Blog

BLOG

6 Actions to Build an Insurance Service Strategy that Drives Growth

Our research finds that consumers expect more, and want products combined with services.

Over the past several years insurance companies have faced increased product commoditization due to ubiquitous online presence, more sophisticated aggregators and the increased availability of insurance products. They are faced with the challenge of driving growth while managing their risk profiles to be less capital-intensive. In a market with heightened expectations for digital experiences – which the COVID-19 pandemic raised even more – the likes of Oscar, Lemonade and other new DTC market entrants are raising consumer expectations, spurring companies to develop more experience-led strategies to drive engagement and value. Then there’s other players like American Express and Chase making their play.

Where should insurers look to drive growth?

Against this backdrop, Life, Health and P&C insurers are turning to new services to drive growth and engagement. Services create more compelling and differentiated solutions that focus on customer needs, going above and beyond basic insurance coverages. This enables insurers to identify new streams of less capital-intensive revenue and increase demand for existing products – especially in a category that has historically struggled to drive engagement at moments outside of the core product moments (e.g., purchase, premium payment and claim).

Based on our extensive experience and research within the industry, integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention. The results speak for themselves:

  1. Customers were twice as interested in an insurance product when sold with relevant services (Source: Prophet Insurer Research)
  2. The presence of services impacts broker interest with three-quarters of brokers stating that services are critical to their choice of provider when recommending to clients (Source: Prophet Insurer Research)
  3. Insurers who offer three or more services on top of the core product see NPS increases between 20-40 points.

When it comes to services, who is doing it well?

Insurers are already recognizing the value services can bring both to their customers and their business. However, as many insurers do not have exclusive relationships with services providers, avoiding services replication across the industry is key. Insurers are therefore partnering and acquiring across the services ecosystem to uniquely deliver new customer value.

P&C providers are already seeing strong integration of services into their offers given their ability to utilize customer tracking and connected devices, not only providing product discounts but also additional services on-top. For example, Progressive Insurance has partnered with TrueMotion to launch Snapshot, a service that monitors and measures driver data through either their smartphones or a plug-in device. This enables customers to understand their driving habits and generate personal discounts. Progressive is continuing to explore expansions to the program and invest in partnerships to combat distracted driving.

“Integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention.”

Health and Life are also now capitalizing upon the opportunity to integrate services into their portfolios by exploring the way they can utilize health tracking to adjust premiums through improved health. From a global standpoint, Vitality is one example of a brand that has developed a personalized customer health and wellness tracking and support platform. In the U.S. specifically, John Hancock has partnered with Vitality to provide discounts and tailored recommendations to their customers based on their health tracking. While in Asia, AIA has made a focused push to expand the solutions they offer to customer across the region.

Health insurers also are exploring the role of partnerships with preventative health start-ups to help customers manage chronic illnesses. For example, Cigna has partnered with Omada Health to offer customers a personalized preventative health solution to mitigate risk against diabetes, heart disease and stroke.

Six actions for insurers to create impact and drive growth through services

We believe there are six actions insurers take to develop a winning services strategy:

  1. Understand what customers want. What is the foundational understanding of customer wants and needs to guide services development?
  2. Identify the business opportunity. What role could and should services play for your business and what business objectives should your services strategy inform (i.e., acquisition, incremental revenue, retention, efficiency)?
  3. Prioritize unique and relevant services. What are the set of unique services most relevant to your customer base that you will prioritize developing?
  4. Drive engagement. Where and when within the journey do customers become aware of services and how do we improve interest for them?
  5. Improve the experience of access and use. What is the right experience behind driving easier services access and use to deliver greater customer value?
  6. Identify the right internal owners. Who within the organization is responsible for funding, building and managing our services strategy?

Identify
Growth
Pathways

RELATED SERVICE

FINAL THOUGHTS

Insurers are falling short on delivering value to customers. A well-defined services strategy can nurture customer relationships and earn loyalty to fuel growth.

If you’d like to learn more about the role of services and how we have helped leading insurance companies execute experience-led strategies that drive impact and engagement, get in touch.

CONNECT WITH US

BLOG

Using Anniversaries to Reinforce Your Brand Purpose

Annual events can strengthen and reinforce important values, helping to tell different stories.

It is more important than ever for companies to have a brand purpose. To remain relevant to their customers, companies need to find opportunities to share that purpose with the world and in turn, also become inspiring places to work for their employees.

A powerful way to reinforce a brand’s value to both internal and external audiences is through brand anniversaries.

They are also an opportunity to celebrate the past while setting up a vision for the future.

In the past few years, many iconic brands have used key anniversary milestones to strengthen ties with their stakeholders and build brand perceptions around a strong purpose. But anniversary celebrations can be used in different strategic ways as well. We’ve identified 3 ways brands can make the most of their anniversary through a focused strategy.

3 Ways Brands Can Use Anniversaries to Reinforce Their Brand’s Purpose

Reinforce the Core

For example, Marvel Studios used its 10-year anniversary to engage core fans and drive loyalty through its “More Than a Hero” campaign. The branding campaign kicked off with a week-long event showcasing 20 Marvel movies in IMAX theaters. Marvel also released behind-the-scenes, never-before-seen footage and launched a sweepstake for fans to share their favorite Marvel memory on social media.

Through these activities and content, they successfully engaged tens of thousands of fans in live events and via anniversary videos on YouTube (which received over two million views), helping to cement loyalty for the franchise.

Strengthen Your Image

Swiss Re celebrated its 150th anniversary by engaging stakeholders worldwide to participate in collaborative dialogues on important topics of our time, such as advancing sustainable energy solutions, funding longer lives and partnering for food security. To achieve its goals, Swiss Re launched The Open Minds Forum around the world, discussing ground-breaking ideas and exploring fresh perspectives on the risks facing generations to come. Employees were also encouraged to write articles and share their perspectives.

The anniversary celebration helped Swiss Re initiate conversations around business and societal risks with its customers and reinforced the brand image of being ‘smarter together,’ by creating a dialogue with people around the world.

Shift the Narrative

For its centennial anniversary, BMW launched “The Next 100 Years”, a year-long integrated campaign to strengthen its brand worldwide. As part of the campaign, the company revealed four concept cars and released “The Next 100” publication to invite industry experts & pioneer thinkers to envision the future of BMW. They interacted with consumers digitally through curated content on a dedicated centennial website, live discussions on social media platforms, and AR/VR interaction through the ‘BMW VISIONS’ mobile app.

These anniversary celebrations bolstered BMW’s status as a future shaper by gathering hundreds of thousands of guests and consumers to join celebration events in person or online.

How Do Anniversary Celebrations Help to Amplify Brand Purpose?

While each of these celebrations took on different forms and focused on different objectives, there were four guiding principles they each followed which made them successful:

  • Be authentic: For any anniversary celebration, you need to stay true to your brand DNA in everything you do and say
  • Be clear: You need to have clear objectives and create a single, overarching theme to align all activities and leave stakeholders with a clear understanding of what your brand stands for
  • Be targeted: You must consider what you represent to different stakeholders and design specific ways to engage each of them appropriately
  • Be bold and brilliant: To deliver impact, you must activate at sufficient scale and frequency to get noticed and to show the company in a new light

Reimagine
Brands

RELATED SERVICE

FINAL THOUGHTS

Anniversaries are a great time for celebration and a great opportunity to reinforce your brand purpose. To get the most out of the milestone, they require a deliberate approach. As you plan your next brand anniversary make sure you do four key things:

  1. Align on the vision, with clear objectives and a creative theme that will serve as the guiding foundation to engage all stakeholders
  2. Plan the experiences throughout the campaign and define the desired interaction and requirements
  3. Design and develop unique content to bring the experience to life at each touchpoint – spanning digital & physical and internal & external
  4. Prepare for activation with an integrated roadmap that pulls together all activities into a coherent campaign
CONNECT WITH US

BLOG

The Mind, Body and Soul of Healthcare’s Consumer-Centric Transformation

Change requires that leaders clarify purpose, articulate cultural expectations and alter incentives.

In today’s environment, patients are increasingly becoming “e-consumers” and that is a good thing. Despite its name, e-consumer is not a technical term. The concept of the “e-patient,” was coined in the 1990s by the late Tom Ferguson, M.D., an American physician who advocated for increasing the role of the patient in managing their own healthcare. E-patients, he says, are empowered, engaged, equipped and enabled. While the concept of the e-patient is limited to direct interactions with healthcare organizations, we have expanded and evolved it into the e-consumer. Read more here.

If healthcare organizations are to serve the e-consumer and engage, empower, equip and enable them, they too will need to make a shift by putting the consumer at the center of all they do.

Challenges of Consumer-Centric Healthcare

  1. Expanding from patient-first to consumer-first thinking.
  2. Being consumer-first even when it conflicts with being physician-first.

Neither is an easy task, and both demand a change in both organization and culture for most healthcare organizations.

