Is Lead Nurturing Over-rated?

Lead nurturing is on every CEO and marketer’s ‘must do’ list. And for good reason as the objective of lead nurturing is pretty clear: Identify high potential, qualified leads that are not ready to purchase and build a trusted relationship by “enabling” their purchase journey. Championed by a wide assortment of marketing technology vendors as best practice, companies frequently point to it as one of the key differences in their success. Yet the amount of resources focused on lead nurturing relative to the results the average company achieves is reason for pause. Are we over enamored with a marketing tactic? Is lead nurturing over-rated? Lead nurturing can make a difference in revenue growth but like most things in life, it’s not that simple. Nurturing is often misunderstood and misapplied. It becomes a ‘bucket’ for all sorts of contacts, leads sales disqualifies, returns to marketing, opportunities that don’t close, or that never really “score” high enough. Sales and marketing (and everyone else, for that matter) avidly believe these leads will eventually purchase if they are only marketed to differently. Yet, what constitutes “being marketed to differently” varies little from lead generation campaigns. The result is that lead nurturing shifts from being a strategy to build persistent engagement to becoming the core of marketing strategies. A dangerous and costly miscalculation.

Where is the disconnect?

The heavy investment that many companies make in nurture campaigns does not motivate the lead to purchase faster; rather they likely have the opposite effect. A recent study on sales and marketing alignment by Peter Strohkorb found that successful companies (in terms of profit and growth) de-prioritize lead nurturing. They invest the bulk of their time and resources on customer retention and developing a steady pipeline of new leads. The adage is “a customer will buy when they’re ready to buy”. The key to nurturing is knowing with whom and when to invest that result in conversion. For many companies that step is hard. In my client work, I’ve frequently found that lead nurturing campaigns ran counter to buyers’ journeys. In other words, campaign engagement, calls-to-actions, and content do not align with what buyers valued, sought and used to achieve their target outcome. Once nurturing was aligned with journey maps, three root causes became apparent:
  1. Campaigns were not attracting the right high value buyers (HVB)
  2. Marketing and Sales were not outcome focused, and
  3. Campaigns were not enabling buyers along their journeys.
The lack of deep “outside-in” understanding of customers, their journeys, and behavior contributes to the belief that every lead will buy if only they are nurtured correctly. Larry Augustin, CEO of SugarCRM, a CRM vendor, believes that part of the problem is all the marketing technology. According to Augustin, “People need a system that integrates all customer information, regardless of where it sits, into a complete seamless view.” Companies need help in spotting the right leads to nurture and “a visual dashboard of workflow, task management, and project management that gets everyone on the same page, organized around the customer managing the whole customer lifecycle,’ shares Augustin. Raghu Raghavan, CEO of Act-On Software, a marketing automation and email marketing vendor, believes that “Marketers lack clear metrics to help them understand how to guide buyers.” For Act-On the key to lead conversion lies in the “sequence of buyer behavior.” Based on big data analytics, Act-On sees itself as the “holder of engagement data” and operationalizes it in an easy to use timeline format. Understanding customer behaviour is the decoder ring to successful nurturing. Lost in all the noise and hype is the criticality of deeply understanding the customer, through their own eyes. Christopher Faust, Chief Marketing Officer of Qvidian, shares that “lead nurturing may be overrated but it depends on how you use it. That, and it depends on the actual lead, nurturing can target those, and offer the necessary value, to specifically help them get to their next step in the buyer journey.” In short, to improve lead nurturing focus on interaction patterns: 1. Clearly define your high value buyers (HVB). 2. Document the buyers’ journey for key target markets. 3. Define scoring algorithms based on longitudinal buyer behaviours 4. Microsegment HVB based on where they are in their journey 5. Define relevant ‘in the moment’ nurture campaigns that enable HVBs to their ‘next’ journey step. 6. Hyper-personalize interactions to build trusted relationships that enable buyers to achieve desired outcomes. Faust sums up the lead nurturing challenge well, “Marketing in general to me, and especially with nurturing, is just that – tease, not sell, and get buyer to next step forward. But personalization is the key component.”   First published in CustomerTHINK.

