Most marketers believe their brands need a customer-centric business model in order to succeed, and that optimising the customer experience is the biggest priority for the profession.
Yet according to new Marketing Week research, structuring a marketing department around the customer journey is currently the least common model of all, with the majority of departments either being product-centric or structured around marketing disciplines.
The Future Marketing Organisation study, conducted in partnership with marketing intelligence company MiQ, finds 42.2% of marketers believe a customer-centric model is the right way to organise marketing, but this is in place at only 5.8% of respondents’ companies. This compares with 37.3% who say their department is set up around individual products or brands, and 19.4% who say the different marketing disciplines dictate structure.
It is no surprise, therefore, that marketers are lukewarm in their views about how well their companies accomplish customer-related objectives. They score their ability to optimise customer experiences and be driven by customer insight 3.1 out of 5 on average, while they score their ability to capture a single customer view just 2.8.
There is clearly a desire to change marketing to fit better with customers’ behaviour and preferences. So, what should marketers be doing to move their organisations towards a more customer-centric business model?
Customer-centricity comes from listening to customers
O2’s director of customer experience, Sandra Fazackerley, argues that businesses need to start by listening carefully to their customers to understand what customer-centricity actually means to them.
Last year, O2 completed an extensive piece of research asking its customers for their own definition of ‘customer-led’. The telecoms business then took the key customer needs identified in this research and translated them into its ‘customer experience principles’, which it uses to keep customers front of mind in everything it does.
“Through having conversations with customers, you can really begin to understand their challenges and how to address their pain points,” she says. “Once you have created the meaning, you then need to embed the definition and ethos within the organisation.”
These principles shape the decisions O2 takes, the way it talks to its customers and how it designs processes, propositions and products. They are displayed throughout its offices and there is a meeting room where staff can stick their own customer pledges to the wall.
Other ways the brand implements customer-centric thinking within the business include ‘the blue chair’, which is used to represent an O2 customer and their needs. During meetings, the chair is left empty to signify the customer and help conduct the meeting in line with the customer-centric business strategy.
O2 also makes use of ‘our stars’, a dedicated group on Facebook Workplace, where staff recognise and nominate others who have demonstrated customer-centric behaviours.
“It’s become a truly inspiring outlet where we get to hear incredible stories from all across the business,” says Fazackerley. “Once a month we select a number of the best nominees and celebrate their efforts by adding them to our walk of fame – a winner’s walkway across all of our main offices.”
Through having conversations with customers, you can really begin to understand their challenges and how to address their pain points.
Sandra Fazackerley, O2
With the majority of businesses organised around products and brands rather than customers, changing organisational structures is obviously challenging. As a result, many businesses have introduced customer-focused roles.
Heather Smith joined insurance firm LV in 2016 as digital transformation director, but took up the chief customer officer role in January before being promoted again to the managing director of its direct insurance business in July. She says the desire for customer centricity within marketing is clear but structuring for it can be complex. One option is to split the team into segments but she says this could result in multiple people executing things in isolation, which is inefficient.
“Our structure is neither brand-, product- nor customer-specific yet ‘customer’ is implicit in it,” she says. The company take a ‘value chain’ approach to the marketing process, consisting of “planning at the beginning; then the proposition thinking; then the execution team with above-the-line, below-the-line and digital; then the performance team at the end”. Sharing knowledge and insight and joining up data points are good first steps within this approach, Smith says, so those involved all understand the customer segments and the targeting strategy.
Meeting brand objectives
However, not all marketers believe restructuring alone is the answer, with Transport for London’s customer director Chris Macleod suggesting that communicating a brand’s core purpose to customers is perhaps more crucial. He strongly believes the entire organisation needs to have a customer focus, not just marketing.
“I am called ‘customer director’ currently but that doesn’t mean I am in charge of the customer, I ‘own’ the customer or I am the only person within the organisation who can have a view about the customer,” he says. “A business might be organised around products or brands but there should be a customer-centricity strand that runs through that. Businesses have to think about those products and those brands through the lens of the customer.”
A purpose-driven approach helps to drive the TfL brand forward, ensuring that both customers and TfL staff know what the brand stands for. The transport network’s purpose is defined in the statement, ‘We do all we can to keep the city moving, working and growing and to make life in our city better’. This is summarised in its communications as ‘every journey matters’.
A key part of its journey to achieve customer-centric objectives is identifying what bothers customers and what it can do to tackle pain points. With its customer programme, TfL puts a strategic focus on these potential issues, like ensuring it has a reliable service and helping people when things go wrong.
