Lithium CEO: Why CMOs own the customer and digital agenda

Social media management software company's chief talks to CMO about what social and digital disruption has done to customer engagement and service, and why marketers are now in the hot seat for digital transformation

Rob Tarkoff
Rob Tarkoff

CMOs hold a rightful place as their organisation’s chief customer advocate and change agent because digital transformation has put them there, Lithium’s global chief claims.

The social management software’s president and CEO, Rob Tarkoff, caught up with CMO to discuss social customer engagement, as well as the increasingly influential role marketers play in customer service as their organisations respond to digital disruption.

Prior to joining Lithium, Tarkoff was the senior VP and general manager of Adobe’s digital enterprise solutions business unit and pioneered the vendor’s customer experience management strategy. He has been in the customer experience management industry for a decade.

“It’s no accident that the digital agenda has moved to marketing because the digital agenda is all about the customer; it’s not about the company,” Tarkoff commented. “A company doesn’t need to digitise internally; all that digitisation is only good insofar as it’s recognised by the customer as a better, simpler and cleaner way of interacting.”

Having CMOs overseeing end-to-end customer interactions is a vital step forward in how organisations remain relevant in a digital and social-driven world, he said. Yet Tarkoff agreed putting marketing and customer experience together is a relatively new phenomenon.

Previously, marketing would be measured on impressions and traffic, while engagement and retention was the domain of service teams judged on Net Promoter Score and customer service metrics, he said.

“That is now changing. CMOs, particularly in industries where customer churn, lifetime value and RPU are really important, such as telecoms, banking and retail, have a unique perspective in that they own the customer relationship. They come at it from the outside-in perspective and try to connect the dots,” he said.

Marketing is taking a substantial role in understanding and responding to changing market perceptions, particularly in a digital landscape where consumers control so much more of the conversation, Tarkoff said.

“A customer doesn’t necessarily want you to sell more products to them, they want to have a better experience for the dollar they spend. If you take that approach as a marketer, you become the chief customer advocate,” he said.

The big question is whether CMOs are ready to be held accountable for end-to-end customer and social engagement.

“The jury is still out on that globally – some are, some aren’t,” Tarkoff admitted. “But unless these two things come together, entire generations of customers will be left behind, and marketing will have a much smaller landscape from which to acquire, because people have already made their decisions.”

Read more: Lithium launches raft of social community analytics tools and features

Fostering brand communities on social

Lithium’s ambition is to provide a platform for brands to build social communities and forums that foster better conversations, engagement and support – vital elements in modern business strategy, Tarkoff said. Its global customers include Telstra, Commonwealth Bank, Optus, Sephora, Skype and Best Buy.

“The way customers want to engage with brands is changing dramatically,” Tarkoff said. “They don’t just want to receive ads or hear only from a brand’s professional content producers, they want to understand the community in and around the products. That includes other customers, prospects and people who have already bought the products and services, in order to gain a 360-degree view of an experience.”

Tarkoff positioned social’s impact on marketing and customer experience in two ways. The first was the medium’s instantaneous nature and the expectations that has produced.

“In our recent studies, specific to the Australian market, what people really expect when they engage with a brand over social media is not just timeliness of response, but professionalism of the engagement process,” he continued.

“It’s about understanding when I tweet to a specific brand address, what I expect you to come back with, who I expect you to engage in that conversation with, what resources you have available to me, what role a call centre plays in this [which is not much], and what role direct or push marketing plays – and again, it’s not much.”

The other important factor is that social engagement is not undertaken in isolation, but is a shared experience, Tarkoff said.

“Each of the social networks are evolving to be a slightly different way to build a graph: One could a social graph; another channel, like Pinterest, an interest graph. Within each graph, I have expectations as to how I’ll be treated, but I also everything is done with a public view,” he said.

“For example, a lot of CMOs I talk to about Twitter will says ‘wow, Twitter is evolving to a place where you shame the brand’. We have seen evidence of that. But others will say they can’t just ignore that. So how do I take a medium that lends itself to shaming brands to one where I can engage positively?”

As an example of how things could be done, Tarkoff pointed to the social community hubs built by its customer, Barclays. The UK financial institution crowdsourced credit card product development so customers directly vote and contribute to the terms and conditions.

“Barclays puts out its P&L, and specifies some restrictions and what they have to make to stay in business, but then asks customers for what they want to see within these parameters,” Tarkoff explained. “The bank’s delinquency rates are less than half, and its retention rate is more than twice as high as competitors.

“Why? My theory is that by putting the P&L out there, for everybody that complains about a bad experience there will be people who then says ‘yes, but look at how Barclays wants to engage with us, and by the way we had a good experience’.

“The biggest way to create a body of conversation, content and advocates, is to have a community where you allow the people who have great experiences with your brand to tell their stories and come to your defence at a time when you need them. Every company has this, even the banks.”

Making social pay

The economic pressures of maintaining call centres, meanwhile, is another trigger for investing in social as a customer support channel, Tarkoff said.

“There are industry economics that show you can easily change the game by freeing up millions of dollars to then invest in digital initiatives,” he said. “That is what David Thodey [Telstra CEO] did at Telstra – he built CrowdSupport, he built the digital care centre at Adelaide, and he’s taking dollars saved to fuel digital initiatives. As average cost per call or resolution rate goes away from call centre to digital, it’s pennies versus dollars for interaction.”

The other catalyst for social investment is leadership. Tarkoff pointed to CBA’s CommSec business, which looked to social as a mechanism for gaining a greater share of customer wallet, or Optus, which perceives social in the content of business transformation.

“They’re not looking at social for social’s sake, they’re talking in business terminology – RPU, or average interactions yielding more,” he said. “We’re in the language the board understands, but with a platform that’s going to change the game.”

Social communities can also open the door to new customer leads, Tarkoff said.

“If I am in a conversation about life changes such as retirement or moving, I’m not necessarily clicking on an ad for a loan, I’m having a conversation about a life event,” he said. “We are building technology to help you identify social conversations as sources of leads.”

As mobile further disintermediates traditional businesses and adds a real-time immediacy to customer engagement, Tarkoff saw social engagement gaining further prominence.

“Reputation is the new currency online,” he said. “If you think about why I’m comfortable getting into a car with a stranger to be driven somewhere, it’s because through Uber I know exactly who they are, I know what they’re ranked, and I know what the experience should be like based on consumer reviews.”

The companies that will survive will be those that have great leadership and vision, and recognise the importance of change, Tarkoff said.

“When you disrupt a customer experience this much – form factor, device, service, content delivery, expectation on timeframes, SLAs, form of the message notion of trust – nothing is the same,” he said. “Social is a digital experience, connected to a reputation system and it’s all different. So when you have that massive an amount of disruption, there’s not going to be people who partially get it.

“Have the mechanisms in place to rebound from the risks on social media, apologise and move on from things that don’t work. Otherwise you’re just sitting there, not doing anything. People are less afraid of social than they were a year ago, but there is a lot of fear still out there. That’s the big thing – overcoming the fear and starting to be comfortable with more experimentation.”

But will customers forgive you if your brand stuffs up?

“If you’re authentic and transparent in your brand, and you’re telling people you did something - whether it worked or didn’t worked, it’s human nature to say ‘I get it’,” Tarkoff said. “Social breaks down the walls between companies and customers and connects people who work at a company to customers. That allows more forgiveness, I think.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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