How Much Does it Really Cost to Keep Your Customers?

We’ve all heard the statistics: It cost 5 times as much to acquire a customer than to keep one (Forrester), reduce churn by 5 percent and increase profits up to 125 percent (Leading on the Edge of Chaos), and that 70 percent of churn is attributable to poor customer experience (Forum Corporate Research) It’s not a new revelation that customer loyalty is a table stake for sustainable growth. We all know that loyal customers are more profitable and yield a higher lifetime value. It’s common sense to invest in understanding what drives loyalty, value and the triggers of repeat purchases. Yet, most companies don’t understand what it takes to build loyalty. That often results in an investment strategy that works against the very thing they are trying to achieve – for SaaS/Cloud companies, that is making sure that 90 percent of customers renew. SaaS/Cloud companies routinely over invest in new customer acquisition at the expense of loyalty. Why? Because companies do not really understand or accurately measure the real costs of customer retention. Kaiser Mulla-Feroze, Chief Marketing Officer of Totango, a customer success and user engagement vendor for cloud applications, together with Bruce Cleveland of InterWest Partners, have defined and operationalized a customer retention cost (CRC) metric that shines the light on what the real costs are to keep the right customers loyal. “Working with a large number of SaaS companies, we saw the urgent need for a new set of metrics that reflects the operational realities and demands of a subscription business,” shared Mulla-Feroze. “We developed the CRC metric to help SaaS companies measure their performance, calibrate their financial health, and steer their investment decisions. As against traditional financial indicators, the CRC metric combined with CAC goes to the essence of running a subscription business.” The CRC metric is surprisingly straightforward and includes all the expenses a company incurs in retaining and nurturing its customer base. The first step is to calculate the CRC. The second step is to calculate the average cost of retaining each customer segment. The third step calculates the CRC Ratio. That answers the question of how much an organization should spend to retain every dollar of revenue from the customer base, taking into account the costs and revenue associated with professional services. The power of Totango’s CRC metric lies not just in the simplicity of the equation, but also in its actionable benchmarking framework that guides how to invest in customer success. “I’ve spent most of my career as a CFO in recurring revenue businesses. We succeed or fail based on whether we can economically acquire and retain customers. A lot of great CAC metrics have been developed over the years, but good metrics on the cost of retaining customers have been missing,” shared Mark Klebanoff, Chief Financial Officer of PayScale, a real-time and market-enabled compensation data company. “I love the thinking that has gone into the development of the CRC framework. It fills a void in how we measure, evaluate, and benchmark SaaS companies.” SaaS companies have implemented CAC, customer acquisition costs, metrics and guidelines. Those guidelines recommend a CAC ratio of 1 or less; the reality is that most SaaS companies actually operate at a CAC ratio 1.5 or higher. Meaning the cost to acquire new customers is 150 to 200 percent of first year revenue and that translates into significant operating losses. A better question to ask: “What are the right acquisition and retention investment levels needed to yield a sustainable, profitable and growing business?” The answer lies in a mindset shift away from optimizing for top-line growth. A balanced investment in both CAC and CRC should be equal to 30 percent of revenue with a target 20 percent gross margin. The actual split between CAC and CRC is heavily influenced by three factors. 1. Your staffing model Revenue per Customer Success Manager (CSM) is how most organizations think about staffing. With Jason Limekin’s popular quoted figure of $2M revenue per CSM, many organizations believe they can optimize CSM revenue by increasing the account-to-CSM ratio. The viability of that depends on the average deal size and complexity of your business which is comprised of the degree of ‘touch’ your product requires, the maturity of your category, and the size of your organization. Rules of Thumb: Totango recommends that highly complex and medium- to high-price-point businesses are best served with a low account-to-CSM ratio with one CSM assigned for every $1M in ARR (30% of ARR). Each CSM, on average, manages between a handful to less than 50 customers. Conversely, low complexity best practices are one CSM for every $4M in ARR (7.5% of ARR) with each CSM managing between 200 and 400 accounts. 2. Customer success systems and productivity tools Information, knowledge and value-centered customer engagement are key to customer loyalty. The rise of systems and tools to support CSMs and other functional teams doesn’t come without a cost which needs to be included in the CRC calculation. Think of these investments as a per-CSM or per-employee cost. Customer success monitoring systems typically track events or activities and are based on big data and predictive analytics that calculate health scores and produce early warning alerts of churn and up-/cross-sell opportunities. Rules of Thumb: Totango found that successful companies spend about one percent of the CSM team cost on customer success productivity tools which works out to be approximately 0.1 to 0.3 percent of revenue. Customer monitoring systems costs on average about 0.5 to 1 percent of revenue. 3. Customer programs Best practice is to include customer nurturing and retention programs under the scope of the customer success organization. These programs focus on best practice development and executing campaigns that drive product usage, education and customer engagement. Rules of Thumb: Totango recommends that companies spend 1 to 2 percent of revenue on customer success programs. “I look forward to incorporating CRC principles into how we run our business and guide our investment choices for the future. It brings much-needed focus to the operational levers that drive the success of SaaS,” states Jeremy King, VP Finance and Operations of InsightSquared. Calculating and benchmarking CRC is a big step forward in understanding the real cost of customer loyalty and how to optimize the investment to yield sustainable growth and profits.

