The Customer Engagement Agency

We usually partner with an agency to serve clients. Because idio is a technology platform, we sit alongside a partner who has a strategic voice to the client and can provide creative and planning services that realise the value idio delivers.

Recently, we have been asked by a few prospective partners what we look for in an agency partner. It’s a good question, as we are quite picky. We used to decide based on a gut-level assessment of fit, in terms of vision for the client and market, culture, credibility and reputation. The vision piece is really important, as we can only really deliver lasting value to the end client when the agency is casting a brave vision for changing the client organisation, shaping products and services around the current and emerging customer behaviours and needs. Unfortunately, some agencies are simply still marketing at the 1990’s consumer. Time has moved on, behaviour has changed, and so has the technology that can deliver on the ageless promise of customer-centricity.

Fortunately, our friends at Forrester have defined a new marketing services target to strive for, which they have named the “Customer Engagement Agency” (CEA). When it was first published, in early 2012, it gave verbiage to our previous beliefs about the direction of marketing services and the type of agency we work well with.

The shifts in the market

We have seen a few agencies start to use the CEA badge, and we expect this to increase. But beyond the badge, there is an underlying vision of the future that truly separates these agencies from much of the landscape.

Customers care about experience, not channels.

The channel-centric approach has now passed. It used to make sense to organise marketing by the channel on which it would be received, but today, with a proliferation of channels, and an increasingly multi-channel consumer, it just doesn’t. If companies do not realise that customers don’t differentiate the technological and organisational challenges that exist between platforms, but just want the right communication sent to the most relevant channel, they run the risk of alienating the very customers they are working elsewhere to acquire. Customer-centric companies aim to deliver a seamless and co-ordinated experience across every channel.

Marketing in the future will shift from brand push to consumer pull.

We have been banging this drum for a while. Campaign is such an ugly word, with connotations of a military assault to subdue an enemy! We believe ongoing, iterative conversations are a better description of modern marketing. For an amusing look at the shift from push to pull, have a look at the Content Marketing Manifesto we wrote a while ago.

Customers will continue to create huge volumes of data, but they will get more savvy about managing it. Marketers who respect this, and give value for the data exchange will win, by helping the end customer win.

Product-centric marketing will gradually be overtaken by customer-centric propositions.

Marketers must evolve to meet their customer’s expectations.

The challenge facing modern marketers is to meet and exceed consumers’ relentlessly rising expectations. This is not just an evolution of tools and approaches, but a new approach which is based on the fundamental shift from push to pull marketing. The campaign approach will no longer generate the returns, goodwill or ongoing relationships necessary for succeeding. Understanding the customer is vitally important. And not just understanding their social-demographic bracket. Real, evolving, customer intelligence is vital to deliver on the promise of relevance to every consumer. And marketing must change, to be able to not only record, but activate this intelligence within it’s communications.

The Shifts in Agency-Land

Alongside the shifting nature of marketing, the agency landscape is changing fast. Existing competencies are shifting in importance, and new capabilities are being demanded by clients. We are seeing media agencies building up owned and earned media teams, whether called “social”, “digital” or “content”; we are seeing PR agencies fight for digital work, and digital agencies take on PR staff; we are seeing direct agencies build in creative competencies and creative agencies that start caring about data. Everyone is making a different sized land-grab in a different direction.

As Forrester have stated, marketers need a new type of agency to help them evolve.

Forward-thinking agency leaders are adding services and changing how they approach the marketing ecosystem, shifting from a traditional campaign-centric view of the world to one of continuous customer engagement. We call this emerging class of providers “customer engagement agencies” (CEAs) and define them as:

Agencies that focus on defining customer-oriented business strategies and mapping them to tactics and execution. They help clients maximize customer profitability and optimize customer experiences by applying data and analytics to every interaction.

What do these new agencies look like?

The Forrester map of Customer Engagement Agencies

From single channel, to multi-channel, to cross-channel

Existing agencies were built around the channel they controlled: print specialists, email specialists, experiential specialists, social specialists, and the rest. Now there is an understanding that since marketing involves multiple channels, taking this view from the beginning, the middle and the end of a campaign is important, and creates more value.

