Retail Talks: How top IT and Marketing teams drive CX Innovation

Welcome to this episode of Solutions Spotlight. I'm your host, J.D. Miller. Did you know that 53% of CIOs expect to increase their involvement in customer experience in the future? It's true, given the critical role that data in tech plays in digital marketing, it's no surprise that forward thinking businesses are looking for ways to blend the art of marketing with the science of I.T., to drive customer experience, innovation, loyalty, and retention. Today, I'm joined by Sara Richter, CMO of Emarsys, and Cristian Sorreno, Tech Mobile's E-commerce and Omnichannel Regional Director, to talk about why building a strong alliance in partnership with your tech tools and internal tech leaders is paramount today. So when we return, Sara and Cristian. Sara Cristian, thank you so much for joining us here today. Thanks for having us. It's an absolute pleasure and I'm really looking forward to the conversation. Absolutely, J.D. Same here and glad to be here with you guys. I want to dive right on in and Sara, I'm going to start with you. Tell us your viewpoint for why now when it comes to creating efficiencies between IT and marketing? So it's such a complex topic but if you look, we are in a perfect storm of digital transformation at the moment. On one hand, we've got something like 50% of global consumers who told us in a consumer research study that they've moved to online shopping just in the last three years. And Forrester tells us that online sales are going to make up 30%, 30% of the $5.5 trillion retail market by 2027. That's not that far away. So brands are constantly now trying to transform their CX to catch up with this. But also because as companies like Bain have taught us, changing your CX, improving it, transforming it is actually contributing to revenue growth and those that do it better are seeing anywhere from a 4 to 8% increase compared to their competitors. So there's real money out there. That's all happening on one hand; it sounds very, very positive. But on the other hand, the marketing and I.T. teams who are required to drive all of this and support it are seeing budgets and resources reduced consistently while the businesses are demanding more from them and looking for more profitability. So it's leaving marketing and IT in a little bit of a sticky situation. And inevitably the companies that are really going to come out of this well, I think are the ones that are saying, how can we pull together? How can we work more closely together? How can we actually drive efficiencies with the solutions that we have today? How can we really look at our tech stack and understand it both from a marketing and IT standpoint and get the most value from it on a consistent basis? To follow up there then, Cristian, what would you say are the biggest benefits for aligning marketing and IT when it comes to enhancing the customer experience? Any real world examples for us there? Absolutely. I think it's a matter of communication, a seamless collaboration. Sometimes we as marketers used to use a lot of fancy words. In this industry, we are talking about customer centricity and omnichannel and automation and this kind of topics that sometimes the other teams, other areas, doesn't understand as well as we do because it's our day to day. So basically, one thing that has been completely different in the way of doing things for us, it's trying to include the I.T. team since the beginning of the projects because it's a complete different experience where we explained them why we need to do some things instead of just sending a million of user profiles and asking them to upload everything into their ERP or create customer profiles, right? So I think it's a matter of inviting them to the projects, explaining to them why we want to do something and sometimes they come up with a completely different solutions that we were thinking before, that it's better, that it's faster and that works in a better way for us. So I think that's one of the examples that we have. And again, when you are driving a business, and I think that Sara brought that to the table before, the cultural digital transformation that we are leaving in the companies ask us to include every area, work together as a team and not like different sites. So I think that's one of the things that you don't realize. So any tips on making your customer insights more actionable, Cristian? Yeah, absolutely. I was thinking about how we can work with different areas, so I'm don't mean just like different silos. One thing that we did was we created kind of SWAT teams, having subject matter experts of each of the different areas of the company in order to make an easier and seamless cross-functional collaboration. And basically, one of the things that we started to do in these kind of things is that you have the point of view of everyone on the table. So it's a completely different result when you are talking about a new project or something. Now, talking about the customer experience, I think it's how we can change the way we measure things. So for example, if you think about how business works, we all do like fancy slides showing revenue, showing growth year over year, units, orders and basically that's it. And sometimes we as business leaders make a mistake to think about the sales of the object. A personal point of view and the way that we are shifting to deliver the customer experience is sales should be the consequence, not the objective. So basically, when we start to create different KPIs, like for example, if the objective or the goal is to sale 10x or 10% over last year, what we are doing is not focus on just sale. Instead, looking for KPIs like cancelled orders, return rate, stock outs, sold outs, and enhancing these kind of KPIs. The consequence is that we're going to keep the revenue, right? Because if I increase my approval payment rate, that would deliver more revenue. If I decrease the cancellation orders because of my delays, it will impact on having more revenue. But on the other hand, you are going to deliver a better experience for consumers. So it's basically that kind of things or the ship