Why service and marketing should have a shared budget

Balance
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"Marketing is the tax you pay for being unremarkable,” according to Robert Stevens, CEO of Geek Squad.

What does this mean? 

The quality of a customer’s experience is what happens relative to what they expected to happen. It drives profitability, retention, acquisition through word of mouth. 

What they expected to happen is driven by all communications from the brand, not least any marketing you use to reach out to customers and non-customers. And of course what people say: staff and other customers.

So marketing drives quality of customer experience just as much as what happens at contact points (such as retail, online, van driver and contact centres) drives quality of customer experience. 

If you over-promise through your marketing relative to the experience you can deliver, you damage experience. (See A)

Promise v delivery

An over- or under-promise is relative to what you can actually deliver at the point of contact. So the two are interdependent.

This also also applies to volume - if you drive too much volume into the business through over-marketing, then operations fail and experience suffers. Likewise if you under-deliver to an idle operation, it's not economic.

Do you believe that excellent customer experience drives word of mouth, aka free effective marketing? If so, you have a reinforcing feedback loop to add to the diagram.

So the less you over-promise and the more you over-deliver, the more free marketing you get and the less you need to spend on marketing. (See B) 

Promise v delivery

QED marketing spend should be zero in a company delivering perfectly brilliant experiences. Anything else spent on marketing is a tax on being unremarkable. 

The knack in an imperfect world is to balance off the budgets of marketing and delivery - spending interlinked between the two. (See C) 

Promise v delivery

A great example might be the case of Autoglass I looked at a few years ago where they throttled TV and radio advertising according to where there was capacity in the network to deliver the service, whilst matching the ability to answer the required number of calls.

Sit down both your marketing and customer management and they will debate and agree on the interdependencies. But will they act that way?

Look at the incentives, formal and informal. Align them to what you want to happen, e.g. matching leads to sales capacity; e.g. communicating what happens not what they think ought to happen; e.g. putting in place adequate capacity and delivering on the promises agreed.

It’s not rocket science. But you have to do the maths.

Peter Massey is CEO of customer experience specialist Budd and can be contacted via www.budd.uk.com.

About Peter Massey

Peter Massey

Peter Massey is CEO of customer experience specialist Budd and can be contacted via www.budd.uk.com.

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By dvla
01st Sep 2016 14:26

Brilliant thinking!

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06th Sep 2016 08:15

Peter, Thanks for posting this, it made refreshing reading and supports your decision flow cartoon video which was also enjoyable. The challenge for combining the funding of these 2 functions is that one sees them selves as a creative business value add and the other is seen as a cost of sale which continues to to be under pressure to reduce costs. Your argument is water tight, but the reality will require strong leadership to implement.

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