strategy

A strategy without the right metrics is called a wish

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I've seen a few posts recently arguing that the phrase "you can't manage what you can't measure" is a myth or bad advice. While the authors make some valid points, I worry that these articles diminish the importance of metrics in any transformation effort. 

what you measure reveals your priorities

Managing what you measure is a factual observation, like the sky is blue. Show me what an individual or an organization measures, and I will tell you their entire philosophy of life and success. What you measure is where your attention goes, rightly or wrongly. And you usually measure what you're focused on... again, rightly or wrongly. 

When an organization obsesses over customer acquisition metrics, but can't tell you customer LTV, I can predict that organization's profitability, growth rate and future prospects for staying in business (low). Those leaders are focusing on the wrong things if their goal is (I assume) to create a predictable revenue machine. 

Likewise, if an organization is drowning in a sea of metrics, it reveals that they have no strategic priorities.

"If you have more than three priorities, you don't have any." - Jim Collins, Good to Great. 

a strategy without metrics is a wish

When I ask clients how they're going to measure progress towards their definition of success, they often have no crisp answer. While the goal is usually measurable -- increased revenue and market share -- there can be a lack of clarity on what it's going to take to move the needle on those metrics. Which is a lot like a pilot who wants to fly from New York to Brazil without a way to know if he or she is flying in the right direction. 

I honestly can't think of a scenario in which the thing you need to manage is unmeasurable. There are ways to figure out metrics that are predictive of what you need to measure and manage. If you can think of any exceptions, please post them in the comments. 

So perhaps we should reframe this observation to be, "you can't manage what you haven't strategically decided to measure," or "you can't manage what you don't know how to measure." In my experience, a strategy without the right metrics is called a wish. 

Which begs the question...  

What are the right metrics? 

Right is, of course, a subjective term that depends on what you're trying to achieve. Let's assume your goal is to create a predictable revenue machine. There's a lot of talk about growth hacking these days, usually referring to marketing. But the ultimate growth hack is to fill the holes in your proverbial bucket so you don't lose customers out the bottom as fast as you pour them into the top. When you fill the holes by focusing on retention and loyalty, every new customer is additive instead of replacement. And these customers buy more from you and refer you to others. Ta da! Your predictable revenue machine, which costs a lot less than a sole focus on acquisition. 

So... how do we measure this? I won't go into too much detail here, but here's where I'd start: 

Strategy metrics.

Yes, I'd start with strategy, not with CX repair. I don't believe you should be down in the weeds of "find and fix" before you've set your future-state vision for your priority customer (which is, by the way, contrary to a lot of CX maturity advice out there.) Strategy helps you prioritize which holes to fix, for whom, and how to fix them in a way that is aligned to your strategy. 

Strategy metrics are outcome-based.

They're anchored on what outcomes your priority customers want you to help them achieve, which are both emotional and tangible. Yes, emotional... even in B2B. How do your customers want to feel when they do business with you? This is the #1 outcome you're aiming for, which guides your brand, business and CX strategies. And remember: there's no and in brand. You have to pick one emotion or mindset that is highly motivating and differentiated enough to aim for, and that is linked to driving business outcomes (for example, feeling in control, successful, confident, a sense of belonging, important, etc etc. Every great brand anchors on an emotion, which is what we built our Value Archetypes to inform.) 

They focus on the why.

All the analytics in the world won't tell you the why behind win/loss. And they won't define the overarching why you're in business and the value you should create. You have to get that understanding up front, use it to set your strategy, then use your strategy to inform metrics and everything else (and continue to listen for the why to fill in your journey- or touchpoint-specific knowledge gaps.) 

They can help you manage an emotion. 

You can reverse-engineer everything you say and do from the emotional outcome you deliver and value you create. I call it "getting all the wood behind one arrow." What experience and business model is required to deliver that outcome? When you do this correctly, you can back into a very short set of perception metrics (7, to be precise) that are predictive of attracting and keeping customers -- and these metrics are shared across the entire business to create alignment. Then you can define the descriptive, operational and department-level metrics that will guide you on closing the gap between current-state and future-state experience. Which then guides your repair metrics and focus. 

PS. Note that strategy metrics are NOT oriented around you, and what you make and sell. Your customer is the only one who can decide whether you're creating sufficient value -- on their terms -- to justify giving you value in return.

PPS. This is all included in customer strategy: the organization-wide blueprint on how to attract and keep customers. I'll be covering this topic in my next White Board Wednesday. To get it in your inbox, click here

Repair metrics 

You are probably doing some form of this, but let's get strategic instead of boiling the ocean with a lot of repairs and metrics that may not actually be the right ones.

For which customers?

First, we have to know which customer groups are most important to your success. And yes, these are defined up in your strategy. If you're losing unprofitable customers, no big deal... which is yet another metric you should be tracking by segment, but knowing how to segment and prioritize customers isn't always straightforward in a complex business. I'll save this for another post. 

Which issues?

Identify where the holes in your bucket are for these customers, and how much revenue is flowing out of each of them as they move through the conversion lifecycle (ie. at what stage do they drop out and why).  Journey mapping is another essential tool that can help diagnose which issues and why, along with more sophisticated methods like analytics and regression modeling to understand what's driving customer win/loss.

Now let's filter these holes by how essential they are to your future-state vision. Let's say your future-state is all based on, say, helping customers feel more in control... which means you need to provide tools, information and resources to empower them. And let's say one of your holes to repair is the lack of easy information and guidance. Boom. Put this in your higher priority fixes. 

How do we measure?

