How can CIOs create Greater Customer Connect in 2014?

Traditionally, organizations have not been very sophisticated users of technology for customer outreach. Marketing tended to depend on print ads, outdoor banners, and the off e-mailer. However, that’s changing. And how! More, if not most, enterprises are now transitioning to actively using social media, the public cloud, CRM, analytics and mobility-based targeting of customers.   That brings us to the big question: Who should be leading these initiatives? Should it be IT, given that many of these services are based on technology? Or should it be marketing, given that they are the business users? Or—and this is tricky—should it be a combined effort?  Reaching out to the end-customer, building new channels for customer engagement, growing customer loyalty have all always been marketing prerogatives. Traditionally, it has been the marketing and the sales departments that have been out there in the market checking the pulse of the customer, designing campaigns, and strategizing to expand customer outreach and improve service, and evaluating the competition and outpacing them. Only now, they increasingly depend on technology to help them do that.  IT, on the other hand, is sitting on a wealth of customer and non-customer data. In the old days, this data was structured and clearly belonged to marketing. Think customer names, address, phone numbers, among others. Today, this treasure trove has expanded to a sea of unstructured data originating from social and mobile interactions. And that’s where the murkiness starts to creep in. The IT department is seen as the only department that can contextually co-relate unstructured big data with historical data to develop a unique profile of the customers, something that was hitherto impossible to have. The task is so technology-intensive that it’s moved into a no-man’s land between IT and marketing. Both departments make a strong case. While everyone agrees that it’s important to understand the customer better, who should lead the way, is a tougher question to anwer. The trick for enterprises, today, say a growing number of CIOs, is to carefully enable collaboration between marketing and IT such that neither steps on the other’s shoes and yet works together in the best interest of the enterprise.  That’s easier said than done. There are things marketing wants to know but doesn’t know where or how to find. There are things the CIO knows but doesn’t know how to use. Business engagement teams can bridge the gap between the two. Sounds easy right? Not so much. At that strategic level, it’s hard to see the differences that can crop up between the two departments. Take, for instance, IT’s insistence on clean data, while marketing only cares about actionable insights.  “The role of the CIO and the technology team is to keep emphasizing on the merits of keeping the data clean. They also need to constantly highlight the various input processes which should be watched and controlled for data to be clean,” says Veneeth Purushottaman, business head-technology and supply chain, HyperCITY Retail.  Marketing doesn’t necessarily care for that kind of stuff.  They just want the right information, at the right time. They want new insights. They want actionable data. Why? Because that’s what marketing success is gauged on.  This gap in needs is precisely, says CIOs, enterprises need to build business engagement teams.  “Bring in people from outside IT; people who understand business enough to deploy IT to make a difference wherever required,” says Sumit Chowdhury, CIO, Reliance Jio Infocomm. “We need to have these engagement teams asking intelligent questions.”  The real job of the business engagement teams should be to provide actionable insights.  “Today, we’re sitting on a wealth of a cross-sectional data. How are we going to analyze unstructured big data? How can I make it visually available to my marketing team? How can I overlay their plans and do co-relation analysis? These are the questions this team needs to answer,” says Chowdhury. When Reliance Life Sciences wanted to design a digital marketing survey, it roped in bio-statisticians to design and analyze marketing data. According to Gopal Rangaraj, senior vice president-information technology, Reliance Life Sciences, the engagement produced one of the most successful digital marketing initiatives in the company. Being subject matter experts, bio-statisticians knew the right questions to ask, and their knowledge of technology helped them do it right, and do it fast. Make ROI Tangible  Marketing doesn’t always lend itself to hard ROI figures. (Sounds like IT, right)A lot of it can be fuzzy and intangible; in fact, CMOs often find it harder than IT to justify marketing spends.  Traditional marketing approaches have relied on loyalty programs, such as customer cards, feedback and surveys, campaigns and reward programs for continued engagement with customers. But often the results are non-quantifiable. However, the technology options available today go beyond these “card tricks” and conventional methods of engagement, says Rangaraj.  “Putting in tangible marketing measures, rather than a mere digital presence will be key to an effective deployment of these initiatives,” he says. He highlights some effective examples how IT can help marketing more effective. IT can automate and improve conventional customer facing processes, including extending CRM solutions, enhancing sales and customer analytics, and augmenting existing customer enabling solutions. IT can also help extend marketing initiatives and customer access touch points through mobility solutions, social media presence, search engine optimization, and creating programs for better customer contact.  Another way technology can aid marketing is by innovating a completely new method of engaging with customers across the marketing lifecycle—from the prospecting stage to becoming a devoted customer—wherein the new initiative is not limited to customer outreach and engagement but becomes a new business model of doing business with the customer.  All these can produce hard ROI results when deployed the thorough help of IT. That’s what Purushottaman did at HyperCITY Retail with great success. “Based on customer buying data we analyzed and put customers into various profiles. The good part is that based on their purchase frequency and buying basket size we could either go after the customer to increase their spend or frequency. For every such scheme we ran, we tracked the conversion and it was a good 30 percent,” he says. Encouraged by these results, HyperCITY Retail also reached out to other customers who had come once or twice and then not come to its stores for six to eight months. HyperCITY Retail sent them a ‘Miss You’ mailer with an offer on the category they had bought the most, (mostly food as 50 percent of their purchase mix is food). The idea worked and the company saw many of these customers coming back to it. It’s a shining example of what can happen when IT and marketing work hand in hand.  Beware of Shadow IT As nice as it is to hear stories of successful IT and marketing collaboration, it’s a known fact that marketing and IT teams haven’t shared the best of relationships.  It’s common for marketing teams to complain of being ignored by the IT team. The general sense is that IT focuses a lot more of its resources and time on finance, operations or products—making marketing feels like its getting step-child treatment.   The other big irritant for marketing has been IT’s insistence on data quality. “The tech guy is concerned about the integration between the various systems and the consistency of information flow and the business team does not want to think about all these as they feel it should be hygiene,” says Purushottaman.But the truth is that dealing with cloud computing, mobility, and social media can open up a lot of compliance issues. “There can be very serious ramifications and compliance issues, when dealing with customers in social media,” points out Rangaraj. These are finer nuances marketing fails to see and invariably starts to blame IT for being a hindrance.  The result? Often marketing seeks IT services outside their own IT departments. After all, they say, these services are cheaper, easier to deploy, and don’t require to be vetted by the stringent IT policies.  Purushottaman believes that cost has been a real game changer and has, in recent years, made organizations and their CMOs look at social media and digital solutions to reach out to the customer.  “Marketing spends are typically the second largest spends in a retail business, the first being manpower. The CMO and the marketing team therefore start looking for cheaper modes of reaching out to the customers.” And therein lies the problem, point out CIOs.  “No digital marketing initiative can be successful with free tools. Cheap stuff will only get you cheap results,” says Chowdhury.  Chowdhury adds that external IT services can only give you information, but it will not interpret it for you. “Don’t get into social media if you cannot analyze the results. Otherwise you will be bringing in a lot of junk into your organization that you wouldn’t know what to do with,” he adds. That IT and marketing must collaborate for effective customer outreach is a given. But, it brings us to the questions we raised in the beginning. Should IT drive it or leave it to marketing? “In my opinion it’s best driven by the business,” say Rangaraj. “IT can be the enabler. But who stands on the podium and says we achieved increased customer conversion rate? Who takes credit for increase in sales or reduced the cost of something? It is the business. If you let the marketing guys have it, the success of the initiative is guaranteed.”  Varsha Chidambaram is principal correspondent. Send feedback on this feature to varsha_chidambaram@idgindia.com