Companies in North America lean too heavily on tech to practice customer-centricity.
It’s official. Marketers and technology are jilted lovers.
Gartner’s latest Marketing Technology Survey finds that marketing leaders are only using 58 percent of their Martech stack’s potential.1 And new research from Martech Today shows that 83 percent of marketers rip and replace their tools each year. 2
Why all the disappointment? I believe the inflated expectations, just like the heady days of a star-crossed love affair, can only lead to a crushing reality when your partner falls off their pedestal.
Technology always under-performs the magical expectations set by many technology vendors and starry-eyed buyers.
I believe the reason this disappointment is so stark in the U.S. is, perhaps counterintuitively, due to the wealth of data we have available. A lot of the tech that American companies are heavily investing in works best when fed large amounts of data. But reliance on one thing can lead to neglect of other equally important things. Your lover won’t be impressed with how buff your body is if you never ask them about their day.
While the amount of data available for analysis is exploding across the world, in America, a mature market with a digital population generating immense data, companies have become addicted to “tool fuel,” as I call it.
Tool fuel is numerical data whose worth is proportional to its quantity, such as the number of visits, sessions, hits, views, likes, shares, etc.
Rather than exploring and deeply understanding customers and their behavior, many companies look for shortcuts to customer insights based on volume-reliant data trends alone, where tools shine. Soon, the tool, not the company leadership and strategy, is setting the customer experience agenda.
Too many companies exclusively rely on clickstream web analytics or another tool to “understand” their customer at an impersonal, quantitative level.
Of course, quantitative data trends and machine learning insights are important to leverage, but customer-centricity also requires thick data for rich customer insights. 3
Tools alone won’t make your company more customer-centric.
Don’t get me wrong; tools and platforms are necessary for customer experience optimization, but unless companies have a thriving customer-obsessed culture, where the tool serves a strategy (and not the other way around) wielded by an empowered team that is laser-focused on understanding and meeting their customers’ emotional and functional needs, then the technology investment is doomed to fail.
GO Group Digital, 4 validated this crucial point when it discovered that companies with a healthy culture of customer-oriented experimentation were 36 percent more likely to report faster growth than those without. The impact of testing is larger when comparing those companies that test and those that don’t. Gartner found that organizations that outperform their competitors were almost twice as likely to make testing and experimentation a marketing priority.
“If testing is so valuable, why don’t companies do it more? After examining this question for several years, I can tell you that the central reason is culture,” said Harvard Business School Professor, Stefan Thomke.
These fast-growth companies are better at discovering, exploring and exploiting customer insights because of their customer-obsessed experimentation culture, not their tools.
A great experimentation strategy relies on multiple methods to surface customer insights.
The GO research also showed that American companies were less likely than those in the U.K. and Germany to harness customer-centricity to power business growth.
European companies, especially fast-growth companies in Germany, which scored 21 percent higher than American ones in customer centricity, reported using multiple methods to understand the customer and their needs. Research tells us that companies that leverage behavioral insights outperform their competitors by 85 percent in sales growth and more than 25 percent in gross margin.
Less reliant on tool fuel, businesses in these markets are leveraging advances in behavioral design, which maps quantitative and qualitative customer data to optimize customer experiences.
Slow-growth companies, meanwhile, reported a much higher reliance on a single method of customer understanding to set their innovation and experimentation agenda. They made decisions more often based on gut feeling over evidence and failed to use rich data to optimize the customer experience. They certainly did not look at the “human element” that drives their customer’s behavior.
…fast-growth companies are better at discovering, exploring and exploiting customer insights because of their customer-obsessed strategy, not their tools.
Instead, many of these companies exclusively rely on clickstream web analytics or another tool to “understand” their customer at an impersonal, quantitative level.
Simply put, slow-growth companies were only looking at “what” customers are observed doing, while guessing about “why” their customers behaved one way or another. And any strategy derived from that guesswork wasn’t paying off.
Customer-centricity is a skill, not an accomplishment.
At its best, quantitative technology tells us what happened (and predict what might happen) with high confidence, but it can’t often tell us why it happened.
Companies need to combine knowledge of what customers behave the way they do with why they do it in order to truly be customer-centric. Building companies that ask “why” is worth trillions of dollars. 5
Over the last ten years, I’ve set up countless digital experimentation programs for companies big and small and here’s what I’ve learned: the best have the process, accountability structures, cultural buy-in, expertise, and yes, technology too, to discover and validate customer-insights faster than their competitors. Tools are one of the five components that serve that purpose. They might start by gathering and examining quantitative data, looking for trends. Equipped with potential insights from the quantitative data, they use qualitative methods to hear the voice of their actual and target customers. They have conversations with their customers; they don’t just tick boxes with the tool du jour. It’s in these conversations that insightful leaders ask why their customers feel and act the way they do. The insights are shared responsibly to product owners and marketing. They aren’t kept bottled up in silos or “locked away” in incomprehensible spreadsheets. Data is translated into genuine insight, shared, and discussed. Backed by insight, employees across the organization hypothesize solutions to solve the challenges described by their customers. These fast-growth companies use rigorous experimentation to validate whether the solutions helped their customers achieve their desired outcomes. Those that don’t are not regarded as failures, but are tapped for further customer insight. “Winners” or “losers,” the process creates a feedback loop that propels customer-centricity forward. Before you invest in your next technology love affair, first take a hard look at the process, accountabilities, culture, and expertise that are needed for successful digital transformation and experimentation. With the right environment, you can make your next technology partner the one that lasts. #1 They start by gathering and examining quantitative data, looking for trends. #2 They use qualitative methods to hear the voice of their actual and target customers. #3 They have conversations with their customers; they don’t just tick boxes with the tool du jour. Insightful leaders ask why their customers feel and act the way they do. #4 Insights are shared responsibly to product owners and marketing. #5 Data is translated into genuine insight, shared, and discussed. #6 Employees across the organization hypothesize solutions to solve the challenges described by their customers. #7 They use rigorous experimentation to validate whether the solutions helped their customers achieve their desired outcomes. #8 There are no “losing” experiments; there are only customer insights, which are internalized across the organization. #9 The experimentation process creates a feedback loop that propels customer-centricity forward. Chris Goward is the CEO of Widerfunnel and co-founder of GO Group Digital. Reach out to him about building or growing your experimentation program in North America. Read the full GO Group briefing report to see how fast-growth companies are building healthy cultures of experimentation to accelerate innovation. This article first appeared on Forbes, Striving For Customer-Centricity? Don’t Lean Too Heavily On Technology Successful programs share common characteristics that make them uber customer-centric.
Fast-growth companies share these 9 characteristics
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