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Tag Archives: Retention

How AI Can Increase Customer Retention

July 30, 2020   CRM News and Info

This story was originally published on March 21, 2020. As a result of popularity, it is brought to you today as part of our Best of ECT News series.

Customer attrition and churn are not new problems. Anyone who has spent time in the sales world has heard statistics around the cost of acquiring a new customer. It can be five to 25 times
more expensive to acquire a new customer than to retain an existing one.

More importantly,
improving your customer retention by just 5 percent can increase profits by 25-95 percent, depending on your industry and company size. Needless to say, companies cannot afford to neglect their customer churn.

Today, many companies are intrigued by the idea of turning to artificial intelligence for help in the sales process. However, most do not know where or how to get started. The best way to tap into the power of AI and machine learning is by building an intelligent experience.

The intelligent experience is all about leveraging AI and ML to derive predictive insights that can be embedded into the workflow of a CRM. Companies seeking a competitive advantage must find ways to make their business operations more intelligent.

Reasons for Churn

How can the intelligent experience help improve customer retention? It starts with a shift in focus. Typically, businesses are addressing the problem by homing in on churn. They invest time in figuring out how to prevent churn. However, the focus needs to shift from customer churn alone to an overall look at customer success.

Focusing on churn exclusively is a very reactive tactic. Oftentimes, companies are late to the party with churn. They will identify customers likely to churn when it’s too late. This is because there is a major difference between a leading indicator and a lagging indicator.

For example, many businesses want to look at order cadence as a sign of churn. However, it tends to be a lagging indicator of a problem that manifested earlier. In order to make an impact, businesses must look at the leading indicators.

Often the best indicators for churn are further back in the customer lifecycle, during acquisition and onboarding. Sometimes high customer attrition is not due to poor customer service but to poor customer acquisition efforts.

Think back to what was happening in your business when a new customer started. Were you launching a new product? Were there changes in your manufacturing process? How long did it take the customer to start utilizing your service once the deal was executed?

It is crucial to assess the landscape of the acquisition time period. This often is where perceptions of the relationship start to form. Customers are going to be comparing their initial experience to the expectations you set during the sales process. As the age-old adage tells us, first impressions are hard to shake.

Examine Cost

Have you ever determined the true cost of customer churn for your business? Before you take any steps to improve customer retention, you must quantify the cost of churn. There are three major variables to consider.

First is obviously the loss of recurring revenue. Whatever that customer is paying is money lost.

Second, with any existing customer, there is an opportunity to upsell and expand revenue. So you have to take into consideration the loss of that potential revenue.

Finally, factor in all your customer acquisition costs.

By combining these factors, you can get a better understanding of the true cost of customer churn.

Once you have determined the true cost of customer churn, you can begin assessing the quality of churn. Not all customer attrition is regrettable. You should be able to determine what an acceptable level of churn is and set an established benchmark using basic analytics.

For example, it might be OK for a customer to leave if the cost-to-serve is high and the margins are low. That assumes you are acquiring net-new customers at an appropriate velocity and volume to compensate for lost business. AI is certainly exciting, but you cannot jump into it without first laying the foundation with basic analytics.

Get Smart About Customer Success

After you shift your focus from purely churn to overall customer success, determine the true cost of customer churn, and establish foundational analytics, you then can begin using analytics and AI to drive customer success and reduce attrition.

As I mentioned earlier, the real value is in creating an intelligent experience. When implementing AI into a business, gathering insights is great, but that is not enough. You must be able to leverage the insights that can be uncovered from data to identify next steps.

Your AI project cannot be simply about getting a score of how likely a customer is to churn. You need to set your team up for action by weaving insights into the business process. This allows the focus to move from churn to customer success.

Here is how it actually works. To predict the probability of a customer to churn, you need a logistic regression model that is trained on historical data. It is looking for examples of customers who have churned and ones who have not. It will learn from these situations and develop a probability score for each customer. Then various actions can be taken to influence that probability in hopes of changing the outcome.

Natural language processing models can be used to discern a customer’s sentiment. These models can be fed large amounts of unstructured data — such as call recordings and Web chats — to find themes. Then customers can be classified by how they feel: good, bad or indifferent. These classifications then are put into a logistic regression-based churn model.

You are starting to chain together multiple models to help isolate customers who are likely to churn. The key is to figure out how to intervene before something actually happens. This is the power of predictive analytics. It allows you to be more proactive in improving customer retention rather than reactive to customer churn.

Here is an example of how to pair insight with action: George, an inside sales rep, is working the retention desk, which is a specialized team tasked with reaching out to customers who have a high likelihood of churning. He enters the office in the morning and logs into his CRM. He sees a call list generated by an AI model that surfaces and ranks customers likely to churn. It tells George why the customer is likely to churn and provides a relevant sales play to take action.

There is even more value in what AI and ML can do after George makes the call and takes the recommended action. Once he inputs his call notes and updates the CRM, the customer can be re-scored in real time. This system allows you to continue ensuring you are taking the next best steps to retain the customer.

Conclusion

AI is the future of business operations. When contemplating an investment in AI, be sure you have a setup that will allow you to embed insights into the daily workflow of your organization. Through the power of AI, you can start blurring the lines between sales, service and marketing.

Remember, the best time to have a selling conversation is right after you’ve solved a problem. AI can be used to improve customer retention in a variety of industries. Consider how implementing AI can help change your sales operations and ultimately drive customer success.
end enn How AI Can Increase Customer Retention


Nicholas%20Christ How AI Can Increase Customer Retention
Nicholas Christ is account director at
Atrium. He works with customers to leverage their data to unlock its analytic and predictive potential. For more than 20 years as a sales and service leader, he has transformed organizational processes and CRM capabilities. He is also a Salesforce Certified Administrator. Nick graduated from Loyola University Maryland where he earned his B.A. in business administration and management. He lives in Maryland with his wife and two teenage boys.

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How AI Can Increase Customer Retention

July 30, 2020   CRM News and Info

This story was originally published on March 21, 2020. As a result of popularity, it is brought to you today as part of our Best of ECT News series.

Customer attrition and churn are not new problems. Anyone who has spent time in the sales world has heard statistics around the cost of acquiring a new customer. It can be five to 25 times
more expensive to acquire a new customer than to retain an existing one.

More importantly,
improving your customer retention by just 5 percent can increase profits by 25-95 percent, depending on your industry and company size. Needless to say, companies cannot afford to neglect their customer churn.

Today, many companies are intrigued by the idea of turning to artificial intelligence for help in the sales process. However, most do not know where or how to get started. The best way to tap into the power of AI and machine learning is by building an intelligent experience.

The intelligent experience is all about leveraging AI and ML to derive predictive insights that can be embedded into the workflow of a CRM. Companies seeking a competitive advantage must find ways to make their business operations more intelligent.

Reasons for Churn

How can the intelligent experience help improve customer retention? It starts with a shift in focus. Typically, businesses are addressing the problem by homing in on churn. They invest time in figuring out how to prevent churn. However, the focus needs to shift from customer churn alone to an overall look at customer success.

