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Owning the customer experience: the evolving role of the CMO

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Owning the customer experience: the evolving role of the CMO

By Alice Blair, senior marketing manager,Engage Hub

Traditional C-Suite positions across organisations have transformed drastically as a result of technological advancements and, in turn, data-driven environments.

Chief Marketing Officers (CMOs), for example, have typically overseen communications, brand management, advertising and campaigns – and they still do, but, in this day and age it is in a slightly different capacity.

With so many ways for marketers to learn about their customers – through big data, IoT, Artificial Intelligence (AI) and marketing automation among others – there has never been a more pertinent time for CMOs to become customer experience experts. And in order to cultivate this expertise, their remit has expanded to data analysis, customer service and user experience (UX).

CMOs are now responsible for more areas of the business than ever before and are provided larger budgets to spend on the right technology. After all, marketing represents a huge portion of customer interaction and is often the first touchpoint between customers and brands. The challenge for CMOs then, is ensuring their marketing teams are up-to-date on the various digital tools on offer and understand how to use data in an ethical and effective way.

Owning the customer experience 

There is no denying that customer experience is vital for business growth – in fact, 42% of consumers say they’d turn away from a brand after only two negative experiences. To reflect the current competitive market, more than 50% of organisations are redirecting investment to customer experience innovations.

Shifting a brand’s customer experience priorities involves digital, organisational and cultural change – and as with many change management exercises, there needs to be clearly defined roles from the beginning. The question for many organisations has focused on who should ‘own’ the customer experience to ensure the best results – especially as it touches so many aspects of the business. Common choices have included customer services, marketing or sales.

A recent Marketo report found that 90% of CMOs believe that they will be responsible for the whole customer experience by 2020. And while it is encouraging that marketing is taking initiative, to deliver the most effective customer experience the answer is not as clear cut as assigning a departmental ‘owner’ as such. Given the increasing overlap across teams there is a high chance that an organisation risks missing out on customer experience opportunities if the responsibility is not shared across departments.

The inter-departmental approach is more challenging and change may seem harder to imbed initially. However, organisations will reap the rewards that result from the customer experience improvements. To aid the process, the correct data orchestration technology will lead to greater operational efficiency.

Data-driven decisions: from subjective to objective

Within customer experience change projects, CMOs play a large part in analysing data and using it to enhance customer experience across the business. The vast amount of data available has led the shift away from subjective decision making in marketing, providing concrete answers to questions that had previously been a matter of opinion.

For marketing teams working on a campaign there are a glut of tech solutions at their disposal. AI-driven tools can now statistically detect which designs will be the most successful and keyword analysis can determine which headlines will drive the highest engagement. So, for example, after hours of work on a campaign and the CEO feeds back with “can we change the colour to blue, because I prefer that to orange”, the team will be able to validate the colour choice based on data analysis and customer preference.

Additionally, tools such as heat-mapping can illustrate which areas of a website receives the most eyeball time. And A/B testing, with real time feedback, can ascertain which customer segments respond most favourably to specific messaging and channels allowing marketers to personalise the customer journey. Equipped with all these solutions, the excuse of “I like it better” can no longer drive marketing spend – solid evidence is required to justify gut feelings and opinions.

The expanding CMO remit

To be able to demonstrate ROI, CMOs need to have a holistic understanding of the customer journey. This includes every touchpoint within it, what technology influences it and what data derives from it.

This shift in ownership and accountability is reflected in marketing spend. According to The Gartner Spend Survey 2016-2017, marketing leaders now allocate up to 27% of their expense budget to technology – an increase from previous years. It is therefore vital for CMOs to have the finger on the pulse of emerging trends affecting each stage of the customer journey, particularly to stay ahead of the competition and optimise the experience the brand delivers.

Traditional high street retailers offer a prime example of companies that have failed to keep up with the latest technological curve – leading to disastrous results. Toys R Us, Maplin and House of Fraser are just a few brands that have been plunged into administration since the beginning of the year. Being unable to react quickly to digital trends is proving to be a death sentence in an increasingly competitive market.

However, it’s not all doom and gloom, traditional businesses are finally getting to grips with transforming in-store offerings to compete with online brands – Zara being a key case in point. Most importantly, the biggest differentiator is focusing on customer experience above price and product.

