Consumer relationship architecture report - by Customer Helix

Customer Relationship
Architecture
Designing a blueprint for enduring consumer
relationships
April 2014
By Dave Frankland

Table of contents
3
Executive summary
7
Consumer relationship strategy — it still matters!

8
Measuring consumer relationship strategy
9
Five categories of relationship strategy

10
Non-relationship-focused firms

11
Revenue-focused firms

12
Consumer experience-focused firms

13
Consumer engagement-focused firms

14
Collaborative firms
16
Most firms aspire to a more consumer-oriented strategy

17
Yet, few firms perform well at their current strategy
20
Consumer relationship strategy permeates the entire business

23
Relationship strategies have broad impact
24
The “best strategy” is the one that’s right for you

25
Recommendations
26
Methodology

Executive summary
In an age when more and more firms say they seek to become “customer-centric”, there remains little
definition about what that really means. Meanwhile, the term Customer Relationship Management
carries so much baggage and has so many interpretations that it has been rendered meaningless.
However, we are big believers — evangelists, even — in all things consumer relationship-focused. We
just wish firms would approach it in a more deliberate and strategic manner.
This report builds on months of research and analysis. We interviewed practitioners from a broad range
of industries and surveyed 200 consumer-facing professionals at large firms. Through our analysis we
identify five consumer relationship strategies that we see firms pursue. We classify these as:
!   Non-relationship-focused. These firms devote little time or attention to their customers beyond
making a product for them to purchase. Relationships are transactional and often disconnected.
!   Revenue-focused. These firms often focus on consumers’ lifetime value, and they emphasize
cross-selling and upselling to existing customers.
!   Consumer experience-focused. Firms that pursue this strategy seek to understand their
consumers throughout the consumer journey and to design more enjoyable experiences and boost
customer satisfaction.
!   Consumer engagement-focused. These firms seek to deliver relevant and personalized
interactions, tailored to each recipient’s preferences, likes, and sentiment.
!   Collaborative. Collaborative firms seek to do what’s right for the consumer — not just for the firm.
They make strategy and business decisions with the consumer benefit in mind, and they care
about how the consumer evaluates their relationship.
Consumer Relationship Architecture
3

Most firms aspire to a more consumer-focused strategy.
Overall, we found 58% of companies currently pursue a company-focused strategy versus 35% that
pursue a consumer-focused strategy and 7% that pursue a collaborative strategy. This breaks down
further as:
!   Non-relationship-focused: 31%
!   Revenue-focused: 27%
!   Experience-focused: 16%
!   Engagement-focused: 19%
!   Collaborative: 7%

A healthy dose of firms (38%) currently pursues their desired strategy. And, of those that wish they
could pursue another strategy, the vast majority (73%) would pursue a more consumer-oriented
approach. Specifically, when we analyzed the desired strategies of all respondents, we found they
aspire to:
!   Revenue-focused: 12.5%
!   Experience-focused: 24.5%
None of these strategies is inherently better or worse than another. What’s important is to identify and
then pursue the strategy that’s right for you and your consumers. Unfortunately, we know that too few
firms can adequately describe their customer strategy, and if you can’t define it, it’s tough to pursue it
effectively.
31%
27%
16%
19%
7%
Customer Helix evaluation of respondent
firms’ current strategies
Non-relationship-focused
Revenue-focused
Experience-focused
Engagement-focused
Collaborative
18%
12.5%
24.5%
28%
17%
firms’ desired strategies
Revenue-focused
Experience-focused
Engagement-focused
Collaborative
4
n = 200
n = 200

Few firms perform well at their current strategy
We ask three key questions when evaluating consumer relationship strategy: 1)
how well do firms know their consumers; 2) how well do they apply that
knowledge; and 3) to whose benefit. To answer these questions we look at a
firm’s culture — driven by its executives’ priorities and the enterprise alignment
as it relates to consumers. We consider the depth and breadth of data that a
company uses to understand its consumers and the technology systems that it
deploys to connect the data. And, we consider how well — and how broadly — a
firm applies the intelligence that it has about itscustomers throughout the
business.
In general, most firms have plenty of room for improvement, regardless of their
respective strategy. As few as 0 – 24% of respondent firms operate at our
highest two levels — a level 4 or 5, out of 5 — for their respective strategy. To
improve, firms will need to review their strategy approach and architecture,
identify barriers and gaps, and build a roadmap to execute on the best strategy
for the firm and its consumers.
This report outlines the key requirements related to culture, applied intelligence,
data, and technology that firms need to deliver on their chosen strategy. It
demonstrates how a firm’s relationship strategy permeates and impacts the
entire business. For example, we found that firms that have a more consumer-
oriented strategy claim to outperform their competition not only on consumer-
focused metrics but also in achieving revenue and profitability targets. And,
finally, the report provides a foundation for Customer Helix’s consulting offerings,
which deliver in-depth and in-person evaluations and roadmap offerings.
“As few as 0 – 24% of respondent
firms operate at our highest two
levels … for their respective
strategy.”