Focusing on churn exclusively is a very reactive tactic. Oftentimes, companies are late to the party with churn. They will identify customers likely to churn when it’s too late. This is because there is a major difference between a leading indicator and a lagging indicator.

For example, many businesses want to look at order cadence as a sign of churn. However, it tends to be a lagging indicator of a problem that manifested earlier. In order to make an impact, businesses must look at the leading indicators.

Often the best indicators for churn are further back in the customer lifecycle, during acquisition and onboarding. Sometimes high customer attrition is not due to poor customer service but to poor customer acquisition efforts.

Think back to what was happening in your business when a new customer started. Were you launching a new product? Were there changes in your manufacturing process? How long did it take the customer to start utilizing your service once the deal was executed?

It is crucial to assess the landscape of the acquisition time period. This often is where perceptions of the relationship start to form. Customers are going to be comparing their initial experience to the expectations you set during the sales process. As the age-old adage tells us, first impressions are hard to shake.

Examine Cost

Have you ever determined the true cost of customer churn for your business? Before you take any steps to improve customer retention, you must quantify the cost of churn. There are three major variables to consider.

First is obviously the loss of recurring revenue. Whatever that customer is paying is money lost.

Second, with any existing customer, there is an opportunity to upsell and expand revenue. So you have to take into consideration the loss of that potential revenue.

Finally, factor in all your customer acquisition costs.

By combining these factors, you can get a better understanding of the true cost of customer churn.

Once you have determined the true cost of customer churn, you can begin assessing the quality of churn. Not all customer attrition is regrettable. You should be able to determine what an acceptable level of churn is and set an established benchmark using basic analytics.

For example, it might be OK for a customer to leave if the cost-to-serve is high and the margins are low. That assumes you are acquiring net-new customers at an appropriate velocity and volume to compensate for lost business. AI is certainly exciting, but you cannot jump into it without first laying the foundation with basic analytics.

Get Smart About Customer Success

After you shift your focus from purely churn to overall customer success, determine the true cost of customer churn, and establish foundational analytics, you then can begin using analytics and AI to drive customer success and reduce attrition.

As I mentioned earlier, the real value is in creating an intelligent experience. When implementing AI into a business, gathering insights is great, but that is not enough. You must be able to leverage the insights that can be uncovered from data to identify next steps.

Your AI project cannot be simply about getting a score of how likely a customer is to churn. You need to set your team up for action by weaving insights into the business process. This allows the focus to move from churn to customer success.

Here is how it actually works. To predict the probability of a customer to churn, you need a logistic regression model that is trained on historical data. It is looking for examples of customers who have churned and ones who have not. It will learn from these situations and develop a probability score for each customer. Then various actions can be taken to influence that probability in hopes of changing the outcome.

Natural language processing models can be used to discern a customer’s sentiment. These models can be fed large amounts of unstructured data — such as call recordings and Web chats — to find themes. Then customers can be classified by how they feel: good, bad or indifferent. These classifications then are put into a logistic regression-based churn model.

You are starting to chain together multiple models to help isolate customers who are likely to churn. The key is to figure out how to intervene before something actually happens. This is the power of predictive analytics. It allows you to be more proactive in improving customer retention rather than reactive to customer churn.

Here is an example of how to pair insight with action: George, an inside sales rep, is working the retention desk, which is a specialized team tasked with reaching out to customers who have a high likelihood of churning. He enters the office in the morning and logs into his CRM. He sees a call list generated by an AI model that surfaces and ranks customers likely to churn. It tells George why the customer is likely to churn and provides a relevant sales play to take action.

There is even more value in what AI and ML can do after George makes the call and takes the recommended action. Once he inputs his call notes and updates the CRM, the customer can be re-scored in real time. This system allows you to continue ensuring you are taking the next best steps to retain the customer.

Conclusion

AI is the future of business operations. When contemplating an investment in AI, be sure you have a setup that will allow you to embed insights into the daily workflow of your organization. Through the power of AI, you can start blurring the lines between sales, service and marketing.

Remember, the best time to have a selling conversation is right after you’ve solved a problem. AI can be used to improve customer retention in a variety of industries. Consider how implementing AI can help change your sales operations and ultimately drive customer success.
end enn How AI Can Increase Customer Retention


Nicholas%20Christ How AI Can Increase Customer Retention
Nicholas Christ is account director at
Atrium. He works with customers to leverage their data to unlock its analytic and predictive potential. For more than 20 years as a sales and service leader, he has transformed organizational processes and CRM capabilities. He is also a Salesforce Certified Administrator. Nick graduated from Loyola University Maryland where he earned his B.A. in business administration and management. He lives in Maryland with his wife and two teenage boys.

Let’s block ads! (Why?)

CRM Buyer

Read More

How AI Can Improve Customer Retention

March 21, 2020   CRM News and Info

Customer attrition and churn are not new problems. Anyone who has spent time in the sales world has heard statistics around the cost of acquiring a new customer. It can be five to 25 times
more expensive to acquire a new customer than to retain an existing one.

More importantly,
improving your customer retention by just 5 percent can increase profits by 25-95 percent, depending on your industry and company size. Needless to say, companies cannot afford to neglect their customer churn.

Today, many companies are intrigued by the idea of turning to artificial intelligence for help in the sales process. However, most do not know where or how to get started. The best way to tap into the power of AI and machine learning is by building an intelligent experience.

The intelligent experience is all about leveraging AI and ML to derive predictive insights that can be embedded into the workflow of a CRM. Companies seeking a competitive advantage must find ways to make their business operations more intelligent.

Shifting the Focus

How can the intelligent experience help improve customer retention? It starts with a shift in focus. Typically, businesses are addressing the problem by homing in on churn. They invest time in figuring out how to prevent churn. However, the focus needs to shift from customer churn alone to an overall look at customer success.

Focusing on churn exclusively is a very reactive tactic. Oftentimes, companies are late to the party with churn. They will identify customers likely to churn when it’s too late. This is because there is a major difference between a leading indicator and a lagging indicator.

For example, many businesses want to look at order cadence as a sign of churn. However, it tends to be a lagging indicator of a problem that manifested earlier. In order to make an impact, businesses must look at the leading indicators.

Often the best indicators for churn are further back in the customer lifecycle, during acquisition and onboarding. Sometimes high customer attrition is not due to poor customer service but to poor customer acquisition efforts.

Think back to what was happening in your business when a new customer started. Were you launching a new product? Were there changes in your manufacturing process? How long did it take the customer to start utilizing your service once the deal was executed?

It is crucial to assess the landscape of the acquisition time period. This often is where perceptions of the relationship start to form. Customers are going to be comparing their initial experience to the expectations you set during the sales process. As the age-old adage tells us, first impressions are hard to shake.

Examining the Cost

Have you ever determined the true cost of customer churn for your business? Before you take any steps to improve customer retention, you must quantify the cost of churn. There are three major variables to consider.

First is obviously the loss of recurring revenue. Whatever that customer is paying is money lost.

