AMERICAN MARKETING ASSOCIATION
AMA.ORG
SEPTEMBER 2018
THE FUTURE OF
CUSTOMER EXPERIENCE
SEPTEMBER 2018 NO.
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table of contents AMERICAN MARKETING ASSOCIATION
4-8 10-25
SEEN ON AMA.ORG ANSWERS IN ACTION • Snapshot • Core Concepts • Ethical Marketing • Tools & Templates
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EXECUTIVE INSIGHTS • Russ Klein • Vikas Mittal • J. Walker Smith
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CAREER ADVANCEMENT • Collaboration
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#OFFICEGOALS
34 What Does the Future of Customer Experience Look Like?
We looked at 10 industries to find out how CX is evolving. What we found: More technology, more speed and higher expectations will force companies to evolve or be left behind.
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SEPTEMBER 2018
VOL. 52 | NO. 8 AMERICAN MARKETING ASSOCIATION
Bill Cron Chairperson of the AMA Board 2018-2019 Russ Klein, AMA Chief Executive Officer rklein@ama.org EDITORIAL STAFF
Phone (800) AMA-1150 • Fax (312) 542-9001 E-mail editor@ama.org Molly Soat, Editor in Chief msoat@ama.org Michelle Markelz, Managing Editor mmarkelz@ama.org Hal Conick, Staff Writer hconick@ama.org Sarah Steimer, Staff Writer ssteimer@ama.org Bill Murphy, Designer wmurphy@ama.org ADVERTISING STAFF
Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Michael Gay, Account Executive mgay@yourmembership.com (727) 329-4421 Nicola Tate, Account Executive ntate@yourmembership.com (727) 329-4437 Jordan Berthiaume, Media Sales Representative jberthiaume@YourMembership.com (727) 497-6565 x3409 Marketing News (ISSN 0025-3790) is published monthly except June/July and November/December (pending) by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601. Circulation: (800) AMA-1150, (312) 542-9000 Tel: (800) AMA-1150, (312) 542-9000 POSTMASTER: Send address changes to: Marketing News, 130 E. Randolph St., 22nd Floor, Chicago, 60601-6320, USA. Periodical Postage paid at Chicago, Ill., and additional mailing offices. Canada Post Agreement Number 40030960. Opinions expressed are not necessarily endorsed by the AMA, its officers or staff. Marketing News welcomes expressions of all professional viewpoints on marketing and its related areas. These may be as letters to the editor, columns or articles. Letters should be brief and may be condensed by the editors. Please request a copy of the “Writers’ Guidelines” before submitting an article. Upon submission to the AMA, photographs and manuscripts will not be returned unless accompanied by a self-addressed, adequately stamped envelope.
LETTER FROM THE EDITOR
What Does the Future Hold?
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ustomer experience will never be the same. As customers ourselves, we expect personalization with full security, excellent service and low prices— and our customers expect the same of us. No big deal. Entertainment. Groceries. Health care. Retail. All of these are changing rapidly. For our cover story, experts from 10 industries, from social media to ridesharing, weigh in on what they see as the “next big thing” in customer experience. “Five to 10 years from now, two things will happen: No. 1, there will always be leaders that are constantly setting the bar higher for everyone. No. 2, there is a strategy that is starting to come to light that I don’t believe has been exposed to the masses yet: convenience,” says Shep Hyken, a customer experience expert and author of the forthcoming book The Convenience Revolution. “Amazon is more convenient than its competitors, and it disrupted them. Convenience is the next big wave of customer service, and it’s going to be a revolution,” he says. “The customer doesn’t see channels anymore,” says Chris Petersen, CEO of Integrated Marketing Solutions. “To them, it’s all commerce. Some days, I prefer to shop online. Some days, I’d much prefer
the store. Sometimes I’m in the store, and I want to ship what I buy home. Those retailers that understand and execute this are doing extremely well. The retailers that are struggling—aka Sears and Toys R Us— use the old-school model of you come to us and we sell you something. They’re dying quickly.” Customers have changed their expectations. How do we as marketers know what they need? We must start with data and end by visualizing their experience from beginning to end. How are you adapting? MOLLY SOAT Editor in Chief @MollySoat
CONTRIBUTORS
Annual subscription rates: Marketing News is a benefit of membership for professional members of the American Marketing Association. Annual professional membership dues in the AMA are $220. Annual subscription rates: $35 members, $145 nonmembers and $190 libraries, corporations and institutions. International rates vary by country. Nonmembers: Order online at amaorders.com, call 1-800-633-4931 or e-mail amasubs@ ebsco.com. Single copies $10 individual, $10 institutions; foreign add $5 per copy for air, printed matter. Payment must be in U.S. funds or the equivalent. Canadian residents add 13% GST (GST Registration #127478527). Advertisers and advertising agencies assume liability for all content (including text, representations and illustrations) of advertisements published, and also assume responsibility for any claims arising therefrom made against the publisher. The right is reserved to reject any advertisement. Copyright © 2018 by the American Marketing Association. All rights reserved. Without written permission from the AMA, any copying or reprinting (except by authors reprinting their own works) is prohibited. Requests for permission to reprint—such as copying for general distribution, advertising or promotional purposes, creating new collective works or resale—should be submitted in writing by mail or sent via e-mail to permissions@ama.org. Printed in the U.S.A.
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ALEX WITHERS
DEBBIE QAQISH
Withers is the CMO of inMotionNow, a leading provider of workflow management solutions for marketing and creative teams. Withers is a seasoned digital technology and marketing executive with more than 20 years of leadership experience.
Qaqish is principal partner and chief strategy officer of The Pedowitz Group. She manages global client relationships and leads the firm’s thought leadership initiatives. She has been helping B-to-B companies drive revenue growth for more than 35 years.
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Customer Journey Mapping in 3 Steps
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ven with the wealth of customer data available through marketing technology today, few marketers validate critical customer journey work by talking with actual customers. This lack of real customer insight clouds any idea of the customer journey your team might have. Marketers cannot simply sit in a room and make stuff up based on a hunch. They must engage directly with customers to identify their challenges and solve them. In the late 1990s, I led a small business group responsible for mapping the sales process for large companies. We always began with the customer journey. Over a three-day
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period, we would create a map with the sales team, including: • Stages of the customer journey, with names for each stage. • Customer needs and outcomes at every stage of the process (in the customer’s language). • Inputs and outputs of each stage. • Responsibilities of sales in each stage. • Sales metrics required at each stage. • The role of tools and technology for each stage. Drafting the customer journey was an important first step, and talking with the customer about this map was critical. Sales teams often pushed back because they felt they were the
experts on their customers. They had a perspective, but they could never really walk in the customers’ shoes. We armed key sales representatives with the process and materials they needed to interview their customers, and we showed the journey map to customers, asking: • Does this look like a journey you might take? • Did we correctly express your expectations and activities during each stage of the journey? • Did we correctly describe how you want sales to respond in each stage? We gathered the input and created our final customer journey map. Only then could we complete our sales process mapping. I provide this example because if salespeople, who talk with clients constantly, need customer input to
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Marketers cannot simply sit in a room and make stuff up based on a hunch. They must engage directly with customers to identify their challenges and solve them. understand the customer journey, then so do marketers. An accurate map that serves as the foundation of your marketing must be validated by the customer.
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Begin Journey Mapping in Sales
I always suggest building the customer journey map in stages and making adjustments based on new information or insights. Sales is the first group you need to work with, including business development representatives (BDR), inside sales, outside sales, enterprise sales, account managers and sales operations. Having representation from each of these sales groups will allow you to draft the entire customer life cycle, including net new acquisition and account expansion. The BDR team can provide insights on when and how new prospects engage, sales representatives can explain how a customer behaves during the buying process and account managers can provide information on behaviors of current customers. Sales operations can begin considering what tools and technologies are required to support the new customer journey. The next step is internal validation with a broader set of the sales team. In this case, you will be validating abovethe-line (what a customer thinks) and below-the-line (what you need to do) activities. This accomplishes two objectives: By engaging more salespeople, you make them feel included, making them more likely to accept changes as the project
unfolds. It also provides you with more information for the map.
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Layer in Other CustomerFacing Functions
Much like the sales team process, meet with other customer-facing functions, show them the map and gather their input. As with sales, define the layers and separate abovethe-line and below-the-line activities. I often see groups such as customer success, customer support and services as key to this step in the process. Your customer success and customer support team are full of information about customers. They can often provide insights into what new customers need.
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Talk with Your Customers
Once you have finalized the input from the customer-facing teams, prepare an above-the-line version that you can take out to customers. Create a strong question set and ensure that everyone who interviews a customer uses the same question set. This interview should be done by the marketing team. Nothing gives you better insights into marketing operations than constant dialog and interviews with your prospects and customers. This is a great learning activity. Regardless of the method you use to collect this information, establish a continuous process. Talking with customers and using data to better understand them is the first step in making marketing customer-centric. Ultimately, if you do this right, marketing becomes the voice of the customer, and you become the leader in helping your company pivot to customer centricity. —DEBBIE QAQISH
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How Amazon’s Acquisition of PillPack Will Affect Health Care
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any people believe the American health care system holds significant opportunity for improvement, whether it be around rising costs or putting people at the center of care. Recent announcements disrupting the status quo include Amazon, JPMorgan and Berkshire Hathaway’s joint venture to create
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a health care “mega-company” and, most recently, Amazon’s $1 billion acquisition of PillPack. As consumers’ lives get busier, they want convenience, and a growing list of brands and services are offering it. Amazon, Walmart and a slew of other companies with strong e-commerce operations have made ordering and receiving everyday essentials easier with
subscription-based deliveries of everything from clothes to mealprep kits. Now medicines can be automatically refilled using online services, too. PillPack offers this with the convenience of personalization. Convenience is an exciting proposition for the millions of Americans who take daily medications to address chronic health conditions. One common pain point of prescription medicine is keeping track of doses and refills. PillPack
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describes itself as “a full-service pharmacy that sorts your medication by the dose and delivers to your door.” Instead of multiple bottles of pills, a pharmacist creates small packets with different doses for each time of day. While it is too early to know how PillPack will actually affect the ecosystem of pharmacies, health care providers, consumers and caregivers, industry insiders have some predictions.
Health Care Providers Tim Gentilcore, director of retail pharmacy at Mission Health & Healthy State believes PillPack will have a positive impact for health care providers since it could translate to increased compliance from patients. Better compliance should lead to better health outcomes. This is especially the case for those managing chronic conditions such as diabetes. “Community providers and pharmacists are seeking bidirectional transparency to better counsel patients on their prescriptions,” Gentilcore says. “Providers would like to see their patients’ entire prescription profile, and in turn, pharmacists would like to see the corresponding medical data. PillPack offers a potentially great proposition that may further support the important continuum of care.”
Pharmacies With the acquisition of PillPack, Amazon has made it easier to order and manage pills, eliminating the need for local pharmacies in many cases. It follows then that pharmacies might not favor this acquisition, especially because Amazon’s mobile app is one of the most popular among smartphone users. On the day the acquisition was announced, stocks of top pharmacy chains dropped significantly—some by as much as 10%. “In addition to the personalized
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services that local pharmacies offer patients, there will be those instances when patients need to fill a new prescription right away, and local pharmacies will remain critical for that need,” Gentilcore says. However, bigger competitors than PillPack are already disrupting the local pharmacy model. Unfortunately for consumers, there’s no reason to think this competition will affect drug prices. E-commerce is already disrupting traditional bricks-and-mortar retailers; now technology is extending the reach of health care with telemedicine. To compete, providers and pharmacies must be ready to serve people with omni-channel access and delivery and train staff on how that delivery model will impact operations.
