McKinsey: How The Digital Age is Disrupting the Marketing Framework
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David Edelman, Partner and Global Co-Leader of McKinsey Digital, Marketing & Sales The digital age is disrupting every area of business, including the way marketing engages and interacts with prospective clients and existing ones. Successfully adapting requires more than new strategies – it requires a complete restructuring of the marketing organization and its operations and processes.
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McKinsey: How The Digital Age is Disrupting the Marketing Framework
- 2. David Edelman McKinseyDigital.com Unlocking growth in the world of NOW
- 3. …but I seem to be spending more on staff and agencies. …but conversion rates are actually falling! …but I have no idea when I will see the returns.
- 4. I want my journey… and I want it now!!
- 8. ME KNOW
- 9. ME KNOW
- 12. Using the card: Incent and personalize Signing up: Expedite and reward Map of Paris with merchant linksDave’s in Paris! Suggest Paris restaurants and link to OpenTable Customize app top page for Paris experience Text Dave to confirm he’s in Paris Reward on first purchases and international purchases Suggest ecommerce sites to register card Overnight delivery of card Instant approval Simple and prepopulated application
- 13. Now?
- 24. Map the journeys Map the journeys
- 25. Uncover the battlegrounds Uncover the battlegrounds
- 28. Right project mix Proactive intelligence Engagement innovation In-the- moment interaction Real-time automation Right project mix
- 29. “The seeker embarks on a journey to find what they want, and discovers along the way what they need.”
- 30. “The seeker embarks on a journey to find what they want, and discovers along the way what they need.” ─ Wally Lamb Novelist, Best Pick Oprah’s Book Club
- 31. Thank you McKinsey & Company David_Edelman@mckinsey.com McKinseyDigital.com
Notas do Editor
- As I speak with leaders at many brands, I am struck by how many say they are spending a ton on digital technology, but claim to not see the financial impact. “ I just put in this content workflow solution, but …I seem to be spending more on staff and agencies” “We have this new ‘intelligence’ system, but …conversion rates are actually falling!” “My team has a $30M digital investment program underway, but …I have no idea when we’ll see the returns” Well, when you look deeper, often that list of digital initiatives is just that - a list.
- A list that does not fit together to really change how the brand helps a customer goes through a journey, get something done, be entertained --NOW. We have high expectations these days, conditioned by what we experience with companies like Uber, Amazon, and Google. Unfortunately, this perspective on what defines a successful journey is not yet shared by most brands. Let me give you an example:
- Six months ago, I had started to think about planning a trip to visit my daughter in Paris, where she was spending her junior semester abroad.
- A few months ago, an airline I use frequently sent me an email for their co-brand credit card promising no-fee foreign exchange on purchases abroad and a nice bump in frequent flyer miles. I already had another card with the bank partner for this offer, and thought that would also make the application process easier
- But I was wrong. The application, even though a seemingly personalized email was sent to me, needed to get filled out from scratch, it asked me questions like “where I had a bank account”, “where I worked”, “how long had I been living in my home”, all of which were things this bank should have known. I had thought I was also pre-approved for the card from the way the email seemed to positioned, but apparently I was not. Once I finally filled out the form, I was told it would take another day to process. Then I finally got an email approving my application and was told the card would take five days to arrive in the mail. Starting to see the leakage? I could have given up on the application, and I bet many do. I could have gotten excited by an instant approval and started using my card much sooner.
- I expected them to KNOW ME, but clearly that was a dream.
- When my card finally arrives, I just get a standard number to call to authorize it, that pitches me payment insurance, which astounds me since I have never missed a payment in my life. No incentives to use the card. Why can’t they immediately provide me a list of ecommerce places I can register the card as my new default, give me an incentive to do so, and then reward me on my first purchases? Then I use the card to purchase plane tickets to Paris to visit my daughter, who is going her Junior Year semester there abroad. Nothing from the card company reminding me about the no-fee foreign exchange or giving me an incentive to use the card or the app for the card in Paris.
- Even worse, when I get there, and use my card on their first day to buy chocolates for her host family, I am denied authorization for the purchase. Just stopped dead, presumably for credit risk of using my card outside the US. But couldn’t they have sent me a text message asking if it was me? They did get my mobile phone number on the card application. I had the app for the card on my phone. So, I could not use the card, was annoyed that I would have to figure out how to call them from Paris to resolve it, and did not end up using the card.
- There are so many lost opportunities in how they managed my journey, it boggles my mind. They should have given me added points for my first time using the card abroad. Changed the top page for the app when I was in Paris to be more useful and suggest a restaurant nearby for lunch, with a link to Open Table (with whom they have a partnership already) to make a reservation, given the time of day. Send a link to a Paris map of merchants with special offers for folks using their card. My expectation is for the brand to be smart about me, to enable to do things I could not do before, and to be immediately responsive. To deliver value not just in price or points, but in being there NOW when I need them. Instead, they just took up my time and proved they did not know me.