Second, with any existing customer, there is an opportunity to upsell and expand revenue. So you have to take into consideration the loss of that potential revenue.

Finally, factor in all your customer acquisition costs.

By combining these factors, you can get a better understanding of the true cost of customer churn.

Once you have determined the true cost of customer churn, you can begin assessing the quality of churn. Not all customer attrition is regrettable. You should be able to determine what an acceptable level of churn is and set an established benchmark using basic analytics.

For example, it might be OK for a customer to leave if the cost-to-serve is high and the margins are low. That assumes you are acquiring net-new customers at an appropriate velocity and volume to compensate for lost business. AI is certainly exciting, but you cannot jump into it without first laying the foundation with basic analytics.

Getting Smarter About Customer Success

After you shift your focus from purely churn to overall customer success, determine the true cost of customer churn, and establish foundational analytics, you then can begin using analytics and AI to drive customer success and reduce attrition.

As I mentioned earlier, the real value is in creating an intelligent experience. When implementing AI into a business, gathering insights is great, but that is not enough. You must be able to leverage the insights that can be uncovered from data to identify next steps.

Your AI project cannot be simply about getting a score of how likely a customer is to churn. You need to set your team up for action by weaving insights into the business process. This allows the focus to move from churn to customer success.

Here is how it actually works. To predict the probability of a customer to churn, you need a logistic regression model that is trained on historical data. It is looking for examples of customers who have churned and ones who have not. It will learn from these situations and develop a probability score for each customer. Then various actions can be taken to influence that probability in hopes of changing the outcome.

Natural language processing models can be used to discern a customer’s sentiment. These models can be fed large amounts of unstructured data — such as call recordings and Web chats — to find themes. Then customers can be classified by how they feel: good, bad or indifferent. These classifications then are put into a logistic regression-based churn model.

You are starting to chain together multiple models to help isolate customers who are likely to churn. The key is to figure out how to intervene before something actually happens. This is the power of predictive analytics. It allows you to be more proactive in improving customer retention rather than reactive to customer churn.

Here is an example of how to pair insight with action: George, an inside sales rep, is working the retention desk, which is a specialized team tasked with reaching out to customers who have a high likelihood of churning. He enters the office in the morning and logs into his CRM. He sees a call list generated by an AI model that surfaces and ranks customers likely to churn. It tells George why the customer is likely to churn and provides a relevant sales play to take action.

There is even more value in what AI and ML can do after George makes the call and takes the recommended action. Once he inputs his call notes and updates the CRM, the customer can be re-scored in real time. This system allows you to continue ensuring you are taking the next best steps to retain the customer.

AI is the future of business operations. When contemplating an investment in AI, be sure you have a setup that will allow you to embed insights into the daily workflow of your organization. Through the power of AI, you can start blurring the lines between sales, service and marketing.

Remember, the best time to have a selling conversation is right after you’ve solved a problem. AI can be used to improve customer retention in a variety of industries. Consider how implementing AI can help change your sales operations and ultimately drive customer success.
end enn How AI Can Improve Customer Retention


Nicholas%20Christ How AI Can Improve Customer Retention
Nicholas Christ is account director at
Atrium. He works with customers to leverage their data to unlock its analytic and predictive potential. For more than 20 years as a sales and service leader, he has transformed organizational processes and CRM capabilities. He is also a Salesforce Certified Administrator. Nick graduated from Loyola University Maryland where he earned his B.A. in business administration and management. He lives in Maryland with his wife and two teenage boys.

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CRM Buyer

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Customer Retention Blooms Again

February 13, 2020   CRM News and Info

Brightback, a San Francisco-based company focused on customer retention for subscription businesses, recently published a report on customer churn and what more than 400 subscription companies say they’re doing about it.

Its findings are in line with many other sources I’ve been writing about recently, and the data deserves an examination.

First of all, we’re way past the point where subscription companies can expect to sign all of the new customers they need to replace those that, for various reasons, decide to end their relationships. In fact, it’s possible that time never existed, for the simple reason that attracting new customers is expensive compared to keeping those you have.

There’s no doubt that customer retention now has a place of primacy in most subscription vendors’ planning, though it’s anything but clear what the best approaches are. After all, different companies have different needs driven by products, customer bases and the like.

Owning the Problem

The interesting thing about Brightback’s report, though, is that retention — not new customer acquisition — is expected to drive the lion’s share of growth this year. That makes sense, because existing customers represent a fertile field for upselling and cross-selling.

Moreover, they represent an audience with a low cost of sale, since by definition an existing customer already understands a company’s product offerings and way of doing business, as well as how to come up to speed. So a sale to an existing customer can be more profitable than a sale to a new customer, which can cost more for sales and onboarding.

The indication from such data is that in many markets we’ve entered a zero-sum condition in which new customers come not from the uninitiated but from competitors. So, a vendor’s first job is to keep churn and attrition low, while its second job is to do what it can to steal customers from competitors. In fact, 62 percent of those surveyed rated customer retention a higher priority than customer acquisition.

Even a casual look at the data reveals that subscription vendors could be doing more to retain customers. For example, 96 percent of respondents said that customers canceled for reasons that could be finessed.

Perhaps that isn’t happening enough because vendors haven’t figured out the whole zero-sum angle. Also, no single department owns the churn problem, though 80 percent of B2C companies and 69 percent of B2B companies said they published churn target. No news on how many achieved it.

The respondents said that up to four different departments had some responsibility for churn, including customer success 27 percent, sales 20 percent, operations 18 percent, and marketing 17 percent.

Creative Engagement

Unfortunately, there’s little outside-the-box thinking happening, in my opinion. Seventeen-percent of companies facing churn responded with loyalty programs, better tracking of why the customer canceled (14 percent), creating or improving automated workflows (14 percent), and creating new channels to engage customers (11 percent).

Those actions take place in the rearview mirror and have little effect on keeping a customer in the stable. That’s especially true for the second most popular tactic of better tracking why customers cancel. What’s needed is churn prediction — but that idea captured only10 percent of the survey’s responses — and shifting from reactive to proactive churn management, which got a dismal 9 percent.

What’s most disconcerting is the turn to loyalty programs and the like. I wrote a book about loyalty a few years ago, and not much has changed. For the most part we still do it wrong. Loyalty programs are a form of discount, and while they may save a customer from churn, they also teach the customer how to obtain a good discount.

Even if the churn rate is acceptable in such cases, the profitability isn’t. Too often a company ends up with two classes of customer. One customer is in good standing and happy to pay the going rate for products and services. The other customer is more of a zombie hanging around the customer base half dead and not contributing adequately to the bottom line.

If a vendor is going to overcome churn and boost retention, it’s not going to happen through discounts and loyalty programs. It has to happen with engagement — getting into the customer’s face in an unobtrusive way to get a better sense of why customers stay and who is dissatisfied enough to leave, and doing it in enough time to execute a plan.

Yet fully half of the survey respondents said that discounts and personalized offers based on the reason for cancellation were their top approaches to averting churn.