10 Ways to Stop “Churn Baby Churn” with B2B Customers

Customer loyalty is critical for any business. Loyal B2B customers are made; they don’t just happen. Yet, between vendors and customers there is a disconnect around what drives loyalty. To many vendors it comes from using the product, it remains installed and renewals paid. To the customer, it means products perform as advertised, additional value in the form of information, expected experiences and access is received over the lifecycle. Just because a product isn’t tossed out doesn’t mean a customer is loyal. The size of the investment, extent of process changes made to integrate the product, and/or the hassle factor in switching out are hurdles that deter customers from hastily churning. They refer to it as being “stuck” or “hostage”. Value is in the eye of the beholder. It is multi-dimensional and contextual. Customers perceive value as realized over time and cumulative. It’s the summation of the pluses and minuses of the customer experience. Understanding what “loyal” means in the eyes of the customer is key to how vendors can avoid churn. Guy Nirpaz, CEO of Totango, a customer success and user engagement vendor, believes “If all you do is focus on value and do it right, you don’t need to worry about the rest.” When Totango first started, Nirpaz believed that customer success was an analytics problem. Five years later, he’ll tell you “it’s actually a contextual value problem because the definition of value changes over time.” Vendors need to “continuously drive momentum within customers.” Many companies are embracing analytics to help spot customers that might churn based on their behavior patterns. But the analytics tracked need to be the right ones and show the link between vendor behavior and customer churn. That linkage is key to convincing organizations there is a big pink elephant in the room. Nirpaz advocates that organizations adopt a health score comprised of five leading indicators:

