical objects and          driving those business environment changes
                    the outside world. A new type of personalised         by 2020 are mobile devices and networks,
                    cloud of devices, information and applications        personalisation technologies and the Internet
                    will travel with the customer, evolving and           of Things.

8                   © The Economist Intelligence Unit Limited 2016
The path to 2020:
    Marketers seize the customer experience

     Which three technology trends will have the biggest impact on marketing organisations
     by 2020?
     (% of respondents)

           59

                         45
                                        39            38             37

                                                                                     25           24               22

                                                                                                                                      10
         Mobile    Personalisation   Internet of   Predictive         Big           Virtual/    Wearable      Contextually        Block chain
       devices and technologies         Things     analytics    Data/Artificial   Augmented    technology     smart virtual      technologies
        networks      (eg, geo-                                  Intelligence       reality                   assistants (eg,     (eg, Bitcoin)
                       targeting)                                                                            Siri, Google Now)

                                                                                               Source: Economist Intelligence Unit survey, 2016

       Taken together, these technology trends                             use that knowledge to drive engagement
    suggest a fundamentally different competitive                          and dialogue. “Although it helps, it’s not
    environment for marketing, one based                                   just experience with particular platforms
    more on data and systems than on media                                 that counts most. It’s almost like you need
    and screens. It is an environment that prizes                          a different kind of thinker because the skills
    marketers who can generate insight about                               are changing,” says Kristin Lemkau, CMO of
    the customer’s immediate context and                                   JPMorgan Chase.

9   © The Economist Intelligence Unit Limited 2016
The path to 2020:
     Marketers seize the customer experience

     PERSONALISATION AT SCALE

     Surveyed and interviewed marketers seem to                 those channels that only deliver branded
     agree that the ability to personalise customer             messages.
     experiences at numerous touchpoints                           When asked about the top three channels
     will become an essential feature in future                 through which customers experience their
     marketing departments. According to the                    organisation’s marketing efforts today,
     CMO Council, personalisation blends a deep                 marketers placed mass-media channels such
     understanding of a customer’s wants, needs                 as print, television and radio at the bottom.
     and desires with timely and tailored delivery of           Interactive media channels like the World
     relevant content, products and services. The               Wide Web, social media and e-mail took the
     internal methods and technologies behind                   top three slots.
     personalisation help marketers listen and                     However, when marketers are asked
     converse with multiple audiences with the right            about the top three channels for customers
     (not often the same) branded messages or                   in 2020, social media increases sharply for
     experiences.                                               marketers, while the World Wide Web declines.
        Personalisation as a driving force for                  By 2020, mobile apps and mobile web will
     marketing success is emphasised repeatedly in              overtake e-mail as a top channel to the
     the survey results and interviews. This does not           customer. Altogether, this suggests that by
     mean that mass-media channels are suddenly                 2020, the top three channels to the customer
     unimportant. It means that technology or                   will be those that focus on personalisation
     media channels that help create personalised               and engagement, while the bottom three
     engagement with the customer are gaining                   channels will be those that focus on publishing.
     value in the eyes of CMOs compared with                       The ability to personalise channels also plays

      What are the top three channels through which you expect your customers to experience
      your organisation's marketing efforts in 2020?
      (% of respondents)

             63

                        53
                                    47         46

                                                        36

                                                                 17         15           14
                                                                                                          7              1
           Social       Web       Mobile      Mobile   E-mail   Direct   Television      Print         Radio          Other
           media                  apps         web               mail
                                                                                  Source: Economist Intelligence Unit survey, 2016

10   © The Economist Intelligence Unit Limited 2016
The path to 2020:
                   Marketers seize the customer experience