My Two Bits

It’s time to take the next step and become proactive about churn. Anticipating churn and monitoring KPIs isn’t hard. Most companies in the survey said they had meetings to discuss churn at least quarterly if not more frequently. That’s a good start since you can’t deal with a problem you don’t know about.

Hanging onto customers ought to be easy, given the data we collect and the available tools. It would help to give the assignment to one department and for that department to take the job aggressively, but that also enters into another challenge.

Too often the sales group will see churn as a sales problem, and likewise all the others. It’s the story of the man with a hammer who sees the world’s problems as a nail to be pounded.

Customer success might be a good fit for the job, as by definition a customer that’s not successful will be first to cut losses come renewal time. This probably means giving a bigger budget to customer success, and there’s no telling if companies are on board with the idea.

Having a 90-day window is important for customer retention. Metrics that can spot a potential churn 90 days out used to be a tall order, but today it’s very doable. The great challenge is organizing and motivating the organization to deal with this very real threat. Although not enough has been done yet, according to the data, that appears to be changing.
end enn Customer Retention Blooms Again


Denis%20Pombriant Customer Retention Blooms Again
Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.

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Retention, Retention, Retention

January 25, 2020   CRM News and Info

It’s hard to say with any specificity where the CRM market will move this year, but I’m a pundit so let me try anyway. After more than two decades, CRM has landed in the business landscape and spread out in impressive ways.

When CRM emerged in the late 1990s social media didn’t exist, and the idea of social networking was confined to a few papers from Harvard and other places. Analytics was a good idea, Bayesian analysis and machine learning and such were interesting ideas — but we were all constrained by compute power.

The Internet was just coming out of its gestation as part of a research project in the Defense Department too, and cloud computing? Please.

Then compute power stopped being a roadblock, memory got better, and storage became practically infinite — all prerequisites for a big data revolution. Today all of that is commonplace, part of CRM, and even in danger of eating its young.

Social media especially has a dark underside that we’re beginning to appreciate even as the purveyors circle the wagons and lawyer up or hire taking heads from K Street in D.C. This rarely works for any industry, yet the founders still try.

R.I.P. Customer Experience

So, where to from here? CRM is too big and has too much momentum, making it unlikely to be derailed — at least not directly. Frankly, some of the new technologies and solutions that will reach the market this year will be too important and attractive to avoid using simply because of any concerns about misuse.

CRM has been around long enough to have covered virtually all of the relevant niches, and that’s been so for a while too. So, my inclination is that the industry will shift but not slow down.

I think the big change coming is toward customer retention. We’ve exhausted the idea of customer experience. We’ve been talking about it for a long time, and while it’s useful — especially for startups selling that first widget — it seems companies today increasingly are trying to figure out how to hang on to what they have and perhaps take something from the competition.

That’s the definition of a zero-sum market and it doesn’t last forever — but it does last long enough to help consolidate a market, leaving fewer vendors competing on thinner margins for the attention of very large customer bases. All of this suggests that customer retention will be the key issue we’ll need to deal with in the years ahead.

The Rise of Engagement

In prior market cycles we talked about selling “whole product” — the idea that a product encompasses much more than whatever gets shrinkwrapped. Today we call it “engagement,” because so much of business is repeat business from subscriptions, and it’s essential to engage if you want to retain.

Retention is not something you do directly, though. It’s a result — not the effort itself. The effort needed to improve retention is engagement, or finding better and more effective ways to get customers to like and, well, engage with, brands. That’s where CRM, when used for good, can be especially effective.

We now have the tools to identify customer needs based on longevity, lifetime value and demographics. That’s where I suspect an increasing amount of effort will land as businesses struggle with the truths of zero-sum economics.

Populations only grow so fast, and based on this, markets grow organically. Still, what businesses and their investors want most is above average growth, which necessitates taking customers away from competitors as well as doing the utmost to retain your own.

All of this stems from engagement. Experience might be the bright shining object that first attracts, but it’s the support, policies and procedures a company deploys through its systems that represents whole product and keeps customers coming back.

So I’m looking for a few interesting announcements from CRM in the months ahead, but my suspicion is that the battle will be won or lost around engagement. We’ll see.

end enn Retention, Retention, Retention

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Denis%20Pombriant Retention, Retention, Retention
Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.

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6 Simple Steps to Improve Your B2B Customer Retention

January 23, 2020   CRM News and Info

By Robert C. Johnson

Jan 21, 2020 12:05 PM PT

The business-to-business buyer’s journey is often difficult and long. The typical buying group for a complex B2B solution involves six to 10 decision makers, according to Gartner, each of them bringing information they independently gathered to share with the group before making a decision.

This information often opens the door for new suggestions, creating an even longer buying process. With sales teams putting in significant effort and work into securing each customer, companies should find ways to ensure they’re able to retain those customers after they sign.

One path is through a company’s customer support team. While improving your B2B customer support team can seem like a long-term process, it doesn’t need to be. No matter what stage your company is in, there are steps, both big and small, you can take that will have a measurable impact on the business.

Following are six changes companies can make to improve B2B customer support and help increase retention in a matter of weeks.

1. Schedule Recurring Follow-Ups With Your Customers

Not all of your customer interactions should revolve around solving a problem. Many businesses don’t think to check in with their customers on a regular basis, especially when things are going well.

Customers likely won’t have a positive impression of your company or product if they talk with you only when something is broken. To become a trusted partner, regular conversations are a must. Talk to customers about your business relationship, as well as your own goals and plans as a company, and how you can be a good partner to them as they try to navigate and grow within their own industry.

Regular checks-in with customers can be a good opportunity for customer support and customer success to work together. Because both teams are responsible for managing the customer relationship post-sale, they often need much of the same information about a customer to maintain the relationship.

For example, a regular call creates a natural opportunity to bring up and discuss potential problems before they cause major issues, both on your end and for the customer. Both customer support and success teams benefit from these conversations, because it gives both the opportunity to proactively adjust their approaches to the customer.

They can make adjustments based on regular feedback rather than relying on developing a relationship based on navigating specific, potentially urgent problems. By caring for the customer beyond reacting to their issues, you can strengthen the relationship, turning your customer into a partner willing to stand by and advocate for your product and your team.

2. Add ‘Contact Us’ to Every Site Page and Outbound Email

Your support team needs to be accessible in as many places as possible. Many companies include a “contact us” link on their main homepage and a few other major pages, but they don’t include information on landing pages or other content, meaning a user who may be on deeper pages has to navigate around the site just to find contact information.

Now imagine this user is one of your customers. A person who can’t find out quickly and easily how to contact your team will be less likely to reach out, and your support team will be left completely unaware that your customer may have a problem.

You don’t want a customer thinking you can’t or won’t solve their issues, so your contact information must be accessible in as many places as possible. Every page must have a “contact us” link, and every email should have a signature with the same option.

Even non-support professionals should have this information, allowing your customers (and maybe even a few future customers) easy access to your support team. With just a few clicks, your team will be available to customers needing answers, giving them the opportunity to demonstrate their expertise and capability to solve their problems.