  • Usage and engagement
  • Attainment of business outcomes
  • Utilization and coverage
  • Customer feedback
  • Operational metrics (such as support, payments…)
Usage and engagement is, in Nirpaz’s opinion, an indicator of satisfaction and value. Totango’s Service Detail Record tracks detailed usage at the user, account, product and transaction level. Comparing trend lines enables vendors to easily spot changes in customer behavior. It’s then up to the vendor’s customer success manager to ask “Why?” A key question to ask and which all too many companies skip hoping instead to find the answer in their datIt’s not there. Asking “Why” reveals how and what the vendor needs to change to reduce churn. In our experience, the ten B2B best practices that reduce churn are: 1. Keep the customer-to-CSM ratio between 25 and 50. Keeping the ratio below 50 enables front line personal to develop real personal relationships with customers and have the time to meaningfully impact the customers’ definition of success. Enterprise customers perceive greater value and are more loyal when the help they receive is customized to their situation instead of being generic. 2. Implement company-wide transparency and real-time reporting of customer health scores. Every employee, regardless of function, impacts customers, directly or indirectly. When employees are blind to how satisfied customers are, they don’t have the opportunity to make informed changes to how they work. Customer health scores are not a secret; sharing them empowers every employee to make a difference. 3. Have the CEO and leadership team model the company’s customer values in their behavior. Employees look to leaders and emulate their behavior. Which is why having posters and platitudes around customer-centricity fails every time when leaderships’ actions do not mirror their words. The fastest way to pivot a company to be customer-centric is to hold management accountable, starting at the top, for their actions. 4. Customer Success, Marketing, Professional Services and Sales jointly own customer-facing processes. Organizations are rife with silos which imped value-creating customer engagement and alignment. Instead of ‘handing’ a customer off from Marketing to Sales to Professional Services to Customer Success, bring the groups together and charter them to collective re-engineering their processes to not only streamline customer engagement but also increase value delivery, as defined by the customer. 5. Measure CSMs on their customers’ satisfaction, business outcomes, and CLV and compare that to cohort benchmarks. Customer Success managers today are often measured on renewal rates and up/cross-sales. The result is behavior focused on the next transaction instead of customer lifetime value. While revenue is important, future revenues comes more easily if customers achieve their outcomes, of which product usage is only a small part. Measure CSMs on Totango’s health metrics as well as within and across like customer groups and cohorts; the trends lines will be accurate and insightful. 6. Replace periodic check-ins with contextual engagement. Check-ins consisting of “how are you doing and do you have any questions?” are appreciated by the customer once or twice. Front line employees should look at customer product usage, trouble tickets, etc. compared to benchmarks and from that to craft the scope and content of routine check-ins. That’s the secret of customer loyalty; make it all about them and advice they can act on right away. 7. Continuously capture and make available to customers tribal and domain specific knowledge. In every vendor organization is a treasure trove of knowledge and expertise; share it. Value, in most cases, is defined by B2B customers as access to the knowledge, experience and best practice that is in the heads of Professional Services, Customer Success, Engineering, etc. Leaving it in their heads is a disservice to the organization’s potential as well as to customers. Leverage it and turn it into your key differentiator. 8. Use post-purchase journey maps to identify key trigger points and align processes. Most companies believe they understand their customers’ post-purchase journey. If they did, churn would not be such a hot topic. Instead of guess, journey map the desired and expected post-purchase experience. Loyal and defected customers will gladly what they expected and were the vendor mis-stepped. That becomes your blueprint for change management; it’s a faster and easier approach. 9. Enhance products with multi-channel engagement and just-in-time education. Replace the traditional method of calling customer support or emailing when a customer has an issue or gets stuck. Embed into your products text chat, video calls, Skype phone calls, hardware ‘call home’ protocols or a direct link to a peer-to-peer community so the user can get the advice they need. If they have to stop and wait for an email response, they’ve lost work productivity and just might not use the product. 10. Set customer expectations during onboarding. Customers come into the onboarding process with preconceived notions based on other similar products they’ve used in the past. Vendors, however, believe that customers have a blank slate of expectations. Understand those preconceived expectations and clearly and directly address them during onboarding. Also set the expectations of what they can expect in terms of cadence of contact and scope; it’ll go along way. 2015 should be turning point year. Customer success use cases are increasingly becoming more sophisticated and companies, with the help of technology, are looking at customer relationships holistically. The debate is shifting from whether companies should invest in customer success to how they can build it into a world-class function. Lastly, new metrics for measuring customer success and the cost of that success are being developed and socialized. In the next article of this series, I’ll explore a new, more meaningful model, for measuring customer success. Further reading: What Causes B2B Customers to Churn? Three Things, and “Price” Isn’t One of Them First published in CustomerTHINK.