Macleod underlines the importance of getting the basics right, rather than an emphasis on differentiation. “I don’t think we are doing anything staggeringly brilliant but we have a purpose,” says Macleod. “We know what our programme is, we have an understanding of what our customers want and we work to deliver it consistently with teams who are signed up to shared agendas.”
Creating true customer centricity comes from joining up the entire business around common goals. People in customer-related jobs are the ones most marketers (44.6%) think they should be collaborating with more closely within their businesses, followed by insight and research (33.2%) and data and analytics (31.2%).
In reality, the highest level of collaboration is between marketing and sales (53.1%), followed by senior management (49.7%), and digital (32.7%). By contrast, just 31.9% of marketers say they collaborate directly with customer-related functions.
Furthermore, only 9.1% of marketers believe their organisation is ‘very well’ structured to achieve cross-functional collaboration successfully. These findings are concerning given the goal is customer-centricity.
Not all brands are struggling though. UKTV prides itself on its collaborative culture, which in turn ensures marketing constantly shares knowledge and data. It gets close to the opinions of customers through collaboration with its customer marketing team, for example, a unit that has direct relationships with TV platforms such as Sky, BT and Freeview.
It also speaks directly to customers via its on-demand interface UKTV Play, and marketing has a close working relationship with the social and online team around campaign strategies and delivering engaging content to viewers.
“I find it incredibly important that marketing champions this customer-centric approach and shares knowledge more widely with the organisation, educating teams about who the customer really is and infiltrating all areas of the business with this knowledge,” says Cherie Cunningham, senior marketing manager for the TV channel Dave, which comes under the UKTV umbrella.
“We look to take opinions out of the mix, challenge others who submit their intuitions and assumptions about the customer, and work collaboratively with our superb in-house insight team to ensure we know as much as possible about our consumer.”
In order to get closer to its customers, LV uses a consumer panel, which is designed to create ongoing conversations with the brand. “It is a panel of customers that we can tap into in the moment for their points of view on things, such as which propositions and features might resonate, or which design layout is best,” explains Smith. “That whole speedy and interactive communication with your customer gives you more regular feedback on your brand and your thinking.”
Everyone within the business can access the panel, which is held centrally and called LV Involve, so they can use it to create better-informed strategies, campaigns and results.
“Rather than planning in a vacuum and imagining what customers think, it is about asking them in the moment,” she says. “It gives you a regular pulse with your customers, a regular touchpoint, more regular conversations on the day-to-day things around your business.”
Marketing is not just about selling products, it’s about developing a cohesive customer experience across all brand touchpoints, which is illustrated by the fact 54.7% of marketers believe marketing is becoming more customer-focused.
Given the shift in focus towards the customer it is unsurprising that newer businesses are establishing themselves as customer-centric from the very beginning. Arguably, consumers also feel more connected to smaller brands given their ability to interact with them on a one-on-one level. It’s the marketing department’s job to listen, digest feedback and react to it quickly.
“The big change has been in media and the way you get very tight feedback loops from the consumer,” says Patrick Cairns, CEO of premium ready-meal brand Charlie Bigham’s. “There is nothing between the consumer and the brand – it is straight feedback.”
Cairns sees value in structuring the business in a way that ensures the feedback it receives gets a high level of visibility with all the people it is relevant to.
“The demand on a marketing department or business is the ability to move quickly and effect the change that consumers want to see in prompt time,” says Cairns. “That is not just about replying to the feedback we get but changing things if we are doing something wrong.”
Rather than planning in a vacuum and imagining what customers think, it is about asking them in the moment.
Heather Smith, LV
Cairns argues it is vitally important to have a consumer feedback group at the heart of the marketing department. “At Bigham’s, we get feedback from consumers every day and the whole management team gets copied on that [email],” he says. The brand doesn’t just receive complaints, though, it also receives good feedback that can “positively influence the agenda”.
As a word of warning, UKTV’s Cunningham suggests remaining product-focused could actually create more distance between brands and their customers at a time when the prevailing philosophy is to bring them together.
“A product focus will only take us further away from our customers’ needs and desires and that’s why at UKTV we ensure we have a constant dialogue with our customers through both qualitative and quantitative research,” she says.
“If marketing can put customers at the heart of everything they do, and then bring that point of view into the organisation, we’ll hopefully see more businesses not only hoping to deliver a customer-centric offering, but actually achieving it.”
Marketing Week’s The Future Marketing Organisation research was carried out in partnership with market intelligence company MiQ. Look out for further coverage next month and on the Insight & Marketing Intelligence Stage at the Festival of Marketing.