3. Customize Responses to Ticket Submissions

It may seem hard to believe, but some businesses still don’t send confirmation emails when they receive a ticket from a customer. Ticket confirmation should include information that lets your customer know what to expect from your customer support team.

These automated responses can be built to include a wide variety of custom information, allowing you to include your company’s logo and even details about your agent. By sharing the name of your agent and a brief message, the response will have a noticeable impact on your customer, who then will know an agent has been assigned to take ownership of their problem.

The message can be as simple as, “Hi John, my name is Jane and I’ve seen your ticket. I’m reviewing it and will follow up with you soon.”

A ticket confirmation message is a must-have for any customer support team, as it lets your customer know at the very least that you’ve received their message. Even if you don’t have the time or expertise to set up a detailed and customized automated response, a simple response acknowledging that your team has received a request will ensure your customer doesn’t feel ignored.

4. Examine Customer Indicators to Better Address Inquiries

Support interactions with a customer who is satisfied with your product and customer support overall should be managed differently than for a customer who may be frustrated with the overall experience.

To ensure that it does what it can to retain existing customers, your customer support team needs software that can help identify which customers are happy and which may be in danger of switching to a competitor.

The right software should be able to analyze the sentiment of your customers’ messages, measuring overall customer distress and aiding your support team in crafting personalized communication with customers tailored to improve the customer relationship.

By understanding your customers’ level of happiness, you can leave them feeling better about each interaction with customer support and confident you care about issues they may have.

Beyond sentiment, your support team should monitor how often your customers use your product. A customer who isn’t using your product as often as other customers could be about to move on to another solution.

This can be a good indicator. You can alert your success team of low product usage, informing them they need to reach out and ask if there’s anything the customer expects from the product or team but isn’t getting. Equipped with this information, you can reduce customer churn and improve your customer’s overall happiness with your product.

5. Provide Customers With Immediate, Self-Service Content

More than ever, customers will try to solve an issue themselves before reaching out to the customer support team. You should offer self-service resources to your customers, giving them access to common fixes and tutorials so they can save their own time and your team’s time by quickly troubleshooting on their own.

This content needs to be updated regularly so customers trust it and it provides them with updates on new solutions and fixes. If the information is stagnant, it will reflect poorly on your support team.

A simple tactic is to develop self-service updates alongside regular product updates, and allow customers to sign up for alerts when the self-service portal is updated. There are resources that can assist in notifying customers when new content goes live.

Your portal should include contact information on every page. A customer who can’t find information should always be one click away from contacting your support team. If a customer reaches out from the portal trying to address a problem for which there’s already an answer, it could be a sign the solution either no longer works or isn’t easy to find, and your team might need to update the process for locating or utilizing the information.

6. Include a Personal Touch

Not all interactions with customers should be via email or over the phone. A thank you note or small gift such as a swag bag with branded items can indicate to your customer you value their business and care about maintaining a positive relationship.

It may not seem like much, but to your customer it can serve as a memorable moment in the long run when assessing whether to continue a relationship with your company. However, it’s important to know what’s appropriate for your customer’s industry. Some industries and companies aren’t able to accept gifts, so doing a little bit of research before sending anything can help you decide between writing a note or sending a gift.

Your customers will be happier when you take small steps to check in with them and make your customer support department more accessible. When you prove to them the value of your solution and service together, they will be more likely to renew their contracts because they see you as an indispensable partner rather than a plug-and-play vendor.

While the above tips can’t replace the need for properly equipping your support team with the right B2B support solution, they can help your team take the next step with customers.
end enn 6 Simple Steps to Improve Your B2B Customer Retention


Robert C. Johnson is the cofounder and CEO of
TeamSupport, a cloud-based, B2B software application built to help customer-facing support teams serve clients better through stronger collaboration, superior teamwork, and faster issue resolution. A seasoned executive and entrepreneur who has founded and invested in numerous software and high-tech companies, Robert’s industry experience as a business leader and a customer inspired him to create TeamSupport to give support teams the tools and best practices to enhance customer loyalty and positively impact product sales.

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Marketing Automation for Insurance Policyholder Retention

January 21, 2020   CRM News and Info

Insurance customer buying patterns have changed drastically over the past few years, and today’s consumers are accustomed to conducting thorough online research and comparing their options before making any kind of purchasing decision. While every industry has had to change its tune to meet the demands of these new buying patterns, insurance brokerages have had to do a complete overhaul.

Insurance Family Marketing Automation for Insurance Policyholder Retention

In the past, insurance brokerages could rely on word-of-mouth and reputation to drive more business. But today, they have to be ready to deliver the right message at the right time to attract, engage, and convert new policyholders. 

Unfortunately, although securing customers is a major challenge in its own right, many insurance brokerages are also finding it difficult to retain customers — even those they’ve had for years. Just like the new policyholders insurance brokerages are trying so hard to acquire, their current customers now have the freedom to shop around and find policies that better suit their needs. 

To prevent this, insurance marketers must be prepared to engage and nurture their customers with relevant offers that solve their pain points. A great challenge for insurance marketers is that, although the tasks required to remain competitive has grown, most smaller teams lack the resources, time, and systems to get the job done. 

Thankfully, technology has significantly evolved to help insurance brokerages deal with the demands of today’s consumers. Marketers now have access to affordable and powerful marketing automation software that can help them innovate their marketing strategies with less effort and better results. The right solution can help them deliver more personalized marketing, streamline processes, and measure success. 

Keep reading to learn a few ways you can use this powerful technology to help your team expand and execute your marketing strategy to build better customer relationships that encourage growth.

Leverage Automatic Segmentation and Lead Scoring to Deliver Personalized Messages

You’ve probably heard time and time again about how important it is to deliver the right message at the right time. But trying to predict your customers’ behavior and what sort of policies they’re looking for is easier said than done. 

If you’re working with an email-only platform or a disconnected CRM, grouping customers into relevant lists can be tedious and, many times, inaccurate. Throw in messaging and timing, and matching your customers with relevant policies and offers can seem almost impossible. Marketing automation helps you mechanize many of the steps required to deliver personalized messaging so you can focus your efforts on enhancing your overall marketing strategy. 

To start, marketing automation enables you to eliminate the guesswork and reduce the amount of time it takes to segment your audience. For example, Act-On allows users to automatically segment contacts as you uncover more information about them and track their behavior. So, if a potential policyholder visits a certain insurance product page or clicks on a link to learn more about bundle pricing, marketing automation platforms can automatically enter them into the appropriate contact lists so you can communicate the right message to them moving forward. 

You can also ensure accurate segments by implementing lead scoring. This process allows you to measure where your customers are in the buyer journey by assigning points (negative or positive) each time they complete an important action (such as filling out a form, downloading a piece of content, or visiting a webpage). Knowing exactly where your customers are in the buyer journey and how they got there empowers you to provide them with more targeted messaging and product recommendations. This tactic will keep customers engaged, cultivate policyholder loyalty, and lead to more upsell opportunities.