Our colleague Tony Fross writes about the “mind, body and soul” of digital transformation, but this model is also relevant for the consumer-centric healthcare transformation (digital or otherwise). In this Prophet model, an organization first determines what it wants its DNA to be – its purpose, its brand proposition and/or its strategic plan to win. Next, it goes to work on the “mind” (its talent, capabilities, and skills), the “body” (governance, process and tools) and the “soul” (its values, behaviors and rituals).

In interviews with over 70 healthcare executives for the book “Making the Healthcare Shift: The Transformation to Consumer-Centricity,” we found changing the organizations’ mind, body and soul to be burning issues, particularly among the CEOs that we spoke with.

Based on our findings, to be a consumer-centric healthcare organization, you must take the following steps:

1. Inspire the Team

Healthcare organizations may have a vision of where they want to go, but they need internal support to get there. “We didn’t develop a consumer- and patient-centric strategy for the sake of hanging it up on the wall,” says Kevin Brown, President and CEO of Piedmont Healthcare. “The patient is at the center of all that we do. We’re living and breathing it. It is how we manage, run meetings, prioritize initiatives, approve capital, hire talent.” Consumer-centric healthcare transformation must be activated at the ground level, and healthcare organizations can successfully inspire their employees in several ways; for example, demonstrate leadership role modeling, codify cultural expectations, co-create cultural expectations and make it personal.

Leadership Teams Need to Model Consumer-Centric Behaviors

Inspiring employees to embrace consumer-centricity requires vocal leaders, who demonstrate their commitment through actions. It is important to have leaders who are on board with pursuing consumer-centricity, as their behaviors set a precedent for the broader organization.

Articulate Cultural Expectations

Much like an organization’s definition of consumer-centricity, a consumer-obsessed culture is most impactful when outlined in a tangible manner and built into the organization’s processes. By articulating the culture through behavioral expectations, organizations can help employees understand what consumer-centricity means to them and what it looks like when carried out on a day-to-day basis.

“The patient is at the center of all that we do. We’re living and breathing it. It is how we manage, run meetings, prioritize initiatives, approve capital, hire talent.”

Tap Employees for New Definitions

In addition to articulating what consumer-centricity means, employees must derive personal meaning from it. That is particularly important, as employees are often the ones who interact with consumers and care for patients. Leadership can help employees find personal meaning through co-creation. After a merger, Indiana University Health (IUH) needed to integrate acquired and legacy cultures. The organization took the time to understand the needs, wants, and aspirations, both personally and professionally, of their employees to co-create a promise that was common to both its employees and members of the communities in which they lived. “Not everyone got the old promise, particularly our professional staff. With [the new one], everyone gets it. Can we show that we’re reinforcing this promise with actions and decisions? We have to do it for every patient, every interaction. That’s the next big step we’re working through,” says CEO Dennis Murphy.

Make Consumer-Centric Healthcare Personal

There is no question that healthcare is personal. Whether undergoing treatment or taking care of a sick loved one, we all experience healthcare at a deeply individual level. Sometimes, organizations can make consumer-centricity more powerful when leaders emphasize the personal aspect. That requires leaders to find their own source of inspiration so they can constantly remind the organization who they are serving each day, why their work matters and why the experience should be among the best in any category.

2. Enable Successful Employers

The executives we interviewed described many ways to enable their employees, including creating new working environments, reimagining traditional business functions and putting purpose over process.

Create Environments That Reinforce the Culture You Want

As healthcare evolves, the demands of employees at healthcare organizations need to evolve as well – and in some cases, change altogether. To solve that challenge, leaders are spending time with companies like Google to understand and replicate some aspects of the culture that those organizations have created to enable both digitally-minded and healthcare-minded people to thrive. If it takes bean bags and dartboards and modifying the dress code, so be it.

Remake Functions and Functional Expectations

In an effort to better address consumers’ questions at their first touchpoint, Florida Blue revamped its customer-service function. By investing in systems that aggregate data across formerly disparate platforms, employees were now empowered with the right tools and information to answer questions, as well as offer solutions and value outside of the immediate issue at hand. The tools don’t just enable employees to do their job; instead, they enable employees to do their job in service of the consumer, which ensures both internal and external impact.

Demand Focus on Purpose Over Process

As healthcare organizations shift their mindset, they may find that their current processes are not conducive to consumer-centricity. Great processes, whether operational or strategic, should be informed by asking how the organization can deliver the best outcome for consumers. Starting with this question leads to clarity of purpose for building a consumer-centered organization. This purpose-first, process-second philosophy better enables employees to deliver on a consumer-centric strategy instead of being inhibited by legacy processes and protocols. Healthcare organizations can empower employees to drive consumer-centricity by ensuring process doesn’t get in the way of progress (or purpose).

3. Incentivize the Team

Once employees have embraced consumer-centricity and have the tools to deliver it, they still may require an extra push to act. For some, cultural transformation requires an enormous shift in their day-to-day lives. Organizations can help by incentivizing their employees and teams personally, professionally and financially.

Establish Metrics That Drive Change

Mobilizing around consumer-centricity requires top-to-bottom alignment on common goals. Organizations need to establish clear metrics that reinforce consumer-centricity to the overall business strategy. If organizations value and reward only non-consumer metrics like revenue or operating efficiency, then progress on those metrics is all that will be delivered. Having consumer metrics, even ones as simple as satisfaction, is critical to showing and driving a true commitment to consumer-centricity. It changes employees’ motivations and behaviors, which are both critical components of culture.

Leaders are rethinking what they measure, moving from measures tied to satisfaction (e.g., Hospital Consumer Assessment of Healthcare Providers and System, NHS Patient Satisfaction Surveys) to measures tied to loyalty (e.g., Net Promoter Score or NPS). Relationship-oriented metrics help paint a fuller picture of the experience and will compel functions across the organization to establish ways of working that address the experience holistically.

Link New Strategies to People’s Pay

Putting compensation and promotions on the line is a sure-fire way to change behavior. However, incentives alone are not enough to drive results. Instilling lasting cultural change requires that employees have a clear understanding of specific performance objectives, behaviors and actions needed to drive improvements tied to consumer-centricity.

To set a foundation for its cultural transformation, Anthem looked at its key metrics and realized that, while consumer-centric measures were in place, the organization lacked clarity around creating real change. Executive leadership endorsed NPS as its key metric and tied it to executive compensation, resulting in a focus on relationship building with consumers. “Once it affected everyone’s bonus, the demand to meet with and discuss the metric took off,” says Doug Cottings, Staff Vice President, Market Strategy & Insights at Anthem.

Empower
Employees

RELATED SERVICE

FINAL THOUGHTS

While changing the mind, body and soul of an organization is difficult, there are tangible steps that organizations can take to get started. With employees who understand, embrace and live consumer-centricity, organizations can both win with and create more e-consumers.

Ready to partner with us to become a consumer-centric healthcare organization? Reach out today. 

CONNECT WITH US

BLOG

M&A Portfolios: Are You Thinking Like a Digital Native?

Companies need radical flexibility, not “house of brands” hang-ups.

After several quarters of near-frenzy pace, global deal-making is starting to slow. But for those in charge of managing portfolio and architecture strategy, the recent mergers and acquisition binge is creating something of a mess.

Many of the decisions about customers, brands and marketing have been addressed too quickly as deals were coming together. And once the integration process starts, those initial plans unravel. As the financial and operations teams that finalized deals hand them off to those responsible for taking new assets to market, tangles of false assumptions and the sub-optimal use of brand assets emerge; the value creation logic of the deal never gets out of the spreadsheet. And with $1.24 trillion in deals already on the books this year, that confusion presents material risk for shareholders.

Increasingly, clients are coming to us for help figuring out the best ways to organize and manage new, post-deal asset bases. Often, they start by asking: “Should we be a house of brands? Or a branded house?”

“Should we be a house of brands? Or a branded house?”

We’re not afraid to say that’s simply the wrong question. Digitally-focused companies can’t afford to think that way. The modern approach to architecture and portfolio strategy, and the one inherently chosen by digital natives, is radical flexibility.

Older companies are coming to understand this, too, focusing on customers earlier in the M&A process, aware that integration management offices are often working with incomplete data.

In order to get this right and maximize the value of today’s deals, we believe the best post-merger decisions come down to answering three essential questions.

Three Essential Questions For the Best M&A Portfolio Strategy

1. Are we customer-obsessed?

Our research on brand relevance offers compelling evidence that companies that are obsessed with customers significantly outperform others. It’s no surprise that the names that dominate the top of the Prophet Brand Relevance Index® are digital-first, including Apple, Amazon and Netflix. And those at the top of the list consistently outperformed the S&P 500 by 3x in revenue and 205x in profit in the last decade. These companies constantly ask themselves: Are we putting customer-use cases and environments first? All decisions are filtered through the perspective of customers and prospects.