Consumers and Caregivers Technology continues to promote positive health outcomes with lifesaving medical devices and overall convenience with patient portals and home delivery of prescriptions. PillPack’s proposition suggests consumers can eliminate phone calls to doctors and pharmacists to orchestrate orders and payments. Amazon saves customers time, one of the most precious commodities of customer experience. For customers with aging, ailing parents, PillPack’s innovation offers a strong value proposition for helping caregivers manage pills. PillPack’s proposition offers greater peace of mind that elder relatives or even children won’t mix up doses since a pharmacist has created single-dose packets for each dosing moment. Convenience and simplicity driven by technology continue to disrupt legacy brands in every industry, whether it be fashion, food, transportation or health care. Providers must figure out how to leverage technology and simplicity to transform their practices to make services accessible and convenient. —CAROLYN KOPF
Providers and pharmacies must be ready to serve people with omnichannel access and delivery and train staff on how that delivery model will impact operations.
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How One Woman Is Using Lemons to Educate the World About Breast Cancer Corrine Ellsworth Beaumont’s goal is simple: Educate every woman in the world about breast cancer symptoms. After her awareness visualization went viral, she’s one step closer. BY HAL CONICK | STAFF WRITER
hconick@ama.org Goal Four months after Corrine Ellsworth Beaumont resigned from her job to focus on the nonprofit she founded, her phone buzzed—it didn’t seem to stop for three weeks. “I wasn’t prepared for the amount of press I got in those first three weeks,” says Beaumont, founder of Worldwide Breast Cancer and creator of the “Know Your Lemons” campaign. “I would see inquiries coming in from Germany one day … then I’d see stuff coming in from Italy and Thailand. I had people contacting me on Facebook, saying they’d seen my stuff in Paraguay.” Since 2003, Beaumont had been
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working on “Know Your Lemons,” a visualization of breast cancer symptoms represented by a dozen lemons in an egg carton. One day in January 2017, the campaign went viral. Erin Smith Chieze, a breast cancer survivor, posted the “Know Your Lemons” image on Facebook, writing that a similar photo helped her identify her own stage 4 breast cancer symptom: an indentation. The image had saved her life, she said. Rather than posting hearts, which some Facebook users had been doing as a secret nod to breast cancer survivors, Chieze wrote that people should post realistic images of breast cancer symptoms to inform unwitting breast cancer sufferers.
The “Know Your Lemons” image fit the bill, and people took notice. Within days, Chieze’s post and the “Know Your Lemons” image were shared 47,000 times, reaching about 3 million people and getting picked up by multiple media outlets. Beaumont was stunned. Her goal for “Know Your Lemons” was to educate every woman about the symptoms of breast cancer. With the shares and media requests piling up, her goal seemed within reach. But with success came struggles: One night, she had to work frantically to rebuild her website, which crashed after a surge in traffic. “It was a victim of its own success,” she says. Beaumont also spent hours messaging journalists for corrections to misstated facts and to ask for credit to her organization for the “Know Your Lemons” image. Finally, she secured interviews with the BBC, CNN and multiple magazines. After 14 years, it was her campaign’s greatest exposure. Beaumont could barely keep up, but she was one step closer to her goal. Action Beaumont knows that reaching every woman is a lofty goal, but she believes that a well-designed visual marketing campaign can appeal to everyone, regardless of culture. But for an image to reach every woman, Beaumont’s design had to account for literacy challenges, social taboos and fear of cancer. Beaumont, who lost both of her grandmothers to breast cancer, studied design for more than a decade at Utah State University and Buckinghamshire University. She wanted to find a way to increase awareness of breast cancer symptoms and believed an image-based campaign was best. (She wrote in her doctoral thesis that most people don’t read wordy educational materials.) Beaumont tested and researched the best ways to use visuals to educate a diverse audience; instead of segmenting, she believed the best idea was to create an image that appealed to everybody. The lemons were perfect; the image showed
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detailed breast cancer symptoms without being too cheeky or too graphic. “I tried to design in a way that would work for as many people as possible and not be so dependent on text,” Beaumont says, adding that many people across the world—including one in five people in the U.S.—have literacy challenges. “By having a visual that could communicate some really important concepts in a few seconds, we could get people interested in breast cancer and educate them at the same time.” The campaign stormed into Englishspeaking countries through the virality of Chieze’s post, but Beaumont wanted to capitalize on the success; she quickly pushed the image to the rest of the world. WBC formed partnerships with educational partners around the world, telling them that they could use “Know Your Lemons” instead of creating new campaigns. Along the way, Beaumont refined the campaign based on the response it received—she’d often change
COMPANY
Worldwide Breast Cancer HEADQUARTERS
Lewisville, Idaho; working virtually from the U.K. and Australia CAMPAIGN TIMELINE:
Beaumont created the “Know Your Lemons” image in 2003 and has been refining it since. She founded Worldwide Breast Cancer in 2014 and the “Know Your Lemons” image went viral in January 2017. RESULTS
166 million views in the three weeks of virality in January 2017 and an estimated 200 million views since the campaign went viral
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the formatting of the text to make the image inclusive for different text sizes in different languages. “Every day, we get someone from a different part of the world calling us, saying they’d like to use the materials,” she says. The campaign is now in 93 countries and has been translated to multiple languages, including Arabic, Spanish and Hindi. “Know Your Lemons” has also passed early taboo tests; the image has been used by the Turkish government, local clinics in Kenya and has been posted in hospitals in Jeddah, Saudi Arabia, an extremely conservative city just outside of Mecca and Medina, two of Islam’s holiest cities. “It’s a pretty good indication that they were able to overcome these censorship issues affiliated with breasts and cancer,” Beaumont says. “People don’t like talking about cancer, either. But we make it friendly.” Chris Bevolo, executive vice president of health care agency ReviveHealth, says that the euphemistic-but-clear design of the “Know Your Lemons” campaign allows it to bypass the universal barrier of talking frankly about the human body. “You like to think we can all be adults and just talk about this stuff, but when you do it that way, there’s a resistance to wanting to talk about it,” he says. “But it’s also not as effective. It’s like advertising Nike, but instead of saying, “Just Do It,” I would be saying, ‘Buy Our Shoes: They Help You Run.” Being so literal and descriptive [doesn’t work].” That’s the great thing about using lemons, Beaumont says: The euphemistic realism of the campaign allowed her to show symptoms without disgusting or offending people. “We removed all the barriers that have kept people from learning about breast cancer by giving them 12 lemons,” she says. Result During the initial three-week rush of media, Beaumont says that the campaign was seen more than 166 million times. These views came mainly from Englishspeaking countries—Beaumont doesn’t have an exact count of the total since the first three weeks, but she estimates that
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more than 200 million people have seen the campaign. The next step for WBC is to translate the campaign into more languages. Soon, the campaign will be translated into Mandarin, the most-spoken language in the world. Additionally, Beaumont says WBC will soon push out a campaign in Lagos, Nigeria, where 75% of women with breast cancer are diagnosed at stage 4—a big difference when compared with the 10% of women diagnosed at stage 4 in the U.S. “We’re working with a health partner [in Lagos] to change that number so that more women can survive breast cancer,” Beaumont says. The results will serve as one metric of success of the campaign. The campaign will also continue in English-speaking countries. Beaumont says that WBC will be partnering with a U.K. charity in October to roll out “Know Your Lemons” as part of a largescale Breast Cancer Awareness Month campaign. In September, WBC will launch an app that will guide women through breast cancer self-examinations. The app will also feature a tool for booking a mammogram. Busy times are expected, but so is money. This is where the organization has the most problems. WBC’s most recently posted revenue was $68,804 in 2016, up slightly from its 2015 revenue of $48,647. The organization hasn’t had an easy time attracting donors, Beaumont says, even with 2017’s virality. Many people don’t realize WBC is a charity, she says, so the organization has set up an online shop and put a button for donations on the website. It’s also recently placed an occasional pop-up on the website that asks readers, “Did you know we are a nonprofit?” “We tried a number of different things, and it’s just not caught on,” she says. “We’re still figuring out that piece of the puzzle.” Even so, Beaumont has enjoyed her hectic year of educating women across the world and pocketing a phone that seems to always be buzzing. “It’s exciting,” she says. “Every day is different.” m
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CORE CONCEPTS
How to Use Direct Mail in the Modern Marketing Mix Far from dead, direct mail marketing gets a higher response rate than it did more than a decade ago. Here’s how marketers can take advantage. BY HAL CONICK | STAFF WRITER
hconick@ama.org
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any marketers have long awaited the death of direct mail. Surely it couldn’t last much longer, they thought; after all, smartphones, video marketing and social media have all become vastly popular. Why would consumers still want to get physical mail? Neil O’Keefe, senior vice president of marketing and content at the Data & Marketing Association, says that marketers began questioning direct mail’s endurance in 2007. That year, Statista reports that smartphone sales jumped 70% from the previous year to $8.7 billion. At the same time, the volume of mail sent through the U.S. Postal Service began to plummet: In 2006, people in the U.S. sent 213.1 billion pieces of mail, according to USPS; by 2017, they were sending 149.5 billion pieces each year, a 29.9% decline. By this point, smartphone
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sales had reached $55.6 billion. The price of postage and paper had skyrocketed, as did the number of internet users— everything seemed to hammer a nail into direct mail’s coffin. But a strange thing has happened in marketing: Direct mail response rates have risen in the past 10 years. The DMA’s 2017 Response Rate Report finds that the response rate for mail sent to people on house lists (subscribers who opted in to mail) was 5.1% for the year, and the response rate for prospect lists (potential clients) was 2.9%. These numbers are up from 2003, when house lists drew a response of 4.4% and prospect lists a response of 2.1%. And even though online shopping has surpassed purchases from direct mail pieces, the DMA reports that 100.7 million U.S. adults made a purchase from a catalog in 2016, compared with 209.6 million people who
made purchases online the same year, per Statista. “Mail is not dead,” O’Keefe says. “The volumes have changed over the last 10 years, but I think it’s more relevant and personal than ever. That’s why you’re seeing the uptick in the interest in the channel.” Though direct mail isn’t dead, it also isn’t cheap. With more expensive postage costs have come more expensive responses. The DMA reports that each response from a customer on a house list costs companies $22.55, while a response from a prospect list costs $39.75. If direct marketing works, marketers should have it in their mix. Here’s how marketers can use direct mail without suffering a budgetary death by 1,000 paper cuts. Direct Mail’s Biggest Challenge: Measurement Craig Simpson, a direct marketing consultant, says that he works on hundreds of direct mail campaigns each year and finds the most successful campaigns are those coordinated with other media. For example, if a brand sends a piece of direct mail to a consumer, who then receives an e-mail and retargeted ads as parts of the same campaign, Simpson believes that those campaigns will have the best results. Marketers want to reach consumers across multiple channels with a consistent message. “They’re thinking from an omnichannel point of view, not just multichannel,” O’Keefe says. But to be effective, brands must measure well and have good data. This is direct mail’s biggest challenge. Marketers try to measure customer response to direct mail through personalized URLs and coupon codes, but there’s no guarantee customers will visit websites from a specific URL or buy products using a specific code. O’Keefe says that consumers will often receive a piece of mail, get inspired and Google the product they want to buy. The difficulty of attributing conversions may be a reason why the pendulum has swung toward digital, O’Keefe says.