- Now means access, acknowledgement, information, and success. Now is simply expected to be simple. Now also means that alternatives are one touch away if you do not deliver. When a brand cannot deliver that NOW across a customer’s journey, it leaks missed opportunities – the opportunities that would have driven the return from the right mix and integration of digital investments. Think about other battlegrounds that have similar opportunities for leakage. Everybody has them in their business.
- Now means access, acknowledgement, information, and success. Now is simply expected to be simple. Now also means that alternatives are one touch away if you do not deliver. When a brand cannot deliver that NOW across a customer’s journey, it leaks missed opportunities – the opportunities that would have driven the return from the right mix and integration of digital investments. Think about other battlegrounds that have similar opportunities for leakage. Everybody has them in their business.
- Now means access, acknowledgement, information, and success. Now is simply expected to be simple. Now also means that alternatives are one touch away if you do not deliver. When a brand cannot deliver that NOW across a customer’s journey, it leaks missed opportunities – the opportunities that would have driven the return from the right mix and integration of digital investments. Think about other battlegrounds that have similar opportunities for leakage. Everybody has them in their business.
- When you look at how the well-hyped “digital native” companies build their momentum, they focus on: Delivering a non-stream of NOW into their CUSTOMER battlegrounds And building a virtuous cycle of value to those battlegrounds that drives growth: They create an automated end-to-end capability to do something in real time – NOW -- that breaks through the current compromises customers face in getting it done now REAL TIME AUTOMATION They make that capability as accessible as possible through interfaces that are tuned to the context someone is in. Get to it NOW. It starts with mobile phones, extends to tablets, to laptops, and sometimes to call centers and stores, all of which benefit from the process support of the real-time capability CONTEXTUAL INTERACTIVITY As a customer interacts, the process generates a stream of intelligence that provides the opportunity for pro-active intelligence. Getting ahead of the customer’s next step to target, personalize, or optimize what the next step in the journey could be – set up the NOW. PRO-ACTIVE intelligence To better use that intelligence, they keep innovating – finding new ways to share information with the customer to help her in her journey, or to offer new services based on the information, extending the range of ways to make NOW happen JOURNEY-FOCUSED INNOVATION And those innovations lead to more automated processes, and more interactions, generating more information and higher value as the intensity, span, and non-stop staccato of the relationship grows. A couple of great examples of companies that see life through the journey lens, also look beyond the narrow product they sell:
- Progressive has long been on the leading edge of driving this cycle. From their ability to seed and scrape quotes off competitor’s website, to generating custom pricing for all kinds of insurance bundles, they have distinguished their value proposition by automation that makes shopping simple, and making you feel smart along the way. Their newest innovation, Snapshot goes even further. A monitor that goes into your car, it tracks your driving habits and generates a custom price. Building on all of their accumulated data on actuarial risk based on customer behaviors, they can pull out the best risk drivers, and keep them loyal. In essence, they have created a new journey that goes from purchase through use of the monitor through one’s renewal at a lower rate. It’s now a game, and could even have new kinds of competition and communities to find ways to cut one’s rate further. Imagine, auto insurance being a fun thing to manage. Snapshot puts Progressive right in the customer’s hands through an app they can track, and that app could become a distribution vehicle for all kinds of new interactions.
- For example, buying a mortgage is not even a real journey. Buying a house is… Commonwealth Bank example of app that launches the mortgage process based on you taking a picture of a house (we have this slide). See the right house, start your journey NOW. They continue to extend innovations down through more aspects of home buying, including managing appointments with realtors, appraisals, and soon, closings. But what is also interesting about Commonwealth Bank is how their data from the process lets them know the better realtors, appraisers, and other service providers to steer business towards, and downstream, they have lower servicing costs from customers enrolling more in auto-pay. Think about the emotional angle here of making it easier for you to buy a house. Get to the purchase faster. Have an amazing branded journe
- For example, buying a mortgage is not even a real journey. Buying a house is… Commonwealth Bank example of app that launches the mortgage process based on you taking a picture of a house (we have this slide). See the right house, start your journey NOW. They continue to extend innovations down through more aspects of home buying, including managing appointments with realtors, appraisals, and soon, closings. But what is also interesting about Commonwealth Bank is how their data from the process lets them know the better realtors, appraisers, and other service providers to steer business towards, and downstream, they have lower servicing costs from customers enrolling more in auto-pay. Think about the emotional angle here of making it easier for you to buy a house. Get to the purchase faster. Have an amazing branded journe
- For example, buying a mortgage is not even a real journey. Buying a house is… Commonwealth Bank example of app that launches the mortgage process based on you taking a picture of a house (we have this slide). See the right house, start your journey NOW. They continue to extend innovations down through more aspects of home buying, including managing appointments with realtors, appraisals, and soon, closings. But what is also interesting about Commonwealth Bank is how their data from the process lets them know the better realtors, appraisers, and other service providers to steer business towards, and downstream, they have lower servicing costs from customers enrolling more in auto-pay. Think about the emotional angle here of making it easier for you to buy a house. Get to the purchase faster. Have an amazing branded journe
- Progressive has long been on the leading edge of driving this cycle. From their ability to seed and scrape quotes off competitor’s website, to generating custom pricing for all kinds of insurance bundles, they have distinguished their value proposition by automation that makes shopping simple, and making you feel smart along the way. Their newest innovation, Snapshot goes even further. A monitor that goes into your car, it tracks your driving habits and generates a custom price. Building on all of their accumulated data on actuarial risk based on customer behaviors, they can pull out the best risk drivers, and keep them loyal. In essence, they have created a new journey that goes from purchase through use of the monitor through one’s renewal at a lower rate. It’s now a game, and could even have new kinds of competition and communities to find ways to cut one’s rate further. Imagine, auto insurance being a fun thing to manage. Snapshot puts Progressive right in the customer’s hands through an app they can track, and that app could become a distribution vehicle for all kinds of new interactions.