What Causes B2B Customers to Churn? Three Things, and “Price” Isn’t One of Them

Why do enterprises abandon a vendor’s product after investing so much time and resources in selecting and validating the solution? Even after training employees and integrating the product into the broader environment, enterprises will abandon it. This is puzzling because most B2B enterprise purchases are not done on a whim; there’s a clear outcome that needs to be achieved. Yet large and small businesses often change the products, hard and soft, to the bewilderment of the vendor’s sales, marketing, and customer success teams. As the vendor’s team “What happened?” and you’ll hear that customer defections are due to missing product features, performance or roadmap issues, infrequent or incorrect product usage, a change in customer strategy, a competitor has “one upped” them, or price. From my experience, in an overwhelming majority of cases it’s none of these reasons. Unfortunately, by the time vendors realize their customer will churn, the relationship is beyond salvage. Equally unfortunate is that most customers aren’t transparent about the real reason for churn. Not wanting to deal with the onslaught of emails, phone calls, or visits by ever higher levels of vendor executives in an attempt to salvage the account, customers gives the vendor a palatable excuse. Yes, customers leave because of poor experiences but it’s not that black and white. What I hear from B2B end-customers — from small businesses to Fortune 100 — the number one reason for defection is lack of enough “value.” Period. It doesn’t matter if it’s a $10,000 SaaS subscription or $500,000 piece of equipment; it all comes down to value. “Value,” as uniquely defined by each customer, is contextual and multi-faceted, and changes over the relationship lifecycle. There is no single, commonly held definition of “value” for each industry, a market or customer segment. In other words, “value” is not solely in the product but in what surrounds it.

Three Dimensions of Value

In virtually every end-customer interview I’ve conducted, “value” was defined along three dimensions: Outcomes, Trust, and Relevance: 1. Outcomes Contrary to popular belief, customers do not purchase to solve a problem, they purchase to achieve an outcome. The problem statement is simply how they articulate the desired outcome. One client’s customers articulated the problem as needing a better way to engage customers. The outcome they wanted was to reduce inbound contact center calls volume. It wasn’t until after they realized their cost savings from deflected calls that their real target outcomes was revealed. From lessons learned to date, the real target outcome was to enable them to influence end buyer behavior and preferences. The vendor was expected to act as a change catalyst. The definition of “value” changed from number of calls deflected (avoided) to how effective the vendor was in guiding the customer through change management to realize the new outcome. The vendor, however, wasn’t tuned into the value shift (or that this shift was happening widely within their customer base) and had essentially “checked out” once the initial ROI was achieved. The vendor thought they were done, yet their customer thought they were just beginning and perceived the vendor’s dis-engagement as a failure of customer service. Outcomes change over time; vendors need to understand how, why, and what triggers the change. 2. Trust At the core of customer loyalty is a trusted, human-to-human relationship — one based on transparency, honesty, and having the customer’s “back.” For the Fortune 500 customers of a mobile security client, keeping company data, trade secrets and communications away from prying eyes was considered business critical. Security and IT teams expected vendors to honor all commitments and be full transparency; their jobs depended on it. The vendor repeatedly missed product roadmap delivery dates. Without advance notice of the slippage, customers were often caught by surprise. Meanwhile, the sales team made promises that it “won’t happen again” coupled with deep discounts to keep the pipeline moving. Trouble tickets remained open and escalation processes didn’t seems to make a difference. Customers vocalized their frustration to executive management and engineering at annual