When considering customers first—the buyers, the deciders–it’s easy to see how easily a company like Procter & Gamble and Schick might be outflanked. Direct-to-consumer brands like Dollar Shave Club and Harry’s have devoted themselves to changing and improving the razor shopping experience, rather than focusing on promotions and product features.

In post-M&A environments, brand portfolios should be built around key customer use cases, balancing the desire for efficiency with a customer-centric model that leverages the strongest brand for each use case. When J.P. Morgan & Co. and The Chase Manhattan Bank merged, they prioritized efficiency over customers and created a brand mash-up that weakened both brands. After a couple of years of brand value degradation, a new strategy that led with customer needs was founded with a powerful institutional brand, J.P. Morgan, and a powerful retail brand, Chase. This approach allows for effective targeting of clearly defined customer segments with separate brands and tailored offerings, and is paying off for JPMorgan Chase, with a five-year gain in brand value of 53%.

2. Can we find max value?

When M&A deals fail to generate revenue synergies, there is usually a lack of early focus on customer, marketing and branding issues. Playbooks often don’t include these steps and when they do, the discussions are qualitative and overly reliant on opinion and emotion.

The solution is in this key question: Are we deploying our assets to maximize customer use cases?

Companies can find significant incremental deal value when they integrate customer and marketing analytics in pre-close analysis and the integration management office. We studied one deal that doubled the final price of a $5 billion global asset by modeling the financial impact of future (post close) brand use cases. Another estimated market-share gains between 2 and 3% on a $60 billion deal through brand portfolio economic analysis. And on the cost side, we are helping companies lower post-merger migration costs between 15 and 40% by using cost-optimization analysis.

3. Are we serving up the right offer?

The best way to achieve this optimization is to constantly elevate the right offer for each person, on the right device and at the perfect time. Companies like Google, Amazon, Facebook and SAP are experts at this kind of hyper-responsiveness, with nearly-infinite capabilities for personalization, depending on the needs of each customer. They continually ask: Do we have an adaptive brand architecture? To win with today’s digitally demanding customers, companies need to maximize all the flexibility available through digital tools, making sure offers are as adaptive and individualized as possible.

Amazon remains a perfect example. Rather than being a monolithic Amazon or a fragmented collection of sub-brands, the brand adapts to its audience, use case or environment. Do you listen to a book at 9 p.m. each night? If so, it’s likely Amazon will push an Audible brand message just before. Recently ordered paper towels? Alexa will check-in to see if you need a refill. Context is king in our world, and successful companies will deliver an adaptive architecture that ensures maximum relevance.

Reimagine
Brands

RELATED SERVICE

FINAL THOUGHTS

Older companies don’t have to cede their future to those that came of age as digital natives. Moving forward, all companies–and all brands­–can benefit from a modern portfolio and architecture strategy. And while all companies acknowledge that the future is digital, we’re convinced that those that win are those that also understand that the digital’s primary power is in better serving customers.

For more information on capturing greater value in the M&A, please contact us today.

CONNECT WITH US

BLOG

5 Ways Digital is Reinventing B2B Selling

From driving demand to enabling sales, new tech solutions make buying easier for business customers.

We’re now several decades into the digital age and yet transformation is still profoundly changing how we work. Until recently, the most disruptive elements have been those that empower consumers, giving rise to entirely new brands and industries like Airbnb, Uber and Spotify. B2B sales organizations–and most B2B sellers–have been several steps removed from the biggest changes. Certainly, B2B companies have deployed digital technologies to enhance business performance. But, in B2B industries such as medical devices, insurance, agriculture and business software, disruption has been less evident.

That’s changing fast, as smart B2B companies race to rethink their selling strategies. Access to data, information and channel alternatives has arrived in B2B and it’s changing the selling landscape. Intermediaries– hospitals, farm cooperatives and brokers, for example–no longer have a monopoly on data. The ability to collect customer data, store it centrally via the cloud and migrate it with orchestration across platforms is quickly breaking down legacy system silos. Data aggregators are emerging, providing a more complete view of the customer. For the first time, end-to-end customer data is a reality in B2B.

The impact of these relatively new changes is transformational. The most evolved B2B companies are reinventing the way they sell and finding ways to increase growth dramatically. But many B2B companies are still struggling to find the best path to modernize selling to accelerate growth.

The Five Digital Shifts Impacting B2B Selling

At Prophet, we see the impact of digital in B2B selling in five selling shifts:

  1. Digital sales enablement
  2. Digital outsourcing
  3. Digital relationship development
  4. Data-driven solutions
  5. Digital demand generation

We’re working with clients to tap into each of these shifts more effectively, leveraging these future-proofing strategies to achieve uncommon growth:

  1. Digital Sales Enablement:

This is the shift where many B2B companies have already made substantial progress by using digital tools and data to enable sellers to become more effective. Sales enablement tools, including Salesforce, Oracle and SAP are so well embedded that they are expected to be a $5 billion market within three years[1]. These platforms, networks and apps help individual salespeople achieve more and help sales teams work more effectively.

In the past few years, these platforms have shifted from customer relationship management to helping customer teams more fully engage the entire customer decision-making team. The advantages are immediate: Better equipped and coordinated salespeople accomplish more. They increase revenues, strengthen customer relationships and stay with companies longer.

  1. Digital Outsourcing:

Companies are shifting more of selling’s routine chores to digital functions because studies of sales time utilization indicate two-thirds of a typical sales person’s day is spent on non-selling tasks[2]. Outsourcing frees-up sellers to focus on what they do best: building and expanding human relationships.

Many early efforts included more precise targeting, better sales resource planning and automating routine order-taking functions. More advanced B2B companies are also successfully making it easy to order spare parts or accessories online and handling problem resolution with advanced AI bots and call centers. These new tools make freeing up the sales persons’ time to develop relationships while increasing team efficiency and effectiveness through improved resource deployment.

  1. Deepening Relationships:

The combination of new, more targeted vehicles such as LinkedIn advertising to reach B2B decision-makers with compelling content like video and virtual reality has opened up a shift called account-based marketing (ABM).

ABM is more personalized and tailored to the needs and criteria of individual decision-makers than traditional push email and digital advertising campaigns. It is also an integrated effort that coordinates the use of salesperson interaction and digital engagement for maximum impact and efficiency. The digital components also extend engagement into an anytime, anywhere experience through the 24/7 advantages of online and mobile vehicles.

“While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.”

  1. Data-Driven Solutions:

Oceans of data flooding the B2B value chain are shifting what sellers sell as well as how they sell. As suppliers gain greater access to data about their customers–and their customers’ customers–they have expanded the playing field for moving from selling products and services to providing data-driven solutions.

Infused with analytics and insights, solution-sellers can more readily mix the elements of the customer value proposition including pricing, value realization, value-added services, experiences and core offer innovation to suit the customers’ particular needs. In a data-driven world, they are better able to extend solutions into partnerships with other providers and make them interoperable with the customers’ systems and the ecosystem of the industry. These strategic decisions are also blurring the lines between sales, R&D, marketing and operations and demanding better leadership and teaming behaviors from sales team members and other functions.

  1. Demand generation:

This may be one of the most exciting and rapidly evolving areas of B2B selling, particularly in intermediated businesses. The explosion of data and a rapidly expanding set of vehicles to reach B2B decision-makers among the customers’ customer is making it possible to create direct relationships with them. These channel and content alternatives are enabling established sellers to generate demand in three principal ways:

  1. Bypassing the intermediary to sell directly
  2. Generating sales pull through the intermediary
  3. Hybrids of 1 and 2 where smaller size customers or certain offerings go direct, and larger size customers or parts of the portfolio are sold via intermediaries.

The Organization Imperative

All five of these B2B selling shifts spark the need to rethink the organization, redefine the roles of sales, marketing, e-commerce, data analysis and customer research and build new, often agile ways, for these teams to work together. It also requires rethinking the digital stack of how platforms and data work together in a way that can support the shifts and adapt to future changes.

Generally, we see a blurring of the roles of sales and marketing as digital investments that were previously the domain of communication-oriented marketers are redeployed to accelerate selling momentum. While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.

And while we realize that B2B selling in many companies may never be fully automated, it’s essential to acknowledge how much digital can do to make it more efficient, not just more effective. Research consistently shows that the top 20 percent of a sales team is truly productive, while the bottom half often has a neutral or even negative impact on revenue growth. Hiring and training humans gets more expensive all the time, while the cost of using digital tools to find, target, serve and support customers in routine areas is plummeting.

—

[1] Jim Lundy, Lead Analyst, Aragon Research, 2017 “Aragon expects the worldwide sales engagement platform market to grow from U.S. $1.57 billion in 2017 to $5.59 billion by 2023.”

[2] Salesforce.com, Top Productivity Trends, Salesforce Blog, 2019

Drive
Customer
Demand

RELATED SERVICE

FINAL THOUGHTS

We don’t expect many B2B companies to be able to modernize selling without bumps and hiccups. The key to tackling these bumps is to think through the shifts and build momentum while in parallel developing and enhancing the organization’s capabilities to handle these shifts.