❛❛                 an important role in customer acquisition,                           success depends on using technology in the
If I can’t         a core marketing objective. According to                             broadest sense of the word,” he says. “If I can’t
combine            Chris M Kormis, Associate Dean and CMO                               combine analytical and creative smarts, it’s
analytical and     for the McDonough School of Business                                 virtually impossible to be an effective CMO.”
creative smarts,   at Georgetown University, the need for                                   Technology excellence is closing the gap
                   personalisation in higher-education marketing                        as a top strategic marketing goal from now to
it’s virtually
                   is changing how schools use social media.                            2020. When asked about their priorities today,
impossible to      “It used to be that you put an ad up on                              survey respondents chose customer loyalty
be an effective    Facebook or sponsored a tweet or similar to                          and retention and customer acquisition as
CMO.               drive recognition of your brand,” she says. “But                     the top two strategic programmes for their
❜❜                 now, as opposed to being another publishing                          organisations (see chart). The third choice—
Jonathan Martin,   platform, social media is more about finding                         pioneering new and emerging technologies
Pure Storage       the people you want for the market you’re                            to engage our audiences—was almost ten
                   trying to reach. You want to find people who                         points below the top two choices. Fast-forward
                   are like your successful students. You want                          to 2020, customer retention and loyalty plus
                   to understand their likes and dislikes. And                          customer acquisition still occupy the top two
                   then, you want to personalise your content to                        slots. But they are separated from pioneering
                   them.”                                                               new technologies by only 1.6%.
                                                                                            This suggests that by 2020, more marketers
                   No longer just about ads                                             expect they will interact directly with
                   Personalisation, therefore, is a key factor in                       their customers through technology and
                   how brands find, win, grow and keep their                            personalisation than interact indirectly
                   customers. It is also affecting how CMOs                             with their customers through media and
                   bring technology into their organisations. Pure                      advertising. This is a logical response to a
                   Storage’s Jonathan Martin notes that more                            marketing environment that overflows with
                   CMOs are coming from science backgrounds,                            information and choices available to the
                   whether computer science or statistics. “My                          customer.

                    What are the top two strategic programmes that define your marketing department?
                      Today      In 2020
                    (% of respondents)

                         45                45
                              39                39
                                                                 37
                                                            35
                                                                                     30
                                                                                28

                                                                                                     19 19                      20
                                                                                                                          18
                                                                                                                                                     15
                                                                                                                                                11

                        Focusing on       Focusing on    Pioneering new    Adopting a mobile- Bringing new skill       Branding and           Becoming a
                      customer loyalty     customer       and emerging       and social-first    sets into the           customer             data-driven
                      and relationships    acquisition   technologies to   approach to major      marketing             experience             marketing
                                                           engage our          marketing         department                                   organisation
                                                            audience          campaigns       (eg, data scientists)

                                                                                                                Source: Economist Intelligence Unit survey, 2016

11                 © The Economist Intelligence Unit Limited 2016
The path to 2020:
                      Marketers seize the customer experience

❛❛                       “Achieving personalisation at scale is the    cycle to acquire it,” says Ms Lemkau. She notes
Achieving             biggest and most important challenge for us      that personalisation at every touchpoint is now
personalisation       to get right,” says Ms Lemkau of JPMorgan        a prerequisite for CMOs who expect to own
at scale is the       Chase. By definition, a banking relationship     the customer experience.
biggest and           requires a customer to entrust an enormous          Customers typically show up at a brand’s
                      amount of data to a service provider.            front door—physical or virtual—already well
most important
                      Service providers in turn are expected to        educated about what a brand potentially
challenge for         use these data for the customer’s benefit.       offers them. This changes how a CMO positions
us to get right.      “So we have to work hard to create the kind      marketing resources and assets. “You’re no
❜❜                    of infrastructure that supports personalised     longer marketing AT people,” says Ms Lemkau.
Kristin Lemkau,       marketing that doesn’t feel like an ad           “You’re influencing them in an environment
CMO, JPMorgan Chase   or invasion, but feels like a benefit that’s     where they’ve already had a chance to form
                      available at the right point of a purchase       a view.”