customer advisory meetings but nothing changed. The customers I interviewed felt betrayed, confused, and had lost confidence in the vendor. Many felt the vendor’s actions had put their own jobs at risk. What was happening within the vendor was a deep commitment to the product roadmap and to each customer’s success but the company had encountered some internal issues. Consumed with internal politics and resource shortages, the customers’ concerns were downplayed. Customers started to churn and the vendor’s sales pipeline weakened as word got out about the roadmap delivery issues. Trust doesn’t come with the purchase order, it needs to be constantly earned. 3. Relevance In today’s world, it takes an ecosystem to keep a company relevant and vendors play a key role. The SMB customers of a Human Resources SaaS client are challenged daily to find, recruit, and keep talent. Armed with knowing which jobs are trending toward labor shortages is vital information for HR managers who can make sure compensation is competitive, work environments are healthy. Customers wanted to work with the same vendor team throughout the lifecycle of the relationship. Not because customers expected to talk to vendor personnel frequently, but because over time the same team would develop a deep understanding of the customer, their business, and labor needs. That knowledge would translate into more relevant advice, product usage training, sharing of industry information and better support. Value was defined as receiving relevant, proactive advice based on the customer’s environment, their product usage, and new upcoming features that would make the users’ work easier. Customers wanted access to industry studies and domain experts that could counsel them on how to best address emerging labor and economic trends in their industry and geography. To customer this value enabled them to be more competitive. This scope of interaction was well beyond what the vendor thought customers needed or wanted. And the vendor’s processes, systems, and organization were not structured to deliver this level of personalized value. With some organization and process changes the vendor found that delivering more relevant, information at each customer interaction resulted in a higher renewal and up-/cross-sell rates. Ongoing relevance is a key driver of vendor stickiness and customer experience. Once a vendor delivers the initial expected outcome, customers’ attention shift to other ways a vendor can help them. In my experience, most B2B vendors have 90 days from the point of onboarding to begin delivering the initial expected outcome. If successful, the customer redefines what “value” means going forward. If unsuccessful, the customer may continue to use the product but the decision is made to either churn at some convenient future point in time or reposition the product as a tactical, non-critical solution. During onboarding, implementation and initial adoption, it’s all about the outcome. Trust begins becoming important in the middle of the sales cycle and lasts well past implementation into day-to-day operations. Trust takes a step back from importance when the vendor has consistently demonstrated trustworthiness, transparency and accuracy. Outcomes remain key until the customers’ needs and expectations change and a new definition of value replaces the initial target outcome sought. Then it’s all about relevance – which is what makes a vendor sticky. During onboarding, implementation and initial adoption, it’s all about the outcome. Trust begins becoming important in the middle of the sales cycle and lasts well past implementation into day-to-day operations. Trust takes a step back from importance when the vendor has consistently demonstrated trustworthiness, transparency and accuracy. Outcomes remain key until the customers’ needs and expectations change and the definition of value replaces the initial target outcome sought. Then it’s all about relevance. Vendors looking to align their marketing, sales, customer success and professional services to deliver a stream of ‘Value’ need to undergo a mindset shift. In Part Two of this article, I’ll share best practices for turning churn into loyalty. Until then, to determine your stage of customer alignment,contact us for a free comprehensive assessment and 30 minute blueprinting call.

