The TCS 2019 Chief Marketing Officer Study

Innovating the Brand Experience through Digital Transformation

Stage 4: Retention

Using Analytics to Predict What Customers Need NextTCS Business 4.0TM Institute

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Contents 3 Innovating the Brand Experience

through Digital Transformation

4 Personalizing the Entire Brand Experience

5 Most Marketers Don’t Focus on Customer Retention

6 Top Insights

14 Best Practices in Action: How a Pharmaceutical Company Is Using Sensors to Provide Personalized Customer Advice

17 About the Research

18 Stay Current

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Innovating the Brand Experience through Digital TransformationChief Marketing Officers have one of the riskiest roles in the C-suite, with most staying in office only 4.1 years on average.1 Diminishing budgets and higher performance expectations are compelling visionary CMOs to transform their organizations into high-value marketing engines that deliver an extraordinary brand experience at every stage of the customer journey.

This study shares fresh insights about how more than 500 enterprise CMOs in North America and Europe are creating impactful brand experiences for their audiences using digital technologies, now and in the future, with personalization that delivers customized, relevant messages for multichannel marketing campaigns.

In this report, we refer to “leaders” and “followers.” Leaders were 85 marketers whose metrics were directly connected to revenue, who fared well on those metrics, and who vouched for their accuracy. Followers were 95 marketers who used metrics that didn’t connect directly with revenue, and who fared poorly on the metrics they used.

1 Korn Ferry Institute study of the 1,000 largest U.S. companies by revenue, conducted in late 2016. https://www.kornferry.com/press/age-and-tenure-in-the-c-suite-korn-ferry-institute-study-reveals-trends-by-title-and-industry

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Personalizing the Entire Brand Experience

Our CMO Study results are being released in four condensed reports to reveal top

insights about how senior marketers currently use, and plan to use, evolving digital technologies to personalize the brand experience at every stage of the customer journey.

Each report highlights what leaders do differently from the followers including:

W The channels they use (both digital and non-digital), and the innovative ways they use those channels

W The customer data they collect, and how they use it to personalize communications

W The proficiency with analytics technologies used to identify prospects and personalize communications

W The level of automation for key aspects of marketing, how much of that technology is in the cloud, and plans for the future

W How adept they are at personalizing and up-leveling a dynamic brand experience

Stage 1: Create market awareness

Stage 2: Convince and convert prospects to clients

Stage 3: Customer support following purchase

Stage 4: Customer retention to upsell and cross-sell

STAGE 4 / Customer Retention

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Only 47% of marketers said they create communications in the retention stage of the brand experience—highlighting a huge missed opportunity to strengthen relationships with current customers.

The Big Reveal: Most Marketers Don’t Focus on Customer Retention

Our series of reports shares results from the TCS 2019 CMO Study, including the number of marketers creating personalized communications in every stage of the brand experience. All marketers surveyed participated in the Awareness phase; most were involved in the Conversion stage (72%); and the Support stage comes in lowest at 37%.

In the Retention stage, it’s important to deliver a relevant customer experience and show a deep understanding of each customer to continue to build trust. Knowing your customer encourages repeat purchases, cross-selling, and upselling other products/services from the company and ultimately, turns them into brand advocates. In this report, we look at the top 6 insights from our study results for this phase of the customer journey.

W Stage 1 Awareness: 100%

W Stage 2 Prospect Conversion: 72%

W Stage 3 Customer Support: 37%

W Stage 4 Customer Retention: 47%

W All stages: 19% of B2B marketers

Marketing Functions Creating Communications in Each Stage

STAGE 4 / Top Insights

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Only 47% of Marketers Are Seizing the Opportunities in the Retention Stage

#1

This phase is about encouraging existing customers to continue buying from your company. If you can delight them throughout the entire experience, they will become customers for life as well as brand advocates, selling your products and services with word-of-mouth and digital recommendations. An amazing brand experience, powered by analytics, enables the business to profit from an existing relationship and capitalize on the goodwill earned from it.

According to one marketer, through the use of analytics and other technologies, this business services firm drove the number of its top 100 customers contracting for new services from 40% to 73%.