Lastly, identify descriptive metrics that are linked to those holes and those positive, differentiated perceptions that we want to create. A descriptive metric for tools and resources might be how often customers access a tool, how much time they spend with it, and whether increased use of the tool helps improve their perception metric of feeling empowered and in control. 

Your navigation system: Strategy, metrics and governance

Oooh, the "g" word. I know governance is a term a lot of people don't like, so let's reframe it as "how we make decisions." If... 

  • you have numerous strategies sitting in silos like marketing, digital, IT, service, product, etc.
  • you are drowning in an ocean of metrics, none of which ladder up to shared goals and outcomes, and
  • your decision-making across the organization is also fragmented and based on different criteria....

... then hoo boy, you're in a world of hurt, as they say back in my hometown in Texas. 

I like to call the intersection of strategy, metrics and governance as the organization's navigation system. It's how effective leaders, like pilots flying an airplane, know the flight plan and the associated metrics to mark your progress. Which then allows you to more effectively make decisions, because your flight plan and dashboard are tightly integrated and boiled down to the essentials that you need to know to reach your objective. 

If these three aren't basically the same thing -- across your entire organization -- well, there's your biggest opportunity to accelerate your growth. 

We'll dive deeper into this topic on next week's White Board Wednesday. Stay tuned. 

 

 

Why B2B buyer personas are a massive waste of money (and what to do instead)

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If you're in marketing, it's likely that you've created buyer personas. If you're in B2B, then the number of those personas are probably proliferating due to all the variations like role/title, vertical, size of company, relevance to various products or business units, etc. 

Buyer personas are based on the enormous fallacy of something called the purchase funnel. Spend a lot of resources generating awareness and consideration among the greatest number of prospects, and then convert them to purchase. Job done, right? 

Wrong. 

It's time to start thinking quality over quantity. When you think with the end in mind --  what are the right products, services and experiences required to keep and grow our most valuable types of customers -- then everything changes. 

See, your product teams can't build as many variations of product to match the variety of customers you're pulling in the door. Nor can your organization build an infinite number of experiences. This is why the trend of data-driven personalization is a band-aid. Sure, it can drive top-line revenue... but how in hell is the rest of the organization going to deliver on 100 different promises? Ending your funnel at purchase is taking care of you, but alas, not helping the rest of the organization. 

Reframing your job

Marketing is the tip of the spear. You're the group who is best poised to understand your customers and prioritize them for the entire organization. You're the only group who can do it. And when you start helping the entire organization attract, keep and grow your most valuable customer types -- which boosts brand reputation, accelerates business growth and decreases inefficiencies -- you win major credibility points with other departments and in the board room. 

Instead of a purchase funnel, start thinking conversion lifecycle: a combination of 'conversion funnel' (ie. from awareness to purchase to loyalty and advocacy) with the major lifecycle stages including, for example, installation and getting support. It doesn't make sense to have two different models for different reasons. 

When you think about who is moving through that entire lifecycle, it's a single human (or group of humans.) There's not a set of buyers who suddenly turn into a different set of customers... which is an artificial distinction created by internal silos, represented by different metrics, goals and funnels. You likely have different personas proliferating around the organization that are built by different departments for their own ends.

With this in mind, your job should be focused on understanding how many and which customers are moving (or should move) past the purchase stage. Your ideal customers may be pouring out the holes in the bottom of the bucket faster than you can keep it topped off -- which happens when your organization isn't aligned on the same customer priorities and takes an all-things-to-all-people approach in a helpless response to customer complexity.  

Throw away your buyer personas

... which are no good to anyone in your organization except for sales and marketing. Instead, build a limited set of priority customer personas, linked together by a differentiated psychographic and mindset, that guides the actions and priorities of the entire organization. Show how each priority role moves through the entire lifecycle, and what experience is required to attract and keep them. NOW you've got the right information to inform your "marketing module" -- how to get these people in the door in the first place. 

"Deciding what not to do is as important as deciding what to do." - Steve Jobs

I've seen too many buyer personas with a laundry list of possible mindsets, needs and motivations. They were built in a bottoms-up fashion without a top-down strategy to guide all employees on the single most important customer outcome that everyone should be aiming to create.  

How to fast-track the right answer

You may be thinking, "Of course, Jen, I know that we need to do this. But I don't have the time or resources to dedicate to a big strategy project." 

Yep, exactly. I know the feeling. I'll let you in on a little secret that consulting firms and agencies don't want you to know (or maybe they don't know it themselves): This process is way simpler than it looks. Why? Because human nature is... well, human nature. It doesn't change. And there are only so many customer variables with which you can build a successful brand. 

After nearly 30 years in the business, I've packaged up all the repeatable shortcuts and frameworks that I built for my own use as a consultant, and I'm making them available to you. It's time to take the know-how and short-cuts out of the minds of consultants and put it where it belongs: in YOUR teams. 

Join us for our upcoming webinar: The Shortcut to Defining Prioritized, Impactful B2B Personas. I'll share my 3-part recipe for getting to the right answer fast. 

Click to register. 

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The Value Platform Archetypes

In the last post, we discussed the purpose of a value platform: to serve as the customer-centric beating heart of an organization’s strategy, informing everything it does in order to bust silos, boost efficiencies, and (most importantly) drive revenue and growth. 

Grounding the Value Platform are the Value Platform Archetypes™, which have emerged over nearly 30 years of customer-insight-driven strategy work. What I noticed after a few years of conducting bottoms-up strategy projects is that we always surfaced variations on the same themes. The first emerged from a brand strategy project for a B2B technology company back in the early 90’s. After numerous 1:1 interviews with technology decision-makers, we noticed three primary needs that drove decision-making: