MKTG6212 Northeastern Illinois CEO Guide to Customer Experience Questions The CEO Guide to Customer Experience and Five Selling Secrets of Todays Digital
MKTG6212 Northeastern Illinois CEO Guide to Customer Experience Questions The CEO Guide to Customer Experience and Five Selling Secrets of Todays Digital B2B Leaders Discussion Questions:What is a Customer Journey? Why should improving the Customer Journey help improve digital marketing success?What is the role of customer data and developing insights from such data in facilitating the customer journey?What internal organizational change is needed to accompany changes in the customer journey? And, how can companies ensure that their changes are helping improve digital marketing outcomes?Video to Watch: https://www.mckinsey.com/Videos/video?vid=4810570007001&plyrid=HkOJqCPWdb&aid=785F27F0-805C-435B-9737-B1532BC2AF42 7/2/2019
Five Selling Secrets of Todays Digital B2B Leaders
RELATED EXPERTISE:
SALES & CHANNEL TRANSFORMATION, MARKETING & SALES, TECHNOLOGY & DIGITAL
Five Selling Secrets of Todays Digital B2B Leaders
APRIL 5, 2016
By Roger Premo , Phillip Andersen , John Wenstrup , and Vikas Taneja
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A quiet revolution has been happening in sales over the past several years. While many
companies have continued to adhere to sales models developed a decade ago, digital
attackers have been busy reinventing selling. Fueled by the ubiquity of data, the growth
of as-a-service business models, and the decentralization of account relationships,
cloud-based companies such as Amazon Web Services, Salesforce.com, HubSpot,
Workday, and ServiceNow are disrupting the sales cycle.
Those companies are creating substantial growth in sales revenue from existing
customers while reaching new categories of customers at much higher volume and lower
cost than companies using more-traditional sales methods have achieved. They are
compressing the sales cycle to hours and weeks from months and years, closing multiple
deals per day. Some longer-established companies have adopted these techniques, too,
both offensively to gain a competitive advantage in key markets and defensively to fend
off threats from disruptive competitors.
To understand what makes digital B2B sales leaders tick, The Boston Consulting Group
undertook a study of the end-to-end selling models used by a dozen next-generation
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sales leaders. We have uncovered five lessons that companies in any B2B industry can
learn from and adapt to their industrys particular conditions.
Start with the customer journey. Many companies fail to look at their products and
services as an end-to-end customer journeyacross stages of the customer experience
ranging from consideration and sale to usage and additional purchase. Customers feel
the pain of disconnected organizational silos such as marketing, sales, and after-sales.
We estimate that 95% of all companies have not written down their target customer
journeys. The customer experience in such cases is almost never delightful.
The best companies deliberately design low-friction customer journeys and fine-tune
how each marketing and sales activity contributes to the overall experience. They know
precisely what step-by-step experiences they want to deliver, which functions will
seamlessly deliver them, and what messages will make them effective. For instance, they
may identify more than a dozen personas, or distinct types of customers with
characteristic needs and motivations for buying, and then provide customers of each
type with a landing page that is tailored to their industry and needs when they search on
Google for information about a product or problem.
On the basis of their previous online activity, targeted customers may receive a trial
opportunity to evaluate a companys offering. A salesperson may try to convert such a
trial into a purchase by using knowledge of a customers activities and needs. Then a
customer success manager may follow up to ensure that the customer is getting
maximum value from the product, and ultimately becoming a power user for the brand.
(See Exhibit 1.)
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Track the journey from cookie to customer. Far too many companies fail to capture
even basic data about customers that they receive from digital channels. Frequently data
is stored in individual silos, or gets lost when it is transferred from one marketing or
sales function to another. In the process, companies lose an opportunity to develop a
data-driven understanding of where they are winning and losing with customers.
Next-generation sellers create a 360-degree view of customers, starting with customers
first interactions with a website. The sellers use techniques like Internet protocol (IP)
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lookups to identify details such as company name and location before customers have
officially made themselves known by entering their contact information. They use every
subsequent interaction to build a continually evolving, data-informed view of individual
customers and to guide them through their buying journey.
With every interaction, companies can see when and where customers signal their
interest, and can calibrate the next customer engagementeither online or offline. Realtime data about customers actions and intent informs every conversation salespeople
have and every action they take. For example, when customers engage in an online trial
or demo, digital leaders take advantage of data specifying how the customers used the
trial, which functionality they accessed, and how actively they used the product, in order
to prioritize which customers to contact and which conversations seem most likely to
help generate a sale.
Sources of this data arent just tech products like cloud software or mobile apps; data
can also come from connected sensors in a physical product such as a jet engine or a car
that relays how its working. Early warning signs that a product is failing can trigger a
maintenance call. Given mobile connectivity and Internet of Things capabilities, physical
goods can relay valuable information about systems used and levels of customer
adoption or efficiency.