5

Customer relationship
architecture

Consumer relationship strategy — it still matters!
Customer Relationship Management, or CRM, is a
flawed term. For many people it refers more to a
salesforce automation tool or a customer database
than consumer relationships. On the contrary, we’ve
long subscribed to the Walt Disney Company’s way
of thinking. Disney’s Parks & Resorts division has a
CMR team — that is, a Customer Managed
Relationships team — recognizing that the company
doesn’t “manage” the relationship with its
consumers. The consumer does.
But, just because the term is flawed, doesn’t mean
that firms shouldn’t pay close attention to their
consumer relationships. For the majority of us,
business survival depends upon it. And, we believe
that firms actually need to pay closer attention to
their consumer relationship strategies. They need to
actively think about the type and form of relationship
that they wish to have with their consumers and to,
then, orient their business decisions, consumer
interactions, and employee incentives around that
desired strategy. Unfortunately, few firms deliver to
this end.
To understand how firms currently approach their
consumer relationship strategies, we recently
surveyed 200 consumer-facing professionals at
large firms. These professionals are responsible for
such functions as consumer acquisition, retention,
intelligence, experience, relationships, and service.
All of the respondents are manager-level or above at
firms with greater than $500 million in annual
revenues, and they represent a diverse range of
consumer-oriented industry verticals.
Representatives from banking and financial services,
consumer packaged goods manufacturing, retail,
and high-tech product manufacturing together made
up a little more than half of the respondents.
This report explains the various consumer
relationship strategies that we see firms adopt and,
through the associated survey [bit.ly/
relationship_architecture], enables readers to
evaluate their current and desired approaches. It
also provides a foundation for Customer Helix’s
consulting offerings, which deliver in-depth and in-
person evaluations and strategy roadmap offerings.
The research is a first step in a complete “consumer
relationship mapping” offering, which combines a
company’s view of its consumer relationship with
the relationship perspective of its consumers. The
consumer research is currently in process and
expected in Q2 2014.
15%
25%
31%
29%
Approximately how many employees
work for your company?
500 to fewer than 1,000
1,000 to fewer than 5,000
5,000 to fewer than 10,000
10,000 or more
18%
13%
13%
11%
9%
7%
7%
6%
6%
4%
3%
3%
Banking/financial services
Consumer products
Insurance
Retail
High-tech products
Automotive
Health insurance
Media, entertainment,
leisure
Cable / telecom
Pharma / biotech
Utilities
Travel
To which industry does your
company belong?
7
n = 200
n = 200

Measuring consumer relationship strategy
No two firms have the same relationships with their consumers.
As we considered consumer relationship strategies and the
approach that different firms employ, we honed in on three
primary questions that we believe underlie every relationship, and
that every firm needs to consider:
!   How well do we know our consumers?
!   How well do we apply that knowledge?
!   To whose benefit?
We then evaluated firms based on three primary categories that
relate to these questions and are central to a successful
consumer relationship approach:
!   Data and technology. This includes the depth and breadth
of data that a company uses to understand its consumers
and the technology systems that it deploys to manage and
connect the data.
!   Applied intelligence. Once firms analyze their consumer
data, this relates to how well they apply that intelligence in
different ways throughout the business — whether in
consumer communications, across functions, or in informing
executive decisions.
!   Culture. A company’s culture is driven by its executives’
priorities, including their consumer relationship objectives,
enterprise alignment, and concern for consumer
expectations.

