Original article at: Business 2 Community
The new high ground for the CMO
Tenet Partners research shows that brands with high familiarity and favorability, combined with a rich customer experience, can have a brand value more than 40% higher than their competitors. Consumers are more likely to trust, respect and recommend these brands, creating a virtuous cycle for customers and shareholders. Customer experience, then, is an increasingly important point of differentiation. Yet, many companies still fail to deliver the experiences their customers expect. Why?
In the 2014 Tenet Partners consumer experience study, 56% of customers cited a poor service experience as the reason that they left a brand. What would you do if half the customers abandoning your brand did so because someone on the front lines delivered a bad experience? I imagine that most CMOs would say that they would do whatever it takes to treat their customers better.
The problem is that the CMO has not traditionally been responsible for designing, delivering and managing the customer experience. This is changing rapidly thanks to digital platforms that are remaking marketing, communications and the delivery of customer experiences. CMOs at leading brands and forward-thinking companies are being asked to step into new operational areas to help craft and deliver the customer experience. In large part, the digital transformation of business models – and the resulting integration of brands into digital and physical touch points – is enabling and accelerating this shift in role.
Yet, few executives stepping up to this new business challenge are truly prepared to tackle this domain because marketing has been isolated from operations. Traditional marketing has focused expressly on advertising and communications rather than the overall experience. Fortunately, driving customer experience in a digitally charged world leverages capabilities marketers already possess – specifically, the ability to gather market insights and develop brands that reposition companies toward market opportunity. But today, more skills are needed to successfully address the bigger picture.
Marketers need to become engaged in – and adept at – developing business strategy, driving innovation and implementing systems that shape the actions of entire organizations. These three dimensions, combined with a strong understanding of the brand, are the tools for driving growth. By engaging with their peers in the design of the business and digital platforms, CMOs help align the business model, culture and operations to the brand. Companies that do this well have a unique opportunity to deliver compelling customer experiences and create enormous competitive advantage.
American Express is one of the strongest brands, according to the 30 years of historical data contained within the Tenet BrandPower Database; it also scored well in our customer experience study. The story, especially versus Capital One, is very compelling. The research results show higher levels of trust among Amex users, which is an essential element for brand loyalty. At a tactical level, the research also suggests that Amex, to a greater degree than Capital One (and most other brands in the study regardless of industry, for that matter) provides the knowledgeable help its customers expect. In addition, Amex engages with customers in a way that respects their unique needs. This includes orchestrating touch points across all channels, including digital. All of these activities are essential to providing a satisfactory experience.
A closer look reveals the impact of other innovations that Amex is driving across its platform. From everyday membership benefits to shaping mobile payment systems and driving fresh innovations to new markets, the company is steadily creating deeper levels of customer engagement. This in turn raises barriers to competing firms.
Bottom line: American Express focuses on the value that it delivers through a highly tailored customer experience that is tightly aligned to its brand attributes. When compared to Capital One, which focuses its primary investment on growing its credit card share through advertising, American Express is winning the battle for the best, most loyal customers.
The lesson is clear. The tried and true pillars of service, value and quality that are aligned to your brand and business model are still the most important. When CMOs concern themselves with value creation by delivering and managing a rich customer experience, they are not only driving marketing, they are driving competitive advantage and enterprise value.