- Progressive has long been on the leading edge of driving this cycle. From their ability to seed and scrape quotes off competitor’s website, to generating custom pricing for all kinds of insurance bundles, they have distinguished their value proposition by automation that makes shopping simple, and making you feel smart along the way. Their newest innovation, Snapshot goes even further. A monitor that goes into your car, it tracks your driving habits and generates a custom price. Building on all of their accumulated data on actuarial risk based on customer behaviors, they can pull out the best risk drivers, and keep them loyal. In essence, they have created a new journey that goes from purchase through use of the monitor through one’s renewal at a lower rate. It’s now a game, and could even have new kinds of competition and communities to find ways to cut one’s rate further. Imagine, auto insurance being a fun thing to manage. Snapshot puts Progressive right in the customer’s hands through an app they can track, and that app could become a distribution vehicle for all kinds of new interactions.
- Progressive has long been on the leading edge of driving this cycle. From their ability to seed and scrape quotes off competitor’s website, to generating custom pricing for all kinds of insurance bundles, they have distinguished their value proposition by automation that makes shopping simple, and making you feel smart along the way. Their newest innovation, Snapshot goes even further. A monitor that goes into your car, it tracks your driving habits and generates a custom price. Building on all of their accumulated data on actuarial risk based on customer behaviors, they can pull out the best risk drivers, and keep them loyal. In essence, they have created a new journey that goes from purchase through use of the monitor through one’s renewal at a lower rate. It’s now a game, and could even have new kinds of competition and communities to find ways to cut one’s rate further. Imagine, auto insurance being a fun thing to manage. Snapshot puts Progressive right in the customer’s hands through an app they can track, and that app could become a distribution vehicle for all kinds of new interactions.
- Data discovery: New providers, such as Clickfox, are emerging that blend data from multiple channel files into one cross-journey view of what customers are doing and what happens as a result. They string together the “events” in these channels into linked views of the customer, knitting whatever identifiers they can find and modeling best guesses for those they cannot. One bank cut their call center costs by 20% -- a huge amount – by using this kind of tool to see all of the web pages that led to a call within 48 hours. By fixing problems on those pages, they not only cut their costs dramatically, they also saw higher sign up rates for many of their services and higher customer satisfaction
- Data discovery: New providers, such as Clickfox, are emerging that blend data from multiple channel files into one cross-journey view of what customers are doing and what happens as a result. They string together the “events” in these channels into linked views of the customer, knitting whatever identifiers they can find and modeling best guesses for those they cannot. One bank cut their call center costs by 20% -- a huge amount – by using this kind of tool to see all of the web pages that led to a call within 48 hours. By fixing problems on those pages, they not only cut their costs dramatically, they also saw higher sign up rates for many of their services and higher customer satisfaction
- Data discovery: New providers, such as Clickfox, are emerging that blend data from multiple channel files into one cross-journey view of what customers are doing and what happens as a result. They string together the “events” in these channels into linked views of the customer, knitting whatever identifiers they can find and modeling best guesses for those they cannot. One bank cut their call center costs by 20% -- a huge amount – by using this kind of tool to see all of the web pages that led to a call within 48 hours. By fixing problems on those pages, they not only cut their costs dramatically, they also saw higher sign up rates for many of their services and higher customer satisfaction
- Making these battlegrounds distinctive requires Product mgmt, marketing, sales, service, and risk management. But in most companies, everyone is sub-optimizing for their function, and the view of the customer journey is lost. No-one has everything they need – data, content, people, policy, intelligence, technology -- to make it happen NOW for the customer. There is a pivot needed in strategy and operations that has to cut across several challenges:
- The right project mix – Building a virtuous cycles of automation, interactivity, intelligence, and innovation
- “The seeker embarks on a journey to find what she wants and discovers along the way what she needs” – Wally Lamb Is your digital agenda just a list, or will it anticipate what each customer needs along their journey? ..and will you be able to deliver it --- NOW!
- “The seeker embarks on a journey to find what she wants and discovers along the way what she needs” – Wally Lamb Is your digital agenda just a list, or will it anticipate what each customer needs along their journey? ..and will you be able to deliver it --- NOW!