Our marketing and sales consulting practice helps B2B companies around the world overcome disruption and identify paths to achieving uncommon growth. Contact us to learn how we can help you.

CONNECT WITH US

BLOG

Is Your Value Proposition Clear and Customer-Informed?

Cigna, Starbucks and JP Morgan all offer lessons on discovering what customers really want.

Companies seeking to accelerate growth by improving their value proposition may be stopping short by solely focusing on identifying the total addressable market (TAM). While identifying attractive market spaces is the right first step, a market-led growth approach alone is insufficient. It can lead to false assumptions that make a business vulnerable. Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.

The Limitations of a Market-Led Growth Approach: Starbucks’ Expansion

To see the limitations of using only a market-led growth approach, recall in 2008 when Starbucks announced the closure of 600 US stores. At the time, Starbucks was confronted with the challenge of continuing to drive same-store sales while rapidly expanding its footprint. The brand created new offers around wi-fi services, music and an expanding menu of food and drinks while opening stores at a rapid pace.

However, Starbucks’ customers were starting to seek out other coffee chains. Companies like McDonald’s and Dunkin Donuts were improving their value propositions around coffee to regain forfeited shares. In the process, Starbucks diverted investments in delivering a great coffee experience in favor of investing in near market adjacencies with little success.

“Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.”

This led Starbucks to deliberately rethink its value proposition and develop a focused set of customer-led growth moves to turn around the business. And where did Howard Schultz start? With the customer. Starbucks launched a series of new moves including the introduction of a Pike Place blend, delivering whole bean coffee to stores and purchasing new machines designed for better coffee brewing. Starbucks later continued with one of the most engaging loyalty programs in retail to continue to drive same-store sales. They have continued to evolve their value proposition in countries against customer needs, with frappuccino beverages ranging from red bean green tea in China to dulce de leche in Argentina. Starbucks has even created uniqueness in its more than 30,000 stores around the world.

Why Value Propositions Should Be Aligned with Customer Needs: An Example From Cigna

Sharpening one’s value proposition against target customer needs and supporting it with market-shaping moves can become an essential motivator on “why buy from us”. But it’s not just retailers who seek out developing strong customer-led, value propositions. We see categories like health insurance and financial services driving massive transformations in their market-facing propositions and investing greatly to understand customer needs.

Take the health insurance challenge of continued cost pressure, rising cost burdens, and trying to create engagement and value beyond the policy. To combat this, global health services company Cigna has made significant investments to truly understand its customers, recently completing a three-year study of 200,000 consumers on health incentives. The company has been on a journey to strengthen its value proposition with a focus on integrated capabilities and connected, personalized solutions that advance whole-person health.

Cigna started this proposition development through a thoughtful augmentation of value-added services for employers and employees built around customer needs. Cigna services support a range of issues employers care about for employees such as life assistance, financial wellness, health advocacy, wellness and travel. The company is taking these services to the next step piloting Cigna Health Today™, an Amazon Alexa voice skill aimed at proactive health engagement.

In 2018, Cigna distributed more than $255 million in cost savings back to customers for completing 2.5 million health goals. Further, in December 2018 Cigna announced a $67 billion acquisition of Express Scripts Holding as a move to strengthen the company’s position as a one-stop-shop for health needs. Core to Cigna’s value proposition is finding a more complete way to engage and support customers beyond just insurance.

A Customer-Informed Value Proposition to Drive Uncommon Growth: JP Morgan Chase

In financial services, a lot of focus has been placed to thwart off emerging FinTech and BigTech (e.g., Alibaba, Apple, Amazon) and winning with the next generation of affluent millennial consumers. JP Morgan Chase shocked audiences during a time of industry-wide increased operational cost pressure by offering 100K point consumer signup bonuses on its new millennial-focused Sapphire Reserve card. The card hit its annual acquisition goal in two weeks and Chase even ran out of the signature metal cards.

JP Morgan estimated quarterly losses at the end of 2016 at over $300 million. This did not come absent of a strategy than invested heavily on deeply understanding millennial consumer financial services and spending needs down to the “plunk” factor of dropping the metal card. JP Morgan Chase was seeking to build one of the strongest value propositions behind Sapphire and extend the offer well beyond credit cards.

JP Morgan Chase, CEO Jamie Dimon shared that despite acquisition costs expensed over 12 months, the benefits would come over several years. Fast-forward just over 2 years since the launch and the results are impressive. The average Sapphire Reserve cardholder income is ~$180K and the average sales volume of $39K, a true “top of wallet” card. What’s more impressive is that 96% of cardholders actively use their cards and annual renewal rates are >90%. The company does 2X the industry average in merchant processing volume over $1.2 trillion and has raised its credit card Net Promoter Score with customers 18 points since 2012. JP Morgan Chase hasn’t stopped there, the company continues to find meaningful ways to deliver customer value (new “moves”). Evolving its Premier Platinum checking accounts to launch Sapphire Banking, with new perks like no ATM, foreign exchange, or wire transfer fees. Sapphire Banking also includes free online stock and ETF trades along with access to special experiences. Sapphire is giving valued customers an ever-widening list of perks and services to keep people locked into the ecosystem.

Drive
Customer
Demand

RELATED SERVICE

FINAL THOUGHTS

What can we learn from Starbucks, Cigna, and JP Morgan Chase? That true value proposition development is a customer-led effort (not just a market-led one) and requires focused, deliberate, multi-stage investments in moves to deliver growth.

Ask the following questions to assess if your organization is headed in the right direction to strengthen its value proposition with customers:

  1. Do you have a clear articulation of why customers should choose you and stay with you vs. your competitors?
  2. Is your growth agenda fueled by deep customer insights on “how to win”?
  3. Have you validated and mapped the series of customer demand-generating “moves” your company will pursue over the next 1-3 years to build your value proposition?

Learn how Prophet is strategically helping evolved enterprises across the globe transform their marketing and sales for uncommon growth.

CONNECT WITH US

BLOG

Driving Uncommon Growth for Digital Native Brands

As these once-disruptive brands hit speed bumps, sharper omnichannel thinking can recapture growth.

As successful early-stage founders and investors would agree, building with a product-market fit focus is one of the top priorities in launching a company (perhaps second only to raising capital to enable the prior). Once a company has reached organic growth and reach with a product-market mindset, the priorities need to quickly shift towards strategic growth and scale.

As the digital marketplace continues to become further saturated and competition has become too numerous to name, we are helping digital-native brands focus on a few strategic objectives to help them reach uncommon growth.

6 Strategic Objectives to Help Digital Native Brands Reach Uncommon Growth

1. Build an irreplaceable, valuable brand

The digital marketplace is now an unbelievably crowded space packed with digital natives as well as droves of large consumer product brands investing in direct-to-consumer initiatives. (According to a recent Salesforce study, “despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”) With such a competitive marketplace all vying for much of the same customers, the value of a meaningful brand is higher than ever.

For many digital natives, growth curves flatten quickly before they can truly build an enduringly valuable brand position. But for those that have a relevant story to tell with their brands (Dollar Shave Club, Everlane, Airbnb), strategic growth comes in the form of growth-stage capital, acquisition exits and IPOs. For traditional CPG companies and the financial market, effectiveness and success in brand building and amplification have become a clear differentiating growth indicator for targeting digital-native brands for inorganic growth.

2. Create a strategic customer targeting strategy to posture for growth

Customer acquisition is VERY difficult at the growth stage for most organizations. It takes additional capital and sophisticated growth techniques for digital-native start-ups to achieve scale without burning through profits. The question we most often hear from our growth-stage,  digital-native clients is, “Now that we have figured out our initial entry market, how do we grow with new, unidentified targets and geographies?”

The first step is in taking a comprehensive look at the market landscape and executing market and customer segmentation mapped to the company’s value proposition. The strategy will be followed with a cohesive roadmap with savvy demand gen and acquisition techniques. However, this poses a chicken/egg dilemma. Many will say that they need strategic capital in order to reach these new customers. But it is very difficult to raise that capital unless you have a strategic plan in place. We’ve found that completing an expeditious, yet effective, customer targeting strategy provides investors a plan they can buy off on, which forms the basis for an immediate plan of action once the capital comes through.

3. Take customer data to the next level 

Digital native brands are rich in data. However, we often find the abundance of data untapped and under-utilized in driving strategies and operational execution. Sophistication comes from not solely basing strategies on historical data, but driving current data into actionable insights that drive the execution of the product and user experience (most often through machine learning).

“Despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”

Customer expectations are driving companies to think about next-gen data strategies. It’s not just about the tools and technology used to access and manage data; It’s the deeply human insights to understand and implement behavioral data-driven retention and acquisition strategies. Journeying through the landmines of data value exchange, ethics in AI and overall customer data privacy become even higher stakes with global expansion.

