Digital Customer Analysis Going Mainstream?

Is it possible the mainstream digital marketing space is about to finally move on from a focus on front-end measurement (campaigns, etc. ) to creating knowledge around how enterprise value as a whole is created?  And actually enabling action in this area?

Judging by the material coming out of the recent Martech conference in Boston, one would think so.  And it looks to me like I’m not the only one thinking “it’s about time”.

A couple of years ago I lamented:

It’s been very popular among marketing types to talk about “the customer” but seek metrics for affirmation other than those based on or derived from the customer. Digital analysts have followed their lead, and provided Marketers plenty of awareness, engagement, and campaign metrics.  As I’ve said in the past, this is a huge disconnect. Does it make sense (analytically) to have discussions about customer centricity, customer experience, customer service, the social customer, etc. and measure these effects at impression or visit level?

If you’d like to review some commentary on the conference, see a list of 5 posts here.  I found the list of tweets here particularly indicative of Martech’s potential, for example:

2 obstacles to marketing change in organizations: accountability and complacency. @paulroetzer #MarTech

Marketing CMOs now own the whole customer experience in the most progressive companies, from product to retention. @lauramclellan #MarTech

The best marketers can think on a strategic level, then execute on a tactical level & get hands dirty. @paulroetzer #MarTech

On average, marketers depend on data for only 11% of customer-focused decisions. @ceb_news #MarTech

What makes a marketing technologist? Curiosity. Leadership. Creativity. Risk-taker. Can start as tech or marketer. @lauramclellan #MarTech

Marketing: right brain. Technology: left brain. #MarTech needs people strong in BOTH brains. Our greatest challenge is very rare talent. @cspenn

While the technology stack for achieving customer-focused value measurement has certainly improved over the past several years, the cultural support for a  movement like this is may be still lacking.  There are of course exceptions, but in general I find most corporate structures in digital have a hard time finding and dealing with the knowledge created from introspection at the customer level.  That thing  called “customer” typically touches a lot of different parts of the business, so the determination of value would also.

The DAA courses and workshops have always taken the “both brained” approach referred to above by MarTech, attempting to create a “view from the middle” that could help address and wrestle these kinds of issues to the ground.   The course material is primarily targeted to folks working in the trenches though; the corporate culture needs to also get in the game by enabling people to easily cross the both-brain boundary.  Some part of greasing this path is also up to the analyst, for sure.

What’s the core challenge to making this work?  Consider a couple of client examples:

Company A spent millions on front-end infrastructure and advertising.  The business does OK, but growth is lacking and the market is specialized, so potential customers are not just out there lurking behind every ad impression.  A very simple customer analysis found best customers to be leaving the company at a fairly rapid rate, and the reason was clear: best customer defection centered around service issues that were not on the radar of the unfortunate marketing folks being held accountable for poor company performance.

Company B also spends a ton of money on front-end campaign-oriented systems and acquisition efforts; they are in all the latest ad formats / platforms and are very sophisticated users of these technologies.  They generate tons of new customers but have a poor customer retention profile for this type of business, so profits were being chewed up by all the ad spend.  A relatively simple Classic LifeCycle analysis showed their campaign spending was very strongly weighted towards generating low value customers, while leaving a lot of high value customer potential on the table.  In this case, there was no centralized assessment of “after the sale” net corporate performance, so the company lacked the ability to allocate marketing resources to highest and best use.

I should also add the people involved were aware of, understood, and cared about the potential for these kinds of issues to be present in the business model, but had not pursued them at their own company due to various forms of “resistance”.

So, what happened, how did these situations evolve?

In both cases the eventual conclusion was simply that nobody was responsible for looking at or understanding these ideas.  In these cross-silo challenges, the silo acts as a barrier to making progress against the business plan.   The pairing of cause and effect bridged institutional boundaries and there was no incentive or negative incentive to analyze across boundaries, since the primary concern was performance within each silo itself.

Meanwhile, from the non-siloed corporate perspective, each business simply walked away from huge piles of free cash flow without even realizing it was there for the taking.

How is it possible companies can afford to spend millions on front-end customer acquisition efforts but do not take the time to foster cross-boundary collaboration and accompanying measurement?  Especially when there’s so much yakking out there on how important “the customer” is, and “customer” is by definition a cross-boundary entity?

Perhaps most companies will need a “business analyst”-style position, similar to the role in classic IT, to cross these silo boundaries between digital operations, marketing, and analytics.  Someone who has a formal responsibility to speak all languages and question all sides.  Or, will Marketing Operations Management as a separate entity be responsible for resolving these kinds of boundary issues?  Catchy name, but name alone will not allow transparent silo boundary crossing and accountability.  Enabling culture required.

Martech / Marketing Operations Management might be able to help with the technical barriers that remain, but let’s hope they also keep an eye on and actively promote addressing the corporate analytical culture issues as well.

Your thoughts on any of the above are most welcome.  When you have encountered resistance to cross-silo optimization efforts, were you able to move the ball forward, or was it more prudent to just leave the opportunity on the table?

If you did move forward with your idea, what approach did you take with manic-ment?

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