8
Every consumer relationship has similar basic requirements

Five categories of relationship strategy
At the highest level of analysis, we find firms to be either
company-focused or consumer-focused. At a deeper level, we
identify five categories of relationship strategy and classify
firms as:
!   Non-relationship-focused
!   Revenue-focused
!   Consumer experience-focused
!   Consumer engagement-focused
!   Collaborative

9

Non-relationship-focused firms
As the name suggests, these firms display no real concern for building
relationships with their consumers. For some, that might be because they don’t
have a direct relationship with their end consumers. But, many others say that
they wish to have deep relationships with their consumers, yet their approach
and activity belie their desire.
Non-relationship-focused firms devote little time or attention to their consumers
beyond making a product available for them to purchase. Their relationships are
purely transactional. These firms do leverage consumer data, although they use it
primarily to inform merchandizing, branding, product, pricing, and sales
decisions rather than on consumer relationships. From a technology perspective,
we found these firms far more likely to acquire point solutions at the business or
functional level, and we also found non-consumer-facing parts of the business to
have a greater share of voice over technology decisions.
Given their historical lack of direct relationships with consumers, we weren’t
surprised to find many CPG and pharmaceutical firms in our non-relationship-
focused category. However, in recent years CPG firms, in particular, have
aggressively adopted digital, mobile, and social media to establish direct
connections with their consumers. And, although we did find a greater relative
number of CPG and pharma firms in this category, every industry that we
evaluated had some representation here.

Senior Brand Manager, CPG company
10

“My customer is the grocery store or wholesale club
that sells my product to the consumer. I invest in
building relationships with my customers, but not
my consumers. We survey consumers to understand
what motivates them, and we pour money into
building our brand and making it appealing to
consumers, but I don’t need an actual relationship
with the consumer. That’s the store’s job.”

While remaining company-focused, revenue-focused firms do recognize that
their existing consumers may be a source of greater or other future revenue.
They often focus on consumers’ lifetime value and emphasize cross-selling and
upselling to existing consumers. It’s almost a zero-sum game in which the
company wins when the consumer loses.
We don’t want to give the impression that these firms are unsophisticated —
many employ relatively advanced segmentation, analytics, and communications
techniques. But, when we dug into what drives behavior and how they appear
to think about relationships, the objective for these firms in their consumer
strategy and consumer interactions is focused almost exclusively on the firm’s
financial reward. Not surprisingly, given their commercial focus, consumer
intelligence in these firms is oriented towards marketing, sales, and pricing
decisions. Similarly, technology decisions are oriented towards sales and
marketing, and their data strategy centers on transactional and behavioral data.
Once again, every industry is represented in this category. However, we did
notice a bump in the number of insurance, banking and financial services, and
health insurance firms that appeared in this category. In light of the changes
that are coursing through the health insurance industry, we have spoken with
many firms that are scrambling to transform from a traditional employer-focused
model to a more consumer-focused model. These transformations don’t occur
overnight, and it’s commendable to see that many have evolved beyond the
non-consumer-focused category. Some have even evolved fully to consumer-
focused strategies.

VP, Customer Development, Cable and Telecom firm

11

“We know a lot about our customers – in aggregate
and at an individual level. We know which product
clusters typically sell best in which order or what
the typical cadence of product purchase is for
different types of customers. And we plan our
communications to leverage that insight. For
example, once a particular customer type has
bought products A and B, we know that it’s 87%
likely that product C will be their next purchase. We
then look for the optimal time and way to present
an offer for product C to that customer.”

Consumer experience-focused firms
Experience-focused firms place a higher importance on building consumer
relationships. They seek to understand their consumers through voice-of-
consumer programs and ethnography and to apply that knowledge in designing
more enjoyable experiences for consumers. This often begins with graphical or
user interface design, but evolves to encompass all facets of the consumer
journey.
Consumer experience-focused firms place a premium on understanding and
improving consumer satisfaction. They seek to personalize experiences in owned
media, particularly websites and mobile apps, and in stores/branches. These
firms typically leverage consumer intelligence as a major factor in brand, product,
and consumer experience.
From an industry perspective, automotive, consumer electronics, and health
insurance firms “popped” here. Similar to CPG firms, many consumer electronic
firms have historically struggled to establish a direct connection with their
consumers. With the explosion in the “wearables” category, the lines between
product, experience, and consumer are starting to blur. No wonder, then, that we
see such emphasis on the consumer experience.

VP, Member Experience, Health Insurance company
12

“Quite honestly, health insurance companies never
had to be great at satisfying consumers, as long as
employers were happy. With so many new direct
relationship opportunities, we recognize that
member experience may be our greatest
opportunity to differentiate our offering. We have
evaluated every facet of the consumer journey and
are investing heavily to design the best possible
experience at each step of the journey.”

Consumer engagement-focused firms
Engagement-focused firms seek to deliver relevant and personalized
interactions, tailored to each recipient’s preferences, likes, and sentiment.
Frequently hailing from industries that enjoy direct relationships with consumers,
these firms deploy a disciplined test-and-learn strategy and demonstrate serious
respect for consumer preferences.
These firms capture and leverage a broad range of data sources, but place a
heavy emphasis on interaction data. Most invest in a connected data
management approach, and we often see flexible and interoperable technology
solutions — at least in the areas of consumer interaction. Engagement-focused
firms generally use a broad array of analytics throughout the consumer-oriented
facets of their business. Consumer intelligence plays a major role in consumer
interactions, and we often see real-time use of intelligence across marketing and
interaction channels.
Retail, media, entertainment and leisure, automotive, and cable and telecom
were the standout industries in this category. Each of these has long embraced
database and direct marketing in their communications approach, but we are
encouraged to see them expand their engagement efforts to encompass the
entirety of the consumer relationship.

VP, CRM, Retail firm

13

“Our goal is to understand our customers as
completely as they will allow. That means
understanding them as a person and not just as a
buyer. Only then can we interact with them in a far
more relevant and personalized way. While it’s a
major commitment and investment, we are already
able to show that customers reward us over time
when we tailor our efforts and demonstrate a
respect for them as individuals.”

Collaborative firms seek to do what’s right for the consumer — not just for the
firm. They act in such a way that demonstrates a belief in a consumer
relationship as truly symbiotic. In essence, they seek to fully understand the
consumer, to apply that intelligence to service the consumer, and to act in such a
way that mutually benefits the company and the consumer.
These firms make strategy and business decisions with the consumer benefit in
mind. They care about how the consumer evaluates their relationship. They
develop and deliver personalized experiences — from products to interactions to
connections. These are companies that would chafe at the idea of making money
off a consumer without delivering at least the equivalent value in return.
Collaborative firms leverage a broad range of intelligence sources, and we
usually find holistic, real-time data management practices. Similarly, we usually
expect to see flexible, interoperable, and future-looking technology solutions.
The sample size of firms that we classify as collaborative is too small to draw too
many conclusions as it relates to industry distribution, but 6 of the 15 firms were
from the banking and financial services industry. The remainder was spread out
across an array of industries. In our experience, firms that are operating under a
collaborative strategy are few and far between, so we wouldn’t expect to see too
much concentration in any one area.
SVP, Entertainment company
14

“We have always tried to put the customer first –
it’s part of our DNA going back to our founder. But,
we have a renewed effort lately towards
transparency – being open with consumers about
how we can deliver greater value to them.
Sometimes, we may be giving up a little revenue,
but we believe it will deliver long-term gain. But, it’s
hard to do. It cuts across every facet of the
business – from product to operations to marketing
to service. You can’t attempt to just do this in one
or two parts of the business.”

Non-relationship
Revenue
Experience
Engagement
Collaborative
•  Customer
relationship is not
the focus of
company decisions
•  Emphasis on
customer
acquisition,
retention, and
lifetime value
•  Relationship focus
is purely
commercial
•  Emphasis on
customer
satisfaction
•  Build relationships
based on
understanding of
customer journey
•  Focus on relevant
offers and positive
customer
experience
•  Respect customer
preference
•  Disciplined test-
and-learn strategy
•  Exec focus on
customer
•  Focus on customer
perceived value
•  Concerned with
mutual benefit for
consumers
•  CI primarily
influences
merchandizing,
branding, product,
pricing, and sales
decisions
•  CI is mainly
focused on
marketing, sales,
and pricing
decisions
•  CI is a major factor
in brand, product,
and customer
experience
•  CI is used to
personalize
experiences
•  Emphasis is on
owned media
channels
•  General use of
descriptive,
predictive, and
prescriptive
analytics
in customer
interactions
•  Real-time use of
intelligence across
channels
•  Broad use of
descriptive,
predictive, and
prescriptive
analytics
in enterprise
decisions
•  Real-time use of
intelligence across
channels
•  Typically acquire
point solutions at
the business or
functional level
•  Non-consumer-
facing parts of the
business have a
greater voice over
IT and data
decisions
•  Data focus centers
on transactional
and behavioral
data
•  Technology and
data decisions are
oriented towards
sales and
marketing
•  Emphasize voice-
of-customer and
ethnography in
customer
understanding
•  Limited emphasis
on data integration
•  Narrow tech
enablement
requirements
•  Heavy emphasis
on interaction data
•  Broad range of
data sources
•  Connected data
management
approach
•  Flexible and
interoperable tech
solution
•  Broad range of
customer
intelligence
sources
•  Holistic, real-time
data management
approach
•  Flexible,
interoperable, and
future-looking tech
solution
A firm’s relationship strategy reflects its emphasis on key relationship elements
Data &
technology
Applied
intelligence
Data &
technology
Applied
intelligence
Culture
Applied
intelligence
Culture
15

