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The Battle For Customers

By Peter Armaly

“We tend to fight the next war in the same way we fought the last one. We are prisoners of our own experience.”

Sam Wilson, Lieutenant General US Army

He spoke those words a few years before the Vietnam War plummeted to its nadir (from America’s perspective). The conflict was gradually slipping out of control of the US government and a thought was emerging amongst a circle of military leaders, troubling and difficult for many to accept, that the US involvement had been predicated on a miscalculation about how wars should be fought. From the start, the war was different in the predominant mode of operations (guerrilla warfare) of the US enemy and in that respect, it had not followed the familiar patterns of the previous two significant conflicts (WWII and the Korean War). Leaders like General Wilson began voicing concerns that the US was up to its neck with the wrong strategy and that they couldn’t win if they maintained their current course. We know what happened after that. That message was smothered and so too were US hopes of victory.

While this article begins with a focus on war, the rest of it is not about that subject or geopolitics. It is about history, though—the history of business and how it tends to view customers.

Taking a longer view is a noble endeavor

The second sentence in General Wilson’s quote came to mind when I recently read, Successful companies more likely to say marketing function “owns the customer” [stats] from Econsultancy, an agency I subscribe to and whose research I admire. This article calls for a reorientation of marketing’s mission so that it can begin focusing on working with a company’s existing customers in a similar way that it focuses today on buyers and prospects. In other words, cover the complete lifecycle of a customer, providing them with the guidance they need to make the best decisions at each step of their journey. That strategy is so virtuous that it’s hard to debate and as a person who spends a lot of time thinking about how the customer’s experience could be improved, it made me want to stand up and applaud.

Taking a step back

A reorientation is indeed necessary for two reasons: 1) because we know marketing struggles to prove to sales (primarily its historical master) that the work it performs makes a difference in whether a customer decides to purchase and, 2) because effort spent working with loyal customers has a larger impact on profit over time than does the effort involved in securing new customers. Focusing on existing customers will be a departure for marketing, however, and will involve: an entirely new way of thinking about revenue, designing new processes that haven’t even yet been considered, cross-organizational conversations to drive decisions that produce mutually agreeable outcomes, and in convincing the entire company that marketing should take a lead role in influencing customer growth.

Prisoners of our own experience

And this is where General Wilson strides back on to the scene. Another perspective on the above-mentioned article would be to consider the idea from a wider lens, past just sales or marketing “owning the customer”. Setting aside the internal turf war that will eventually erupt because of that assertion, there is one perspective that isn’t considered in that scenario. When you think about it more expansively, the question of ownership has always been about money. Who has the relationship with the customer decision-makers? That’s why it has historically rested on sales to carry that responsibility. But what about in the new world of cloud where the customer experience is increasingly seen as the linchpin to renewals and growth? Is it marketing? A case can be made that they are better prepared for that than sales but how will marketing get the full picture of the existing customer without an intimate partnership with those organizations that work most closely with those customers? That would be customer success, customer support, and education.

Much of what’s being written about marketing’s new need to focus on existing customers, unfortunately, repeats the refrain (owning the customer) from an old hymn book and it sounds discordant in the world of cloud businesses. While I don’t disagree with the underlying research in the article, I do believe obsessing about who owns the customer is a waste of corporate energy that should be diverted towards more substantial concerns like organizational alignment around the customer experience. Wanting to be seen as the organization that owns the customer perpetuates a questionable strategy that has historically failed at addressing customer need and sees a company’s organizations pitted more against each other than in being cooperative.

Who owns the customer?

No one really “owns” the customer in subscription companies. It’s actually more accurate to say that the customer owns the customer because, although many companies seem to have difficulty coming to terms with this truism, the customer is in control. McKinsey implied as much in this piece, called Organizing for the Future, in which they framed the need to redesign our corporations in response to digitization, which is ultimately driven by consumer and customer preferences.

Tien Tzuo, CEO of Zuora, attempted to speak to this too in his book, Subscribed. Where he depicted a modern corporation operating in the manner shown below, one in which the customer forms the nucleus and all processes flow around them. That new model contrasts sharply with the conventional (and increasingly risky in the digital age) hierarchical model that sees the product as the source of a company’s work and its reason for being.

So instead of saying any particular organization owns the customer, it might be wiser and more digitally efficient and accurate to ask “since the customer owns their own experience with products and services, how can we all work together to make sure they get optimal value from those things?”

I’ve been calling for a convergence of customer success and marketing going back at least five years and if I co-opt the main message of that research I called out earlier, it looks like we might be approaching an opportunity for it to come true. If marketing and customer success can collaborate and build integrated and automated processes, they can drive the kind of digital transformation that would see the customer benefit in the end (and naturally, therefore, the company would too). Customers will receive the targeted guidance they need in near real-time and it will be based on a full picture of their preferences and on their rate of adoption against the business goals they’ve articulated for the solutions in which they invested. It’s worth mentioning that our recently announced CX Unity holds great promise for moving the industry down that road.

Let’s break with the past

It has been said that the most difficult aspect of digital transformation is the “cultural”. I see language as a key element of the cultural component. It can hinder or accelerate depending on how it’s used. For companies to be truly customer-centric in today’s economy, lots of things need to happen. But, first and foremost is the need for organizations, and the people who work within, to reimagine how they focus their effort around the customer. They need to understand that collaborating cross-organizationally is the only pathway to success.

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Source:: http://feedproxy.google.com/~r/itsallaboutrevenue/~3/NhhsoxQAhy4/the-battle-for-customers