2018 is The Year of The Dog. According to astrology, this means we’ll be communicative, serious, and responsible in our work. We’ll be able to distinguish good from bad. And because we’re dedicated we won’t do things by halves.
At Thunderhead we agree as we also see it as the Year of Customer Engagement and a year of opportunity to focus on what truly matters, customer relationships. This is when we’ll see Marketing mature into focusing on the long-term and making customer trust a priority. We believe 2018 is the year we’ll see our Engagement 3.0 model being truly embraced to drive valuable customer relationships. All Very Dog.
As 2018 is going to be such a big year for Customer Engagement, we’ve got two lists of things to think about for the year: Strategic and Practical Tactical.
Here are our 5 Top Strategic Themes for Customer Engagement in 2018:
- A Focus on The Long-Term Customer Lifecycle
Most CMOs are using data to manage transactions, not relationships. In 2018 brands will begin to recognise the problem and put steps in place to shift the focus from the myopic short-term transactional view. As our CEO Glen Manchester wrote in his blog at the end of 2017, this is the year the focus will move from short-term transactions to long-term customer relationships.
It’s not going to be for the faint-hearted or anyone inclined to doing things by halves. The shift demands new metrics, such as Lifetime Customer Value, Retention and Engagement measures. It’s not going to be just about Sales and Leads. It also needs a strong leader to champion the customer relationship as the true asset to a business.
The main challenge will fall between CMO vs CFO, so short-term returns vs long termism. The CFO will be looking for sales and revenue balanced with what is likely to be a shrinking budget. Their focus will be the next 12-18 months, putting pressure on the business to think in the same time frame with transactional short-term objectives.
The CMO will need to present a case which proves looking to the longer term, 3 years and beyond, will in the end drive more value for the business. 2018 will be a case of investing in customer relationships and the future, the proof of the pudding to be enjoyed later. This is a tricky path to navigate, and one which ultimately demands everyone in the business is truly customer focused, including the CFO. Brands will need to avoid the vicious cycle of short-term wins. If Marketers continue to win increasingly disloyal customers with aggressive (and expensive) pricing and promotions, they will lose their gains to relentless churn and attrition, and then just repeat the process. It’s not a good prospect for any business.
There is also now plenty of evidence to show that brands who invest in customer engagement to build stronger customer relationships over time will see their efforts rewarded with increased revenue.
- Customer Trust Becomes a Top Priority
Declining consumer trust continues to be a major issue, as the annual Edelman Trust Barometer reminds us yet again. Trust is a foundational pillar of our Engagement 3.0 model. Trust is generated by delivering what is in the best interest of the other person in the relationship (the customer), consistently over time. It is an outcome of engagement that is built by using the knowledge that a business has of a customer to shape and inform all its interactions at every customer touchpoints. In a trusted relationship, customers will be more willing to share information about themselves. When this is used to improve each individual experience over time and deliver value based on more personalised, contextual and relevant interactions, the greater the degree of customer engagement.
As Customer Engagement becomes a priority, trust will move to the very top of leading marketers’ thinking. Understanding the dynamics of consumer trust is critical. This is no more evident than with the impending GDPR directive and the increased focus on brand safety and transparency.
- Management of consumer data as an opportunity
With Trust becoming a higher priority, the management of consumer data will become a real issue in 2018, forced by GDPR and the upcoming e-Privacy Directive. It’s up to marketers whether they see this as an opportunity or a problem. We think marketers should treat this as a valuable business opportunity. Customer preferences, privacy and data ownership will all be critical issues and priorities for business this year, and customer data management will become a core business requirement.
- CMO Responsible for Customer Experience
With marketing shifting to the long-term and starting to implement Next Generation Campaigns, Customer Experience will continue to be the battleground to win and keep customers, with CMO’s responsible for moving from transactions to relationships. This is a continuation of what we saw in 2017, with an increased number of marketers taking on CX responsibilities. This also means the skill set CMOs will need will shift to CX skills. To understand their customer journeys, be able to derive actionable insight from those to drive further more valuable interactions with customers, the skills will need to have a more behavioural, psychological and analytical understanding.
- Make Sense of Machine Learning and Artificial Intelligence
Artificial Intelligence (AI) and Machine Learning (ML) were the buzzwords of 2017, but marketers are sceptical. We think this technology has a major role to play in improving customer engagement, but it needs to be applied in the right way – serving the holistic outside-in customer view, not buried in silos. To realise the value of these technical developments businesses in 2018 will need to look at the foundations of how they are organised before any meaningful implementation is undertaken. This means you’ll need a true outside-in approach which spans your whole business, all departments, and all customer touchpoints. 2018 will see wins and losses as businesses discover the issues emerging from any silo’ed approach. If you use this smart technology to coerce and manipulate customers’ behaviour you will fail. If, however, you use the ‘smart tech’ to foster better relationships, you will win.
The future’s bright. It’s time you made yourself and your brand stars. Take these on board and 2018 will be a stellar year for you. Go on, be The Dog.
Next Blog: Practical Tactical Ideas for Customer Engagement in 2018.