Remain Top-of-Mind With Lead Nurturing Campaigns

Good marketing (and good customer marketing, especially) is not only about delivering the right message at the right time, but also consistency. You can’t go weeks or months without talking to your insurance customers and expect to be their first choice when the time to renew their policies comes around. You also can’t blame them for researching other vendors that can meet their needs if you haven’t taken the time to communicate what you have to offer. 

With all the work you have to do, the last thing you want to hear is that you need to start sending more emails. Launching automated nurture campaigns is a great way to keep customers in the loop, introduce them to helpful offerings, and help them build confidence in your brand — all without using more time and resources. 

Even better, the engagement information you gather from these campaigns can mobilize your team to reach out with even more targeted information and resources that improve loyalty and promote retention. Your team can leverage nurture campaigns to track user behavior and identify opportunities to match customers with additional insurance products, remind them of their current benefits, or step in to remediate a situation if there is ever any conflict or sign of customer dissatisfaction. 

The best part is that Act-On allows you to create automated nurture campaigns for a variety of customer marketing efforts (such as onboarding, customer loyalty, and upsell programs) that launch whenever a customer completes an action or meets certain criteria. This allows you to send frequent and relevant communications to your customers without having to go into the platform manually to ensure that the email is sent. 

Educate Customers With Relevant Content 

As I’ve mentioned, your prospective and existing policyholders will actively look for solutions to their pain points. As they do, they’ll likely come across your competitors’ websites and marketing materials. If your rivals are offering targeted content and product offerings that match your customers’ needs, you run the risk of losing them to the competition. 

You can prevent this from happening by distributing relevant content and information to all of your target audiences. Placing content front and center on your website is the first step toward guiding your customers to the information they need. Taking the extra step of gating this content behind manicured landing pages allows you to collect additional prospect information that you can use to inform your marketing efforts and improve your outreach. 

Once you know a customer is interested in a certain insurance topic, you can enter them into a related automated email campaign to provide more information that can help them in their decision-making process.

Own the Customer Journey From Beginning to End With Act-On

Marketing automation equips insurance marketers and agents with everything they need to get to know their customers, deliver timely and relevant messaging, and stand out from the crowd. It also allows you to automate your efforts and streamline processes, empowering you to focus your skills and expertise where they will make the most impact. As a result, your organization will reduce costs and improve results. 

If you’d like to learn how marketing automation helps insurers overcome common marketing challenges to drive results, you should check out our eBook “5 Common Challenges Facing Insurance Brokers.” 

And if you’d like to see our platform in action, please book a demo with one of our marketing automation experts. They can show you how to leverage Act-On to implement the strategies mentioned above — and much more!

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How To Improve Customer Experience And Boost Retention Rates

August 22, 2019   BI News and Info
 How To Improve Customer Experience And Boost Retention Rates

Great customer experience (CX) leaves a lasting impression. It can make you feel more positively about the brand and encourage repeat purchases. While this is often conflated with customer service – which refers to the direct assistance and advice provided to customers for a product or service – CX goes several steps further. It’s about the interaction between a brand and its customer for the duration of the relationship, taking in customer care, product and service features, advertising, and social media engagement.

It cannot be overstated just how important this is to a company’s success. A study by the Temkin Group found that 86% of buyers are willing to pay more for a great experience. As such, CX can have a major impact on your business’ retention rates and, in turn, your bottom line. In fact, the report found that companies can expect to see a whopping 70% increase in revenue within three years of investing in CX.

But as CX is such a broad concept, how exactly can your brand improve on the experiences you provide?

Understand your customers better

The first step to improving CX is learning as much as you possibly can about your customers. If you don’t understand their preferences and priorities, it will be difficult for you to connect with them and provide the experience they’re looking for. Effective market research is particularly useful to bolstering retention rates, with 54% of consumers more loyal to brands that demonstrate a deep understanding of their needs and desires.

One way of better understanding your customers is by creating personas and giving them each a name and personality. Doing this helps you recognize different sections of your audience and determine what they want from your brand. However, you shouldn’t just rely on demographics like age, profession, and location to create these personas. Use analytics tools to give you real-life insights into your audience, like where your site traffic is coming from. Apply this information to your personas so you know where and when to most successfully reach them.

You can go even further than this with analytical tools to better understand audience preferences. From clicking on a link to reading through a Web page, every customer action provides useful insight into their behavior when using your site. As such, these tools are crucial for gathering and organizing behavioral data on customers; for example, analyzing your website performance, such as what visitors are searching for when they access your site and what the bounce rate is on certain pages.

These details can help you ascertain elements that your audience doesn’t understand or like about your site and create a better overall user experience. For instance, if people are struggling to navigate certain pages, you’ll know you need to be work on them. Another option may include five different cloud solutions that can be used for CX purposes. For instance, a customer data cloud solution helps companies streamline data they’ve gathered on their audience into one app, while a marketing cloud solution can be used to create in-depth customer profiles.

Produce a defined CX vision

The next step to improving CX is to create a clear, customer-focused vision for your company. The simplest way to do this is with a vision statement that can act as a guiding principle for employees. For example, Nordstrom’s mission statement is: “To give customers the most compelling shopping experience possible.” Although clothing choice, quality, and value are all encompassed in the statement, it’s evident that customers are the main focus. By creating a similarly definitive vision for your company, you ensure that employees are all on the same page and motivated to deliver an exceptional experience to customers on your behalf.

To create your mission statement, you’ll need to take into account whether there’s a gap between the needs and wants of customers and what they experience when interacting with your brand. You will also have to think about how your brand can gain an advantage against its competitors and which points on the customer journey require particular attention.

It’s therefore essential to create a customer journey map, outlining each step your customers go through when interacting with your brand – including pre- and post-sale aspects of their experience. By mapping out each of these interactions, you can make it easier for employees to visualize the customer journey and improve their understanding of customer needs at each point on it. Combining this with your CX vision helps employees to pinpoint exactly how they can influence it and improve on their current performance.

Create emotional connections with your customers

The best customer experiences foster a connection with brands on an emotional level. In fact, a study by Forrester and FocusVision shows that 93% of retailers believe customers are more likely to spend money on a brand they’re emotionally linked with. As such, creating these encounters can significantly improve a customer’s brand experience.

There are numerous ways you can foster this connection, with perhaps the most obvious strategy being to make your customers feel like they’re being cared for. This can include anything from paying close attention to their feedback to keeping them in the know (such as letting customers know the exact progress of an order). Another method is weaving user-generated content (UGC) into customer journeys, such as reposting customer pictures on Instagram (always crediting the original account, of course) or encouraging them to produce video content for advertising campaigns. This can spark a greater sense of belonging among your audience, which in turn helps to create feelings of loyalty and affinity. In fact, UGC has been shown to increase online sales by up to 15%.

Even something as simple as using certain colors when it comes to things like your logo, advertising, and office or store layout can help create an emotional CX. Different colors evoke different emotions, so make sure to use colors that are in line with the emotions you want to elicit among your audience.

Next-Generation SAP Business Scenario Recommendations report provides you a bird’s eye view of your business and identifies the potential value from SAP S/4HANA. Want to learn more? Join our webinar on September 26th.