12                    © The Economist Intelligence Unit Limited 2016
The path to 2020:
     Marketers seize the customer experience

     WINNING WITH CUSTOMER
     EXPERIENCE

     Engaging customers with compelling,                                         CMOs have become laser-focused on
     contextually relevant experiences is the new                             CX because it directly hits both the top and
     competitive high ground. This is because                                 bottom lines of business. In analysing the
     the information battle to find the best deal                             survey findings, the EIU cross-referenced
     is over between brands and customers.                                    respondents who are self-reported customer
     Customers won that battle in a rout courtesy                             experience leaders (ie, those companies that
     of search engines and social media. By                                   set the standard for their primary industry)
     becoming one another’s intelligent agents                                with general business measures of profitability,
     via social networking, people can rapidly                                revenue growth and customer acquisition. Of
     access competitive offers, check reviews,                                the 499 total survey participants, nearly half
     ask their friends and share results across their                         of the self-reported profitability leaders are
     communities.                                                             also customer experience leaders. Customer
         This shines a bright light on the link between                       experience leaders account for 41% of
     what marketers say via advertising and                                   revenue growth leaders and 43% of customer
     what they do as captured by the customer                                 acquisition leaders. When we compared
     experience (CX). There are numerous                                      customer experience leadership with
     technical and industry-specific definitions of                           marketing performance, the EIU found that
     CX that range from the most broad—“the                                   two-thirds of customer experience leaders are
     cumulative impact of marketing content and                               also marketing performance leaders.
     touchpoints on a customer’s perception of a                                 Given the importance of customer
     brand”—to the most banal—“what people                                    experience to the business itself, CMOs are
     feel when a brand helps them score a point in                            being held accountable for CX across the
     the game of life”.                                                       entire organisation, not just the marketing

      Rank from 1-5 (1=most important, 5=least important) what your organisation thinks are the
      priorities for a winning customer experience.
      (% of respondents)                                                                            1           2          3           4           5
       20

       15

       10

        5

        0
            An entertaining/fulfilling   A personalised/relevant   A socialised/engaging   A consistent/predictable         A fast/efficient
             customer experience          customer experience      customer experience      customer experience          customer experience
                                                                                               across channels
                                                                                                    Source: Economist Intelligence Unit survey, 2016

13   © The Economist Intelligence Unit Limited 2016
The path to 2020:
                          Marketers seize the customer experience

❛❛                        department. According to the survey, 86%                Personalisation is not the only ingredient in
For us,                   of CMOs and senior marketing executives             a winning customer experience. When asked
engagement is             believe they will own the end-to-end customer       to rank the priorities for such an experience,
more than                 experience by 2020.                                 respondents listed a personalised customer
repeat sales of              Full ownership of the customer experience        experience at the top, followed by a fast
                          by the CMO’s office affects many                    and efficient experience that feels consistent
healthcare
                          organisation-wide decisions. CMOs will need         across platforms.
equipment;                this additional clout as their role expands             The analysis suggests that for a growing
engagement is             beyond planning and executing marketing             number of CMOs, modern marketing is
having a                  campaigns. If they are expected to own the          all about contextually relevant customer
meaningful                customer experience outright, CMOs must             experience and engagement. But it is equally
long-term                 become more deeply involved in decisions            important to remember that some of the
relationship              that affect the entire organisation. For            best customer experiences are often those
                          example, nearly 90% of survey respondents           that help people travel along a journey that
with all the
                          believe marketing departments will exercise         culminates in the human touch. “Regardless
stakeholders.             significant influence over business strategy        of how they were inspired to visit our website,
❜❜                        by 2020, while nearly 80% say marketers will        we want the website to be relevant and
Hans Notenboom,           exercise the same influence over technology.        responsive to what they’re looking for,” says
global head of digital,
Philips