Most firms aspire to a more consumer-oriented strategy
As we analyzed our survey results, we built a model to
determine which strategies different respondents currently
pursue, as well as to understand their desired strategies.
Overall, we found 58% of companies currently pursue a
company-focused strategy versus 35% that pursue a
consumer-focused strategy and 7% that pursue a
collaborative strategy. This breaks down further as:
!   Revenue-focused: 27%
!   Experience-focused: 16%

A healthy dose of firms (38%) currently pursue their desired
strategy. And, of those that wish they could pursue another
strategy, the vast majority (73%) would pursue a more
consumer-oriented approach. Specifically, when we
analyzed the desired strategies of all respondents, we
found they aspire to:
!   Revenue-focused: 12.5%
!   Experience-focused: 24.5%

31%
27%
16%
19%
7%
firms’ current strategies
Revenue-focused
Experience-focused
Engagement-focused
Collaborative
18%
12.5%
24.5%
28%
17%
firms’ desired strategies
Revenue-focused
Experience-focused
Engagement-focused
Collaborative
16
n = 200
n = 200

Yet few firms perform well at their
current strategy
While it may be tempting to run off and pursue
a more consumer-focused strategy, we found
many respondents struggling to simply
execute on their current strategy. We created
an evaluation model to score respondents on
how well they deliver against their current
strategy, and divided the respondents into five
levels.1
To evaluate each strategy, we broke the
scoring criteria into three primary areas: 1)
culture; 2) analytics and applied intelligence;
and 3) data and technology. The criteria we
evaluated within each of these areas varied for
each respective strategy. For example, we
evaluated 13 elements in scoring revenue-
focused firms versus 97 in evaluating
collaborative firms.
In general, most firms have plenty of room for
improvement, regardless of their respective
strategy. As few as 0 — 24% percent of
respondent firms operate at our highest two
levels — a level 4 or 5, out of 5 — for their
respective strategy. In detail, here’s what we
found:

Revenue-focused firms. We scored 45% of
revenue-focused firms at levels 1 (17%) and 2
(28%). A further third (32%) were at level 3,
20% at level 4, and only 4% at level 5. What
impacted their scores? Those at the lower
levels are clearly focused on cross-selling and
upselling consumers, but there’s not much
sophistication in that pursuit. In these firms,
the use of analytics and segmentation is often
sporadic, and most consumers are treated in
pretty much the same way as one another. At
the higher end, we found a greater emphasis
on understanding and boosting consumer
lifetime value and found communication
approaches that demonstrate an
understanding that not all consumers are
created equal. These firms still view their
consumers primarily as a source of future
revenue, but their approach and execution is
focused on, or sometimes driven by, a
consumer’s potential value.
17%
28%
32%
20%
4%
1
2
3
4
5
Level
17
n = 54
1
We didn’t score the non-relationship-focused respondents.
If they’re not focused on building relationships with
consumers, it doesn’t make much sense to evaluate how
well they do it.

Experience-focused firms. The firms we
classified as experience-focused struggle
to get into a high gear. We graded two-
thirds of these firms at levels 1 (13%) and 2
(53%), with most of the remainder at level 3
(31%). Only 3% scored a level 4 and none
reached level 5. What’s holding these firms
back? Many fail to leverage important
experience-oriented tactics, ranging from
their understanding of consumer journeys
to their usage of voice-of-consumer
programs, ethnography, and consumer
satisfaction programs (including Net
Promoter Score). And, while we are big
believers in consumer experience as a
discipline that is focused on delivering
enjoyable experiences across all aspects of
the business that serve a consumer’s need,
we are also aware that many CX
professionals and programs evolved from a
user-experience heritage. As such, we also
included a small number of questions
related to UI design and gave credit to
those using tactics such as eye-tracking
technology and web analytics.
Engagement-focused firms. We found a
comparatively high number of level 5 firms
among those that are engagement-focused
— albeit at 3%. We also found the fewest
level 1 firms (0%). Not surprisingly, then,
there’s a large group bunched in levels 2
(38%), 3 (51%), and 4 (8%). A lot of these
firms engage with their consumers in a
plethora of channels, but far fewer execute
effective multi- or omni-channel
communications — for example, by
leveraging contact strategies to tailor
communications in one channel based on
an understanding of how the firm has
interacted previously, or recently, with that
same consumer in another channel. The
engagement-focused firms that scored
highest personalize their interactions based
on what they already know about a
consumer’s preferences, needs, and
sentiment, and see each interaction as an
opportunity to learn more about them to
inform future interactions.
13%
53%
31%
3%
0%
Experience-focused firms
1
2
3
4
5
Level
0%
38%
51%
8%
3%
Engagement-focused firms
1
2
3
4
5
Level
18
n = 32
n = 38