that we are trying to do in the way of reading the metrics. Sara, to follow up then, what are the biggest challenges you're seeing with your clients for driving the customer experience innovation and how are they overcoming them? So there are a lot of challenges out there. And I think rather than tell it esoterically, I'd love to pull out a couple examples of our customers and just tell a little bit of their stories and highlight two different challenges that we're seeing. And one is, I think, something that probably a lot of people can relate to from COVID, where we saw a lot of brands actually moving from or expanding depending on what their model was, to truly having direct customer engagement rather than being further away from their customers. And an example that people probably wouldn't think about is actually Gibson guitars. And Gibson is an iconic brand, right? We think about them, we have the image of these amazing guitars that have been shaping sound for generations. But they actually, before they started working with Emarsys were really relying on resellers. So stores like Guitar Center and Sweetwater that we're all familiar with to actually engage with their customers because they were selling through them and that meant that was where the relationship was with the actual reseller of the guitar, not with the actual Gibson brand itself, which is quite remarkable when you think of it, a brand that actually was so well-known because often that's a feature of that the brand isn't. That was not their issue. So they have really started to work with us, try to figure out how could they support a new strategy that is often called B to B to C, to Cristians point about acronyms and marketing, right? And they were really looking to how can they create campaigns while continuing to have the selling model that works for them and customer engagement and CX was absolutely fundamental. And they've built this incredible model for their fans around content that they're providing. And within the first year they saw a 50% growth in revenue from their email stream, doubled their email engagement, and then from some of the automations they were building in terms of their marketing engagement, CX engagement, started to see that increased by almost 10% in a year. So they created a fantastic experience that people want to engage with and want to engage with the brand, but they've done it in such a way that is actually moving the bottomline forward and moving their new business model forward. And that's the magic, is being able to bring those two together. That's one of the challenges we see and it's definitely not unique to Gibson in the marketplace. Another one and this is one of my current favorite topics of the moment, because it's I think it's so, so important; all about building loyalty. Loyalty is such a catchword, I think, for all marketers at the moment. And a very, very different look at a very different brand would be Moen and you may or may not have it come to mind immediately. J.D. I know we talked a couple of weeks ago, you mentioned you were having bathrooms redone, so sure enough you get Moen. Those amazing faucets, it looks so fabulous. So if anybody that hasn't immediately made the connection, you almost certainly have seen a beautiful bathroom layout. That's almost certainly what you looked at. Moen's been around for a long time and they had a very specific model of engaging with customers. They had processes that were around specific customer journey that were really also built around customers going to showrooms. Well, as I talked about earlier, the world has moved on and digital has transformed their business just as it has everywhere else. So they needed to look to shift their model to understand and enable the online shopping and the digital interaction that their customers were asking for. And that actually went far beyond just marketing. They needed to digitize sales and services so they could actually reduce the number of calls that they were getting, reducing the amount of time that it took to respond to those calls, and overall provide the seamless customer experience that their customers were frankly demanding. And they've made an enormous transition in how they have approached this and now things like waiting times and call resolution has dropped. They're actually able to launch new campaigns faster and improve their sales and marketing operations. So it's completely transformed their whole approach, their business, and continue to take their brand forward into a more modern digital age, if you like. Great examples there. Absolutely. Cristian, so as a brand building off of what Sara said as a brand that has moved from traditionally B2B to driving a full e-commerce direct to consumer presence, what have you seen as the biggest challenges for driving customer experience, innovation, and how have you overcome them? I think they did without hesitating at that point in the process was the biggest chance that we have. When you are used to do things in a certain way and then you shift or you add something new, that transition period is very complex. Direct to consumer, from the metrics, from the processes, from the things that you need, and to set the framework of the projects is completely different of a company from Brussels. Just to give you an example, we used to discuss a lot of operations team regarding the field rate. When you are selling to be considered to a big retailer, in these B2B purchase orders, if you have a field rate of 97% because you are delivering most of the product. In a metric of direct to consumer, if you are delivering 90% of field rate, that refers to 3% of your consumers are not receiving any profit. So and it's a matter of how you read the metrics and the process that you need to align. Another thing that is very important, and I used to be very repetitive in this topic when I have been spaces like this, that cross-functional alignment is very, very important because you need to explain to the other business unit peers what are you doing, why is it important what you are doing, and also try to understand that you are not in a competition. It's not like B2B versus