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3 CRM Benefits That Will Boost Your Member Retention

October 25, 2018   CRM News and Info

Membership retention is like a window into your nonprofit’s health – your association’s gauge of overall organizational performance. If retention is high, morale and productivity are, too. If it’s low, concerns abound.

What is your nonprofit’s retention rate? What would you like it to be?

According to Associations Now Daily News, a common retention target is 75 percent. But a recent membership benchmarking report from Advanced Solutions International (ASI) suggests that average retention rates may be slipping: In 2016, 73 percent of survey respondents said retention was higher than 75 percent, compared to only 65 percent in 2017. Certainly, this evidence poses a concern for association leaders who understand that losing members is one of their greatest organizational challenges.

“Perhaps the biggest key to member (and donor) retention is personalizing your outreach,” says Jeff Gordy, President and CEO of Z2 Systems Inc. and contributor to NTen. Gordy explains that while most of your members share a commitment to your organization’s common cause and are likely motivated by similar incentives, it’s important to remember that everyone brings unique preferences, interests, and challenges to the table.

“They all want to hear from your organization through different communication channels, and they all want to engage with your organization in different ways,” Gordy continues. “The more you can cater your outreach to each individual donor based on their habits and preferences, the more relevant, and thus, compelling your outreach will be.”

Engaging members with CRM software

Focusing on member engagement may be the path toward increased customer loyalty, and thus retention. One practical tool to grow loyalty within your existing member base is to ensure you have a reliable and association-friendly membership tracking and retention software in place.

Here’s how using a customer relationship management (CRM) system helps to better engage your members.

1. Maintain accurate data. A CRM provides up-to-date member information such as donor status, event attendance, and preferred channels of communication. Furthermore, by using a member management system powered by business intelligence, you can generate real-time member data dashboards. These reports include data on donor trends, event registrations, email, and social media interactions, for example.

2. Communicate smartly. Process new memberships, renewals, product and service orders, and membership communications promptly and accurately. An effective CRM reveals the best timing and mediums for communicating your member messages, such as phone, direct mail, email, or social media.

3. Personalize interactions. A CRM can help you track member interactions and develop custom messages for individuals based on their prior engagement with your products and services. A member management system also allows you to create segmented audiences based on personas, with personalized pushes for each.

BroadPoint Engage: The best of both worlds

Microsoft Gold partner BroadPoint has built a reputable CRM software that effectively tracks member engagement and retention. Called BroadPoint Engage, the CRM member management system is an enhancement to Microsoft Dynamic 365 that is designed to achieve everything a traditional association management system does while adding capabilities the most sophisticated businesses in the world use.

“BroadPoint Engage is a Saas-based solution built and run 100 percent in the Cloud. We take world-class software and domain expertise to build Engage – providing integrated functionality within the CRM to make it work uniquely for the nonprofit space,” says Tom Condon, VP of Enterprise Solutions at BroadPoint.

Engage fulfills the above benefits and more by creating unique member experiences using intelligent analytics, on-demand data, and contextualized member campaigns. Learn how take your association to the next level with this powerful member management CRM. Contact BroadPoint today to get started.

By BroadPoint, www.broadpoint.net.

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Customer Retention Secrets For Startups

January 12, 2018   SAP

When members of Lowe’s Innovation Labs first began talking with the home improvement retailer’s senior executives about how disruptive technologies would affect the future, the presentations were well received but nothing stuck.

“We’d give a really great presentation and everyone would say, ‘Great job,’ but nothing would really happen,” says Amanda Manna, head of narratives and partnerships for the lab.

The team realized that it needed to ditch the PowerPoints and try something radical. The team’s leader, Kyle Nel, is a behavioral scientist by training. He knows people are wired to receive new information best through stories. Sharing far-future concepts through narrative, he surmised, could unlock hidden potential to drive meaningful change.

So Nel hired science fiction writers to pen the future in comic book format, with characters and a narrative arc revealed pane by pane.

The first storyline, written several years before Oculus Rift became a household name, told the tale of a couple envisioning their kitchen renovation using virtual reality headsets. The comic might have been fun and fanciful, but its intent was deadly serious. It was a vision of a future in which Lowe’s might solve one of its long-standing struggles: the approximately US$ 70 billion left on the table when people are unable to start a home improvement project because they can’t envision what it will look like.

When the lab presented leaders with the first comic, “it was like a light bulb went on,” says Manna. “Not only did they immediately understand the value of the concept, they were convinced that if we didn’t build it, someone else would.”

Today, Lowe’s customers in select stores can use the HoloRoom How To virtual reality tool to learn basic DIY skills in an interactive and immersive environment.

SAP Q417 DigitalDoubles Feature3 Image2 Customer Retention Secrets For StartupsOther comics followed and were greeted with similar enthusiasm—and investment, where possible. One tells the story of robots that help customers navigate stores. That comic spawned the LoweBot, which roamed the aisles of several Lowe’s stores during a pilot program in California and is being evaluated to determine next steps.

And the comic about tools that can be 3D-printed in space? Last year, Lowe’s partnered with Made in Space, which specializes in making 3D printers that can operate in zero gravity, to install the first commercial 3D printer in the International Space Station, where it was used to make tools and parts for astronauts.

The comics are the result of sending writers out on an open-ended assignment, armed with trends, market research, and other input, to envision what home improvement planning might look like in the future or what the experience of shopping will be in 10 years. The writers come back with several potential story ideas in a given area and work collaboratively with lab team members to refine it over time.

The process of working with writers and business partners to develop the comics helps the future strategy team at Lowe’s, working under chief development officer Richard D. Maltsbarger, to inhabit that future. They can imagine how it might play out, what obstacles might surface, and what steps the company would need to take to bring that future to life.

Once the final vision hits the page, the lab team can clearly envision how to work backward to enable the innovation. Importantly, the narrative is shared not only within the company but also out in the world. It serves as a kind of “bat signal” to potential technology partners with capabilities that might be required to make it happen, says Manna. “It’s all part of our strategy for staking a claim in the future.”

Companies like Lowe’s are realizing that standard ways of planning for the future won’t get them where they need to go. The problem with traditional strategic planning is that the approach, which dates back to the 1950s and has remained largely unchanged since then, is based on the company’s existing mission, resources, core competencies, and competitors.

Yet the future rarely looks like the past. What’s more, digital technology is now driving change at exponential rates. Companies must be able to analyze and assess the potential impacts of the many variables at play, determine the possible futures they want to pursue, and develop the agility to pivot as conditions change along the way.

This is why planning must become completely oriented toward—and sourced from—the future, rather than from the past or the present. “Every winning strategy is based on a compelling insight, but most strategic planning originates in today’s marketplace, which means the resulting plans are constrained to incremental innovation,” says Bob Johansen, distinguished fellow at the Institute for the Future. “Most corporate strategists and CEOs are just inching their way to the future.” (Read more from Bob Johansen in the Thinkers story, “Fear Factor.”)