Collaborative firms. We should start by
saying two things. First, it’s really hard to be
genuinely collaborative. Second, only 15
firms out of the 200 (7%) even fall into this
category. With such a small number of
firms, we’ll refrain from making any broad,
sweeping statements about the category.
When we scored these firms — across
almost 100 criteria — we found that five of
the 14 were at level 1; five were at level 2;
and four at level 3. None scored at a level 4
or 5. In some respects, collaborative firms
demonstrate many of the best qualities of
each of the other categories — they are
sophisticated in how they segment and
understand consumer value and treat
different consumers differently; they focus
heavily on delivering great consumer
experiences, understanding consumer
journeys, and engaging with consumers in
a highly individualized way based on their
understanding of them.

But what elevates collaborative firms is
their desire to be just that: collaborative.
The idea of a zero-sum game has been
inverted. These firms recognize that they
win only when consumers win. And, that
might mean that they occasionally take a
small, short-term revenue hit in order to
build mutually beneficial, long-term
relationships. As we said, it’s hard to do.
Especially when there are shareholders to
report to, revenue goals to meet, and
sometimes conflicting internal objectives
and incentives. We were actually
encouraged that a relatively small number
of firms say they seek to pursue this
strategy — it’s really not for the faint of
heart, and it’s better to be successful at a
chosen strategy than to pursue the one that
sounds or looks good, and do so poorly.
We wonder whether we will ever find many
firms that perform as high as a level 5 when
pursuing this strategy. But, we absolutely
tip our hat to those that try, aiming for
mutually beneficial relationships while
maximizing consumer perceived value.
5
5
4
0
0
1
2
3
4
5
Level
19
n = 14

Consumer relationship strategy permeates the entire business
Understanding a firm’s consumer relationship strategy is not an
academic exercise. The strategies that different firms pursue
correlate with a broad swath of behaviors and impact business
success in different ways. We cross-tabbed the responses from
the firms that fell into each respective strategy to understand the
similarities and differences among these firms, beyond the
narrower topic of consumer relationships.
We started by trying to understand the drivers of executive
decisions. In our survey, we asked respondents to identify what
they felt were the five most significant drivers of board and
executive decisions — regardless of the firm’s marketing and
corporate literature. Given the primary roles and responsibilities of
senior executives, “profit” was, not surprisingly, a top three choice
across all strategies with sufficiently large sample sizes.1 Where it
got interesting, though, was in how other choices seemed to
reflect the consumer relationship strategy. Non-relationship-
focused firms, for example, also emphasized revenue and return
on investment, whereas consumer engagement-focused firms
leaned more toward consumer retention and consumer
experience.
20
Profit
Customer
experience
Return on
investment
Revenue
Customer
satisfaction
Customer
retention
Risk
Customer
lifetime value
Customer
acquisition
Customer
perceived value
Share price
Innovation
Accuracy of data
to support decisions
Confidence in
ability to deliver
Corporate social
responsibility
Internal politics/
relationships
Environmental
impact
Non-
relationship-
focused

Revenue-
Focused

Experience-
Focused

Engagement-
focused

Most cited areas of perceived executive focus
Perceived areas of executive focus
1
Due to the small sample size of collaborative firms, we have not included percentages
or responses for the questions that we cross-tabbed. Where a very large number of
the collaborative firms gave a specific answer, we called it out in absolute rather than
percentage terms.