B2C or the physical world, but this is the only world. It's we are just one company, we are just one brand, and we have from one consumer and it's left pocket, right pocket. It doesn't matter, but we need to be obsessed with our consumer. And another thing that is important that I have seen is a challenge and how we can overcome that is to partner with third parties that could help. As we have subject matter experts in each of the areas of the company, we need to have a strong partner that will allow us to get to the next stage. In this case, and Sara mentioned that, Emarsys is our partner regarding automation, marketing and it's amazing the work that we've been doing together. Just to give you an example, in real life, last year, we have 3% rate of repurchase rates. This year, in just eight months of launching new products and developing new tools with them, new journeys, we reach 20% of repurchase rate. So it's massive. It's huge the change that we've done and also thinking about profitability, I think that we are living in a very interesting moment or era for the commerce. It's not e-commerce, it's not online commerce, it's not omnichannel. I think it's unified commerce and we need to think and really put the customer in the center of all the things that we are doing. We are listening from the last couple of years or three years, customer centicity, customer centricity, customer centricity. And when you review the processes, customer centricity is not where we as a company are doing, right? You want a refund and they ask you for your birth certificate and your elementary school diploma in order to release the money to us. So I think it's a matter of how we can collaborate with all of the company business units and partner with strong partners that will allow us and help us to get to the next stage. And also that help us evangelize across the company these kind of projects or efforts. I think that's one of the ways that we are overcoming these challenges, but for sure there's a long way to go to. Cristian, I think you make such an important point about customer obsession. And I love that and illustrating how customer obsession, it's not just about marketing or CX or customer support, it's the whole business actually rotating themselves around the center as the customer and everything has to reflect that. It's really, really, really hard to do. But I think you've also made the point that companies that get it right, they get very happy customers. But actually what they see is an increased revenue and it has such a positive impact on their bottom line. And we started talking about bringing marketing and IT together. Well, that's a piece of the puzzle. That's a very important piece of the puzzle. But it's absolutely all those different departments coming together. And they're always thinking first about the customer and not first about sales or marketing or services or support. And it's a really exciting transformation for a company to make and I'm going to be fascinated to watch how many more really, really take it on as we move forward into 2024. Absolutely Sara, I can't agree more with you. And also, J.D., I think it's important to highlight sometimes the friction is that we have the process to deliver a better customer experience, it's not on the table, the technology. It's a matter of the strategy that we have as a company, right? So customer centricity, omnichannel; it's not a project. It should be a mindset of the company. It should be a cultural thing that we need to work, to work to work to deliver and make all the people a team embrace it. It's not a model that just said, we're going to do this because it's customer centric. We really need to think how we change our processes in order to make that for the final consumer a really frictionless and seamless journey. And if that refers that we need to make a lot of changes and we need to work extra hours to change the process, let's do it. That's the way to deliver a really frictionless experience. Great point. With that in mind, Sara, retailers they're preparing for the upcoming holiday season, as is most of the world, right? What advice would you give that when it comes to blending the art of marketing with the science of IT? Oh, that's a fun one. And yes, everybody's gearing up, right, that the Black Friday holiday season is only just around the corner. So I'll go for a couple of things. I'll start with one, which maybe is a little bit more appropriate to Halloween now that I think about it. Are you being clever or are you being creepy? The power of data allows you to be both, and it's a fine line to walk. Are you delivering the right message at the right time to your customer and really bringing a moving engagement and experience along? Or are you being intrusive and are you using the data that you have in the most appropriate way at the most appropriate time? And trust me, your customers will tell you. But ask yourself that as you're thinking about how you use your wealth of data and this information you have, and remembering that your segment, perhaps if that's how you divide things up, a customer boils down to real people. They're each individuals, and if you engage with them that way, you're probably more likely to be up to air on the side of clever rather than than creepy. Which leads me to thinking about what else those campaigns are doing other than just driving revenue. And I don't mean just obviously that's quite important, but as you're doing that and as you are in reengaging with your customers, you're hopefully continuing to get more information, more data to understand them better, to become more obsessed about that, about them, if you like. So think clearly about how you're gathering that data and when you're doing it, are you taking the opportunity to learn more about that customer so that you can enrich the experience that they continue to have with you so that next engagement can be that much more profitable, more enjoyable, have less friction, whatever the things are that are top of mind for you. We live in an omnichannel world. We absolutely do. And channels proliferate faster than most of us can keep up with. And I think there