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Forrester: Customer experience will make traditional marketing defunct

6th Apr 2014
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The drive of customer experience into business strategy “calls into question the existing role of marketing” and is set to cause “friction” between certain departments in mid to large-scale businesses, according to Forrester’s principal analyst for customer experience, Paul Hagen.

Following the analyst firm’s recent Chief Customer Officer Snapshot report for 2014, Hagen states that a number of customer experience trends are occurring in large-scale organisations that suggest a grave future for conventional marketing departments. He also explains that many other business divisions, including support and operations, will soon need to reassess how their positions fitted in with their company’s future customer experience-led demands.  

Among the trends cited was that of hiring chief customer officers (CCO), which was gathering pace in big businesses, with 6% of the S&P 500 in the US now officially holding CCOs on their executive board. There were almost 1,000 individuals in CCO positions across the US at the start of this year, up 27% on 2013, with 58% of those being hired externally.

As a result, concerns are being raised about the current primary function of the role, with the Snapshot report claiming CCO positions are at present, “experimental”, despite the board-level power they hold.

85% of the CCOs referenced state they are the first to hold that position within their company, and more than one-third of CCOs were completely new to the job in the past year. However, the statistics give a clear indication of how important large companies view customer experience to their future success and this, states Hagen, alongside the power being given to CCOs, was what will likely create the potential for widespread disruption:

“Is this evolution causing friction? Absolutely. In some respects, it calls into question the existing role of marketing.

“When you look at it, you’re moving from acquisition to retention being the focus, so you’re essentially downgrading what marketing does [by shifting to a customer experience-led business model]. There are a lot of questions in this new world, where customer voice drowns anything produced out of a marketing department; and it makes you wonder what the role of marketing is.”

Hagen’s opinion is backed up by the Snapshot report which specifies a further trend of media and production budgets being replaced in many marketing departments, with spend shifting to content and connections instead: “Marketing is an important process,” the report states. “But getting it right in a customer-obsessed world will involve taking orders from customer experience (CX) leaders who understand how to serve and retain customers.

“As the age of the customer forces companies to change the way they work, to ascend to the CCO position, marketing pros will need to build clout with the vast operations that deliver the bulk of experiences and result in customer retention and advocacy, particularly in companies with complex products or services with long lifecycles. If not, they should prepare to work for a new boss.”

Hagen describes current processes as “reflective of the industrial age”, also questioning the necessity for businesses to continue to deliver direct marketing and advertising campaigns when customers were expecting more brand engagement:

“You’ve got these processes that have existed in companies– we build a product, we market it, we sell it, we’re done. Customer support is a cost centre. When you look at that, it feels really broken in today’s world. Marketing can’t compete with the voice of the customer, so why are we still doing direct marketing and advertising? Why are we still doing that if no one trusts it, no one reads it? It becomes a numbers game that’s much harder to do, so we start to ask why we have marketing at all.

“Similarly, why do we have customer support centres if we’re trying to engage people? Because now we can engage people in the context in which they’re using our products and services. Why would we not want to engage them and deliver more value there as opposed to viewing them as just a cost centre? So I think some of these roles in companies just don’t make sense, with the future in mind.”

Statistics suggest companies are divided between hiring CCOs from either marketing or operational backgrounds, with 22% being appointed from each. Again, Hagen suggests this is a sign of the blurred lines customer experience creates between front and back office processes, and further proof of why customer experience brings a clash between both:  

“We’ve had front office and back office divides for a while, but if you think about something like flying, for instance – when a plane is delayed, the back office information is critical. When is that plane going to arrive and is it going to get to its destination in time to make connecting flights?

“That information is expected to be visible now, and the CCO coming in and literally putting what that customer experience is in front of people is a challenge for what actually drives value to customers and what they actually care about. It challenges the status quo in a whole bunch of places.”

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