Strengthening brand and consumer relationships are near-
universal goals
21
Similarly, when asked about the primary goals for consumer-facing
parts of the business, “growing long-term relationships” and
“strengthening the value of our brand” were universally among the top
answers. However, “boosting consumer loyalty” popped with those
pursuing a more consumer-oriented strategy, along with an emphasis
on consumer satisfaction versus an emphasis, not surprisingly, on
consumer lifetime value and cross-selling and upselling to existing
consumers as primary goals for revenue-focused firms.
Grow long-term
relationships
Understand
consumer needs
Enhance
customer service
Customer
satisfaction
Strengthen brand
value
Consumer
acquisition
Consumer loyalty
Improve efficiency
Customer
lifetime value
Enhance consumer
experience
Deliver relevant
communications and offers
Identify future consumer
needs
Consumer perceived
value
Provide tools for consumers
to manage relationships
Reduce attrition
Consumer facing goals
Cross-sell /
upsell
Non-
relationship-
focused
Revenue-
focused
Engagement-
focused
Experience-
focused
Consumer-facing goals differ by strategy

Consumer-oriented firms deploy more open and connected technology solutions
22
We acquire point solutions at the business or functional level
We leverage shared data capabilities across the organization
We acquire enterprise solutions for the entire organization
We leverage a service-oriented architecture to connect enterprise-wide solutions
We deploy an “inter-enterprise” approach, connecting our internal systems with relevant external systems
As it relates to technology systems, we found company-focused firms far more likely to acquire point solutions at the
business unit or functional level (49% of non-consumer-focused firms, and 47% of revenue-focused) than consumer-
engagement-focused firms that are more likely to leverage shared data capabilities across the organization, and
experience-focused firms that are more likely to acquire enterprise solutions for the entire organization. Seven of the 14
collaborative firms leverage a service-oriented architecture to connect enterprise-wide solutions.

Q: Which of the following most accurately reflects your company’s current technology approach to consumer intelligence?
n = 200

To understand how consumer strategy impacts the business, we correlated
each firm’s responses to questions we asked about how each firm’s
performance compares to their competition. We asked a series of questions
about how they compare across elements such as achieving profitability
targets, attracting and retaining consumers, delivering innovative solutions,
and investing in new technologies. The responses proved interesting, both as
an indication of priority by firms within a given strategy, as well as when
looking across the response choices at how much more likely they were to
be chosen by firms within specific strategies.
There’s a danger of falling into a “causation versus correlation” conversation
when examining these results. But, when looking at them in totality, it’s clear
that the firms that have a more consumer-oriented strategy claim to
outperform their competition not only on consumer-focused metrics but also
in achieving revenue and profitability targets.
Delving deeper by strategy, we found:
!  Non-relationship-focused firms generally claim to outperform their
competition most often on financial metrics: achieving profitability
targets; growing profitability and margins; achieving revenue targets; and
delivering shareholder value. These are all admirable achievements;
however, it is notable that only one attribute, “achieve profitability
targets,” was selected by more than 50% of respondents.
!  Responses from revenue-focused firms extended beyond a purely
financial focus, with top responses spread across profitability targets,
growing profitability and margins, and attracting new consumers
combined with delivering value to consumers and satisfying consumers.
Perhaps reflecting the breadth of top responses, no attribute was
selected by more than 50% of respondents.

!  When we got to experience-focused firms, the pendulum swung firmly in
a consumer-oriented direction. These firms highlight consumer
satisfaction, delivering value to consumers, and engaging with
consumers as the top areas in which they outperform their competition.
Each of these three attributes, plus two others — grow profitability and
margins and upsell/cross-sell to existing customers — was selected by
more than 50% of respondents.
!  Engagement-focused emphasize their relative success in delivering value
to consumers, consumer satisfaction, achieving revenue targets, and
investing in new technologies. These four attributes plus three others —
achieving profitability targets, engaging with consumers, and delivering
shareholder returns — were selected by at least 50% of respondents.
!  With so few collaborative firms, we don’t have a statistically significant
number of firms to separate out the most frequently referenced
elements. However, at least seven of the 14 collaborative respondents
believe that they outperform their competition across 11 attributes:
achieving profitability targets, delivering value to consumers, satisfying
consumers, growing profitability and margins, achieving revenue targets,
engaging with consumers, attracting new consumers, retaining
consumers, obtaining referrals or recommendations from existing
consumers, achieving revenue targets, delivering shareholder returns,
and delivering innovative solutions.