Missed Opportunity?Marketers not involved in reaching out to existing customers are missing out on a big opportunity to leverage valuable data. For example, new technologies like digital sensors embedded in products are enabling companies to track how customers are using their products and services.

Example: A pharmaceutical firm we interviewed is bringing to market a system with sensors that can rapidly diagnose the health of livestock, leading to better outcomes for farmers and increased sales for the company.

STAGE 4 / Top Insights

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Involvement is highest in:

Retail 76% Automotive 70% Consumer packaged goods (CPG) 65%

Involvement is lowest in:

Industrial manufacturing 19% Healthcare and life sciences 13%

B2C/B2B2C vs B2B: At 58%, consumer marketers are more engaged than 19% of B2B marketers

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Marketer Engagement in the Retention Stage Varies Widely by Sector and Industry

#2

Marketing’s level of engagement in creating communications at this stage varies by sector.

Level of Marketers Involved in Stage 4 Communications by Industry

Banking and Financial ServicesInsurance

Telecommunications ServicesHigh-tech

RetailConsumer Packaged Goods

AutomotiveMedia, Entertainment & Info Svcs

Travel, Transportation and HospitalityHealthcare and Life Sciences

Industrial Manufacturing

44%59%

76%

36%

65%

37%

70%25%

49%

19%13%

STAGE 4 / Top Insights

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#3 Marketers Use Fewer Communications Channels in the Retention Stage Compared to Stages 1 and 2

In this phase, marketers already have a common way of interacting with customers compared to Stages 1 and 2. As a result, Stage 4 marketers need and use fewer communications channels to reach their customers.

Involvement is lower in:

Retail stores/branches/ field outlets 79%

Billboards 78% Print media 77%

Involvement is lowest in:

Field sales 19%Ads on online review forums 7%Direct mail 4%

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All stage 4 marketers use these two channels:

Digital media advertising 100% Company website 100%

Other popular digital channels include:

Online video sites 77% Mobile apps 72%

STAGE 4 / Top Insights

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Leaders Are More Active in a Wider Variety of Communications Channels than Followers

#4

Marketing leaders are more likely to use certain channels than followers including:

Traditional media channels

Broadcast advertising 88% vs. 76%

Print advertising 83% vs. 68%

Digital channels

Online video sites90% vs. 73%

Company’s social media sites52% vs. 38%

Ads on e-commerce sites 48% vs. 32%

STAGE 4 / Top Insights

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*Leaders are defined as marketers that measured their impact more directly on revenue, had stronger impacts, and could vouch for the accuracy of those impacts. Followers measured impact on non-revenue items, had less effectiveness on achieving those metrics, and were less able to vouch for the accuracy.

Leaders vs. Followers

Leaders Are More Active in a Wider Variety of Communications Channels than Followers (continued)

#4

Digital media advertising

Our company’s website

Online video sites

Broadcast media advertising

Print media advertising

Retail stores/branches/ other field outlets

Our firm’s mobile apps

Contact center/call center

Email marketing

100%100%

100%

73%

76%

68%

76%

65%

68%

100%

90%

88%

83%

81%

75%

71%

65%60%

BillboardsMessages on our company’s social

media site pagesAds on other companies’

e-commerce sitesEvent marketing

Ads on other firm’s mobile apps

Field sales force

Ads on online review forums

Direct mail marketing

65%76%

38%

32%

43%

16%

22%

3%

8%

52%

48%

33%

21%

15%

10%

4%Leaders

Followers

STAGE 4 / Top Insights

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#5 Active Marketers in this Stage Tap Into Buying-Behavior Data to Personalize Communications

Active marketers primarily focus on three types of data to personalize communications with customers for cross-selling and upselling:

Past buying behavior with the company 74%

Demographic data 72%

Buying behavior with other companies 60%*

*This number is a significantly higher percentage than Stage 1 (47%), Stage 2 (44%), or Stage 3 (29%) marketers.