4. URL to IRL. Getting physical with the brand experience

With the rising cost of digital customer acquisition, many successful growth-stage digital-native brands are finding growth in brand awareness and customer acquisition with offerings in a physical retail experience (Warby Parker, Casper). However, going physical without considering the customer journey with a brand will often come up short.

It is critical to have a customer-centric approach in understanding and meeting the customer’s journey with the brand toggling in the metaverse of both digital and physical.

5. Expanding with a brand portfolio

Perhaps the market assessment tells you that an unserved market will require a different brand identity or positioning. Too many razor options for facial-hair growing men? Grooming products and supplies? Razors for women? Will the master brand be sufficient or stretched too thin? Should there be a sub-brand to capture additional opportunities among adjacent consumer segments?

Prophet vice-chairman and master brand guru, David Aaker, writes about innovating with new brand subcategories in his book coming in 2020 titled, “Achieving Uncommon Growth in the Digital Age: Own Game-Changing Market Niches.” In it, he’ll discuss how game-changing market niches create growth, how digital drives and enables new market niches to win, and how to find, evaluate, manage and build barriers around these game-changing market niches.

6. Growing together with your employees and brand advocates

In reaching out to new targets and markets, it’s easy to lose sight of the early-stage magic that created traction with customers and employees in the first place. Accelerating the speed and scale of growth without alienating the core consumer group takes extra care and caution in brand management disciplines.

The often unforeseen challenge in strategic growth is in paving the way for organizational growth – keeping the best talent, training existing talent for skills required for the next generation of growth, and luring new talent to fill resource gaps and needs. With a competitive market, it’s more than free food perks at this stage. Start-up culture is part of the secret sauce – so how do you grow without losing sight of the most important ingredient of success – employee culture?

Due to the nature of the start-up hustle, most digital-native companies have not prioritized professional development support and are not the best positioned at cultivating talent. Where speed to market is a constant drumbeat, work-life balance and communication are often weak. And as the fight for talent increases, companies need to rethink team growth. Another clear differentiating growth indicator is how companies are leveraging employee/team optimization to help with growth.

Reimagine
Brands

RELATED SERVICE

FINAL THOUGHTS

In the post-digital-revolution age where businesses are pervasively disrupted – entry barriers to earning the “first pots of gold” are ever low, while driving toward the second, third pots of gold, and achieving enduring growth is extremely challenging. Moving from organic growth focused purely on a mind-blowingly-great product or service to making strategic choices based on an understanding of their unique brand, customer and employee culture is a necessary path to achieve 2.0 and 3.0.

If your digital native brand is ready to determine its path to uncommon growth, let’s set up a time to discuss. Our team of strategic consultants is ready to help you chart the course.

CONNECT WITH US

Related Thinking

View All

Blog

AI Is Everyone’s Luxury: Premium Brands Can’t Afford a Generational Blind Spot

Blog

2025’s Brand Winners and Losers: From Dr. Pepper, Gap, Skims and Google to Southwest, Target, Tesla and Fast Fashion

Blog

Uncommon Growth Leaders: A Conversation with Beth Wood and Brad Kaufman of Principal Financial Group

Blog

Uncommon Growth Leader: How to Lead with Creativity and Collaboration

Blog

Brand as a Strategic Growth Engine: A Conversation with Piedmont Healthcare’s CMO

BLOG

The Next Chapter of Digital Transformation in China

Our research finds that in China, change efforts are more likely to be customer-focused and led by CEOs.

How to Unlock Uncommon Growth in the New Digital Era

Digital transformation is one of the most closely followed topics in the world today. And in China’s distinct and fast evolving landscape, digital transformation is even more important. In the past few years, the tech giants BAT (Baidu, Alibaba, Tencent), JD and some of our most recent tech unicorns including Didi Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping among others, have led the first wave of digital transformation. Now, we are entering the ‘second half’ of the digital revolution, where more traditional businesses are transforming themselves to become more digitally-led to compete and thrive.

Prophet’s digital research arm, Altimeter, recently published The 2018-2019 State of Digital Transformation report, aiming to capture the shifts and trends that are shaping modern digital transformation, globally and in China. We surveyed 554 digital strategists, C-suite and other executive-level leaders from organizations with at least 1,000 employees, across three geographies: North America (US and Canada), Europe (UK, France and Germany) and China. Our global study revealed insightful differences between businesses operating in China, and those in the rest of the world, on how they think of and approach digital transformations.

Altimeter identified ‘The Six Stages of Digital Transformation’ to help companies understand where they are — and where they need to be — on the road to digital transformation

In this article, we will discuss some of our observations and findings as well as implications on how to drive digital transformation and unlock uncommon growth in China.

Digital transformation is no longer an option, but an enterprise-wide initiative that is increasingly led by the CEO.

Our study demonstrates that almost all companies around the world, and even more so in China, are undergoing some sort of digital transformation. Digital transformation is no longer an option but a crucial component in any business growth strategy. In China, 89% of the companies interviewed are undertaking cross-disciplinary and enterprise-wide digital transformation, higher than the rest of the world.

Q: Is your organization undergoing a formal digital transformation effort in 2018?

In the past, it’s oftentimes the CIO/CTO that leads digital transformation initiatives. Nowadays, they are increasingly led from the top. 42% of the companies in China said that their steering committee for digital transformation is led directly by the CEO, which is significantly higher than what we found in other countries (29% in rest of the word).

Q: Which role or group does the steering committee primarily report to?

Companies in China are ‘playing offense’, using digital transformation as a way to differentiate, drive revenue, enhance customer experiences and acquire new customers.

When we asked which departments are prioritized in their digital transformation efforts, Chinese companies compared to the rest of the world are far more focused on digital transformation in the space of marketing and customer experience (83% of digital transformation in China touch customer experience, 58% marketing, 75% e-commerce, compared to 32%, 40%, 23% respectively). China is also applying and directing digital transformation towards product and innovation, far ahead of the rest of the world.

However, Chinese companies seem to be putting less emphasis on its digital transformation behind internal efforts such as HR, employee and legal.

Q: You mentioned that your role directly supports the digital transformation of a specific business unit. Which business unit(s) do you support?

This orientation of digital transformation toward external factors over internal efforts is closely linked to China’s highly competitive digital ecosystem and dynamic market landscape. To serve rapidly changing consumers and respond to a fast-moving and innovative environment, businesses in China use digital to stay competitive. Every industry has to keep up and evolve – retail only exists as “new retail,” finance is simply fintech and manufacturing is all about IoT, robotics and AI-powered solutions.

For companies in China, digital transformation is all about ‘playing offense’ and driving a competitive edge. Digital transformation helps identify growth opportunities (62% in China versus 48% in rest of the word), it helps understand consumer behaviors and preferences (50%  versus 45%) and it helps respond to increased competition (45% versus 40%).

On average, global firms tend to use digital transformation as a means to drive operational efficiencies, whereas China tends to focus its digital effort to drive customer demand and experiences.

Q: What are the key drivers of digital transformation within your organization?

The drive for growth is clearly reflected in Chinese companies’ long-term priorities of digital transformation as well. When deep diving into the areas of focus for their transformation, one can clearly see how CX and customer data strategy dominate the agenda. While 62% of the firms in China are investing in IT and technology to better manage data, a third of companies in China are still finding their way to design new and improved customer experiences, to integrate better and make e-commerce more intuitive, to improve the agility of their operations.

It is worth noting that organization and internal transformation is relatively low in terms of priorities for many Chinese companies, compared to CX and other growth-centric efforts.

“For companies in China, digital transformation is all about ‘playing offense’ and driving a competitive edge.”

Q: Each of the following describes different types of digital transformation initiatives. Please indicate which initiatives are most important to your long-term digital transformation efforts. (Data shown above is from China respondents only)

As high as 74% of the Chinese companies interviewed are in the process of (28%) or have completed (46%) mapping out the customer journey.

BAT or the like of Didi have raised consumers’ expectations. Any consumers interacting with a brand and business expect fluidity, just in time, total personalization, and complete integration cross touch points and interactions.

Q: Which of the following best describes your company’s efforts around the customer journey/experience?

Companies in China see ROI and budget as bigger challenges than organization and culture.

As companies in China evaluate whether to increase investments in digital, they expressed concerns about the lack of data and ROI. In fact, 61% of companies in China expressed concerns over the lack of data and ROI, while only 34% shared concerns with budgeting. While external factors clearly motivate companies in China to transform digitally, they are less worried about internal facing ones compared to the rest of the world.

In other countries, a lack of clear vision (18%) and company culture (23%) pose major challenges for companies. Whereas in China, these numbers are substantially lower, at only 11% and 6% respectively. This again signals the confidence and determination of businesses in China to drive forward digital transformation despite internal obstacles. The top-down cultural norm in China and the fact that many employees are digital native and fluent as consumers, provide businesses a competitive advantage, being more intentional and more rapidly willing and ready to transform.