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Although there’s no panacea for direct mail’s attribution problem, Simpson says that he shores up his data by matching a list of recent buyers with consumers from the campaign’s direct mail list. This method is more inductive than deductive, in that he cannot be entirely sure the direct mail led to the purchase, but it allows him to have an idea of how effective a direct mail campaign has been. Good data also allow marketers to learn important information, such as what demographics enjoy receiving mailers, what mailers get the best response and, perhaps most importantly, whether mailers work at all. To find what campaigns bring in the best ROI, O’Keefe suggests that marketers test as many aspects of their campaign as possible, including frequency, number of pages and types of mail they’re sending. He also suggests that marketers get a baseline of their efforts, then test their campaign by holding off on sending mail to certain segments of customers. This can help marketers understand the true value of that segment. O’Keefe says that many marketers get nervous about losing touch with a potentially important customer group, but he believes holding off is one of the best ways to get statistically significant data on the ROI of direct mail. “It takes good self-discipline to understand your customer segments, how much money you’re spending on them and … whether or not you’re getting the return your business needs,” O’Keefe says. Personalization Pitfalls One hundred years ago, companies such as Sears, Roebuck & Co. and J.C. Penny Co. used customer data to send out catalogs and mailers. Back then, the companies possessed small sets of data, mainly names and addresses of customers. Now, marketers have mountains of complex data and are faced with a modern conundrum: How much personal data is too much to incorporate into the content? Target Corp. inadvertently drew an early line in the sand between good data
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use and data use that was too personal for customer comfort. In 2012, Charles Duhigg reported in The New York Times that Target addressed a mailer, which featured coupons for cribs and baby clothes, to a high school girl. When her father complained to the company, yelling that his daughter was not pregnant, the company apologized; when the father called back a few days later, he was contrite. “It turns out there’s been some activities in my house I haven’t been completely aware of,” the father said, according to Duhigg. “She’s due in August. I owe you an apology.” “Target was right,” O’Keefe says. “The algorithm worked. There was really no question about the accuracy or the power of data. But the question is how to deliver the message in the best way possible.” Just because something is true, it doesn’t mean it should be sent to the customer. Good personalization is relevant and valuable, but it shouldn’t be too specific, O’Keefe says, citing Netflix and Amazon as good examples for direct marketers. These companies know what their customers want, but they don’t go over the top in telling them things about themselves they may not yet know. One positive way marketers can personalize content is by giving customers control over frequency of the mail they receive, which O’Keefe says will likely earn marketers the favor of their best customers. “[Customers] have raised their hand to say, ‘Keep sending me good communication,’” he says. How Direct Mail Should Look Junk direct mail should be extinct, but it’s surprisingly extant. “The worst thing [marketers] can do is show up looking like junk mail,” Simpson says. Instead, he says, marketers should aim to look personal and unique with their mailers. “We have to find ways to stand out in that small mail pile to make us the priority piece.” Simpson says that he can tell when a brand hasn’t put effort into designing a mail piece, but he can also tell when
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it puts in too much misguided effort. Direct mail shouldn’t look like a beautiful magazine ad, he says, as this kind of mailed content tends to draw little response from consumers. Instead, direct mail pieces should have good copy and the right offer for the right demographic. Unlike online content, direct mail cannot be ignored. A catalog sits in someone’s inbox, earning attention whether the person buys a product because of the content or throws the mailer in the trash. “It’s worth it to put the time and energy in because you get to sell one-on-one to the prospect with very few distractions,” Simpson says. “That’s why I love direct mail.” Find the Best List Without a good mailing list of potential customers, it doesn’t matter how good the offer or copy is, Simpson says; the content won’t work. Marketers must look at the demographics of their best customers, put those customers onto house lists, then build prospect lists of customers that are similar to their best customers, he says. Simpson’s next step is to include warm leads, people who have contacted the brand but have not yet purchased from it. “If people are already raising their hand and showing interest, we’ll have to go after them first,” he says. Can Mail Endure? While Simpson believes that direct mail can continue its surprising ascent, O’Keefe is skeptical its use will continue to rise. But even if direct mail stagnates, O’Keefe believes that it will remain an important part of the marketing mix. “If marketers keep adjusting the format and making it more relevant, more personal and more valuable, they’ll experience an increase within their customer base,” he says. The biggest challenge O’Keefe sees for marketers is balancing respect for customers’ privacy and access to the data that informs personalized campaigns. But without the data, they will lose access to the customer. m
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ETHICAL MARKETING
Teaching Ethics to AI Artificial intelligence has become a core part of the customer experience, but it can only be as well-rounded as the data it uses. Marketers can guide the ethics of AI on the back end to produce positive CX on the front end. BY SARAH STEIMER | STAFF WRITER
ssteimer@ama.org
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rtificial intelligence is presented as the opposite of natural intelligence, which is demonstrated by animals. By that definition, AI would appear to be free from the social neuroses and discriminations that can plague humans. But machine learning originates from human makers, meaning those shortcomings can be passed along via algorithms and data input. AI is increasingly customer-facing: It includes asking Siri details about an upcoming trip or turning on Netflix and seeing recommendations based on viewing habits. AI touches numerous points along the customer journey, meaning its limitations can have organization-wide consequences.
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Susan Etlinger, an industry analyst for Altimeter and author of the research report “The Customer Experience of AI,” has explored the ways different industries use AI and its effects felt by consumers. “It seems to me that ethical AI and ethical data use are part of customer experience,” she says. Etlinger’s report found leaders from large companies—such as Microsoft, Adobe and IBM—to small startups are developing ethical guidelines and best practices for their AI use. Similarly, experts at AI Now released a 2017 report that provides recommendations on ethics and governance, noting that, “New ethical frameworks for AI need to move beyond individual responsibility to hold powerful
industrial, governmental and military interests accountable as they design and employ AI.” As organizations try to manage ethical concerns with AI, marketers can start by considering the ways they influence ethics. Data Input and Discrimination Type “gymnast” into Google’s image search, and the vast majority of the top results are female, as are the results for “nurse.” The term “parents” shows almost exclusively heterosexual couples. The results to these searches are driven by AI, which isn’t explicitly taught to discriminate. Rather, these prejudices are the result of the data submitted to the AI algorithm. The Google image search function is far from the most egregious example of this bias. Joy Buolamwini, a researcher at the Massachusetts Institute of Technology Media Lab, found genderrecognition AIs from IBM, Microsoft and Megvii could identify a person’s gender from a photograph 99% of the time, provided the photos were of white men. The AIs misidentified the gender of as many as 35% of the “darker-skinned women” in the experiment. [Editor’s note: The terminology “darker-skinned” was used by Buolamwini in her study and refers to skin types that rank IV, V or VI on the Fitzpatrick scale, a six-point scale for classifying skin color, where I is the lightest and VI is the darkest. Skin types ranking I, II or III were classified as “lighter-skinned” in the study.] In another instance, a Palestinian man was arrested in Israel in 2017 after posting a photo of himself on Facebook posing near a bulldozer. The social platform’s automatic translation software interpreted his caption to say “attack them,” but it was wrong: The Arabic phrase for “good morning” and “attack them” are similar, and the software mistook the harmless post as threatening. “One of the things that’s really endemic to AI and to machine-learning technology is that it has to learn from data, and the data we train it with comes from people,” Etlinger says. “People have biases, and
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the data absorbs all those biases. Some of them are things we explicitly state, and some of those are errors of omission.” Customer relationship management systems have historically powered marketing intelligence, but Kathryn Hume, vice president of product and strategy at Integrate.ai, says these systems often capture data about fewer customers than are actually served. Because it can be difficult to engage every single customer and get their feedback, surveys and net promoter scores, the data collected often don’t provide a full picture. “You can look at successful customers that you know a lot about and use [their behavior] to make mappings to new customers … to make guesses,” Hume says. The marketing consequences of these guesses are not often dire: The wrong marketing is presented to a potential customer. It doesn’t resonate. An opportunity is missed. But there can be more negative consequences. In the worst-case scenario, a brand might present the wrong marketing to a prospect who finds it offensive. For example, an algorithm that has been trained on a customer base of white males may incorrectly target a new customer who does not identify with either of those traits. The prospect can feel alienated and strongly put off despite the brand’s intention of a personalized offer. Hume says marketers should experiment to manage risk and gather user group feedback when testing AI algorithms. “AI lives and breathes on feedback,” Hume says. “Engagement with customers creates great training sets for the systems and participatory experiences for the customer. [Marketers] should engage the customer as much as possible and reduce the scope down to a small test bed. Learn from the small one, and then gradually expand to a larger population.” When biases do surface, it’s also a good check on the company. If the algorithm results in AI experiences that treat different people unfairly, it may mean there’s a submarket the organization hasn’t adequately addressed.
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answers in action
People have biases, and the data absorbs all those biases. Some of them are things we explicitly state, and some of those are errors of omission. Transparency Some AI is so advanced that interacting with it can feel like talking with a real person. As the technology improves, there may be a case for alerting customers that they’re not talking with a real person. When Google previewed Duplex, its phone-calling AI assistant, it sounded like a human making a hair salon appointment, with verbal tics like “um” and “ah.” “There’s an ethical issue there,” Etlinger says. Most often when consumers contact businesses and hear, “This call may be monitored for quality assurance purposes,” they have a reasonable expectation that the data of the call will be captured, she says, but not all consumers will respond to a bot the same way they would to a real person. “Some people say it doesn’t matter or shouldn’t matter, some people say it matters hugely.” Experts and companies will need to figure out if it is possible to have an interaction with AI in a way that serves the customer and the business while disclosing the machine learning aspect. Some have recommended, in the case of Google Duplex, an introduction of AI up front, so the human can decide how they want to interact with it. “At worst, it could be a feeling of exposure, of having something shared in a way you didn’t anticipate,” Etlinger says. “You might make more of an effort to be chatty with a real person because you’re trying to develop a relationship with them. It can feel like a waste of time if you discover you’re not talking to a person.” Relationship-building, or understanding what the system
already knows, is another big customer experience issue in AI. If you’re assisted by the same person time and again at a retailer, that associate will likely remember you and offer a certain level of empathy and shared history. With AI, it’s unclear if the machine remembers a prior interaction with a customer—and it’s unlikely to be empathetic. Collaborate and Get Excited Etlinger advocates for a closer relationship between data scientists and businesspeople in pursuit of better AI. “You can’t—as in the old days—give a marketer or a technologist a set of business requirements and expect them to spit out something that’s 85% ready,” she says. The onus is not only on data scientists and programmers, who are focused on optimizing for what they’re told. The responsibility also lies with marketers to dig into the data and find relationships between different segments of people. Etlinger says there could come a time when AI erases the need for traditional demographics. There’s an opportunity to better segment around behavior and attitudinal data. “The truth is that we’re marching very quickly toward an algorithmic future, and it’s going to be a much more effective and efficient way of doing a lot of things— not everything, but a lot of things,” she says. “There’s no closing your eyes and hoping it’s not going to happen. It’s a real opportunity for people to start thinking about what we can make more predictable, what we can make more probabilistic and what we can just make better.” m
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TOOLS & TEMPLATES
How to Consistently Increase Conversion BY DANIEL BURSTEIN
daniel.burstein@meclabs.com
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arketing executives are challenged to get consistent performance out of their teams and agencies just as their manufacturing, engineering and business process peers do. MECLABS Institute created the Conversion Sequence Heuristic in 2007 to provide marketers with a process improvement tool. Marketing leaders have used it to help their teams and agencies consistently take a customer-first approach to their initiatives — no longer relying on individual star performers who just happened to have the “golden gut.” The conversion sequence heuristic is not a formula to solve. Rather, it is a thought tool to help marketers see their messaging through the eyes of the consumer and optimize the factors that influence conversion.
MECLABS Institute Conversion Sequence Heuristic Probability of Conversion You can never guarantee conversion, but by using this methodology, you can increase its probability. Make sure to choose conversion objectives that serve your ideal customer.
Motivation (of the Customer) The numbers in front of each letter indicate its impact on the probability of conversion. Tapping into your potential customers’ motivations has the biggest effect on conversion, so it is represented with the largest coefficient.
DANIEL BURSTEIN is the senior director of content and marketing at MECLABS Institute. He oversees all content and marketing coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the marketing direction for MECLABS .