CMOs are now responsible for more areas of the business than ever before and armed with bigger budgets to spend on technology. By utilising consumer data gathered at various touchpoints in the customer journey, CMOs can ensure alignment between departments. And finally, technology and data are eradicating opinions from the Board Room so that stakeholders can make informed, data-driven decisions that are right for the customers.

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19 1

Organizations in the Middle East have had to take immediate actions in reaction to the COVID-19 pandemic, such as shifting to remote and virtual work, implementing new ways of working and redirecting the workforce on critical activities. According to Deloitte’s 10th annual 2020 Middle East Human Capital Trends report, “The social enterprise at work: Paradox as a path forward,” organizations now need to think about how to sustain these actions by embedding them into their organizational culture.

“COVID-19 has created a clarifying moment for work and the workforce. Organizations that expand their focus on worker well-being, from programs adjacent to work to designing well-being into the work itself, will help their workers not only feel their best but perform at their best. Doing so will strengthen the tie between well-being and organizational outcomes, drive meaningful work, and foster a greater sense of belonging overall,” said Ghassan Turqieh, Consulting Partner, Human Capital, Deloitte Middle East.

According to the Deloitte report, many organizations in the Middle East made quick arrangements to engage with employees in the wake of the pandemic through frequent communications, multiple webinars where senior leaders addressed employee concerns, virtual employee events, manager check-ins, periodic calls and other targeted interactions with the workforce.

The report also discussed how UAE and KSA governments have reexamined work policies and practices, amended regulations and introduced COVID-19 initiatives to support companies and the workforce in the public and private sectors. Flexible and remote working, team-building and engagement activities, well-ness programs, recognition awards and modern workspaces are among the many things that are now adding to the employee experience.

Key findings from the Deloitte global report include:

  • Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
  • 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
  • Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
  • Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.

“Worker well-being is a top priority today, and similarly to the rest of the world, companies in the Middle East are focusing their efforts to redesign work around well-being by understanding workforce well-being needs,” said Rania Abu Shukur, Director, Human Capital, Consulting, Deloitte Middle East.

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One in five insurance customers saw an improvement in customer service over lockdown, research shows

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One in five insurance customers saw an improvement in customer service over lockdown, research shows 2

SAS research reveals that insurers improved their customer experience during lockdown

One in five insurance customers noted an improvement in their customer experience over lockdown, according to research conducted by SAS, the leader in analytics. This far outweighed the 11% of customers who felt it had deteriorated over the same period.

This is positive news for insurers during such challenging times, with 59% of customers also saying that they would pay more to buy or use products and services from any company that provided them with a good customer experience over lockdown.

The improvement in customer experience also coincides with a rise in the number of digital customers. Since the pandemic started, the number of insurance customers using a digital service or app has grown by 10%. Three-fifths (60%) of new users plan to continue using these digital services moving forward.

However, while the number of digital users grew over lockdown, half of the insurance customer base has not yet chosen to move to digital insurance apps or services.

Paul Ridge, Head of Insurance at SAS UK & Ireland, said:

“It’s impressive that there was a net improvement in customer experience during lockdown, despite the challenges the industry was facing with a transition to remote working and increased claims for things like cancelled holidays. While many were forced to wait on customer help lines for long periods, part of the improvement may be explained by even a small (10%) increase in the number of digital users.

“However, it’s clear that a huge number of customers are still yet to make the move online. It’s vital that insurers provide the most accurate, timely and relevant offerings to customers, and this is best achieved by having additional insight into online customer journeys so they can understand them better. Using analytics and AI, insurers can seize this opportunity to digitalise their customer experience and offer a more personalised approach.”

Meanwhile, for insurers that fail to offer a consistently satisfactory customer experience, the price could be severe. A third (33%) of customers claimed that they would ditch a company after just one poor experience. This number jumps to 90% for between one and five poor examples of customer service.

For more insight into how other industries across EMEA performed during lockdown, download the full report: Experience 2030: Has COVID-19 created a new kind of customer? 

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The power of superstar firms amid the pandemic: should regulators intervene?

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The power of superstar firms amid the pandemic: should regulators intervene? 3

By Professor Anton Korinek, Darden School of Business and Research Associate at the Oxford Future of Humanity Institute. Gosia Glinska, associate director of research impact, Batten Institute for Entrepreneurship and Innovation, Darden School of Business

Recent news that Apple hit a market cap of USD2 trillion highlights an extraordinary success story: A once struggling computer-maker on the verge of bankruptcy innovates its way to becoming the most valuable publicly traded company in the United States.