                           CASE STUDY 2     Helping people succeed with their health
                           Exchanging personal data effectively and           US from US$174bn in 2007 to US$245bn in
                           securely across a continuum of health              2012, according to the American Diabetes
                           professionals, patients, families and caregivers   Association1.
                           is crucial for next-generation healthcare.            The migration of healthcare outside of
                           Nowhere else is a single, best version of          traditional hospital and clinic settings feeds
                           patient truth more sorely needed, but more         into a second trend, which focuses on greater
                           difficult to achieve.                              personal responsibility for health. In this case,
                               “The key is connecting the different pieces    the primary healthcare marketing goal is to
                           of the puzzle and ensuring that the right data     help a patient make a lifestyle change. As
                           are exchanged at the right point,” says Hans       such, healthcare marketers are taking more
                           Notenboom, global head of digital for Philips.     holistic approaches for engaging patients
                           According to Mr Notenboom, two core trends         across a range of medical, nutritional,
                           are transforming how healthcare is delivered       physical fitness and community-oriented
                           and, by extension, how healthcare marketers        contexts. “For us, engagement is more than
                           must respond.                                      just repeat sales of healthcare equipment,”
                               The first trend is that healthcare is moving   says Mr Notenboom. “Engagement is having
                           away from hospitals into the home and              a meaningful, long-term relationship with all
                           daily life. Home monitoring and remote             the stakeholders. Our direct buyers are only
                           diagnostic technologies are providing              a small fraction of the ecosystem. But our
                           medical professionals and caregivers with          solutions must create value for each and
                           an on-going, remote picture of a patient’s         every member of the healthcare ecosystem if
                           condition. This is especially important for        we’re to be successful.”
                           treating chronic conditions like diabetes,
                                                                              1
                                                                                  http://www.philips.com/a-w/innovationmatters/blog/
                           the cost of which has increased in the                 Innovating-across-the-health-continuum.html

14                        © The Economist Intelligence Unit Limited 2016
The path to 2020:
                    Marketers seize the customer experience

                     How is marketing impact measured in your organisation today?
                     How will it be measured in 2020?
                     (% of respondents)
                                                Revenue          Brand       Lead           Customer             Customer            Budget
                                                impact           awareness   generation     acquisition          engagement          efficiency
                                                                             and pipeline                                            (eg, ROI)

                     25

                     20

                     15

                     10

                      5

                      0
                                                   Today                                                  2020
                                                                                                Source: Economist Intelligence Unit survey, 2016

                    Ms Kormis of Georgetown University. “We want              reducing huge data sets about customers
                    them to learn more about our students, our                into the decisions and actions that create
                    faculty and our alumni. Then, if they give us             a contextually relevant and personalised
                    their contact information, we want to engage              customer experience. But analytics is also the
                    them through e-mail and then phone calls.                 area where speed counts most, according to
                    And then we want to get them to come to an                Mr Martin of Pure Storage. He notes that there
                    event to give them a taste of what we offer.              remain many marketing organisations that run
                    Eventually, we hope they will tour the campus             their customer analytics as batch computing
                    to meet other students and other members of               jobs at the end of a business day, rather than
                    the Georgetown community.”                                moment-by-moment: “They can tell you how
❛❛                     Elevating a personalised, efficient and                the world was yesterday or last week. What
All organisations   consistent customer experience requires                   they can’t do is tell you about the world three
are struggling to   that CMOs integrate multiple departmental                 seconds ago. And they certainly can’t predict
understand          agendas under a single umbrella. Most                     the future,” he says. “All organisations are
where the           CMOs readily admit that this is often a                   struggling to understand where the customer is
                    long, tough slog. But in the same breath,                 in their journey at any one moment.”
customer is in
                    they acknowledge that better customer                         Even if a critical mass of marketers gains the
their journey at    experience is the foundation for business                 ability to understand the world three seconds
any one             performance.                                              ago and predict where it will go next, they still
moment.                                                                       must describe how such knowledge directly
❜❜                  The need for speed                                        affects business performance. When the
Jonathan Martin,    Historically, CMOs operated in an environment             survey asked how respondents measure the
Pure Storage        where information about the customer                      impact of their marketing strategy, revenue
                    was difficult to obtain, difficult to obtain              impact and customer acquisition stood head
                    quickly—or both. This is no longer the case.              and shoulders above other measures of
                    The amount of information about customers                 marketing success like brand awareness or
                    is expanding rapidly as more of daily life is             budget efficiency. By 2020, revenue impact
                    digitised with connected objects and locations.           remains the top metric, with every other
                    Simultaneously, the quality of captured                   measure playing a more or less equal role in a
                    information in this environment has frequently            suite of measuring capabilities.
                    not kept up.                                                  That said, different forces are now
                        Analytics capabilities are critical for               influencing customer loyalty, according to