Executive Summary

  • Over the past decade, China’s growth and technology transformation has been led and fueled by BAT (Baidu, Alibaba, Tencent). We are now entering the next chapter of digital transformation where businesses and brands must adapt and lead their own digital transformation to compete and thrive.
  • In China’s unique digital ecosystem, almost all companies are undergoing digital transformations. Compared to other countries in the world, Chinese enterprises embrace digital transformation in a more proactive way—with CEOs playing a bigger role in leading the effort.  Additionally, companies in China prioritize consumer-facing touch points, such as customer experience and e-commerce, to a significantly higher degree in their digital transformation.
  • It is worth noting that having a strong organizational culture is instrumental to sustainable growth. However, companies in China are overwhelmingly more concerned with ROI than internal initiatives like organizational structure and employee engagement. While a driving customer-centric growth is a competitive advantage for companies operating in China, internal organization, way of working and company culture are also essential enablers for tapping into the Body, the Mind, and the Soul of the organization. Another global study by Prophet, Catalysts: The Cultural Levers of Digital Transformation, argues that organizational culture and the employee experience have a vital part to play in shaping progress. As a result, the human factors in digital transformation have grown in prominence.

We believe, in order for businesses to win with digital transformation, they must adopt four necessary shifts in mindset and way of working:

1. From being technology-focused to being customer-obsessed

Technology is a means, not an end. Investing heavily in IT or data systems is undoubtedly important. However, without deep understanding of your target audience, you are just doing digital for the sake of digital. Businesses must leverage digital approaches and strategies in a smart way to identify, understand and serve their customers in a more agile and profound way.

2. From tech-led sponsorship to multidisciplinary sponsorship

Digital transformation is instrumental to the future of any company, and how business will operate. CEOs must play a pivotal role in driving the transformation agenda forward.  The CEO must clarify the strategic roadmap, drive cross-disciplinary collaboration, coordinate resources, and encourage trial and error across the organization, to experiment, learn, to codify and ultimately scale up.

3. From investing in operations and touch points only to investing in people and culture

The growth of a business and brand is deeply rooted in its internal capabilities and the company culture. This is especially true in the digital age where a company’s organization, people and culture need to be more agile and adaptable. However wonderful the digital infrastructure or system is, the capability of the team (the mind), the mindsets (the soul), the new operating model (the body), anchored on a clear purpose (the bigger Why, the firm’s DNA), are what matter in delivering truly effective, winning digital transformation.

4. From regarding digital transformation as a cost center to keep up, to thinking transformative investments to achieve uncommon growth

Although digital transformation requires significant investment, the outcome will be extremely beneficial if successful. Instead of worrying about the cost, identify clear objectives and benchmarks to continuously measure ROI and impact on revenue growth and profitability, while adjusting investment accordingly. After all, digital transformation is not a ‘whether or not’ question, it is a must have, must do.

Identify
Growth
Pathways

RELATED SERVICE

FINAL THOUGHTS

Successful digital transformation means shifting focus from technology to customers and moving resources towards internal organization, employees, culture and measurement. As China’s digital ecosystem becomes increasingly sophisticated, on top of investing in consumer facing digital initiatives, companies must adopt the mindset to look inward—to their own organization, culture and work style—to find sustainable growth in an era of disruption.

Where does your company stand in digital transformation compared to other companies around the world? Click here to download the global report for more insights.

CONNECT WITH US

BLOG

Now’s the Time to Create Your CMO Transformation Agenda

Marketing leaders need clear ambitions for change–and concrete moves for each ambition.

Victim or Victor? 

That’s a choice all CMOs face today in responding to the multitude of changes rocking the marketing landscape. If CMOs let change put them on the defensive, marketing’s role at their companies (and their job tenure) may shrink. But if they get in front of change, the role that marketing plays at the company can become more strategic than ever, with the CMO’s role on the c-suite team more critical.

The average CMO tenure remains short, just 44 months. In many cases careers are brief because CMOs struggle to master a confluence of changes:

  • The businesses that marketing supports are changing,
    including key aspects of their go to market / commercialization
  • The behavior of customers served by those businesses is changing
  • The way marketing gets done is changing
  • The role that marketing needs to play in the company is changing
  • The talent that marketing must inspire to join and stay with the company is changing

This presents CMO’s with a pivotal question, every Monday morning. Is that marketing leadership hill that I’m climbing a mountain that I’m going to stand atop?  Or is it a volcano that’s going to erupt?

The answer depends in large part on the existence and quality of the CMO’s transformation agenda. It also depends on CMO success in linking their marketing transformation agenda to the company’s overall transformation plan.

“Once developed, refined and socialized, the agenda serves as a guiding light that CMOs use to inspire their workforce and company leadership to invest in new impact.”

Creating a CMO Transformation Agenda

What is a CMO transformation agenda? Very simply, it’s a CMO’s game plan for how a marketing organization undergoing transformation can better serve a company that’s undergoing transformation. Every good agenda includes three elements:

  • Clear ambitions for change
  • Concrete moves per ambition in a roadmap
  • A headline theme that captures the agenda’s overall impact.

Once developed, refined and socialized, the agenda serves as a guiding light that CMOs use to inspire their workforce and company leadership to invest in new impact. Five steps will help CMO’s to effectively develop their agenda.

1. Gather a brain trust who will walk through the agenda development journey together.

The marketing transformation leadership team should be large enough to look at the business and its marketing function from multiple angles, but small enough to keep discussions confidential and minimize politics so that free-thinking ideas can be generated. A team that can be counted on one hand is optimal.

If resources are available, it helps to supplement the effort with an outside advisor in touch with marketing transformation trends across multiple industries to stimulate creative thinking. A good advisor will also provide a helpful sounding board and help synthesize team inputs and outputs into effective communication documents.

2. Prepare the team with common inputs to enable everyone to brainstorm effectively.

The agenda needs to address the underlying forces that are compelling marketing to undergo a transformation. A CMO and team should identify those forces to craft a vision that is on-target for impact.

Start by studying the company’s current corporate strategy and business plans, and compare them to their 3-5-year-old versions. How are the roles of marketing and go-to-market channels changing?  Is there leadership talk today of even more change over the horizon? If so what are the implications? Repeat this thought process BU by BU, region-by-region, customer type by customer type, always looking for major patterns (vs. niche instances) of how marketing needs to show up differently.

Key questions to answer in this exercise include:

  • How are customer behaviors, priorities, and segments changing?
  • How are business models and offer value propositions changing?
  • How are routes to market and post-purchase relationship opportunities changing?

Keep bringing these questions back to the implications for marketing:

  • What new market-facing capabilities does the business need?
  • Which of those capabilities might marketing provide, including new roles?
  • How will marketing need to redefine and shift emphasis from its current capabilities?

Beyond taking inspiration from the company’s business requirements, explore changes occurring in the world of marketing, not only in your industry but in other industries that may prove insightful. This exploration will help identify opportunities for marketing to add value in ways that company strategists and peer executives don’t yet know about.

What are key trends in marketing? Our next blog post is devoted to that topic – we’ll share a handful of marketing trend themes that we’ve observed, each one in its own right a combination of 3 to 4 trends.

As you review external marketing trends, ask yourself:

  • Which trends obviously apply to our situation? Why?
  • What factors underly other trends?  Might those factors apply to our situation?
  • Do some trends link to our corporate strategy choices?   What are dependencies?
  • Will key trends be easily understood and received by the company’s leadership team?  If not, how much socialization is involved?

3. Over the course of several meetings, brainstorm 3 to 5 transformational ambitions, several moves per ambition, and a unifying vision.  

We find the brainstorming process is best served by starting first with ambitions, then moves, and finally vision. That’s because most teams don’t have a clear vision in mind when the process starts. The vision will be more powerful as a “golden thread” expression of what the ambitions have in common rather than a “beacon” that serves as a guiding light throughout for the ambitions.

What does a CMO transformation/change agenda look like? Here’s a hypothetical example inspired by several CMOs who have gone through this process:

Note that the vision statement addresses the “why”, the ambition statements address the “what” and the move statements address the “how.” It’s at the move level that a management team can sequence investment, focus management attention, and harness organizational energy to bring ambitions and vision to life over time.

4. Socialize the Agenda with senior management, the board, and marketing leadership.

When a strong draft of the transformation agenda exists, socialize it with the CEO and other key executives in private. Once their feedback has been incorporated, it’s time to socialize the agenda with the senior management team together.

If possible, strengthen support by presenting an up-leveled version of the agenda to the company’s board of directors. If the CEO arranges for such a presentation, it’s a good sign that the CEO views the CMO’s agenda as a core part of corporate transformation.

After getting buy-in from company leadership, share the plan with the extended marketing leadership team. More times than not, transformation agendas will involve top-down shifts that can be unsettling – a shift in resourcing, a change in skillsets, a re-organization – so become a relentless source of inspiration and encouragement around the agenda to top marketing talent. With leadership, a transformation agenda can mobilize and unite that talent.