Successful companies ask questions such as these:
Are we measuring the right things?
Are we creating a low-friction experience to catch demand, or are our organizational
silos hindering customers?
Are we creating barriers to quick transactions, such as delays in getting a price
quote?
Are we losing customers at a particular step in the process?
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Are customers who have purchased a product using it regularly and deriving value
from it?
In one case, for example, a global enterprise technology company identified gaps
between its target and its actual digital customer journey. By introducing end-to-end
visibility into its customer journey, the company tied upstream gaps in the journey to the
downstream revenue losses that those gaps caused. With that lens on value, the
company recognized that the effort and investment needed to close gaps were clearly
justified. In just three months, the company doubled its sales yield for targeted offerings.
Stop cold calling. Inside many B2B organizations, salespeople spend much of their time
on unsolicited outbound sales calls to lists of customers, often from third parties and
partners, with little customization of offers and sometimes with minimal knowledge
about the prospect. Often that approach entails making dozens or hundreds of calls to
yield a single sale, and the sales process feels more like high-pressure telemarketing than
like a sophisticated sales discussion.
Digital attackers sales efforts are much more targeted, based on inbound, digitally
qualified leads. Search-engine optimization, social media, e-mail marketing, and blogs
provide leads for more than three-quarters of B2B customers surveyed by HubSpot, an
inbound marketing and sales platform. These leads cost half as much as those drawn
from traditional outbound sources, and they can yield important data about a
customers existing needs and interests. (See Exhibit 2.)
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When digitally enabled salespeople follow up on an inbound lead, they know which
products and content the customer has tried or downloaded. They know the customers
search and social-media history, and the level of usage of current customers. They can
engage in informed conversations about services and features, based on a
comprehensive understanding of the customer and the customers areas of interest.
Consider the selling process of a global enterprise cloud-software company. By using
predictive lead-scoring systems that assess marketing engagement activity and other
first- and third-party data, the company can chart the size of a potential deal and the
customers likelihood of purchasing. The highest-value leads can be funneled to inperson salespeople; medium-value leads can go to in-house sales teams; and low-value
sales can be nurtured online before the most promising of those prospects graduate to
the next level. The conversion rate of properly scored leads can be two to three times as
high as the corresponding rate for traditional cold leads. Some teams have seen as much
as a tenfold increase in productivity once they started working warm, well-scored leads.
Rethink inside sales. The traditional B2B sales process is face-to-face, highly
orchestrated, time consuming, and difficult to scale. Typically, a team of well-
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compensated salespeople travels to the client for a major pitch meeting. Its the model
of the heroic sale.
That model is being replaced by a high-volume, high-quality inside-sales engine that
quickly capitalizes on demand before it evaporates. Traditional salespeople can see
perhaps one or two clients per day in person. Sellers who work inside for digital
attackers may have ten times more high-quality sales conversations in the same period.
These conversations result from a different model of inside sales. Armed with data
about the customers progression through the buying journey, an inside sales rep can
have a phone conversation or close a sale at a speed and with an improved economic
model that traditional call centers or face-to-face reps cannot match. For digital
attackers, inside sales is often the primary sales channel. Inside sellers are highly skilled
and motivated, with career paths, competitive compensation, and a good working
environment.
Consider HubSpot. Throughout its rapid growth from zero in revenue when it was
founded in 2006 to more than $180 million in revenue in 2015, the company has relied
on inside sales as its primary selling channel. Use of inside sales reps and inbound
selling techniques has enabled sellers to reach dozens of customers per day. Taking
advantage of the rapid sales cycle that inside sales teams make possible, the company
can fine-tune marketing levels daily to ensure that the volume of high-quality leads
matches the capacity of the sales force. From its start in the US, HubSpot has now scaled
its model internationally, building inside sales centers in Dublin, Sydney, and Singapore
to reach new markets and customers.
Grow through customer success. Traditionally, companies have achieved most of their
revenues up front when they deliver a product. Digital attackers, on the other hand,
achieve most of their revenues when customers succeed with the product and keep
buying more.
In fact, almost all the digital attackers we studied have created a customer success
function. Customer success managers (CSMs) engage customers to improve their
adoption and deployment of the product, and to increase their value creation from it.
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The experience of these companies is that customers who use products more extensively
are stickierthey stay with a company longerand tend to buy more.
The key to making the customer success function work is using real-time data about
customer usage to proactively engage customers in the places that create the most value.
