McKinsey: How The Digital Age is Disrupting the Marketing Framework

good morning everybody Wow quite a crowd today and I spill over two so clearly there's a lot of folks here all of you marketers who are interested in understanding the latest this and that what's going on in terms of this whole incredibly fast-paced changing area of digital mobile social and video and I think it's very easy to get distracted by all of this stuff that's going on out there and lose track about the core of what all of these different capabilities are trying to allow you to do which is as marketers connect with your customers in ways that are going to drive growth and really thinking through what the customer is going to have to experience to unlock a growth partnership with you and it's very tempting to spend money on all kinds of technologies and I talk to clients all the time who say things like well we've just put in this new content management system and we seem to be spending more though on staff and agencies we haven't gotten the cost savings or we've just put all of this money into programmatic buying that's the latest catch term so programmatic buying but the reality is our conversion rates are falling or we're working with a systems integrator and we've got 40 million dollar program to put all of this digital underpinning in place but I don't know when I'm going to get the return and the problem is that they're not thinking about the customer journey they're not recognizing that what people really want when they interact with a brand today is they want to be able to get something done and they want it done now it's all about immediacy it's about capability and not having that image of what the customers journey is makes all of these different technology in these different technology initiatives just really a list of initiatives that are not coming together in a way to really change how the brand is interacting and the performance it can it can offer so let me tell you a story of my own journey an experience I have that illustrates some of the challenges involved for financial services in trying to deliver this kind of journey and in all deference to add the example I'm going to talk about is actually not American Express so I won't be coming up and talking about issues with a company that just presented so several months ago my daughter Claire was in an exchange program she's a college senior she was in an exchange program over in Paris and we were planning to head over to Paris as a family to visit her for Thanksgiving which we thought would be a wonderful thing to do and I was starting to think through all of the planning for the trip getting over there buying the plane tickets all of that and I got an email from a bank who I do business with who I have a checking and savings account with offering me a credit card that seemed to actually fit really well with what I was planning to do it was a very traveller oriented credit card giving me extra credit for miles and in particular no foreign transaction fees on purchases outside the United States well that sounded you know just right it seemed like the right fit so I click to apply and then I'm greeted with this I you know it's just overwhelming this is a bank I thought knew me I I have an account with the bank and there's just all of this that I have to fill out so most people would give up right I mean would you bother I didn't I was a bit more determined maybe some masochism there but I was also curious to see what would happen so I fill out the whole thing submit the form I'm told that it'll take another day to find out whether I get approved it takes another day for me to get the email that's says I'm approved then it tells me it's going to take another three days to get my card when my card comes I get this nondescript envelope and I get a card and that card just simply says calling to authorize it it doesn't remind me of my benefits congratulations nothing and when I call in to authorize the card it tries to offer me purchase insurance when you know I've never missed a payment in my life you know over many years and my credit should be telling them that so I'm going through this whole experience and you know it's just very clear that instead of knowing me which is what I would expect a process and a journey that used as much information as possible to help me get through this process you know it was clear that they did not know me at all and that already starts to taint my view of the brand but it gets worse so I go over to Paris I fly there on the plane ticket that I bought with the credit card so I use their credit card to go over to Paris and the first thing I do is go to a chocolate store to buy some chocolate to bring to my daughter as a gift lovely chocolates are by the way this place is amazing it's like a Museum of chocolate in the Marais and one of the things in particular I want to do by with this which I thought would be a nice centerpiece my daughter was making dinner with some friends for us and that maybe we could have this for dessert so I go to the checkout to present my card and I'm turned down so first time I use my credit card that I'm supposed to use for foreign exchange fees abroad that I used to buy a ticket to Paris and I basically run headfirst into a brick wall and they don't even I mean they have my mobile phone number they can't send me if they're concerned if they don't want to just give me credit they could send me a mobile message is this you put in your but nothing I just hit a brick wall and there's like a phone number that I got a call and there's a line behind me and I just said forget it I'm just not going to bother and so I've used a different card and the whole journey was ridiculous and it totally changed my perception of the brand because they hadn't really thought through the whole journey that their value proposition was trying to offer with all of the technological bells and whistles that are actually pretty simple on the surface to provide the problem is that there's all these underlying different departments different systems but they do need to be stitched if that's the way you're going to go to market because the kind of journey that I should have had would have just carried me right through the sign up taking me over to Paris they would know I'm over in Paris they would tell me through the app of different places to go to eat where there might be great deals for the card and it could have been a fantastic experience of carrying me all the way through and it's a question of thinking through what is that journey because what people want from a journey is the ability to get something done now if you're going to promise something you got to carry it through and make sure somebody is capable of doing it needs to be able to be customized I do expect you to have a little bit of creepiness and know that there are certain things about me that you have that you can use to make my experience easier and then make the whole interface and flow of it as incredibly simple as possible and that's really what we want and if we talk about Millennials I'm not sure Millennials are necessarily different from all of us in the room maybe the demands are even higher and the expectations are there but I think in today's day and age thinking through how journeys can deliver on these things is the primary way to connect with customers to drive growth but it's not easy there's a lot of different chain