This article was published in the Spring 2019 edition of Silicon Slopes Magazine.
By Nick Stagge, VP of Marketing for ExpertVoice
All too often companies define themselves as “product-led” or “marketing-led” organizations, trying to “disrupt” the industry. Hogwash. This mentality elevates the input and output of one department over others — building gaps, not bridges between departments.
Instead, companies should define themselves as “consumer-centric” organizations, where departments are joining forces to deliver meaningful value to their customer, e.g., Amazon, Southwest Airlines, and TD Bank.
Most companies struggle to find a balanced approach between marketing, product, and sales despite the desire to deliver a consumer-centric experience. Alignment should no longer be a buzzword, but an intentional action to create a seamless experience for the customer.
The impact of misalignment
Make no mistake about it, when marketing, product, and sales teams are fractured, so too is the customer experience. This tension — felt both inside and outside of the organization — can tear at the fabric of a company’s success.
The customer experience, or lack thereof, is the leading cause of client churn. And it makes sense. Unhappy clients are more likely to leave, and when they do, they take a piece of your business elsewhere.
Losing a client can have a real impact on revenue performance. In fact, 80 percent of a company’s future revenue will come from just 20 percent of their existing customers. Looking at it from another angle, the Harvard Business School reports that reducing churn by 5 percent can increase profits by 25-125 percent.
The impact of losing a single customer stretches beyond the loss of existing revenue. When a client churns, it’s usually because they’re dissatisfied with the services, prices, or deliverables, and these frustrations are rarely kept quiet.
Acquiring a new customer is expensive, time consuming and comes with low probability. In fact, the probability of selling to a new prospect is 5-20 percent, compared to 60-70 percent probability to upsell with existing clients. And that’s before churned clients share their negative experiences.
According to Moz, 67.7 percent of customers surveyed said that customer reviews affect their purchasing decision. In the same study, reports show that if a single negative review surfaces in search results, it can cost up to 22 percent of new potential customers. Even if an opportunity transitions to a new client, the contract value and overall adoption can be much lower than a client who has not come across a negative review.
Bob McHugh poignantly said, “Negative customer reviews are a gift to your competitors.” And he’s right. If these customers are not doing business with one company, they are doing business with another. And while it may seem that just one unfavorable comment won’t have much of an impact, it actually takes 12 positive experiences to make up for a single, unresolved negative one.
The cause of misalignment
Despite the potential devastating impact of misalignment, these departments often struggle to operate in harmony. Sales, marketing, and product misalignment may come down to one thing: when they want to sell.
Marketing wants to sell tomorrow
Marketing teams try hard to stay ahead of the curve in their respective industries and against their competitors. And it’s understandable, they’re responsible for building a strong brand identity and establishing thought leadership for the future.
Product wants to sell today
Product teams are focused on building for tomorrow, but they’re interested in selling existing product features and value adds now — all those design sprints, feature validation, and A/B testing to get a new product or feature to market want to drive adoption right away.
Sales wants to sell yesterday
Sales teams are often measured on immediate results, so they’re looking for ways to create greater sales velocity. They want to shorten the sales cycle, create a sense of FOMO and build confidence with their prospects that partnering with their company is a sure shot for future success.
When you consider the customer experience through this dynamic, it becomes apparent why they become frustrated and dissatisfied with the relationship. They were initially hooked with the promise of future solutions, were sold on the premise of past successes, and given access to the product/services available today. Feels pretty dysfunctional.
Creating alignment and driving results
Addressing the issue of alignment should no longer continue as a general topic of conversation, met with equal amounts of head nods and eye rolls. Instead, it must be a real topic of discussion with tangible action items focused on helping the business grow.
Here are three things to help you build internal alignment and create a better consumer experience:
Build a consumer-centric culture
Begin and end every conversation with a simple question, “How are we providing value to our customer?” When each team stops thinking about their own goals and instead considers the consumer, everything changes. The conversations, brainstorming sessions, decisions and actions become — as they should — focused on the consumers’ needs, and the company’s ability to provide value.
With the customer experience as the foundation for all decisions, compromises are made and solutions are found. This will improve the customer experience, elevate their satisfaction with the company and increase their likelihood to re-invest.
Get to know your customer
Spend time, as a unit, interacting with your customers. Give each department the opportunity to connect with the client to better understand their needs, then come together to address them. This creates a shared experience across teams, a bond for future collaboration and most importantly, the company is presenting a united friend to the client, centered around meeting their needs.
Define your target personas by their roles, responsibilities, and pain points. Then work together to establish the solutions your company can offer and the value you’ll provide.
Map your customer journey to have a better understanding of the process required of them to do business with you. Explore how each team can support the consumer at every major touchpoint and develop a unified voice/approach at each mile marker.
Create shared goals and incentives
Compensation structure drives behavior. If each team is compensated for slightly different results, each team will prioritize slightly different outcomes. Over time, this creates a considerable gap between teams and presents significant problems within the customer experience.
Take the time to align individual and team goals with corporate goals. Establish a measurement system that creates transparency and visibility between departments so teams can work together to make progress on major objectives and key results.
Establish compensation and incentive packages that reward an improved customer experience rather than an easy-to-track, easy-to-hack measurable. Include cross-functional departments to help define incentive packages so the rewards can be matched across the organization.
Bringing it all together
As companies evolve to keep up with customer expectations and needs, departments must learn to come together to create a better customer experience. The ramifications of misalignment can be devastating and the causes of misalignment are real. But there are ways to bridge this gap and grow your business, it’s simply a matter of putting the customer first.