23
Relationship strategies have broad impact
The highest number of respondents within
each strategy chose:
•  Non-relationship-focused: achieve
profitability targets
•  Revenue-focused: satisfy consumers
•  Experience-focused: satisfy consumers
•  Engagement-focused: deliver value to
consumers
•  Collaborative: grow profitability and
margins

The “best strategy” is the one that’s right for you
Although it’s a question we’re asked frequently,
we don’t suggest that one of these strategies is
inherently better than another. Instead, we
believe that companies and brands should
carefully decide which strategy is right for
them. The right strategy will depend on the
company’s desired relationships, their
competency and capability to enable that type
of relationship, and the consumer’s
expectations. And, once they decide, they
should then align their processes, interaction
technologies, investments, and employee
incentives in such a way to best execute the
strategy. For a company that makes widgets
that are sold through an intermediary to invest
heavily in establishing and maintaining a
collaborative relationship doesn’t make too
much sense.

But, at the same time, it’s not just about
choosing a strategy. Once a firm decides which
is the best relationship strategy, it must focus
on aligning and delivering against that strategy.
For example, firms that seeks a collaborative
relationship will need to invest in truly
understanding their consumers, in thinking
through how to best apply that knowledge in
every interaction, and how to genuinely
establish a mutually beneficial relationship —
not just one that benefits the company.

24

Recommendations
We have designed our research and survey to provide you with a diagnostic of your business. We’ll provide you a
summary report that shows which strategy we believe you are currently pursuing, how well you are pursuing it, and
which strategy you demonstrate a desire to pursue. If you wish to leverage the diagnostic and improve your current
approach, we’ll highlight barriers that appear to be holding you back and provide you the ingredients to build a
consumer relationship strategy roadmap.
If you prefer to leverage Customer Helix and Targetbase, a leading consumer engagement agency, to manage the
process, we partner to offer:

25
To take the survey and receive a
free diagnostic — analyzed and
prepared in concert with our
partner, Targetbase — please go to:
http://bit.ly/relationship_architecture
!   Strategy architecture reviews. We can deliver
a qualitative assessment of your firm based on a
variety of stakeholder interviews from within
your firm, and we can also benchmark your
strategy and approach against peer and
competitor organizations. This provides an in-
depth and independent assessment of your
current and desired state, and provides practical
recommendations on how best to evolve your
current approach.
!   Consumer relationship mapping (coming
soon). Map your approach to your consumers’
expectations. Using a proprietary data set, we
can identify the types of relationships that your
consumers wish to have with your firm,
compared with the experience that they have
today. We can then plot this against your
strategy architecture to further hone in on your
most appropriate approach.

!   Roadmap development. We can develop a
detailed roadmap based on a gap analysis of
your current and desired approach. Leveraging
quantitative and qualitative assessment data,
we will suggest how to evolve your culture, data
and technology, and applied intelligence
approaches to successfully build the most
appropriate consumer relationship strategy for
your firm.
!   Business case. Let’s face it: despite the
buoyant stock market, budgets are still tight. We
can help you develop a business case to help
justify the expenditure required to evolve your
consumer relationship strategy and approach.

Methodology
This research is the culmination of several months of research. We interviewed scores of consumer-
facing practitioners between Q3 2013 and Q1 2014 and we surveyed 200 practitioners during Q4
2013.
The quantitative survey was managed by ResearchNow, an independent survey company, and
ﬁelded to 200 randomly selected consumer-facing professionals that met our inclusion criteria.
Respondents are all manager-level and above, with North American or global responsibility, within
companies with at least $500 million in revenues. All work within preselected, consumer-facing
industries. The survey was ﬁelded in Q4 2013 and Q1 2014.
Exact sample sizes are provided throughout this report on a question-by-question basis, and in
some questions the results may not total 100% due to rounding.

26

This report is published under the notion of open
research. The Creative Commons License is
Attribution-Noncommercial-Share Alike 3.0
United States.

About Customer Helix
Customer Helix provides independent advice to
help companies deliver value to their customers.
By sharing research, opinions, and advice, we
guide ﬁrms to better understand their
customers, deliver superior customer
experience, and boost customer perceived
value.
Customer Helix also provides strategy
consulting to help ﬁrms develop and improve
their customer orientation.
Learn more at www.customerhelix.com

About the author
Dave Frankland is the managing partner of
Customer Helix.
Most recently, he was an award-winning analyst
and research director at Forrester Research,
advising senior executives on customer
intelligence strategy. Dave has consulted with
companies – ranging from Fortune 50
businesses to international and regional
organizations – on marketing and customer
intelligence. His research and opinions have
been featured in The New York Times, The Wall
Street Journal, Bloomberg Businessweek,
Harvard Business Review, Forbes, Ad Age, and
CNN’s “The Situation Room.”

Consumer relationship architecture report - by Customer Helix

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