changes that the marketing organization has to make in order to really stitch that together and deliver it and as you look at some of the companies who are born digital and the way they think about journeys and the priorities they put on certain elements of design they tend to be a bit different than how traditional marketers think about it traditional marketers especially who are just trying to make a sale so what you need to start doing is thinking about how to shape that journey with there may be more but there are four key elements that we've seen and I'm going to go through these quickly and then give some examples in detail of how to design an experience that carries somebody through and if you think about the uber z-- and you think about you know Amazon they really stick to these four principles and the question is how do you apply it to your more traditional business so the first is actually not a marketing thing it's means not going to market unless you have some real-time automation behind something the ability to apply for a card online get instantaneous approval get a number be able to use it be able to get things done in the moment right then and there to be able to have interfaces that fit where you are on your phone that you can interact with that know what you're doing and take advantage of that to help push you further proactive intelligence that takes advantage of the information that the company knows about you and uses that to target you at the right time with something relevant to personalize it for you and to optimize that over time and then as you get all of that information as you get all of those interactions let's change the nature of the engagement and innovate and come up with new things and new capabilities that will drive people to interact even more with you and give you more information and keep that cycle of growth happening and if you're thinking about going to market with new kinds of offerings do you have all the underpinnings that this talks about behind that that's part of the challenge and let me give you some examples most of them are outside of financial services some are in but I think they provide some good parallels for kinds of things you can think about so first real-time automation Starwood Hotels has always been a bit more on the leading edge of thinking about how to use digital in the hotel experience and you know it's 10 o'clock at night you get into a hotel you're tired you just want to go to your room you don't want to deal with somebody behind the desk you especially don't want to deal with a line waiting for that person behind the desk so what Starwood now has in their app is the ability to send you a text message when you cross a beacon line in the hotel if you've signed up for it you need to authenticate that it's yourself through a thumbprint and then it gives you the room number and you just go up to the room hold your phone up and the door opens and they're rolling this out in a number of hotels especially the W's or aloft in the W's and it's gradually going to expand and that's you know a journey a capability that totally allows the customer to get something done now gives them a whole empowerment of capability that they didn't have before in the moment of interacting there are things sometimes that you want to be able to do and take advantage of that normally you might not and sometimes the moment is right then and there when most people are thinking about a mortgage they're actually really not thinking about the mortgage they're thinking about buying a house that's what they really want to do is buy a house Commonwealth Bank has an app that allows you to take a picture of any house if the house is for sale it'll give you a whole lot of information about that house if it's not for sale it'll tell you what that house last sold for so they use api's to connect up with Trulia or Zillow depending on the market you're in and then as you start going through the process with this app it tells you so here's an example of how much the house actually costs and then you can go through getting more information you can make an appointment with the broker to go see the house and most importantly from the bank's perspective you can start then going through the process of applying for a mortgage and all of the the cycle of the mortgage paperwork and everything is carried through that app now there's a little bit behind the scenes of Wizard of Oz going on because not all of the paper is clean and everything but from the consumers point of view it's a very clean flow and they've used that to raise their percent their market share in mortgages pretty dramatically and they're now starting to think about where else could they apply this in areas for example such as investment and could this concept work in other parts of their business based on all of those interactions what you also want to have is a company using the information they know about you and information they may have to make your interaction more useful help you get stuff done and L'Oreal has done something very interesting with makeup genius so makeup genius is an app you take a picture of your face and based on 61 different characteristics of how your face looks it scores you for what's the right kind of makeup and not just in general makeup but makeup for different kinds of situations for at night for during the day for casual for formal and it starts creating suggestions for you of what is the right makeup recipe to put together in order to get that look and then it shows the woman what it looks like on her face it generates the shopping list to be able to actually buy it they then get to see what she likes what she doesn't like what she buys and then usually use that to constantly update that algorithm over time it's constantly learning it's constantly a companion and it's brought the whole notion of that department store clerk who people sometimes feel really awkward with they don't trust and it's put that you know right in the hands of a woman you know making what may feel like some high-risk decisions and changing the whole flow by which she goes through the decision journey on what makeup to buy and then speaking of flow my one little joke here progressive has always been on the leading edge of using different kinds of technology to change the buying experience they were one of the first to offer the ability to see competitive quotes on their website because they would submit your information to another website scrape off the results and then based on that figure out what progressives should charge you whether or not they wanted to be the cheapest maybe they wouldn't want to be the cheapest because you're actually high risk and they can afford putting a premium on and they actually found that people were willing to pay up to a 25% premium for progressive relative to the competition so they were able to take on higher and higher risks but they've done something even more interesting now with a new capability called snapshot which you may have heard of snapshot is really changing the entire journey of thinking about auto insurance it's a gizmo that goes in your car and it tracks how you drive the reason you might put that gizmo in your car is because if you're a good driver it can lower your rates it also has an app that allows you to track how you're driving and whether you've been driving well or not and what some of the things you did that might not have been