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answers in action
Clarity of the Value Proposition (Why Act?)
Friction Elements of the Process
Your value proposition is the appealing, exclusive, credible and clear answer to the question, “If I am your ideal prospect, why should I buy from you rather than any of your competitors?”
The minus signs in the heuristic indicate elements that hinder conversion. Friction is an aggravation factor, a psychological resistance to elements in the conversion process.
Incentive to Take Action
Anxiety About Providing Information and Receiving Value
When brands don’t ask for customerfirst conversions or have a true value proposition, they try to compensate by overdoing incentives. Incentive is paired with friction in the heuristic because it should only be a little extra something that helps overcome friction, not the entire reason for the customer to act.
Anxiety is another aggravation factor. It’s a psychological (and not always rational) concern stimulated by a given element in the conversion process. Anxiety and friction can never entirely be eliminated, but you can optimize your marketing initiatives to reduce the impact of these elements on
conversion.
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TOOLS & TEMPLATES
The Psychology of Website Visitor Intent
NAVIGATIONAL QUERIES, in which the searcher is looking for a specific website, make up 10% of all searches.
BY ANDY CRESTODINA
andy@orbitmedia.com
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ver since I had an epiphany about website visitors, I’ve thought differently about web content. I had been reading some research about search engine use and searcher intent that connected two dots for me and added clarity to hundreds of marketing decisions I’ve made since. The research, a scholarly article by three Pennsylvania State University researchers, broke down three types of key phrases visitors use in search
up 10% of all searches. The searcher has a product or service in mind when they use these queries, and they’re planning to spend money.
engines: informational, transactional and navigational. INFORMATIONAL QUERIES, in which the searcher is doing research, make up 80% of all searches. Searchers typically use these queries early in the buying process or if they may not have any interest in buying anything. TRANSACTIONAL QUERIES, in which the searcher has commercial intent, make
Since the third type of visitor is just using a search engine to navigate to a brand, we know the least about their intent. They may be a current customer, a job applicant or someone looking for basic contact information. Let’s set them aside and focus on the first two, those with informational and commercial intent. Web visitors who encounter your site via informational queries are usually doing research. They are looking for answers. Visitors who come to your site through commercial queries need help finding a product or service. They are planning to make a transaction. You can immediately see the value in targeting and segmenting these types of visitors. Some are much higher up in the funnel or not in a buyer journey at all. You may be able to attract them and create brand awareness, but they are far less likely to convert. Who we attract depends on the key phrase we target. Key Phrase Targeting Every key phrase indicates intent. A phrase that includes “how,” “what” or other question words often indicates a searcher’s desire for big ideas, specific details or instructions. An example might be, “How to fix a leaky faucet.” A phrase that includes a type of product or the name of a service or business category indicates a searcher’s intention to take action on that topic. An example could be, “Chicago plumber.” Notice how phrasing immediately segments your potential visitors into two groups. Search engines deduce intent from the phrase and return the most relevant pages.
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Types of Pages Site visitors land on one of two types of pages: content marketing pages or sales pages. The difference, according to marketing adviser and best-selling author Jay Baer, is teaching versus selling, content versus copy and help versus hype. Content marketing pages, including blog posts, articles, videos and resources, are successful when they answer questions. They should be scannable and thorough, visual and detailed. Sales pages include homepages, services pages and e-commerce catalogs. These pages are successful when they are trustworthy. They emulate sales conversations by addressing objections, answering top questions and providing supportive evidence such as statistics and testimonials. Every page has a job to do and an associated goal. Nurturing pages, such as landing pages for downloads or subscription forms, aim to bring visitors back and maintain brand awareness if they ever develop commercial intent. Sharing is an ideal micro-conversion on these pages. Conversion pages, which might have contact information or an
e-commerce function, aim to get the visitor to convert to a lead or customer. If it is a feature of the site, chatting is one optimal micro-conversion of these pages. The best pages of either type are focused on meeting the goals of both the visitor and the brand. They both have calls to action and, when successful, they bring visitors to thank-you pages. We Are All Visitors Visitors aren’t aliens from distant worlds. They’re us. To demonstrate this to yourself, open up your browsing history and look at the last few hundred websites in there. Ask yourself why you visited those websites. Just like everyone else on the internet, you likely visit websites for two main reasons: You’re researching a question, or you’re looking for a presumed answer. Put yourself in the shoes of your would-be visitors and give them the answers they’re looking for.
answers in action
The best pages are focused on meeting the goals of both the visitor and the brand. They have calls to action and, when successful, they bring visitors to thank-you pages.
ANDY CRESTODINA is the co-founder and CMO of Orbit Media. He’s an international keynote speaker and the author of Content Chemistry: The Illustrated Guide to Content Marketing.
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EXPERIENCE DESIGN
Experience Design Is the New Imperative BY RUSS KLEIN
rklein@ama.org
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recently read an interesting article written by Avi Dan, an individual for whom I have great respect. He wrote about the changing landscape and ambiguity around what the 21st century creative agency should look like. He cites the shrinking, razor-thin margins many agencies can command for their creativity. My view is that it’s not merely creativity that clients are becoming increasingly unwilling to pay for; it’s whether the so-called creativity is being placed against highyield business solutions that can change the trajectory of a business. I’m here to disabuse all marketers of the idea that the client community needs more artful or emotional storytelling. Agencies and marketers alike are addicted to storytelling. The advent of so-called content marketing has been the equivalent of a speedball coursing through the craving veins of marketers who think every problem can be solved by telling a better story. Soon they are going to miss a window of opportunity that will quickly end up in someone else’s portfolio. If marketers and agencies don’t come to terms in a hurry with the structural factors that have set the stage for experience-driven brand building, CEOs are going to tap other resources to do it instead. Experience design is the next frontier for brand-building. Why should you be worried? The old mathematical representation
of a brand in the predigital, pre-social media era was Brand = Promise + Experience. Unfortunately, marketers were too focused on the promisemaking, and too frequently promisebreaking, until the customer began demanding more, including a co-creation role in content. Out with that old formula. My new mathematical expression of a brand (below) simply means that a brand can be built on experience alone without the use of storytelling. Conversely, a brand cannot be built on story alone. No experience, no brand. Storytelling can add power to great experience design, or if it’s lousy, diminish it. Great experience design inspires more authentic and compelling storytelling. If marketers, and agencies, don’t jump on experience design, they will lose the direct responsibility for it just as they abdicated sales, customer service, business intelligence, pricing, supply chain and distribution because those disciplines weren’t sexy enough or cool enough to appreciate the creativity that’s been spun up since WWII. But open your eyes! In the average American enterprise, only 40% of marketing activity is under the direct authority of marketing! The question is whether marketers and their agencies can acquire the talent and skill sets necessary to be great at experience design. Whether they do or don’t, the function will become the most
treasured marketing capability for any and every brand. Experience design spares people the effort traditionally needed to enjoy your product or service, with a bias toward removing friction while elegantly layering in relevant enhancements. It is a combination of disciplines:
Brand = Experience Story 26
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executive insights
Most people will accept a replacement product or refund. They are utterly unwilling to relive a poor experience.
design thinking and decision science, intentionally applied to the lives of people. Experience design is probably not what you think it is. Experience design is not only customer service, service recovery or digital phenomenon (despite the term “user experience” being coined by Apple in 1993). World-class experience design: • Is intentional. • Is human-centered. • Feels like a story worth telling/is indivisible from storytelling.
• Is remarkable/unforgettable/shareable. • Is relevant and differentiating. • Is coherent/repeatable/systematic/ cultural. • Is omni-channel and seamless with no dead ends. • Has fastidious attention to detail.
business due to bad experiences with a business. And nearly 80% of consumers share bad experiences; warning others, discouraging others, venting about their negative experience with brands. The performance data behind firms who take an intentional approach to experience design is clear. Happier customers. Higher retention. More profitable. Most people will accept a replacement product or refund. They are utterly unwilling to relive a poor experience. m As CEO for the American Marketing Association, RUSS KLEIN is charged with the transformation of the AMA to become an essential community for marketers. Klein is a five-time award winning CMO who has quarterbacked teams for many of the
More people describe their experience with a brand than the product or price. More than 80% of consumers would pay 25% more to ensure a superior experience! More than 80% of consumers will stop doing
world’s foremost brand names—holding top marketing and advertising posts at Dr Pepper/7UP Companies, Gatorade, 7-Eleven Corporation, Arby’s Restaurant Group and Burger King where he also served as president from 2003-2010.
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CUSTOMER SATISFACTION
Forget Delight, Customers Just Want Their Expectations Met Special treatment can provide momentary satisfaction, but research shows the sustainable and more effective way to make customers happy is to simply avoid disappointing them FIGURE 1 BY VIKAS MITTAL
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any executives believe that managing their customers’ experience will improve customer satisfaction and sales. Yet attempts to articulate customer experience typically yield little to no actionable insights. This is because many companies think of customer experience as a subjective exercise that cannot be precisely defined. But customer experience can be precisely defined and measured in terms of the things that satisfy and dissatisfy customers. For the last two decades, marketing scholars have developed algorithms to statistically identify satisfier and dissatisfier attributes of customer experience. My colleagues and I have analyzed hundreds of attributes in dozens of industries to identify satisfiers and dissatisfiers. Our research reveals how satisfiers and dissatisfiers can be used to analyze customer experience. Attributes are defined by their impact on overall customer satisfaction. Typically, satisfier attributes are hedonic, sensorial, “nice to have” attributes of a product or service that are not considered critical to the basic utility customers get. At a hotel, a chocolate on your pillow would be a satisfier attribute. Dissatisfier attributes are fundamental aspects of customer experiences, must-haves that deliver the basic utility customers expect from the product or service experience. At a doctor’s office, an accurate diagnosis is a dissatisfier attribute. Above-average performance of a
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OVERALL CUSTOMER SATISFACTION
vmittal@rice.edu
BELOW AVERAGE
AVERAGE
ABOVE AVERAGE
ATTRIBUTE PERFORMANCE ATTRIBUTE SATISFIER
BELOW AVERAGE
AVERAGE
ABOVE AVERAGE
ATTRIBUTE PERFORMANCE ATTRIBUTE DISSATISFIER SOURCE: ANDERSON AND MITTAL (2000, JOURNAL OF SERVICE RESEARCH)
satisfier attribute has an asymmetrically more positive effect on satisfaction than the negative impact of below-average performance (Figure 1). In the oil and gas sector, sustainability and social responsibility are satisfier attributes. The positive impact on customer satisfaction of providing above-average sustainability and social responsibility will be disproportionately greater than the negative impact of providing below-average sustainability and social responsibility. Below-average performance on dissatisfier attributes has an asymmetrically more negative effect on overall satisfaction than the positive effect of above-average performance. In other words, below-average performance on a dissatisfier attribute is more deleterious
for overall customer satisfaction than the benefit from above-average performance on the attribute. Communication is a dissatisfier attribute among oil and gas customers; the negative impact of below-average communication on satisfaction is disproportionately larger than the positive impact of above-average communication. Table 1 shows examples of dissatisfier attributes (such as product quality, safety and confidence in the service provider) and satisfier attributes (including social responsibility and making the customer feel valued) from different industries. In most industries, a large proportion of customer value, as measured by overall customer satisfaction, comes from dissatisfier attributes, not satisfier attributes. Companies that want to maximize their customers’ experience should focus on reducing and potentially eliminating below-average performance on dissatisfier attributes. By minimizing and eliminating below-average performance on dissatisfiers, they can avoid steep declines in overall customer satisfaction. In general, the negative impact of dissatisfier attributes is twice the positive impact of satisfaction attributes. Thus, any analysis of customer experience should strive to identify dissatisfier attributes, rather than satisfier attributes (so-called “delight attributes”). Customer experience management is prominent in the services sector with brands such as Ritz-Carlton in hospitality, Sears in retail, JPMorgan Chase in financial services, Ford and Toyota in automotive dealerships and Disney in entertainment. These brands emphasize the sensorial and hedonic aspects of the interaction between brand and customer; the goal is to endlessly please and delight customers by continuously exceeding their expectations. Delighting customers by providing above-average performance on all attributes theoretically leads to disproportionately higher customer satisfaction. Bloomberg reported on employees at a Ritz-Carlton in Bali who demonstrated this concept when a child guest with food allergies arrived. The child required special eggs and milk that could only be obtained in Singapore.
