CEOs surveying the 2011 landscape will face ten major challenges. In this blog, we examine the first five of these ten "game-changers." We'll look at the second half of the list in our next blog.
CEO CHALLENGE #1. Accept that the balance of power between buyer and seller has changed… forever.
Customers will call more shots and set more agendas in 2011 than ever before.
The poor economy and unprecedented consumer empowerment due to the web and social media have significantly increased customer demands for relevance and value. The “center of power” has forever shifted from the marketer to the customer.
WHAT TO DO: Identify new ways your company can provide clearly defined, competitively differentiating value both at the point of purchase and throughout the customer’s lifecycle.
CEO CHALLENGE #2. Completely re-think how you view your customers.
Abandon the old view of customers as limitless commodities that can easily be replaced. As the level of marketing “clutter” increases, it will become harder and more expensive to replace customers in 2011.
WHAT TO DO: Make Customer Lifetime Value an essential business metric.
CEO CHALLENGE #3. Stop chasing the “quickie.” Build relationships.
The name of the game in 2011 will be customer Retention, not just customer Acquisition. The long-term relationship is what really matters. That will only happen if you use the initial sale as a paid opportunity to prove your value.
WHAT TO DO: Shift the allocation of budget and resources from the traditional focus on Acquisition to a balance between Acquisition and Retention. Change compensation plans from an Acquisition/new sales focus to reflect Retention and repeat customer purchases.
CEO CHALLENGE #4. Communicate with customers and prospects through multiple channels.
More and more customers in 2011 will demand multichannel communications that are both relevant to the customer and driven by that customer’s opt-in media preferences.
One channel will no longer be enough to ensure engagement. According to Jamie Nordstrom, President of Nordstrom Direct, they are cultivating “people who shop at Nordstrom in more than one way, since multichannel shoppers spend four times, on average, what a one-source shopper spends”.
WHAT TO DO: Emphasize the value of opting in to a relationship with your company, via all media and channels. Then personalize the communications per individual opt-in preferences, so the value and relevance is obvious.
CEO CHALLENGE #5. Create uniquely powerful Opt-In preference-driven databases.
We are seeing an important new trend: privacy sensitive consumers are recognizing that in order to receive or access increasingly relevant information, they must share increasing amounts of information about their preferences. If they trust the marketer and see a useful value proposition, consumers will Opt-In and self-profile their preferences and expectations. Clients such as Microsoft have achieved significant increases in response and revenue due to Opt-In preference-driven communications and offers.
WHAT TO DO: Re-think your marketing so that it provides unquestionable value from the consumer's point of view. Conduct research to identify the value propositions required to engage customers to Opt-In. You also need to learn what questions are appropriate to ask at different points in the customer lifecycle.
As a result of providing increasingly relevant information and offers, customers will in turn provide you with their increasingly detailed Opt-In preferences. This will result in the creation of a uniquely accurate, detailed database that gives you a powerful competitive advantage.
CEO CHALLENGE #6. Re-design your web site to meet customer expectations.
Per extensive Voice of Customer research, we have learned that most customers and prospects are not satisfied with current websites. They feel that most websites are one-dimensional, corporate, "me"-oriented experiences. Websites must now provide a three-dimensional experience that provides access to, in order of importance, 1) peers, 2) content experts, and 3) the company itself.
WHAT TO DO: Re-think your entire website strategy. Learn how your customers and prospects define value and relevance. Follow their lead by connecting them with easy access to peers, subject matter experts, and your corporation.
CEO CHALLENGE #7. Give Customer Service the respect it deserves.
In 2011, the companies who thrive will be the ones who recognize that Customer Service is not an expense to be trimmed back, but a revenue contributor.
WHAT TO DO: Start an internal revolution. Abandon the view of Customer Service as an Operations expense line-item. Reposition it as a revenue center, and synchronize it with your marketing efforts. Yes, this may mean stepping on some toes. The earlier in 2011 you step on those toes, the sooner the customer-centric revolution will be completed at your company.
CEO CHALLENGE #8. Don't let short-term financial objectives destroy your long-term customer focused strategies.
Whether they sell to businesses or to consumers, 2011's most successful enterprises will shift their selling focus away from just "closing deals."
Teams that focus on building customer relationships over time will win market share and competitive advantage. Don't allow short-term income targets to reinforce the old behaviors of "Spray and Pray" marketing or "churn and burn" customer acquisition.
WHAT TO DO: Use quarterly financial forecasts as...simply forecasts. Don't become a prisoner of short-term forecasts.
CEO CHALLENGE #9: Model the behavior and the priorities for your employees.
As CEO, you are the single most important role model for your team members. Use that "bully pulpit" to show how you want both internal and external customers to be treated ... and to demonstrate the values your company stands for.
WHAT TO DO: If you haven't already done so, create an Employee Council and:
* Meet with its members at least once a quarter.
* Hear what is on people's minds.
* Listen openly to both criticisms and suggestions.
* And remember: The respect you show these people will determine the respect your front-line employees show to your customers!
CEO CHALLENGE #10. Accept that ultimately, the responsibility for moving away from "business as usual" in any and all of these areas is yours.
Adjusting successfully to a customer-driven world won't come naturally to you or your organization. In the year to come, you must be the catalyst for customer-focused change in your organization.
WHAT TO DO: Throughout 2011, champion initiatives that that tap into the Voice of the Customer as an essential source of wisdom and strategic insight.
Acting on this customer-driven wisdom will often mean altering products, procedures, and relationships that your team has grown used to...and that seem to be "working just fine."
As you advocate for these changes, your leadership ability will inevitably be tested. But being tested is one of the things you love about this job, right?
Additional insights are contained in Ernan's manifesto "Don't You Want To Do Real Marketing?" published by 800-CEO-Read.
Ernan Roman is President of the marketing consultancy, Ernan Roman Direct Marketing.
Recognized as the industry pioneer who created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing, and Voice of Customer Relationship Research.Top 10 Marketing Challenges for CEO's in 2011