15                  © The Economist Intelligence Unit Limited 2016
The path to 2020:
                   Marketers seize the customer experience

❛❛                 Ms Lemkau of JPMorgan Chase. “Customer           That can still work, but we also see sharing
The experience     experience-based loyalty will be a big change    economy platforms like AirBnB that build
is the marketing   for us,” she says. “For example, many of our     loyalty through a repeat positive experience.
and the            products are reward-based products. They         The experience is the marketing and the
experience is      measure loyalty in points accumulated by the     experience is what drives performance.”
                   customer the more he or she uses the product.
what drives
performance.
❜❜
Kristin Lemkau,
JPMorgan Chase

16                 © The Economist Intelligence Unit Limited 2016
The path to 2020:
                  Marketers seize the customer experience

                  CONCLUSION

                  As CMOs adopt new innovations in marketing          culture. Today’s audiences traverse multiple
                  technology and best practice, they speed up         mainstreams and counter-cultures via mobile
                  the adoption rate of other innovations, as if       and socially connected devices and services.
                  in a chemical reaction. Only in this case, the      Audiences in 2020 will do that and a lot more
                  volatile compounds being mixed are mobile           as IoT, virtual and augmented reality, plus AI
                  and broadband technology, social media,             cause interactivity to spill out of screens and
                  data, analytics and, soon, the Internet of          into the outside world.
                  Things (IoT) and Artificial Intelligence (AI).         It raises the question: How will brands
How will brands      To stay relevant in the midst of such change,    find, win, grow and retain customers across
find, win, grow   marketers are moving away from just porting         fragmented audience environments with
                  the same creative idea across technology and        unlimited digital shelf space?
and retain
                  media platforms. Instead, leading CMOs are             The research suggests that marketers should
customers
                  organising their departments to stand ready         organise around a single, best understanding
across            to engage the customer with contextually            of the customer and her context to drive
fragmented        relevant, personalised experiences—                 personalised customer experiences across
audience          everywhere and anytime.                             platforms and at scale.
environments         Of course, the irony is that the more               As data and analytics capabilities transform
with unlimited    powerful technology becomes for tailoring           marketing organisations, CMOs must master
                  and targeting content and messages, the             a new model of value and exchange based
digital shelf
                  more complex and variable the customer              on personalised customer experience.
space?            journey starts to be. It may be that customers      According to Unilever’s Keith Weed, customer
                  are accessing similar content on similar            experience-based marketing offers a better
                  websites, apps or platforms. But in their journey   model than advertising for a crowded,
                  to a transaction, people are stringing together     information-rich marketing environment.
                  and/or mashing up these technical and social        “Brands need to help people simplify life so
                  elements in combinations that often are             we all don’t go mad as this world becomes
                  unique to them.                                     more complex,” says Mr Weed. “I believe that
                     This complexity will swell because CMOs no       people who focus on that will unlock the true
                  longer live in a world where they only need         power of data.”
                  to engage the mainstream and the counter-

17                © The Economist Intelligence Unit Limited 2016
The path to 2020:
     Marketers seize the customer experience

     Whilst every effort has been taken to verify the
     accuracy of this information, neither The Economist
     Intelligence Unit Ltd. nor the sponsor of this report can
     accept any responsibility or liability for reliance by
     any person on this report or any of the information,
     opinions or conclusions set out in the report

                                                                 Cover: Shutterstock

18   © The Economist Intelligence Unit Limited 2016
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