good spouses could compare their driving capability it creates a game out of driving and all of a sudden auto insurance which was something that you maybe only thought about once a year when you were up for renewal when you bought a car or when you had an accident claim becomes a game that you're playing every single day it's right in front of you all the time the brand providing you with information helping you be a better driver making it fun auto insurance you know that's a real game-changer and that's rethinking the journey and putting that whole mindset together of what might the customer want to do and how can we change that whole experience and so from a marketers perspective I would argue that marketing is no longer and it probably has been true for a while it's not just about the message and the connection and the brand it's actually now about the journey that you can provide somebody in buying and using your product and that that journey in and of itself is a product of your brand it's a representation of your brand the journey needs to be managed in a way as if any product needs to be managed where somebody's on top of it putting together all the different pieces across functions driving continuous improvement and thinking about innovation in order to do this well it starts by thinking through what what are the journeys that people want to go on and putting yourself in the customers shoes some of that is data some of that's good old ethnographic research getting out there and talking to people you can actually now do all kinds of things in terms of tracking what people are doing through mobile Diaries and sending them pings and asking them to respond but creating a map of what are the end-to-end journeys and the real goals that people want to do and then seeing where is their value which of the journeys we want to own that we've got to stitch together within those journeys there are going to be battlegrounds places where there are traditionally compromises that frustrate people or places where great value ad can happen that can distinguish your brand over somebody else's this is an example and I'm not going to go through this of a chart from new kinds of tools that are out there this one is from a service provider called click Fox that we use a lot where they can actually create a meta database that pulls together data from every single touch point you have around your institution so imagine if you're a b2b player in the financial services space you have people coming to events looking at your content going on to your website getting emails having visits you can correlate that with your activity you've not easily been able to string that together and there are services like click Fox that let you do that without having to build the all-singing all-dancing mega 5-year data warehouse they do it in a lightweight way they string things together and then you can start seeing patterns on what happens and this is a particular one that says what are all the steps somebody goes through that lead them to give us crappy satisfaction ratings when we survey them and in this case it turns out they were in the IVR the voice response they were cycling around their problems with the voice response so let's fix that voice response it's probably worth putting some extra money into that or maybe even the website they hit before they even had to go to the voice response wasn't working and we might have been able to mitigate the call and so you can start seeing journeys that are happening now and figure out how to improve them over time and then the last part is understanding your underlying IT architecture every single one of you as a marketer better have a really close relationship with your chief technology and your chief information officer yes there's a lot of stuff going on that marketers are going to be the biggest spenders on technology over the come years I don't know if that's exactly true and I think it depends on who controls the budgets but you better know your architecture you better know what's in the realm of the possible better be able to ask what are the possibilities of changing things because I think in the rush to be cool and digital marketers are defaulting towards the design and the front-end stuff and apps and the easy things to do but all the examples that we're talking about here require playing with the backend you've got to be able to understand the wiring you got to understand how data flows you got to be able to enable people to get stuff done that they haven't before and so you've got to immerse yourself in where the architecture needs to go and start asking those questions tomorrow so in order to put this all together there's just there's a lot of issues especially in a financial services institution to pull together journeys for marketers to bring that all together there's issues of not only the data but policy issues how do we want to treat customers well are you going to call me a risk when I land in Paris or not that's a policy risk question there's issues about technology and people that all have to come together and a lot of different functions beyond marketing who have to be orchestrated in order to get this done and we would argue that there's an organization shift that has to happen in order to deliver against journeys which is to organize more against journeys and to create cross-functional teams who are looking at things like acquisition through activation or relationship deepening or service problem all the way to advocacy or new journeys that you come up with and having people squarely on them probably from marketing usually being the lead person to drive that but who are then bringing together the functions around them to drive the improvement in that journey as if it were like any other product you sell because that will give them the authority to bring together the functions to create the capability and to drive the improvements over time so as you're thinking about all of the technology things that you're doing spending on this not this partnership and that new technology thing you know think about your project mix from the lens of how are we really bringing these four things together the automation interaction the intelligence and the innovation how are we bringing that all together through whatever we're doing to drive breakthrough improvements in the journeys that our customers experience that's really the the challenge that you've got to ask yourself I'm going to just close with a quote The Seeker embarks on a journey to find what they want and discovers along the way what they need your customers don't know what exactly the journey should be you have an opportunity to shape that journey you don't have to blindly accept that customers are pinging around there's ways as these companies show of getting ahead of it through the capability diverting and getting customers into your flow in order to build a different kind of brand relationship with them Wally lamb who's written adult books and children's books I think just put it really well because you have the opportunity to guide the customer and from what we have seen in the companies who have taken these kinds of steps there's a lot of rewards here if you can really pull it together and break through thank you

Channel: LinkedIn Marketing Solutions

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Id: E6nZiGIr8VQ

Length: 26min 30sec (1590 seconds)

Published: Sun May 10 2015