How B2B Companies Approach Customer Alignment

Despite the multitude of articles, books and webinars on how to deliver the experience customers will value, people are confused. The confusion is not about whether customer-alignment is a good idea but rather where to start, the approach to use, and how best to proceed. Recently, I asked a group of B2B CMOs and VPs how they were approaching customer-alignment. They were confused by the multiple and often conflicting approaches and overwhelmed by the claims touted by consultants, software vendors, outsourcers, professional services providers and “thought leaders”. They were paralyzed by worry that picking the wrong approach would lead to dire consequences for the company and them personally. So they sit on the sidelines. To response to increasing pressure to drive better customer experience, they resort to tactical improvements that optimize campaigns, user generated content, relationship with sales, and spend more time visiting customers. But lead an organization-wide customer-alignment transformation; not much other than talk is happening there. Not only are the various approaches confusing, these CMOs felt they couldn’t determine which ones deliver measurable and sustainable increases in customer loyalty and revenue. Demonstrable ROI is key since CEOs have no appetite to spend money on ‘leaps of faith’. Without the ability to point to tangible proof, CMOs choose lip service, low-risk/low-return approaches and department-level customer alignment initiatives that are within their sphere of control. While it feels like they are making progress, the lack of results speaks for themselves. What B2B CMOs want is a decoder ring that guides them on which approach to use to achieve what types of results. One SaaS CMO asked me, “Tell when to use surveys or NPS or focus groups.” What that CMO and others are looking for is a simple and clear guide – if they want to improve campaign conversion use this approach; to improve sales productivity, apply this approach, etc. This highlights how early the customer experience movement is. Marketing, as a whole, has yet to come to terms that customer-alignment operates on two levels: Customer lifecycle and interaction points. You cannot fix the latter without first understanding the former. Equally you cannot align your organization to the lifecycle expectations of your customers without understanding the elements (who, what, where, why, how) of each interaction (employee, system, reputation, message, etc.). This disconnect between the understanding marketers have of the customer alignment transformation process and the various approaches explains why they gravitate to NPS, EFM, surveys or purported end-to-end CEM/CX platforms. In the search for the proverbial silver bullet, many are beginning to realize there is no one-size fits-all methodology for aligning employees, strategy, processes and technology to customer expectations. Some methodologies, likeThunderhead Engagement 3.0,New Business Strategies’ Sellers’ Compass™, and ClearAction, are more comprehensive than others in spelling out how companies should go about transforming into customer-aligned organizations. What sets these methodologies apart is they incorporate different approaches based on the level of insight sought. While the core premise of these approaches is different none are perfect for every situation, customer segment, or company. Robin Caputo , CMO of Datavail, a database management vendor, is a forward thinking marketer leading the company’s customer-alignment initiative. She and her team started by conducting qualitative interviews, many of them face-to-face on-site customer discussions, to develop journey maps. The scope of information and the level of detail captured enabled her identify the journey patterns that drove customer segmentation and campaign plans. But they also revealed a number of questions about what content customers valued at which stages. Caputo and team turned to surveys and incorporated additional questions to inside sales’ script to the get the answers. Caputo’s plan to become customer-alignment was rooted in first understanding the overall lifecycle journey and customer expectations while the rest of her team understood the details of specific interactions points and the data they needed to act. Deep understanding of B2B customer behavior, expectations, emotions, etc. can only be discovered when in close proximity to customers. Once patterns have been identified, other methods further away from the customer can be used like those list in the below diagram. There is a correlation in how actionable information is and how it was obtained. That’s why NPS does not tell you how to fix customer churn or big data analytics tell you why a customer made a certain decision. Action-ability refers to the extent to which the data can be acted on by the organization to improve a specific touch point, customer situation or metric. Much of the data we collect informs us at a general level on what is happening but doesn’t give enough specifics to drive behavior, processes or systems change. For example, qualitative interviews, conducted correctly, can result in a very detailed journey map that drives business process, employee behavior or training changes. Win/loss interviews, on the other hand, can highlight behaviors or situations that contributed to the win or loss. If a specific behavior or situation comes up often enough and described clearly, the sales or marketing team can act on it. The degree of action-ability depends on how customer information was gathered. As you move down the diagram, the information captured becomes increasingly more general and less actionable. That doesn’t mean all customer interaction and alignment data must come from face-to-face interviews. Rather companies need to plan out their information needs along with identifying the right approach. Think of it as a stair step process. At the top of the stairs you need a detailed, comprehensive understanding of customer behavior and expectations – through their eyes. That is best accomplished with qualitative research which reveals areas where you have additional questions or need more clarity. Depending on the question you can either conduct a Customer Advisory Board session or, if the questions are very clear and defined, conduct a survey. As you act on the information you’ll need to use different approaches to measure and gain insight into specific interactions. For example, Enterprise Feedback Management (EFM) is a good at capturing specific details about a specific customer interaction in a way that employees can act on it. The key in selecting a method to use is — can you act on the data? “Marketers have so much data now; the challenge is to gain insight from that data that you can act on and translate to enhanced marketing performance,” said Caputo. “We know our buyers’ journey will never be finished, especially as we gain more Fortune 100 clients with multiple personas. But the initial data and insight we’ve gathered is pointing us in the right direction and delivering results.” By understanding the many ways of becoming customer-aligned and knowing which method to use to capture actionable data, Datavail’s customer alignment initiative is a core part of Caputo’s strategy and is delivering measurable results. First published in CustomerTHINK