5. Build the Foundation for Successful Implementation.

Execution of the change agenda will take several years (vs. months). The team will go farther faster if the CMO builds a strong foundation for change prior to implementing. Depending on the situation this might include steps such as:

  • Re-organize to enable new competencies to emerge
  • Shift resourcing levels from legacy capability teams to future-focused teams
  • Promote new cultural values for new capabilities
  • Request extra investments to make needed transitions
  • Nurture peer relationships to expand marketing’s role in the company –
    often in white spaces involving data, digital monetization, and/or digital CX
  • Institute agile change processes and pilots to make change happen quickly
  • Design enterprise-level programs that change the company, not just marketing
  • Find a way to measure and monitor impact with a keen eye on ROI

Common Ambitions in CMO Agendas

Every CMO transformation agenda we’ve seen has a few key elements in common. The most frequent ambitions that we have seen adopted include:

Digital marketing excellence:

Digital marketing is the greatest zone of disruption and innovation in marketing. Unsurprisingly, digital marketing excellence is the most frequently mentioned transformation ambition. Goals might include expanding the number of business use cases that digital marketing empowers (e.g. adding cross-sell and up-sell marketing to new customer acquisition), improving specific capabilities (e.g. real-time personalization) or marketing through new engagement channels (e.g. a conversational commerce platform). Identifying key initiatives on each of these three dimensions is the first step for driving digital marketing transformation.

Data responsibilities:

Thanks to digital touchpoints, customers generate exponentially more data than they ever have before. Data about location, segmentation, digital journey stage, browsing behavior, preference indicators, physical factors, distribution channels, and purchase triggers are all critical for companies to use in their best-move rules. Yet most companies still struggle with capturing, storing, and acting on this data. Will the CMO Transformation Agenda convincingly offer to step up and take responsibility for 360° customer journey data? If not, new executive roles such as chief digital officer or chief customer officer will emerge, narrowing marketing’s role.

New monetization:

Digital enables marketing to create or enhance 1:1 relationships with customers in a way that used to be the sole domain of the sales force or channel partners. Thanks to new digital relationships, marketing can extend its role to help drive growth through monetization techniques never used at scale before. This use of marketing’s competencies for new growth can take several forms:

  • Direct sales to fragmented, long-tail end users (e-commerce, AI advisory, etc.)
  • Direct management of small channel partners (vs. multi-tiered distribution)
  • Next-best-move support to account leaders, sales reps and customer service reps

Varying Ambitions in CMO Agendas

Despite the common patterns above, every CMO’s agenda is unique, reflecting the fact that no two companies and marketing departments are alike. There are dozens of potential ambitions to adopt – here are 20 to help jumpstart your reflection.

  1. Category Reframing: redefining the company’s value context, proposition and edge
  2. Launch Re-invention: from launching single products to holistic product line updates
  3. Influence Scaling: developing a systematic influencer cascade
  4. Pricing Sophistication: dynamic pricing systems and new value capture approaches
  5. Solutions Innovation: customer-focused design and partner ecosystem enablement
  6. AI Integration: enriching marketing and CX through AI / machine learning use cases
  7. Intelligence Branding: updating Brand Portfolio and Architecture for intelligence
  8. Re-segmentation: blending best of online and offline information insight sources
  9. Content Re-invention: redesigning content for personalization and digital touchpoints
  10. AR/VR Adoption: engaging customers through immersive experiences
  11. Digital Customer Experience: improving CX monitoring and analytics
  12. Customer Re-connection: building digital buyer relationships after channel sales
  13. Social and Experimental Listening: gathering customer insights via digital feedback
  14. Account Based Marketing: collaborating closely with sales to grow top accounts
  15. E-Commerce: developing a new channel for customer convenience and lower cost
  16. Channel-partner Data Sharing: collaborating for win-win business growth
  17. In-Use Marketing: messaging inside cloud hosted applications and digital services
  18. Global-Local Role Shifts: centralizing and decentralizing tasks for flexibility and cost
  19. Silo-spanning: agile funding of integrated marketing initiatives across budget owners
  20. Impact analytics: calculating return on marketing spend in new and better ways

Reimagine
Brands

RELATED SERVICE

FINAL THOUGHTS

Wondering When to Start?

Tactically there might be an optimal time of year to carry out the work of agenda-setting:  3-4 months before annual planning and budgeting begin. That enables the CMO and marketing leadership team to head into planning season with a new strategic imperative, a transformation game plan, and a linked funding request.

Strategically, any CMO who hasn’t yet developed a transformation agenda is running late and should start now. Change in the market won’t wait; neither should the leader of marketing.

CONNECT WITH US

BLOG

Five Ways to Design Impactful Experiences in Financial Services

Our research shows that brands should prioritize changes that focus on growth, agility and holistic perspectives.

Historically, product and price were the go-to levers for financial services leaders looking to drive growth, however, the importance placed on experience innovation today means it is now the most critical area of investment. Strategic and thoughtful experience design addresses the evolving expectations of digital-first customers, the increasing complexity of channels and business models and the growing reserves of untapped data across financial services relationships.

The industry is already taking notice. As uncovered in Altimeter’s State of Digital Transformation report, two-thirds of financial services organizations say ensuring a more consistent experience across touchpoints is a top internal priority, compared to just over half across other industries. But less than half of financial services organizations have taken the crucial step of mapping the end-to-end customer journey.

Designing effective experiences requires following a deliberate process that balances external and internal considerations, and creative analytical approaches. Over the course of working with hundreds of financial services clients around the world, we’ve found that the companies who best capture opportunities in experience innovation exemplify five key principles:

  1. They are human-centric
  2. They are growth-oriented
  3. They are operator-obsessed
  4. They bring a holistic perspective
  5. And they are designed for agility

The 5 Key Principles Required For Experience Innovation

Let’s dive deeper into what these principles look like in action:

Human-centric

In the past, financial services companies might have designed customer experiences from the inside out, building a profitable experience first and then finding a market for it. But experiences today must start with the needs of the people for whom they are designed – whether mass affluent consumers, high-net-worth individuals, captive agents, branch employees or independent advisors.

Established financial services firms can learn from newer players who have adopted a human-centric mindset to design for latent needs. Ellvest, for example, is an investment company that recognized most providers cater to a definitively male audience and saw an opportunity to build a brand designed for female investors’ unmet needs such as clearer access to female advisors, and a broader range of investment strategies. Ellvest has designed experiences that directly address these challenges, from providing tailored recommendations based on gender-specific salary curves to including larger retirement targets for longer female life expectancies. Taking a human-first approach has positioned Ellvest to capitalize on significant economic opportunity, given that women are expected to hold $72 trillion of private wealth by 2020.

Growth-oriented

While better catering to customer needs and behaviors, experience investments must drive business growth. In financial services especially, legacy business models can hinder brands from moving quickly enough to capitalize on growth opportunities to get access to new revenue sources and untapped customer data.

One way in which incumbent brands can better shift to market dynamics and customer needs is through strategic partnerships or purchases to get access to new platforms and technology, rather than building entirely in-house.

AXA recently partnered with insurtech company, Slice, to offer on-demand cyber insurance to small businesses – specifically, taking a policy normally sold with a $5-$10 million limit, and bringing it down to $250,000 to $3 million. The platform, powered by Slice, allows small business customers to purchase comprehensive coverage in a matter of minutes, submit the first notice of loss through claims bots and offers insightful data to help SMBs understand their cyber risk exposure. Customers also see an individualized dashboard with an overall cyber risk assessment and scores along with benchmark scores of their industry peers across each risk category. By partnering with an emerging player, AXA was able to bring the first-in-kind product to market in just three short months – delivering unique value to a new customer base while growing the business and tapping into new data.

Operator-obsessed

Experiences must be designed as much for the people and operators responsible for delivering them – employees, agents, call center reps, front-end developers or data scientists — as for the end-user, keeping feasibility of implementation and management top-of-mind.

When Prophet redesigned the treasury management experience for a large US bank, we took operators’ considerations into account throughout – understanding the business context, technical constraints and needs of the users responsible for serving the target clients. Through key use cases for both operators and clients, we designed and delivered a reimagined digital treasury management experience that followed an ideal journey with a responsive and mobile-first interface.

Holistic Perspective

While considering the needs of internal operators, financial services companies must also ensure organizational silos don’t lead to fractured ownership of experiences. Ultimately, financial services customers don’t care about organizational complexity; they just want solutions that consistently meet their needs across channels and touchpoints. Part of addressing internal challenges well means taking a holistic perspective to experience design.

The largest legacy banks in the US recognized this opportunity when they partnered to create Zelle, a peer-to-peer payments platform that integrates directly into existing banking apps. Eliminating the need to leave the secure environment of users’ personal banking apps, Zelle enables seamless money transfer through a single, trusted experience. Beyond successfully collaborating across internal groups—analytics, IT, marketing, and more — to bring this to market, these brands managed to break down competitive siloes to create greater value for the end-user.