For instance, customers who have purchased but have not used a product may receive
getting started training and user guides. Customers who are already using the product,
but arent using all of its modules and features, may receive introductory how to
coaching on using and getting value from new modules. Customers who are heavy users
of the product may be connected to sales teams encouraging them to increase their
volume, move up to higher-level product tiers, and expand their buying in adjacent
offerings. (See the sidebar, Three-Dimensional Sales Expansion.)
THREE-DIMENSIONAL SALES EXPANSION
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Spending the time necessary to understand the crucial data to track, and to identify the
triggers for sales interventions from CSMs (or the digital tools that can automate CSM
roles for smaller customers) is a critical design point in creating value. Structuring the
function is typically an evolutionary process that involves using the product roadmap
and an analysis of customer attrition to continually fine-tune the model to improve
customer success.
For digital attackers, customer success is mission critical. In nearly all the companies we
studied, customer success is the focus of a CXO leader, with a title such as chief success
officer or chief adoption officer. Although these companies often devote up to 25% of
total sales spending on customer success teams, the long-term returns of the model more
than justify the investment. Customer success efforts such as these can help companies
achieve breakout growth, boosting sales by as much as 30% from existing customers
alone, and giving companies a powerful engine for growth.
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Huge shifts in business and technology have upended the world of B2B selling. Digital
attackers have responded with bold plays that are rearranging the competitive
landscape.
Established B2B companies have a major opportunity to recapture growth and build a
substantial go-to-market advantage. Companies cannot simply tinker at the margins of
their current approach. They must build a fundamentally new sales organization
before digital upstarts disrupt their business.
Authors
Roger Premo
Managing Director & Partner
Boston
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Phillip Andersen
Managing Director & Partner
Seattle
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John Wenstrup
Managing Director & Senior Partner
Seattle
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Vikas Taneja
Managing Director & Senior Partner
Boston
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© 2019 Boston Consulting Group
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The CEO guide to customer experience | McKinsey
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Operations
McKinsey Quarterly
The CEO guide to customer
experience
August 2016 | Executive Brie?ng
Companies that create exceptional customer experiences can set
themselves apart from their competitors.
W
hat do my customers want? The savviest executives are asking this question more
frequently than ever, and rightly so. Leading companies understand that they are in
the customer-experience business, and they understand that how an organization delivers for
customers is beginning to be as important as what it delivers.
This CEO guide taps the expertise of McKinsey and other experts to explore the
fundamentals of customer interaction, as well as the steps necessary to redesign the
business in a more customer-centric fashion and to organize it for optimal business
outcomes. For a quick look at how to improve the customer experience, see the summary
infographic.
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Infographic
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The CEO guide to customer experience | McKinsey
Armed with advanced analytics, customer-experience leaders gain rapid insights to build
customer loyalty, make employees happier, achieve revenue gains of 5 to 10 percent, and
reduce costs by 15 to 25 percent within two or three years. But it takes patience and guts to
train an organization to see the world through the customers eyes and to redesign functions
to create value in a customer-centric way. The management task begins with considering the
customernot the organizationat the center of the exercise.
Observe: Understand the interaction
through the customers eyes
Technology has handed customers unprecedented power to dictate the rules in purchasing
goods and services. Three-quarters of them, research ?nds, expect now service within ?ve
minutes of making contact online. A similar share want a simple experience, use comparison
apps when they shop, and put as much trust in online reviews as in personal
recommendations. Increasingly, customers expect from all players the same kind of
immediacy, personalization, and convenience that they receive from leading practitioners
such as Google and Amazon.
Central to connecting better with customers is putting in place several building blocks of a
comprehensive improvement in customer experience.
Identify and understand the customers
journey.
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It means paying attention to the complete, end-to-end experience customers have with a
company from their perspective. Too many companies focus on individual interaction
touchpoints devoted to billing, onboarding, service calls, and the like. In contrast, a customer
journey spans a progression of touchpoints and has a clearly de?ned beginning and end.
The advantage of focusing on journeys is
twofold.
First, even if employees execute well on individual touchpoint interactions, the overall
experience can still disappoint (Exhibit 1). More important, McKinsey research ?nds that
customer journeys are signi?cantly more strongly correlated with business outcomes than are
touchpoints. A recent McKinsey survey,[ 1 ] for example, indicates customer satisfaction with
health insurance is 73 percent more likely when journeys work well than when only
touchpoints do. Similarly, customers of hotels that get the journey right may be 61 percent
more willing to recommend than customers of hotels that merely focus on touchpoints.
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Exhibit 1
Quantify what matters to your customers.
Customers hold companies to high standards for product quality, service performance, and
price. How can companies determine which of these factors are the most critical to the
customer segments they serve? Which generate the highest economic value? In most
companies, there are a handful of critical customer journeys. Understanding them, customer
segment by customer segment, helps a business to maintain focus, have a positive impact on
customer satisfaction, and begin the proce…
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