is pressure on all of us, right? Have you tried out this new channel? Have you experimented with that? And while there as marketers, I think we all have that desire to be creative and to try something new, I bring a little caution to the table. Think about why you're engaging with your customers on a new channel. Are you equipped to do it? Are your customers actually on that channel? That's the point of omnichannel. You want to meet your customers where they are. If they're not there, then you're not necessarily engaging on the right channel and they want to think about that in your strategy and think about the differences in terms of how you use your channels, but still continue to represent yourself as a single brand with a consistent message, which is really a challenging thing to do. And then my last point would be I'll go back to loyalty, which I'm probably will do again if you give me the opportunity. When you're thinking about building customer loyalty and driving customer loyalty. Are you thinking about it as a value exchange that happens over multiple engagements that over time are creating an engaging experience? Or are you thinking about it quite trance actually? As I just gave that customer a 10% discount on that item and that should make them loyal to me. And that trap is really easy to fall into. It doesn't sound easy the way I just said it, but it's an easy trap to fall into. Certainly they're thinking about Black Friday. Discounting is top of mind for everybody and how are you driving volume? And I don't want to suggest that driving revenue is not important. But we're in the midst of this cost of living crisis where consumers are so price conscious. This is a really fine line, a real balance for marketers, retailers, CX professionals to walk to really get that right of actually driving loyalty and having that value exchange that continues to go on through that engaging experience while being conscious of the business bottom line and the size of the customer's pocketbook and what they are actually going to be willing to spend. I think Sara to get to your point on talking about loyalty, it's very important to also highlight and thinking long term, right? The customer lifetime value. What do you mentioned regarding the pricing and the discounts, I think we are living in a very aggressive pricing battle era or moment for the industry. And to be pretty honest, I think that can't keep doing it the same way. It's not scalable, right? I mean, we as a companies, we are business leaders, we need to think also about profitability. And when you talk about marketing, it's not just run this fancy campaign and it has a lot of views and a lot of likes or shares or whatever it is. It's how we can really engage and connect with consumers for another transaction. As I mentioned before, in a separate example, we partnered with you guys in order to increase that engagement rate around the repurchase rate. And it's crazy that just thinking about not going out and try to reach more and more and more and more consumers, we are having better return of investment and more profitability. And I think that's also one of the biggest mistakes that we sometimes as a business leaders jump in because it's like I want more consumers, because more consumers are going to bring me more revenue. No, we need to also take a moment to think with the information that we have the data you mentioned also big data, all the data that we can collect. And sometimes we are obsessed bringing data, data, data, data. We have a ton of data lakes and tons of GBs on the cloud. But if we did not transform that data into actionable insights, it's just data. It's just gigs of storage over there. So I think it's important also to share with the audience and try, obviously from a personal point of view that it's very important to consider that all the things and all the work done from the marketing teams for commercial teams, it's also measured long term and try to read about not just a simple conversion for one consumer, it just thinking how many times it's consumers and how long the year it's going to buy me. And then we can review our acquisition cost, our investments. In our case with this report is a project that we are running, we reduce our budget and it's amazing because sometimes also we as business leaders want more money to do things. So I think it's also moments to start thinking how we can invest cleverly. Wonderful point, Cristian. Wonderful point. This has been a fantastic conversation. And final thoughts for us here today, Sara? Be obsessed with your customer. Be obsessed with your customer regardless of what you do in an organization, whether you are an organization that has a large customer base, a small customer base, be obsessed with those customers, understand them, think about the experience, and help to get the rest of your organization to be thinking about that. If you do that, I genuinely believe that success in multiple forms, including ROI and revenue and profitability I think is a really important point, will follow. Cristian, final thought for us today? Absolutely J.D. and thanks for having me up. Three main ideas. Try to summarize what we discussed. Starting before technology. It's not all about platforms, technology, investments. We need to think why we want to do things where we want to go so we can get there. Second, when you think of the consumer, we are not talking to baby boomers, Millennials, Centennial Gen Z. We are talking to the generation of the customer experience, generation of CX, and it doesn't matter of gender, age or race or whatever. It's all of them being obsessed with consumer. And last but not least, there's no secret. You need to test, test, test and test again. And even though when you think that you have been successful with one idea, with one project, you need to review it and tested again. That's the only way that you can be ahead of competition and in these challenging moments. So that's it. Sara, Cristian, thank you so much for joining us today and letting me pick your brains a little bit as we talk about the customer experience going forward. Thank you so much. Thank you guys. Thank you.