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The staff called in personal favors and transported the food more than 1,000 miles for the child. This increased the overall customer satisfaction disproportionately higher than if the staff had made a subpar effort to accommodate the child. Based on this, should all companies strive to maximize positive performance on all attributes to delight customers? No. Scholars have realized that a constant focus on customer delight by exceeding expectations may be unrealistic and unprofitable. Such an approach requires constant investment in ever-increasing performance that can constantly delight customers by improving customer satisfaction. As customer expectations increase, delighting them becomes progressively more difficult and costly; yet due to competitive pressures, most firms are unable to raise prices commensurate with the delight experienced from customer satisfiers. Thus, a strategy of delighting customers through everincreasing above-average performance may sound good, but it is difficult to implement and likely erodes margins. It is operationally less costly to minimize or eliminate dissatisfiers, rather than to maximize satisfiers. A B-to-B company we worked with found that customers expect their order to be fulfilled within two weeks. Previously, this company worked to minimize fulfilment time such that some orders were being fulfilled in fewer than two days, but others were being fulfilled in more than three weeks. The average fulfilment time was 1.5 weeks, yet many customers were still dissatisfied when their order took more than two weeks to fulfill. Based on our recommendation, this company implemented a strategy to minimize below-average performance by fulfilling every order in fewer than 12 days. To accomplish this, the company eliminated its policy of rushing orders to delight customers and replaced it with a goal to ensure all orders were met within the 12-day limit. By eliminating rush orders, the company not only saved resources but also ensured overall customer satisfaction increased, leading to an 8.3% increase in sales and 14.6% increase in margins. My colleagues and I also counseled executives from an oilfield-services
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executive insights
TABLE 1: EXAMPLES OF ATTRIBUTE DISSATISFIERS AND SATISFIERS FINANCIAL ADVISOR ATTRIBUTE DISSATISFIERS
Solving problems in one call Clearly communicates required information Confidence in adviser’s advice
AUTOMOTIVE
ENERGY/OIL AND GAS
Comfort/handling
Safety
Safety
Communication
Power and pickup
Ongoing service and support
Ease of getting in and out of vehicle Product quality
Sales and bidding Pricing and billing
Driver’s seat comfort Quietness of engine Brakes operation and transmission
ATTRIBUTE SATISFIERS
Makes you feel like a valued customer
Interior roominess
Provides the right amount of information
Corporate social responsibility/ sustainability project management Product and service quality
SOURCES: MITTAL, ROSS, AND BALDASARE (1998, JOURNAL OF MARKETING); ANDERSON AND MITTAL (2000, JOURNAL OF SERVICE RESEARCH); CCUBES.NET
company that treated communication as a satisfier attribute. Its sales team and customer service representatives were communicating with customers as often as possible, using as many different modalities as possible. Customers were receiving an average of five communications per week, including customer surveys, service representative calls and messages and requests from salespeople to arrange demo meetings for new products. Rather than delighting customers, the communication fatigued and dissatisfied them. Executives were surprised to learn that communication was a dissatisfier, not a satisfier, for its customers. Further research showed the optimal communication was one touch point every two weeks, or two communications per month. By decreasing the communication frequency from 20 touch points per month to two, this company maximized overall satisfaction, decreased its cost of doing business by 20.3% and simultaneously increased sales. What Now Because losses loom larger than gains,
most customers are looking for value that comes from consistent performance and minimization of negative occurrences on dissatisfier attributes. Such an approach runs counter to the oft-touted principle of customer delight, which can be costly to implement, inflate customer expectations and erode margins. To identify dissatisfier attributes, a company must have a clear and consistent measurement strategy that links attribute performance to overall customer satisfaction after accounting for the asymmetric relationship. This requires a deep understanding of the customer experience, competency in developing customer measurement surveys and fluency with advanced statistical analysis. Such an approach can eventually help a company navigate its goal of astutely managing customer experience, customer satisfaction, resource optimization and its sales and margins. m VIKAS MITTAL, Ph.D., is a member of the faculty at the Jones Graduate School of Business at Rice University in Houston.
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BRANDING
What’s Old Is New Again The bleeding edge of digital tech provides marketers many new opportunities, but an old objective remains the same: brand name awareness
BY J. WALKER SMITH
jwalker.smith@kantarfutures.com
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he future of digital technologies is not digital—at least not simply digital. The analog edge isn’t going away just because digital technologies are taking over. As digital technologies continue to advance, everything analog is making a comeback. In particular, digital technologies themselves will look and feel analog. For decades, as digital technologies have been in ascendance, consumers have had to master a digital interface, and indeed multiple, often inharmonious digital interfaces. With only a few notable exceptions, digital technologies have been designed with the underlying presumption that people could and would make any necessary accommodations to adopt them. It has been taken for granted that humans would become more digital rather than digital technologies becoming more human. This is changing with smart speakers, which are a turning point in the trajectory of digital technologies. Voice technologies don’t require people to learn or do anything digital. Talking is all it takes. People tap into the digital power of smart speakers by having a conversation, which is the very thing that many experts argue sets humans apart on the tree of life. Admittedly, conversing with an Amazon Echo, Google Home or Apple HomePod is not the same as conversing with another person. The vocabulary is different. The grammar is constrained. The range of topics is limited. The repartee is preprogrammed. Nevertheless, it is a conversation. It is an interaction in human, not digital, terms. It is
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composed in human, not digital, syntax. It proceeds at the speed of chitchat, not the speed of light. While smart speakers instantaneously harness the power of massive digital databases, they do so at the direction of humans using real-time natural language. In short, smart speakers are digital technologies that look and feel analog. This renascence of analog features is bringing marketing around full-circle. When consumers use smart speakers to order or ask about products, they can do so either by brand name or by product type. Marketers prefer the former because if consumers don’t ask for a product by name, then the underlying algorithm informing a smart speaker will dictate which brand is presented to consumers. Marketers want more influence in the consumer decision journey than being at the mercy of an algorithm, so the imperative is to get consumers to ask for a brand by name. This is one of the critical priorities facing marketers in the transition to voice technologies, yet it is nothing new. In fact, it is an old analog issue dressed up in digital garb. Early in my career, I oversaw marketing research for a glass-cleaner brand. At that time, the brand was stuck in second position with a market share about half that of the leader. In some qualitative work we fielded, we heard a woman describe how she shopped the category. She said when she sees blue bottles out of the corner of her eye as she is pushing her cart down the aisle, she reaches out and grabs one as she walks by. For those of
us behind the mirror of that focus group room, a collective lightbulb went off. We realized in a flash that the typical shopper wasn’t shopping by brand name. She was shopping by product type. When the blue liquid in the clear plastic bottles popped into her peripheral vision, she grabbed something on the way by. Since the leading brand had more than twice as many shelf facings as our brand, it was much more likely to get chosen if a shopper was just snagging the first bottle within reach. What we had to do was get shoppers to stop at the shelf and look for our brand by name. Otherwise, more often than not, the rule of thumb, or mental algorithm, shoppers used to choose would work against our brand. In the shopping environment of that period, we had to increase spending on TV and step up
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BRANDING
activity at the point of sale to get shoppers to stop specifically for our brand, rather than just scan sideways for the category. In that analog era we were trying to boost top-of-mind name recognition. We couldn’t stay in constant contact with consumers, so we needed to create an enduring awareness that would carry over without reminders. By contrast, nowadays, digital channels offer the ability to reach consumers at every moment in the decision journey, so reminders can do the job that awarenessbuilding used to do. Digital has meant less need for consumers to spontaneously recall a brand name because marketers can reach people with pertinent reminders at the critical moment of truth. With voice technologies, though, top-of-mind name recognition assumes
central importance again. When consumers buy something via a smart speaker, there are no ready prompts to serve as reminders. It’s a conversation, so consumers must mention the brand themselves. If not, the smart speaker defaults to an algorithm, which is akin to the woman in our glass-cleaner focus group who said she just reaches out and grabs the nearest blue bottle. We have a tendency to overcomplicate digital technology. We imagine it requires radical ways of thinking and unheard-of ways of managing. In fact, many of the challenges are the same as always, particularly in the coming era of smart speakers. These technologies are new, but the requirements for success will be the same as ever. Not all brand-name recognition is
executive insights
created equal. Traditional tracking studies begin by asking respondents to name whatever brands they can think of in a category. The interviewer then probes for more until respondents can’t think of any other brands. After that the interviewer reads a randomized list of unmentioned brands to see if respondents can also recognize any of those. This sequence of questioning is known as unaided and aided brand awareness. Unaided brand awareness is the most valuable and often the only awareness managers care about. It is certainly all we cared about with our glass-cleaner brand. One sort of unaided awareness is most valuable: first mention or top-of-mind, which is to say the brand that respondents mention first when asked on an unaided basis. This is the brand that people think of before any other when they think about a category. With voice technology, top-ofmind brand awareness has taken on renewed importance. When people converse with a smart speaker, they ask for the first thing that comes to mind. They will rarely, if ever, go back and make corrections. Just as in every conversation, there will be few reminders. So brands will once again need people to remember them by name straightaway, and thus top-ofmind awareness returns as the primary objective as well as the critical metric of success. What was central to the analog era of marketing is no less central to the next era of digital marketing. Voice technologies are taking off, driven by the twin demands of convenience and public safety (specifically, driving). As a result, the future of digital will feel more analog to people, and the challenges facing marketers will reprise analog issues. The fundamentals for connecting with consumers are circling back to the priorities of the analog era. m J. WALKER SMITH is chief knowledge officer for brand and marketing at Kantar Consulting and co-author of four books, including Rocking the Ages. Follow him on Twitter at @jwalkersmith.
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WHAT DOES THE FUTURE OF CUSTOMER EXPERIENCE LOOK LIKE? We looked at 10 industries to find out how CX is evolving. What we found: More technology, more speed and higher expectations will force companies to evolve or be left behind.
BY HAL CONICK AND SARAH STEIMER
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f you want to know what the future of customer experience will look like, just picture today’s customer journey with more speed, better technology and higher expectations. Today’s customer already expects quick delivery, more shopping options and instant responses from companies. Customers are so used to great customer experiences that 32% say that they’ll walk away from a brand—even a brand they love—after just one bad experience, according to a 2018 analysis by PwC. But what will the expectations be for traditional touch points like in-store retail, new technology like artificial intelligence and new services like ride-share apps? Marketing News spoke with 10 customer experience experts to learn what we can expect over the next decade. These interviews have been edited for length and clarity.
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AUGMENTED AND VIRTUAL REALITY
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he augmented reality and virtual reality market, taken as a single entity, was worth $111.4 billion in 2017, according to International Data Corporation. By 2021, IDC expects it to be worth $215 billion. “There is a lot of potential to use these technologies to make customers’ lives easier and better,” says Blake Morgan, a customer experience expert and host of the “Modern Customer” podcast. AR and VR are already being used as important parts of customer experiences. Morgan cites Sephora, which uses AR to allow customers to “try on” makeup through the company’s smartphone app. “We also are seeing other companies, like Yamaha, that allow customers to use a special headset to look at the mechanics of their motorcycle and see virtual renderings of the engine, the composition of the fuel and other parameters,” Morgan says. “Alibaba is another company that launched a virtual reality shopping program in 2016, which gives 400 million users the ability to generate 3-D renderings of thousands of products and allows retailers to create their own virtual reality stores. “The potential to give customers an idea of what they can expect from a product is strong.” Marketing News spoke with Morgan about customer expectations, industry trends and the future of customer experience with AR and VR.