Data Sources for Personalization

Past buying behavior with our company

Demographic data

Past buying behavior with other companies

Web traffic data

Customer’s social media behavior

Customer’s real-time proximity/geo-data

Product usage data from embedded product sensors

Service usage data from embedded sensors at various business locations

No customer personalization at this stage

72%74%

28%

60%

24%

38%

15%

10%

4%

STAGE 4 / Top Insights

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When it comes to personalizing communications in the Retention stage, Leaders use newer digital data sources more frequently than Followers.

Leaders are far more likely to use:

Customers’ real-time physical proximity

31% vs. 24%

Product-usage data captured by embedded sensors

15% vs 3%

Followers are more likely to use:

Social media behavior data

35% vs. 27%

Past buying behavior with other companies

54% vs. 50%

Missed Opportunity?Of all marketers surveyed in this stage:

Only 30% provide relevant videos

4% say they do not personalize cross-sellling and upselling communications

#5 Active Marketers in this Stage Tap Into Buying-Behavior Data to Personalize Communications (continued)

STAGE 4 / Top Insights

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All marketers in the Retention stage focus on these messages:

76% Suggest products/services based on previous buying behavior

73% Provide special offers/pricing

71% Communicate useful product/ service information

Leader are more likely to engage in this stage using all three message types:

Suggest products/services based on previous buying behavior

84% vs 64%

Provide special deals and prices

84% vs 56%

Provide useful product information

84% vs 69%

Leaders Prefer Delivering Special Deals Over Useful Product Information

#6

BEST PRACTICES IN ACTION: How Leaders Keep the Customer Satisfied

How a Pharmaceutical Company Is Using Sensors to Provide Personalized Customer Advice

Challenge

Imagine the marketing challenge you would face if the end users of your product were incapable of communicating with humans, ever. That’s the problem experienced by a large pharmaceutical company’s division that makes drugs to improve the health of farm animals. It’s also a problem that digital sensors, machine learning and artificial intelligence are now tackling, says a marketing leader for the division, one that could have revolutionary implications for marketers of many types of products.

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Solution

The company sells digital sensors that farmers implant in livestock. The technology gives the pharma company an unprecedented platform for Stage 4 in the brand experience: cross-selling and up-selling.

The sensors detect livestock and other farm animals’ health issues early. The sensors—worn in the ear of livestock, or around a pet’s neck—may signal that an animal’s behavior has changed, that its activity level has decreased, that it is scratching or running a fever. This data is then used to diagnose health issues. The diagnostic capabilities are powered by machine learning, and are expected to improve, pinpointing a growing variety of diseases.

Already, the pharma company’s automated, sensor-based approach is saving farmers’ labor costs. It minimizes human error associated with manually inspecting a herd. But it offers numerous additional benefits. By improving heat detection, sensors can optimize insemination timing and reduce disruption to the animal’s routine. By detecting disease early, it lets farmers use less expensive drugs and fewer doses than they would need once symptoms become obvious.

The sensors can also track how effective treatments are across the herd. The result for the animal owner: lower costs, greater efficiency, better animal health and enhanced output.

BEST PRACTICES IN ACTION: How Leaders Keep the Customer Satisfied / continued

Results

The pharma division marketing executive said the firm’s use of the technology is still in its early stages. However, the executive believes it will open a world of possibilities. When animal owners opt-in to share their data, the company can see that a herd or a pet is in need of care. It can then send personalized educational materials to the owner to add value and strengthen its relationship with the customer. It can also upsell or cross-sell remedies, and it can do this directly in regions of the world where such pharmaceutical marketing is allowed. The advantages to this approach over mass-marketing are profound. “We anticipate better-quality relationships with our customers because we are pinpointing their unique pain points,” said the marketing executive.

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BEST PRACTICES IN ACTION: How Leaders Keep the Customer Satisfied / continued

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The company’s investments represent an emerging business model that depends heavily on leveraging data from the Retention stage in the brand experience. Under this model, companies are not only selling solutions, they’re also harnessing technology and intelligence—using sensors, data, analytics, automation and machine learning—to personalize their marketing messages and help customers better understand their needs.