“Ultimately, financial services customers don’t care about organizational complexity; they just want solutions.”

The result? Last year alone, users moved $119 billion through Zelle – nearly double the $62 billion moved through Venmo, which requires users to connect their bank account with the external app. And the holistic nature of the experience only continues to improve, with the number of participating regional banks increasing by over a third in early 2019.

Designed for Agility

Perhaps the most obvious difference between legacy financial services companies and their younger, fast-growing competitors is the rate at which they can move and adjust. Yet even the largest financial services firms can design experiences adaptable to rapidly evolving customer expectations and market conditions.

For example, Chase invested in new tools and processes to move with greater agility when launching experiences. The strategy included adopting an open API store and micro-services in its digital development, capitalizing on the rich data of its 47 million digital customers and implementing Scrum work processes. Chase’s agile design process led to the complete overhaul of its online and mobile experience in just 18 months.

Designing for agility should not be confused with the “move fast, break things” mantra of many Silicon Valley digital disruptors. In legacy financial services businesses, breaking things is not an option. Chase’s agile transformation has only improved its operating efficiencies, achieving a 99% straight-through processes rate on more than $5 trillion daily wholesale payments and lowering the cost per check deposits by 94% through digital transactions.

Revolutionize
Experiences

RELATED SERVICE

FINAL THOUGHTS

As legacy financial services brands continue to focus on building experiences that allow them to challenge and surpass their disruptive competitors, these five principles can serve as north-star guides.

If you’d like to learn more about how experience-led innovation can drive growth in your business, please contact us today.

CONNECT WITH US

BLOG

Supporting Progress On and Off the Field with the US Women’s National Team

This major branding effort for women’s soccer has been a labor of love, amplifying women’s voices everywhere.

Nearly four years ago the US Women’s National Team (USWNT) defeated Japan 5-2 to win their third World Cup in front of the largest TV audience (26 million) in U.S. soccer history. In 2015, some of America’s most famous footballers – including Alex Morgan, Abby Wambach and Carli Lloyd – were building on the success of 1999 World Cup champions like Mia Hamm, Julie Foudy and Brandi Chastain, while making a case for equal pay with their US Men’s National Team counterparts.

Since then, our champions have been leading the charge for equality, both on and off the field, by elevating the level of the women’s game and fighting for causes like gender equality, parity to the US men’s team in terms of pay, coaching and medical treatment, frequency of games, quality of fields and even how they train and how they travel to matches.

Prophet is proud to support the USWNT players as they look to repeat as World Cup Champions and more importantly, make advances in their fight for progress.

As part of our Prophet Impact (formerly Prophet for Nonprofit) initiative, a team of strategists, designers, copywriters and developers volunteered to create a new brand and digital experience to capture the essence of the players—both as world-class athletes and as passionate activists. All the spirit, hard work and positive energy has been channeled into a new brand: OOSA.

Introducing OOSA

The name OOSA is a nod to the team’s 20-year-long tradition of players chanting “OOSA, OOSA, OOSA-AHHHH,” as a rallying cry before they take the pitch. And now, OOSA is a brand, that capitalizes on the collective value of the players, while providing an avenue for supporters to get involved in their efforts to push for meaningful progress. The brand provides something tangible to rally behind while helping to defray the cost each player incurs to lead the cause for change.

Prophet is thrilled to share the new OOSA website and brand video, just in time for the 2019 Women’s World Cup.

Chant with Us

We are proud of the yearlong effort of many Propheteers to help build a brand that supports a cause that aligns so closely with our values as a firm. Our partnership with OOSA is just one element of our dedicated effort to elevate women and strengthen their voices, and we look forward to continuing our partnership with such an inspiring and passionate group of powerful women. In the meantime, we wish the team the best of luck throughout the World Cup. And while we’re a global team, don’t be surprised if you hear chants of “OOSA, OOSA, OOSA-AHHHH,” vibrating from Prophet offices across the US.

“The name OOSA is a nod to the team’s 20-year-long tradition of players chanting “OOSA, OOSA, OOSA-AHHHH,” as a rallying cry before they take the pitch.”

BLOG

Inside The Experience of Relentlessly Relevant Brands

How hyper-personalization, contextual shifts and intelligent offers are reshaping consumer expectations.

Culture is being re-coded, and people expect very different relationships with brands: more human, immediate, seamless and responsive.

Across every category, from healthcare to household goods, auto to automation, B2B to B2C, the companies that are building the most cohesive businesses—through what we call “dynamic and digital brand experiences”—are expanding their relevance and are growing faster than competitors.

Dynamic brand experiences are the new standard. A company that can functionally integrate around the customer with regard to technology, data, marketing and the customer experience is delivering its product and service not simply as an offer, but as an experience ecosystem: a hyper-contextual, empathetic, cohesive and humanized experience that responds to, learns from and anticipates its customers’ next moves and needs.

What Is a Relentlessly Relevant Brand?

We call them relentlessly relevant brands because they understand that they must prove themselves every day, that they operate within an ecosystem of customers and other brands, and they adapt their behaviors in real-time based on context.

They have both a brain and a heart. They are strategic and emotive, contextual and aware. And they lead with data-informed stories. Customers love these experience ecosystems.

“A relentlessly relevant brand is continuously testing its approach and optimizing it in real-time.”

In the modern brand world, relevance trumps consistency; the brand shifts and adjusts in the quest for individual relevancy, explicitly at the expense of being consistent. A relentlessly relevant brand is continuously testing its approach and optimizing it in real-time.

Here’s a simple metaphor: An individual behaves differently with her spouse, her children, and her colleagues. Each expression is authentic but unique. We each have a personal “code” that allows us to behave differently in different settings but still makes us recognizable across all our relationships.

Key Characteristics of Relentlessly Relevant Brands

Relentlessly relevant brands are already flourishing around us. The easiest way to identify them is by looking for entities that are already exhibiting these key characteristics:

Relentlessly relevant brands are hyper-personalized.

The experiences that brands offer are driven by empathy and are designed to feel personalized to each individual. With a rich data set on returning users, TurboTax makes filing taxes a breeze—with prefilled data and explanations about why tax returns might be different from past years, based on personalized events such as moving, getting married, or having a baby.

Relentlessly relevant brands are contextual.

The brand shifts how it acts, feels, and looks according to the environment in which it operates. With the addition of separate kids, music, and gaming environments, YouTube adapts depending on a user’s context. The YouTube Kids interface, for instance, offers icons instead of text navigation and family-friendly content only.

Relentlessly relevant brands are intelligent.

These brands are in learning mode all the time and use this knowledge to inform how they think, act, and engage with consumers. Netflix learns from its users’ viewing habits not only to offer recommendations on what to binge-watch next, but to actually create original content. The company famously commissioned “House of Cards” because it knew a wealth of users had streamed “The Social Network,” which was directed by “House of Cards” producer/director David Fincher.

Relentlessly relevant brands are continuous.

Infused with a digital pulse, brands maintain ongoing conversations with customers. Marriott’s new Li Yu program helps Chinese tourists traveling outside of China feel at home wherever they go. Through a WeChat program, these tourists can engage with a local concierge who can assist in Chinese with anything from restaurant recommendations to in-room amenities requests.

How to Become a Relentlessly Relevant Brand

Where to start? There is no single journey to becoming a relentlessly relevant brand and engaging customers through dynamic and digital experiences, but there are important features that empower brands to succeed in today’s transforming world:

To make your brand more contextual:

Update brand guidelines and toolkits to support adaptive design elements, data-driven content, and personalized, persona-specific experiences. Wrap core products with value-added services and experiences.

To make your brand more intelligent:

Offer customers opportunities to exchange data for improved service levels. Leverage predictive analytics to create proactive offers. Embed AI and machine learning into your data environment and smart (data-enabled) solutions.

To make your brand more continuous:

Use APIs to create seamless connections with ecosystem partners. Integrate customer data records and provide customer single sign in. Embed product extensions or solution recommendations in customer service and digital assets. Create value-added service layers and platforms for customers to expand customer utility and reward loyalty.

Reimagine
Brands

RELATED SERVICE

FINAL THOUGHTS

We are living in an experience economy. Today, we understand that brands are no longer static logos or advertising campaigns, but total, immersive experiences.

For companies to grow, they must evolve from selling, distributing, or communicating to building dynamic brand experiences. To do this, they must be purpose-centered and powered through culture, capabilities and employee engagement.

They must become “humanized” organizations prepared to deliver experiences people remember and love—experiences that matter in both function and emotion, and consider the entire person—the head and heart. Brands no longer just have an opportunity, but they have an obligation to come to life in order to remain relevant and drive profitable growth.

Download Prophet’s Brand Relevance Index® to learn more about the brands that consumers simply can’t live without.

CONNECT WITH US

Your network connection is offline.

caret-downcloseexternal-iconfacebook-logohamburgerinstagramlinkedinpauseplaythreads-icontwitterwechat-qrcodesina-weibowechatxing