Q A
What are the current customer expectations for AR and VR?
It’s very nascent, but if Sephora’s augmented reality app doesn’t allow you to perfectly line up your face with the fake eyelashes that you’re trying on, that doesn’t look good for the brand. The accuracy is important, but that’s the power of AI. The accuracy of AI is improving companies’ abilities to understand what customers want and provide a tangible experience for them with few errors.
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I imagine customer expectations will rise as the technology improves. What will companies need to offer as part of an AR/VR experience in the future?
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If the AR/VR experience is just for fun—like a marketing ploy—that’s going to die. But if it truly serves a purpose in the customer’s life and makes it easier and better, then the experience will have staying power.
Q A
What trends do you see happening over the next five to 10 years?
I was interviewing Jay Samit, the independent vice chairman of Deloitte digital, and he predicted that smart glasses will be so omnipresent one day that if you’re walking in a rice paddy in China and you see a sign, the glasses will translate the characters into your native language. Some people think these technologies will be embedded in the human brain in the future, but that sounds terrifying to me.
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You mentioned that AR and VR need to serve a purpose. How can each company find their best purpose for these technologies?
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Anytime you need to provide an experience to someone remotely, that can be an interesting use case. That can mean training nurses to give them the experience of being in the emergency room or providing customers with a medium between e-commerce and bricks-and-mortar stores. It could be interesting for a sports arena where you can experience the game from literally any seat in the stadium; you can imagine how immersive that would be. That would completely disrupt the cable world.
Q A
What should companies avoid doing with these technologies?
Marketing something that is not useful to customers. The technology is half-baked if it’s not making customers’ lives easier and better. If it isn’t thoroughly vetted, do not release it, and do not talk about it because it can be very disappointing. It makes you seem like you only care about advertising and not the customer experience. If you provide a good experience to your customers with these technologies, they will talk about it.
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RETAIL
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e live in an omni-channel world, says Chris Petersen, CEO of Integrated Marketing Solutions, and the bricksand-mortar retailers that don’t realize it are going out of business. “The customer doesn’t see channels anymore,” Petersen says. “To them, it’s all commerce. Some days, I prefer to shop online. Some days, I’d much prefer the store. Sometimes I’m in the store, and I want to ship what I buy home. Retailers that understand and execute this are doing extremely well. Retailers that are struggling—such as Sears and Toys R Us—use the old-school model: You come to us, and we sell you something. They’re dying quickly. It’s all about helping, engaging and creating options for the customer as opposed to just selling product to price.” Marketing News spoke with Petersen about the future of in-store customer experience and how successful retailers are measuring customer lifetime value.
Q
In retail, the number of employees and in-store sales are declining. This can be frustrating for customers. How can the in-store shopping experience be improved?
A
Stores are an incredibly important touch point. They used to be the only touch point for customers, but they’re now one of five or six. The difference today is customers are empowered and can research all kinds of places to buy from, including brand websites. There are good reasons for coming to a store—you want to have a personal interaction, you want assistance in confirming the best solution, you want to touch certain products. If I bought a brand of toilet paper before and I liked it, I can order it again from Amazon. But if I’m buying a computer, that’s an entirely different considered purchase. But how do we do retail CX with fewer employees and fewer sales? Apple is a great example of turning that paradigm on its head: It treats employees as an asset to building the brand and selling. Everybody forgets about Apple. That’s the retailer that sells more per square foot than any other retailer in the world. [Editor’s note: Apple earns $5,546 in sales per square foot, according to CoStar.] And the reason is that it uses technology to free up the associates to engage you as a customer. They’re not there to sell you something today. They’re there to create an Apple experience.
Q
What do you think customers will expect from the in-store touch point in five to 10 years?
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Let’s start with where they are today: Customers expect choice in terms of selection, where they purchase and how they pay, and it has become important to provide choice of delivery. Customers want to be able to immediately track their purchase; that’s why Amazon does so well. One of retail’s biggest missed opportunities is the importance of customer relationship management (CRM). They’ve marketed to old baby boomers and Gen X—that was sufficient when they used mass media to engage customers. Today, they need individual relationships. They need to know the customer’s preferences and purchase patterns, so they can make recommendations based on past purchases. That all requires individual detail and Big Data and analytics. Amazon, Walmart and Best Buy are investing heavily in CRM to sell relationships and maintain them versus selling products. Best Buy almost went broke, but it realized that it needed to recreate a model around service. Now it makes its money on services more than products. Its transformation was becoming the digital plumber rather than the gadget guys. It engages with you through maintenance contracts and providing unparalleled service. And if it does that, it has earned your business for life, not just sold you a computer today.
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You’re saying that brands are looking for return business through different means than just selling products?
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All old retail was built on selling product models; you had many people visiting the store, numbers of sales, net conversation rate and how many units you sold. Best Buy now has formulas based on its relationships with customers. If you buy a TV, what kind of relationship does that create? Best Buy thinks of add-on purchases: such as the Wi-Fi network or hooking up the smart TV system. It is a solution-oriented environment rather than a sales environment, one where [the retailer] looks at what individuals need and how the company can help them buy.
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57% of people
say they won’t recommend a business if it has a poorly designed mobile website.
FORMSTACK
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SOCIAL MEDIA
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o create a great social media customer experience, a company needs to do more than respond to complaints, according to Shep Hyken, a customer experience expert and author of the forthcoming book The Convenience Revolution. One of the foundational tenets of social media customer experience is realizing that social media is a conversation, not just a help desk, he says. The companies that are best at social media publish personalized content that is segmented to their markets. For example, marathon runners who follow Nike will get content on running shoes, not basketball shoes. Another tenet is customer service. “Many companies are slow to react to opportunities to fix problems where they could not just win customers over, but make them evangelists,” Hyken says. “Response time is a huge issue in social customer care, which is a big part of customer experience. The average response time is abysmal. If I want my question answered in seven hours, I’ll wait seven hours to ask the question.” Marketing News spoke with Hyken about the future of customer experience on social media.
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What happens if a company responds slowly or poorly to complaints on social media?
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Response time is key. I have no problem if the response comes from a chat bot or a human being; if I can get my questions answered quickly, that’s what I want. If it’s done in a cordial manner, what do I care if it’s a robot or a machine answering me rather than a human being? It’s the response that is important. When somebody posts a complaint on a social channel like Twitter or Facebook, it is imperative
for the company to respond in a timely manner because the time stamps are posted, and somebody who’s interested in doing business with that company will look and say, “Wow, somebody made a complaint, and in 18 minutes, the company responded.” My friend Jay Baer, another customer service experience expert, has the best line: Social media customer care is a spectator sport. Everybody gets to watch if they want to.
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What do you think will change in social media customer experience over the next five to 10 years?
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Customers are smarter than ever because they’re experiencing great service from certain brands, and those rock-star brands are setting the bar higher for everyone else. The first thing you’re going to see is companies trying to catch up and do a better job in virtually every sector. You’ll notice there’s been an uptick in customer satisfaction over the past couple of years, but billions of dollars have been lost due to poor customer service. Customers are saying, “If you don’t treat me how I want to be treated, I’m going somewhere else.” Five to 10 years from now, two things will happen: No. 1, there will always be leaders that are constantly setting the bar higher for everyone. There are technologies we haven’t discovered yet that are going to be implemented and will hopefully create a better customer experience. No. 2, in the next one to five years, there is a strategy that is starting to come to light that I don’t believe has been exposed to the masses yet: convenience. Amazon is more convenient than its competitors, and it disrupted them. Convenience is the next big wave of customer service, and it’s going to be a revolution.
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GROCERY DELIVERY
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he list of companies willing to bring groceries directly to your door is growing. The milkman aside, Peapod was one of the earliest grocery delivery services, and Amazon and Walmart have been battling it out for consumers’ food delivery dollars. Then Instacart jumped on the scene, its shoppers’ ubiquitous reusable bags popping up on grocery conveyor belts en route to consumers. Some shoppers who want even fewer steps between the grocery store and their plate subscribe to meal delivery kits, such as Blue Apron or Fresh Direct. These services offer pre-portioned ingredients to cook meals. Even home cook extraordinaire Martha Stewart has her own take on the trend: Martha & Marley Spoon. One newcomer, Imperfect Produce, is a grocery delivery company that purports to deliver “ugly” produce for 30% cheaper than grocery store prices. The company is striking at an audience that’s not only hungry for convenience but is tired of waste in the food supply chain. Reilly Brock, content manager at Imperfect Produce, says the brand isn’t trying to disrupt food delivery so much as it’s trying to improve the food system. Younger consumers like convenience, but they’re also drawn to environmentally friendly brands. A 2015 global study by Nielsen found almost threequarters of millennials are willing to pay extra for sustainable products. Buying food that
would otherwise wind up in a landfill fits that bill nicely, and Imperfect Produce also uses less packaging than carefully portioned meal kits. Consumers also want more transparency. A 2017 report from The Hartman Group found approximately 70% of consumers say they want retailers to be more transparent about their sustainability efforts. “Transparency is central to our customer experience,” Brock says. “If you only ever buy food from the supermarket, it is pretty opaque. It just shows up in these cases, and you don’t really know where it’s coming from. But we try to give people more info about where it’s being grown, why it’s ugly or imperfect or surplus.” Brock says the company is hoping to offer consumers more customization abilities with their boxes and potentially add an app, but he says Imperfect Produce is “proudly not a meal kit company.” Convenience has its shortcomings, he says, and a 2017 poll by Morning Consult and Money Magazine offered some examples: Of respondents who canceled a meal kit service, 49% cited cost as the reason for canceling their subscription, and 13% cited not liking the recipes. An analysis by Daniel McCarthy, an assistant professor of marketing at Emory University, found Blue Apron is losing money on about 70% of its customers due to increasing cost of acquisition and low retention. Meanwhile, online grocery sales are expected to capture 20% of total grocery retail by 2025, according to the Food Marketing Institute.