Rather than using the “spray and pray” approach of mass marketing, the company takes on the role of an informed partner, helping customers better achieve their goals.

“The capability to gather this kind of data changes the way you look at your product portfolio,” the company’s division marketing executive says. “You think about honing your holistic offerings in a way that is data driven and that provides an edge over your competitors. You may also be able to expand your markets by using data to prove the value or even the return on investment of your products in a way that you couldn’t before.”

— Company’s division marketing head

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This short report is based on a portion of a 45-question online survey and phone interviews, to capture what CMOs do in the Retention stage (Stage 4) in creating communications to retain and nurture existing customers. Stay tuned for the comprehensive master report to be published later in 2019. Be sure to read the previously published reports covering each stage of the brand experience here: “Innovating the Brand Experience Through Digital Transformation” URL: https://sites.tcs.com/bts/cmo-innovating-the-brand-experience-through-digital-transformation/

The CMOs we surveyed work in: W 11 industries

W Companies with at least $500 million in annual revenue, with most in much larger companies

W Firms with average revenue $10.6 billion and the average annual marketing budget was $392 million

W About two-thirds (65%) were from consumer companies (both B2C and B2B2C firms), while 27% were from B2B companies

W The remaining 8% worked in companies with a fairly balanced mix of B2C and B2B end customers

W 60% work in North America, and 40% work in Europe

About This ResearchResearch Goals & MethodologyOur research goals were to determine:

W How technology-enabled personalized marketing content today is used throughout the brand experience for prospects and customers (in their marketing and sales campaigns, and customer support and retention initiatives)

W The impact of such personalization and the key factors in making it effective

W How CMOs and their organizations develop communications across all stages of the customer lifecycle

The research looks in depth at what marketers are doing in each of the four stages: what channels are being used by companies in different industries, different target end customers (consumers vs. organizations), and different countries; what data companies are using to personalize communications; how they are personalizing communications based on the data they possess on prospects and customers; and how the most successful marketers differ from the rest in channel usage, data for personalization, and types of personalization.

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The study findings, based on a mix of B2C, B2B, and B2B2C, are segmented into key stages of the customer journey and will be released in 4 short reports, all of which will be found here: Innovating Brand Experiences Through Digital Transformation.

Stage 1 (Creating Awareness): Attracting the Digitally Distracted Prospect

Stage 2 (Prospect Conversion): Personalizing Content to Turn Prospects into Customers

Stage 3 (Customer Support): Interacting Digitally to Become Invaluable Customer Advisers

Stage 4 (Customer Retention): Using Analytics to Predict What Customers Need Next

Master Report: How Leading CMOs Captivate and Convert Customers for LifeThis comprehensive report to be released in late 2019 consolidates the findings and provides in-depth analysis and surprising new insights about how leading marketers differ from the rest in the innovative use of digital technologies, data, and analytics to personalize the brand experience—within, across and outside all four stages of the customer journey.

Do a deeper dive: Read the initial findings report now.

Stay CurrentSign up to get the entire series as each report is released.

Learn MoreTCS Interactive Services: Our digital and interactive advisors are here to help you transform your vision into successful outcomes.

About the TCS Business 4.0TM InstituteThe TCS Business 4.0 Institute is a research-driven center with a mission to deliver practical, forward-thinking technology and business insights that inform the strategy of TCS prospects and clients. Our data-driven research provides best practices and recommendations that lead the way for transformational journeys.

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About Tata Consultancy Services (TCS)Tata Consultancy Services is an IT services, consulting and business solutions organization that partners with many of the world’s largest businesses in their transformation journeys. TCS offers a consulting-led, Cognitive powered, integrated portfolio of IT, Business & Technology Services, and engineering. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India’s largest multinational business group, TCS has a global footprint and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India.

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AuthorsSunil KarkeraGlobal Head of TCS Interactive

Lisa FairbanksTCS Product Management Leader Customer Experience Strategist and Customer Analytics Innovator

James WhelessGlobal Managing PartnerTCS Consulting & Services Integration

Lakshmi RameshGlobal Head of Center of Excellence Digital Media & Marketing

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