Apple’s 13-figure valuation is indicative of a larger trend that is not entirely benign — the rise of a handful of superstar firms that dominate the economy. Over the past three decades, advances in information technology, mainly the Internet, have supercharged the superstar phenomenon, allowing a small number of entrepreneurs and firms to serve a large market and reap outsize rewards. And COVID-19 has greatly accelerated the phenomenon by pushing us all into a more virtual world.

Apple — along with Amazon, Facebook, Google, Microsoft and Netflix — is a case in point. The combined market value of those six companies exceeds USD7 trillion, which accounts for more than a quarter of the entire S&P 500 index. Even amid the pandemic’s economic wreckage, these megacompanies continue to prosper. The combined share price for Apple and its five peers was up more than 43 percent this year, while the rest of the companies in the S&P 500 collectively lost about 4 percent.[1]

Superstar firms can be found in almost every sector of the economy, including tech, management, finance, sports and the music industry. They command increasing market power, which has consequences for technological, social and economic progress. It is, therefore, critical to understand how their advantages arose in the first place.

THE FORCES BEHIND THE SUPERSTAR PHENOMENON

The “economics of superstars” was first studied by the late University of Chicago economist Sherwin Rosen. Forty years ago, Rosen argued that certain new technologies would significantly enhance the productivity of talented workers, enabling superstars in any industry to greatly expand the scope of their market, while reducing market opportunities for everyone else.[2] Digital innovations, including advances in the collection, processing and transmission of information, is what Rosen envisioned would lead to the superstar phenomenon.

Digital technologies are information goods, which are different from the traditional, physical goods in the economy. What it means is that fundamentally different economic considerations apply. Unlike physical goods — a loaf of bread or a car — information goods have two key properties: They are non-rival and excludable. Non-rival means that something can be used without being used up. Excludability means that an owner of digital innovation can prevent others from using it, by protecting it with patents, for example. These two fundamental properties of information goods are what give rise to the superstar phenomenon.

In a working paper I co-authored with Professor Ding Xuan Ng at Johns Hopkins University[3], we described superstars as arising from digital innovations that require upfront fixed costs that allow firms to reduce the marginal costs of serving additional customers.[4] For example, once an online travel agency has programmed its website at a fixed cost, it can easily displace thousands of traditional travel agents without much additional effort, scaling at near-zero cost.

Because a firm can exclude others from using its digital innovation, it automatically gains market power. The innovator then uses that power to charge a mark-up and earn a monopoly rent — basically, a price superstars charge in excess of what it costs them to provide the good — which we call the ‘superstar profit share’.

THE POLICYMAKER’S DILEMMA

In a vibrant free market economy, businesses compete for customers by innovating and improving their offerings while keeping prices low; otherwise, they are displaced by more innovative rivals entering the market. Unfortunately, the increasing monopolization of the economy by technology superstars is weakening the competitive environment around the world.

Monopoly power is the main inefficiency from the emergence of superstar firms, because superstars can exclude others from using the innovation that they have developed.

So, what policy measures can be employed to mitigate the inefficiencies arising from the superstar phenomenon?

We do have antitrust policies designed to promote competition and hence economic efficiency. Authorities could take a drastic measure and break up monopolies. Or they could tax all those excess profits megacompanies make.

Another policy to consider involves giving consumers control rights over their data. Right now, only companies have that data, and they are selling it. If you free it up and don’t allow them to sell it anymore, it reduces their monopoly profits. And if you give consumers more freedom over their data, they could, for example, share it with the latest start-up and create a more competitive landscape.

However, such policy remedies can be a double-edged sword. On the one hand, they reduce monopoly rents. On the other hand, they can also reduce innovation.

Innovation requires investments in R&D, which represent a significant sunk cost that only large firms can afford. Government regulations can easily backfire, discouraging large firms from making long-term R&D investments.

What, then, is the best policy intervention? Professor Ding Xuan Ng and I believe that basic research should be public. Digital innovations should be financed by public investments and should be provided as free public goods to all. This would make the superstar phenomenon disappear, and the effects of digital innovation would simply show up as productivity increases.[5]

We live in a brave new world that is increasingly based on information. Because the information economy is different from the traditional economy, antitrust policy should be revamped to reflect that. Instead of worrying about the economy being eaten up by these gigantic monopolies, policymakers need to focus on the question ‘What specific actions can we pursue to make the economy more competitive and efficient?’

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