55% of customers are
willing to pay more money for a guaranteed good customer experience. THINKJAR
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ARTIFICIAL INTELLIGENCE
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hether customers realize it or not, they have likely used artificial intelligence. HubSpot reported in 2017 that 63% of people who used AI—such as voice search, web chats and voice-controlled assistants like Siri and Alexa—didn’t realize it. “To them, it’s just a strange box that does smart things,” says Karsten Weide, program vice president of media and entertainment at IDC. Despite sometimes being unaware of what AI is, people love what it does. Voice-controlled assistants—as well as online customer service chat bots and interactive voice response systems on phones—stick close to their scripts rather than “thinking” new thoughts. But Weide believes they’ll take on human-like personalities in the next 10 to 15 years. In large part, this humanization of technology is what customers want. A survey from Capital One and Wakefield Research finds that 82% of Americans believe an AI assistant would be helpful (for financial help, in the case of this survey), and 77% believe AI should take on a human-like personality. “It’s going to be your assistant. It’s going to know everything about you,” Weide says. “It’s going to know more about you than your wife or your mother. It’s kind of scary, but it’s the case, and it’s going to be everywhere.” Improved AI will likely mean improved customer experience, but Weide says that it also presents some unanswered questions. What, for example, are the implications of human-like AI on data collection and customer privacy? How will it impact marketing and advertising? Weide believes that as the technology becomes more intimate, consumers will see advertising as obtrusive. Marketing will have to be so good that people seek it as they would content. Many companies have already started creating their own apps for Alexa, which Weide believes
will be the closest these devices get to advertising directly to users. Otherwise, advertising to users through these speakers—similar to how companies would advertise to radio listeners—might be seen as a betrayal of the customer’s confidence. While consumers will have to wait for humanlike AI, they likely won’t wait to spend billions of dollars through devices such as the Amazon Echo or Google Home. Retail purchases made via these AI- and voice-controlled devices are set to rise from $2 billion this year to $40 billion in 2022, according to a study from OC&C Strategy Consultants. This sets up a big market battle between Amazon, which eMarketer says owns 66.6% of the voice-controlled speaker market, and Google, which owns 29.4% of the market. Surprisingly, Apple has not yet been a factor in this market. Price of the devices may play a role—while the Amazon Echo and Google Home retail at about $100, Apple’s HomePod retails at about $350. Even with analysts expecting increased sales, both Amazon and Google will need to improve the intelligence of their voice-controlled speakers. Weide says that he has Alexa-controlled devices installed throughout his house, but he has had a very hard time researching and ordering certain products—dishwasher pods have given him the most trouble. “Scripts have to get better,” he says. “And there has to be more intelligence if that’s going to happen.” Weide says that AI has been around for decades and has always reportedly been a decade away from mattering, but he believes that the technology will soon reach its tipping point and become a bigger factor in the customer experience. “We’re at the very bottom of the S curve now,” he says. “There’s going to be a lot of improvement in a short amount of time because we don’t see the upward slant of the S curve. A lot of things can happen.”
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espite all the talk of autonomous vehicles being the future of ride-sharing, there may be a glitch in the system that puts that dream in neutral. “This is going to be a two-steps-forward-one-step-back situation in terms of public opinion,” says John E. Carroll, a partner at Ipsos. Recent fatal accidents involving autonomous vehicles will slow, if not halt, the progress of autonomous car technology, he says, including in the ride-share sector. In that context, some are asking how else ride-share companies will improve customer experience. Where competition exists, it hasn’t been over customer experience, Carroll says. “The standard competitive stances are price, product innovation or customer service,” he says. “Uber is mostly a product innovator type of company. Lyft is trying to compete on service. I don’t think there’s going to be a significant change in customer service in the U.S. markets where these competitors are playing. That’s not what we see them talking about.” These companies are innovating in other ways. For instance, Uber now offers Uber Eats, a restaurant delivery service; Uber Freight, which matches carriers with shippers; and Uber Health, a ride service for patients and caregivers. Carroll says the ride-share industry is still in its early stages. Brands are trying to get the basics right. Before they can compete with one another, ride-share companies have to fight for their right to do business on a city-by-city basis with local regulators. Autonomous cars will be yet another battle. “Autonomous driving technology may be a risk to the
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brand,” Carroll says. “When you take away the human interaction on the service, what is left?” Lyft’s success has hinged on human interaction, he says, whereas Uber’s innovations have not significantly impacted its base customer experience. Those companies that may be able to compete in the autonomous car space are more likely to be technology companies that have an existing customer experience. Think of an autonomous vehicle from Apple that runs on its user-friendly operating system, or if Alphabet combined its technology and CX with Ford’s hardware. “It’s like a Venn diagram of two dark clouds,” Carroll says. The first cloud is the deaths related to autonomous cars (there have been four recorded) and the fears surrounding the use of robots in the future. The second cloud is rooted in the history of ride-share, wherein consumers have found their experiences with taxis to be negative. “You want to merge those two concepts and think you’re going to get rainbows and unicorns?” Carroll says. He predicts the negative stigmas of these industries will hold them back from great CX. Some have found ways to offer positive experiences with autonomous vehicles, such as Pizza Hut and Toyota’s selfdriving delivery truck. Carroll suggests keeping an eye on non-U.S. markets, China in particular. “The Chinese government doesn’t have to ask for permission at a local, regional level,” he says. “If they want to lay beacons into roads, they can do that. They could accelerate autonomous tech.”
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70% of
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treaming services are in more homes and on more devices as consumers continue cutting cords. A “CNBC All-American Economic Survey” found 57% of consumers use some form of streaming service. Among those who stream, 51% subscribe to Netflix, while 33% subscribe to Prime Video (Amazon’s offering) and 14% subscribe to Hulu. Among music services, Statista found Apple Music had 49.5 million monthly users in the U.S., followed by Spotify with 47.7 million, Pandora radio with 36.8 million and SoundCloud with 34.2 million as of March 2018. Bob Gilbreath, co-founder and CEO of Ahalogy, provided his predictions for streaming entertainment, in which he sees an increasingly ad-free future where brands compete across categories.
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What trends are you seeing in streaming services as they relate to customer experience?
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Netflix may say, “We’re video streaming, so our competition is the other video players.” Sirius XM might say, “I’m going against the other music software.” At a high level, they’re all competing with each other because consumers have these apps on their phones, their tablets and their home TVs. If there is one feature that you get on Netflix—a way to get recommendations—then when you turn on your Sirius XM the next morning, you’re expecting that there, too. The expectations don’t stay within one category of media. Consumers are very selfish. They have high expectations, and that means brands have to copy one another both because the expectation is there, but also because, who’s to say Netflix can’t add audio? Who’s to say Sirius can’t add video?
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The ad-free offering appears to be one of the bigger trends in streaming—is that going to stick around?
A
As people get used to paying for content or paying for an ad-free experience, that will pervade other categories. Now advertising is annoying—not because we’re at the 3,000th impression of the day, but because we start changing our habits to a more ad-free experience, and the ads that get through become more painful. There are rumors that Netflix or Amazon is going to add ad-supported versions. I highly doubt them because there’s not a problem to solve. It’s almost going against the grain. Imagine if you’ve got millions of people deciding to pay out of their pocket—that’s a great business model—now you’re going to take some of them out of that? The money that you make from direct payments is more profitable than from ads, and it frees you up. If you have to create an ad sales team, put in ad tech and do reporting for advertisers, that would be really painful for a business like Netflix that’s already proven that it can go without advertising. Why would they mess with a good thing?
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Aside from being able to download content and consume it on the go, are there other ways that people are using subscription content?
A
One thing that can be interesting is extended content. We’re seeing that in gaming: Instead of an expansion pack, customers buy a subscription to receive updated content, levels and add-ons. Publishers don’t have to release a game every three years. Instead, they have a continual release, which is not only better for the buyer, but creates an always-on business. Whether it’s a marketing campaign or a movie release, it’s painful to gear everybody up for this one big shot. How do we just make incremental content every day? You can plan for that. You can hire for that. You know it’s predictable revenue, which means you can make predictable investments.
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HEALTH CARE
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he future of customer experience in health care is starting at the ground floor: Companies—some for the first time—are putting the patient at the center of the enterprise. “Generally, health care organizations put the care providers, the doctors at the center of their organizations,” says Denise Lee Yoh, a retail brand consultant and author of What Great Brands Do and Fusion. “It’s a wholesale change by putting the patients there instead.” This customer-centric shift comes at a low point for health care CX. PwC’s “Future of Customer Experience Survey 2017/18” found a 25% disparity between the level of satisfaction health care customers expect and the level they actually experience. Health care organizations have begun to listen: A 2017 report from The Beryl Institute found 82% of those working in health care reported patient experience as one of their top priorities for the following three years. As traditional health care organizations put their patient experience plans into place, startups are moving into the space with CX as their explicit purpose. One such startup, California-based doctor house call app Circle Medical, allows users to scan their insurance card, arrange a visit and receive updates about appointments, Yoh says. Patients without insurance pay a $200 flat fee for the service. “What’s great about Circle Medical is that all their
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communication is done through an app on my mobile phone—the way that I would normally communicate with any other person or entity in my life,” Yoh says. Other health care startups are disrupting the industry by reducing barriers to care. Some patients willing to pay a premium have sought out concierge medicine, which gives them a higher level of personal interaction with a physician for an annual fee. Much of the new wave of patient experience includes digitized components, which have provided an opportunity for some tech companies to join the health care market. Yoh points to the joint health care venture formed by Amazon, Berkshire Hathaway and JPMorgan, but analysts are watching the more than 300 health care-related patents filed by Alphabet, Microsoft and Apple between 2013 and 2017. “Huge established enterprises getting into the space and saying ‘We need to do things differently’ will prompt a lot of the larger health care organizations to make changes,” Yoh says. “They may go after some of these startups (as acquisitions) in order to incorporate their learning and their technology.” Yoh doesn’t expect traditional insurance providers or health care organizations to disappear completely, but as technology companies have shaken up retail, media and many other sectors, health care may feel the rumblings of a tech-based CX revolution as well.
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87% of
customers believe that brands need to work harder to create a “seamless experience.”
ZENDESK
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MOBILE BANKING
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fter a jittery start, consumers are now more comfortable banking on their phones. According to Bankrate, nearly two-thirds of smartphone users have at least one financial app on their device. In addition, Juniper Research finds that 3 billion people—almost half the world—will use a banking service on their devices by 2021, an increase of 53% from 2017. But users aren’t completely over their fear of mobile banking; growth has slowed over the past few years as consumers have become more aware of security and privacy issues. Business Insider Intelligence reports that the growth of mobile banking users by the three largest U.S. banks— JPMorgan Chase, Wells Fargo and Bank of America—has declined since 2012. According to BI Intelligence: • Use of Chase’s mobile services grew by 51% in 2012; in 2017, it grew just 3%. • Use of Wells Fargo’s mobile services grew by 29% in 2012; in 2017, it grew 2%. • Use of Bank of America’s mobile services grew by 30% in 2012; in 2017, it grew 11%. Peggy Ann Salz, founder of MobileGroove, says that if financial companies want to overcome customer fear, they must get customers to use mobile banking apps as a part of their daily lives. “It’s a matter of making the value proposition very clear,” she says. “Banks need to be more than banks. There’s a financial decision behind every personal decision you’re going to make as a consumer. Banks need services, messaging and value propositions to move up the food chain and not just be in the last link of a process.” Salz has spoken with banking executives who have considered making their apps a hub for other services. For example, potential homebuyers might use an app with a litany of other services to shop for—such as repairs—
as they’re signing up for a loan. “You build trust through familiarity and frequency; Seth Godin started off with the idea,” Salz says. “The more often you use something, the more familiar you are with something, the more you trust it.” Meanwhile, consumers are finding daily uses for fintech apps, such as Venmo, a peer-to-peer payment app from PayPal that reached $12 billion in volume this year (up 80% from last year). To Salz’s point, perhaps users trust Venmo because they use it often during social outings. It becomes a bigger part of their life, one that has a defined use. “We want a one-stop shop,” Salz says. “We want a frictionless journey. We want to deal with a couple of trusted partners—not a whole bunch of apps. Fintech apps do have excellent customer experiences and an excellent approach to customer service; that’s why they’re disruptive. Banks could learn from them and do even better because they offer a broad range of services and products from one source. Apps are trying to be more like financial institutions, but financial institutions could try to be more like apps. From the perspective of having a mix of capabilities, banks can nail this; apps are going to have a harder time.” In the future, Salz says that banks should make their customer journey more intuitive to create a better experience. This is something they can learn from apps like Venmo: Get to the point straightaway. While simplicity is fintech’s forte, Salz says that mobile banking apps can top fintech apps by having a better and larger variety of customer service options. Instead of relying on AI, FAQs and automation to answer customer complaints and questions, banks have the resources to hire real people to answer questions from consumers on the phone or over SMS messaging. This may help ease the average customer’s privacy and security fears.
79% of U.S. customers will only
consider spending with brands that show they care about “me.” WUNDERMAN
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75% of customers want
a consistent customer experience, whether they engage with a company by phone, online, on social media or in the store.