However, CEAs take the next step as well. They realise that the interplay between channels is important, and can be co-ordinated. It’s not just enough to be active on each channel, but since the customer will no doubt journey across multiple channels, the creative idea, message, and analytics need to follow consistently and progressively across those channels. What happens on one channel should impact other channels.

CEAs will therefore become masters of plotting cross-channel customer journeys, co-ordinating activity that influences that journey, and build in measurement techniques that attribute across channels.

Build a broader and deeper team

The agencies we would class as vying for the CEA name are hiring staff that would not have been hired at a normal agency. They don’t hire according to traditional agency roles, but rather place a high value on understanding emerging customer behaviour, whether the actual role is in creative, planning, or business development. They place a strong emphasis on collecting first-hand data about their customers interests and behaviours, and are eager to try new approaches to engagement and influence.

Sell business change, not a marketing service

We think it is exciting that CEAs are not obeying the confines of a marketing brief, but are assertive in suggesting solutions to the client that actually change the way their processes, resourcing, or product delivery works, in order to better serve the customer. In this way, CEAs are increasingly going to compete with Systems Integrators (like Accenture and Deloitte). We have seen this cause resistance from some clients, who want the agency “back in their box”, but forward-thinking clients are embracing this approach, realising that marketing, and particularly the understanding of customer behaviour and how they can be best influenced through quality experiences, is often limited in impact because of entrenched business structures. If the customer truly is king, everything in an organisation is up for consideration of change, if the customer can be better served.

Remuneration is changing, and is more aligned

Here is an interesting facet of the CEA; remuneration is closely tied with performance – and not just performance against activity objectives, but on the resultant business outcomes. Several CEAs are starting to take the leap out of the comfort zone of the traditional charging structures, and are betting their fees on positive client outcomes. This might be in the form of fees that scale with business success, or in some cases a commission-type approach based on planned objectives such as customer acquisition or retention. Because of this close alignment with the company, in remuneration as well as in knowledge and strategic importance, it is likely that CEAs will not work closely with clients that compete directly, but rather align to a single player in each industry subcategory.

Invest in technology platforms

Another hallmark of CEAs (at the risk of sounding self-serving, but Forrester do list this is as one of the key attributes of a CEA) is that they tend to build close partnerships with emerging technology platforms, or indeed build their own in-house. They do not compete on technology capabilities, but certainly use them as a differentiation, and to achieve the goals that their clients are demanding. Whereas in the past the technology has been a question that is left to last (“ok, so how do we actually do this now?”), CEAs have the understanding of the proprietary and open-source platforms that are relevant, and build that into the very core of their proposals.

Summary

At idio we believe in the future as described above, and encourage all our partners to read what Forrester has to say about this newly-defined segment, and those chasing after the badge of Customer Engagement Agency. Of course, CEAs will be cut in many different shapes, and won’t necessarily reflect every attribute listed above. But the vision of a closely aligned, customer-centric, business-changing agency model is exciting, and the mix of creative flair with deep customer intelligence expertise is one that we believe will increasingly be patterned.

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Last month  Aly Richards (Idio CXO), drew upon over twenty years in CRM  to discuss these emerging trends and how businesses can use them to improve their ROI, overall brand image and customer satisfaction. Specifically, Richards talked through her work with Orange, where she presided over the implementation of ‘real-time decisioning’ technology to improve customer-centric engagement in call-centres – a move that saw massive commercial and operational benefits for Orange.

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Idio’s Content Marketing breakfasts are a monthly forum for networking, learning and discussion around eCRM and “content marketing” (ie using content to attract, engage, and retain customers).

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Aly Richards (Global CEM Practice Leader, Acxiom)

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Felix Velarde is Founder and Managing Director of leading eCRM strategy company, Underwired, and he is also the Course Leader for eCRM at the Institute of Digital and Direct Marketing. We caught up with Felix recently after our January Brand Breakfast, at which he was a speaker. Here are the key points:

On eCRM

• Customer engagement is centred on increased understanding of consumers in a way that allows better engagement with them through digital channels.
• Such understanding of people goes beyond behaviour and demographics but the needs, attitudes and motivations of customers.
• Know their motivations, and you know how to create power to build lasting relationships with them.

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