SALESFORCE
EDUCATION
F
or years, online courses have provided remote students an alternative to bricks-and-mortar institutions. Though online learning platforms are not a new concept, they’re no longer just an alternative to traditional education, but a supplement. Emily Poague, vice president of marketing at LinkedIn Learning, offers a glimpse of the way the platform is being used and by whom.
the classroom. Teachers can supplement course work with online courses and videos that align with learning objectives. By assigning video tutorials and training as homework, they can reserve class time for concept mastery.
Q
A
Are LinkedIn Learning and similar platforms picking up where traditional in-person education leaves off?
A
LinkedIn Learning complements in-person education. To be competitive, it’s important for people to always be learning. We want people to have the flexibility to learn on their own anytime, anywhere. If used in addition to in-person education, online learning can help teachers modernize
Q
Where do you expect customer experience in education to head in the future? Will we see more online opportunities?
To be competitive, education tools and resources need to be easy to access and not just available on desktop. Being able to access learning technology on the go is important and gives people flexibility. As online learning evolves, we anticipate that it will be more social, more community-driven and flexible. We also believe that data will play a significant role in informing actionable insights, so people can develop their own skills for their future career development.
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3 Ways Marketers Can Work Better with Creative BY ALEX WITHERS
awithers@inmotionnow.com
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arketing depends on small creative teams that are increasingly being asked to do more work, in greater variety and at a faster pace than ever before. That’s according to findings from the “2018 In-House Creative Management Report.” The report is based on a survey of more than 400 creatives and marketers. It was conducted by InSource, a nonprofit professional association dedicated to
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in-house creatives, to better understand how creative work gets done. In recent years, quality creative seems to have taken a back seat to marketing and advertising technology, but the fact remains that good creative is still a linchpin in successful marketing campaigns. Creative is the fuel on which marketing automation runs, and it is an essential element of differentiation. The report illuminates some of the
critical challenges facing creative, as well as tangible ideas for better collaboration between creative and marketing for the benefit of the business. The creative team is no longer considered an art department. The findings support the value of creative work, the challenges in bringing it to life and its indispensability to marketing. Creative is Measured by Business Impact When asked how they measure the value of creative, the majority of organizations said business impact (55%). This was closely followed by audience feedback (51%) and stakeholder satisfaction (48%). Individuals value creative work similarly. Business impact, audience feedback and stakeholder satisfaction
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AMA Recruitment Classified Advertising — Need skilled marketing professionals or qualified business professors for your University? AMA’s Recruitment Classified Ads are the most cost effective way to reach your target audience!
ORDER INFORMATION To place a classified ad in Marketing News, please contact Joseph.Petit@ communitybrands.com or call Joe at (727) 497-6565 x3706. To post your job on AMA's online job board, go to http://jobs.ama.org.
CONSULTANTS AVAILABLE FREELANCERS AVAILABLE QUANTITATIVE & QUALITATIVE SERVICES: Combinations of primary and secondary research and BI designed to deliver actionable results including strategic planning. Research methodology, survey and interview design, in-depth interviews, online surveys, hybrid methodologies, max diff, conjoint, and other multivariate techniques, data processing and data entry. Focus on pharmaceuticals (HCP, patients), medical device & large government contractors. Available for on-site consulting. Please call 770.614.6334.
Professor of Marketing and Eli Broad University Professor Broad College of Business Michigan State University The Department of Marketing in the Broad College of Business at Michigan State University is seeking to hire an established senior faculty. Strong candidates will also be considered for the endowed chair, Eli Broad University Professor of Business, in addition to the rank of Full Professor of Marketing. Applicants should possess a Ph.D. in a relevant area of scholarship and should have a professional record consistent with an appointment to Full Professor with tenure at Michigan State University. Salary and benefits are very competitive. The Marketing Programs at Michigan State University have received numerous accolades in recent years (see http:// marketing.broad.msu.edu for some of these rankings). For example, MSU’s Department of Marketing is #12 in the world for research impact, with the full professors ranked #7 worldwide. Our Master’s degree in Marketing Research (MSMR) is ranked #1 and our undergraduate program is ranked 21st in the nation. Our international business program, housed in the Department of Marketing, has been among the elite in the world in both education and research impact for some thirty years, and the Broad College is in the process of implementing a “global mindset” curriculum for all undergraduates. We offer a range of programs — a Ph.D. in Marketing, Executive and Full-Time MBAs, MS in Marketing Research (offered both face to face and online), online certificate programs, a large undergraduate program as well as extensive executive education programs. Strategically, the department has set a focus on providing research leadership worldwide in four areas — Marketing Strategy, International Marketing, Product and Brand Management, and Relationship Marketing and Sales. Successful candidates should be an established global brand in one of these four areas. Preferably, the candidate would also be able to contribute to leading PhD seminars on quantitative/methodological topics and contribute to the PhD program. We hope to have sparked your interest and would very much welcome your application. Also, we will be happy to answer any questions that you may have. Contact Tomas Hult (hult@msu.edu) or Doug Hughes (dhughes@msu.edu) for an informal discussion about the position and/or additional information. Submit materials through the MSU Jobs website: www.careers.msu.edu, job posting #516100. To be eligible for full consideration, all application materials should be received by November 1, 2018, but the position will remain open until filled. Michigan State University is an Equal Opportunity/Affirmative Action Institution. Applications from women, veterans, individuals with disabilities and people from diverse racial, ethnic, and cultural backgrounds are encouraged. Persons with disabilities have the right to request and receive reasonable accommodation.
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COLLABORATION
were the top three responses among individuals as well, but they placed greater emphasis on audience feedback and stakeholder satisfaction. Just 22% of in-house creatives cited industry awards as a measure of success. Small Teams Answer to Many Stakeholders Most creative work is produced by in-house teams. The study found that most businesses are highly dependent on small creative teams. These small teams tend to serve a large ecosystem of stakeholders who often bring competing priorities. Approximately 85% of creatives serve 10 or more internal stakeholders while 60% serve 20 or more. It is not uncommon for a team of fewer than 10 creatives to support the demands of more than 50 stakeholders in businesses with $500 million or more in revenue. Demand for Creative Grows in Velocity, Volume and Variety Three of the top five challenges facing creative teams are the speed at which they are expected to work, the volume of work they are tasked with and the variety of marketing channels they must create for. The proliferation of technology, digital channels and analytics have all added new demands on creative. Not only do marketers need creative projects in market faster, but real-time data collection requires near-real-time adjustments to be made. Previous research from International Data Corporation found creative output had increased tenfold to support the variety of channels. The InSource study both validates that finding and creates a new sense of urgency to hire creatives given the dependence business has on their work. 3 Ways Marketing Can Drive Better Collaboration with Creative The findings of the study leave marketing leaders with a decision: Creatives are doing important work and delivering
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results that businesses are dependent on. For better work and results, will marketers invest the resources necessary to maintain the quality of creative? There are three ways marketers can immediately address the challenges facing creative teams and drive better collaboration with them.
1
UNDERSTAND CREATIVE
Most marketers only see the beginning and the end of the creative process. Few understand it. As a result, many marketers’ impression of creative is skewed. They believe good creative can be produced with few resources. “This is a very transactional view of creative and the highly skilled team of people behind it,” wrote one vice president of a global brand in a commentary in the report. “It leads to inefficiencies across marketing and a lower overall quality of work.” Marketers need to understand creative—the people, personalities, talents, processes and value—to maintain high-quality work. Take them to lunch, shadow them for a day and grow your awareness of the tools they need to get work done.
2
STANDARDIZE CREATIVE PROCESSES
The best way to standardize a process is to document it. A good place to begin is the creative brief and project intake processes.
For better work and results, will marketers invest the resources necessary to maintain the quality of creative?
The survey found these first steps in the creative process are also the biggest challenges in creative workflow, as reported by 42% of respondents. About 67% of respondents say it’s hard to get the necessary information to begin work. The information requirements for a five-minute explainer video will be very different than those for an infographic. Establishing a process will identify the information required for different projects and set them up for success.
3
IMPROVE COLLABORATION
Improving collaboration doesn’t mean inviting the creative team to more meetings. Instead, find ways to give them more time to be creative. In this study, most creatives (46%) reported that they spend between three and seven hours per week on administrative efforts. About one-third of respondents said they spend seven or more hours per week on admin tasks. That’s about one full day every week, or 20% of creative time annually, spent on noncreative work. Improving collaboration means respecting the creative process your organization has documented— providing good creative briefs where they are warranted and being responsive throughout the review and approval cycle. Improving collaboration is about treating the creative team like partners, not vendors. Tighter collaboration between creative and marketing is an imperative. This study was equal parts inquiry into the tasks and organization of marketing, advocacy for creative teams and evidence for marketers to consider a point of view that will improve the results we all collectively deliver to the business. After all, creative and marketing are better together. m ALEX WITHERS is the CMO of inMotionNow, a leading provider of workflow management solutions for marketing and creative teams. Withers is a seasoned digital technology and marketing executive with more than 20 years of leadership experience.
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advertisers’index
ADVERTISERS’ INDEX Quick source for contacting the suppliers in the September 2018 issue of Marketing News. 2018 AMA Symposium for the Marketing of Higher Education / ConnectED . ................ inside back cover URL: h ttp://ama.marketing/highered2018 2018 AMA Summer Academic Conference / Thank You to Sponsors and Exhibitors ......................................... p. 7 ttp://ama.marketing/summer18 URL: h 2018 AMA Training Series ...................................... p. 21 URL: h ttp://www.ama.org/ts 2019 AMA Winter Academic Conference . .............................................................. p. 13 ttp://ama.marketing/winter2019 URL: h Advanced School of Marketing Research ............p. 17 URL: h ttp://ama.marketing/ASMR18 AMA Digital Marketing Bootcamp ....................... p. 15 URL: h ttp://ama.marketing/bootcamp18
AMA’s Marketing Resource Directory ............. p. 5, 53 URL: http://marketingresourcedirectory.ama.org AMA Professional Certified Marketer® Content Marketing Program . ............................... p. 19 URL: http://ama.marketing/PCM-CM AMA Professional Certified Marketer® Digital Marketing Program .................................... p. 31 URL: http://ama.marketing/PCM-digital AMA White Papers ................................................. p. 29 URL: http://www.ama.org/whitepaper Ascribe......................................................................... p. 9 Ph.: 1-877-241-9112 x55 URL: http://www.GoAscribe.com Collegis Education.................................................... p. 3 URL: http://www.CollegisEducation.com
AMA Marketing Week ................................. back cover URL: h ttp://ama.marketing/mw2018
Marketing News....................................................... p. 55 Email: sales@ama.org URL: http://www.ama.org/mediakit
AMA Marketing Week Live Conference . .............. p. 11 URL: http://ama.marketing/MWL2018
Salesforce........................................... inside front cover URL: http://www.salesforce.com/marketing
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#OfficeGoals A peek inside the marketers’ offices that make us drool
goCstudio to redesign its Seattle office in a historic 100-year-old building. Creating a large social space that could be multifunctional was an important factor in the design of the expansion. By day, the large kitchen is used as work space for employees; at night, the 25-foot kitchen island and 16-foot bar island allow for an easy transformation into a full-service event space. Music and creative expression have always been important to Substantial. The floating DJ booth from the original office space was retained as a focal point on the east side of the redesigned office. A large skylight was added adjacent to the entry staircase to naturally light and draw people into the heart of the building. Ebony-stained plywood, steel and glass additions complement the existing exposed brick, old-growth Douglas fir beams and warehouse-style window walls. For the first time in many years, views are opened from east to west across the building.
PHOTOS: KEVIN SCOTT
SUBSTANTIAL, a digital product studio, hired
Architect: goCstudio
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