Inching forward won’t cut it anymore. Half of the S&P 500 organizations will be replaced over the next decade, according to research company Innosight. The reason? They can’t see the portfolio of possible futures, they can’t act on them, or both. Indeed, when SAP conducts future planning workshops with clients, we find that they usually struggle to look beyond current models and assumptions and lack clear ideas about how to work toward radically different futures.

Companies that want to increase their chances of long-term survival are incorporating three steps: envisioning, planning for, and executing on possible futures. And doing so all while the actual future is unfolding in expected and unexpected ways.

Those that pull it off are rewarded. A 2017 benchmarking report from the Strategic Foresight Research Network (SFRN) revealed that vigilant companies (those with the most mature processes for identifying, interpreting, and responding to factors that induce change) achieved 200% greater market capitalization growth and 33% higher profitability than the average, while the least mature companies experienced negative market-cap growth and had 44% lower profitability.

SAP Q417 DigitalDoubles Feature3 Image3 1024x572 Customer Retention Secrets For Startups

Looking Outside the Margins

“Most organizations lack sufficient capacity to detect, interpret, and act on the critically important but weak and ambiguous signals of fresh threats or new opportunities that emerge on the periphery of their usual business environment,” write George S. Day and Paul J. H. Schoemaker in their book Peripheral Vision.

But that’s exactly where effective future planning begins: examining what is happening outside the margins of day-to-day business as usual in order to peer into the future.

Business leaders who take this approach understand that despite the uncertainties of the future there are drivers of change that can be identified and studied and actions that can be taken to better prepare for—and influence—how events unfold.

That starts with developing foresight, typically a decade out. Ten years, most future planners agree, is the sweet spot. “It is far enough out that it gives you a bit more latitude to come up with a broader way to the future, allowing for disruption and innovation,” says Brian David Johnson, former chief futurist for Intel and current futurist in residence at Arizona State University’s Center for Science and the Imagination. “But you can still see the light from it.”

SAP Q417 DigitalDoubles Feature3 Image4 Customer Retention Secrets For StartupsThe process involves gathering information about the factors and forces—technological, business, sociological, and industry or ecosystem trends—that are effecting change to envision a range of potential impacts.

Seeing New Worlds

Intel, for example, looks beyond its own industry boundaries to envision possible future developments in adjacent businesses in the larger ecosystem it operates in. In 2008, the Intel Labs team, led by anthropologist Genevieve Bell, determined that the introduction of flexible glass displays would open up a whole new category of foldable consumer electronic devices.

To take advantage of that advance, Intel would need to be able to make silicon small enough to fit into some imagined device of the future. By the time glass manufacturer Corning unveiled its ultra-slim, flexible glass surface for mobile devices, laptops, televisions, and other displays of the future in 2012, Intel had already created design prototypes and kicked its development into higher gear. “Because we had done the future casting, we were already imagining how people might use flexible glass to create consumer devices,” says Johnson.

Because future planning relies so heavily on the quality of the input it receives, bringing in experts can elevate the practice. They can come from inside an organization, but the most influential insight may come from the outside and span a wide range of disciplines, says Steve Brown, a futurist, consultant, and CEO of BaldFuturist.com who worked for Intel Labs from 2007 to 2016.

Companies may look to sociologists or behaviorists who have insight into the needs and wants of people and how that influences their actions. Some organizations bring in an applied futurist, skilled at scanning many different forces and factors likely to coalesce in important ways (see Do You Need a Futurist?).

Do You Need a Futurist?

Most organizations need an outsider to help envision their future. Futurists are good at looking beyond the big picture to the biggest picture.

Business leaders who want to be better prepared for an uncertain and disruptive future will build future planning as a strategic capability into their organizations and create an organizational culture that embraces the approach. But working with credible futurists, at least in the beginning, can jump-start the process.

“The present can be so noisy and business leaders are so close to it that it’s helpful to provide a fresh outside-in point of view,” says veteran futurist Bob Johansen.

To put it simply, futurists like Johansen are good at connecting dots—lots of them. They look beyond the boundaries of a single company or even an industry, incorporating into their work social science, technical research, cultural movements, economic data, trends, and the input of other experts.

They can also factor in the cultural history of the specific company with whom they’re working, says Brian David Johnson, futurist in residence at Arizona State University’s Center for Science and the Imagination. “These large corporations have processes and procedures in place—typically for good reasons,” Johnson explains. “But all of those reasons have everything to do with the past and nothing to do with the future. Looking at that is important so you can understand the inertia that you need to overcome.”

One thing the best futurists will say they can’t do: predict the future. That’s not the point. “The future punishes certainty,” Johansen says, “but it rewards clarity.” The methods futurists employ are designed to trigger discussions and considerations of possibilities corporate leaders might not otherwise consider.

You don’t even necessarily have to buy into all the foresight that results, says Johansen. Many leaders don’t. “Every forecast is debatable,” Johansen says. “Foresight is a way to provoke insight, even if you don’t believe it. The value is in letting yourself be provoked.”

External expert input serves several purposes. It brings everyone up to a common level of knowledge. It can stimulate and shift the thinking of participants by introducing them to new information or ideas. And it can challenge the status quo by illustrating how people and organizations in different sectors are harnessing emerging trends.

The goal is not to come up with one definitive future but multiple possibilities—positive and negative—along with a list of the likely obstacles or accelerants that could surface on the road ahead. The result: increased clarity—rather than certainty—in the face of the unknown that enables business decision makers to execute and refine business plans and strategy over time.

Plotting the Steps Along the Way

Coming up with potential trends is an important first step in futuring, but even more critical is figuring out what steps need to be taken along the way: eight years from now, four years from now, two years from now, and now. Considerations include technologies to develop, infrastructure to deploy, talent to hire, partnerships to forge, and acquisitions to make. Without this vital step, says Brown, everybody goes back to their day jobs and the new thinking generated by future planning is wasted. To work, the future steps must be tangible, concrete, and actionable.

SAP Q417 DigitalDoubles Feature3 Image5 Customer Retention Secrets For StartupsOrganizations must build a roadmap for the desired future state that anticipates both developments and detours, complete with signals that will let them know if they’re headed in the right direction. Brown works with corporate leaders to set indicator flags to look out for on the way to the anticipated future. “If we see these flagged events occurring in the ecosystem, they help to confirm the strength of our hypothesis that a particular imagined future is likely to occur,” he explains.

For example, one of Brown’s clients envisioned two potential futures: one in which gestural interfaces took hold and another in which voice control dominated. The team set a flag to look out for early examples of the interfaces that emerged in areas such as home appliances and automobiles. “Once you saw not just Amazon Echo but also Google Home and other copycat speakers, it would increase your confidence that you were moving more towards a voice-first era rather than a gesture-first era,” Brown says. “It doesn’t mean that gesture won’t happen, but it’s less likely to be the predominant modality for communication.”

How to Keep Experiments from Being Stifled

Once organizations have a vision for the future, making it a reality requires testing ideas in the marketplace and then scaling them across the enterprise. “There’s a huge change piece involved,”
says Frank Diana, futurist and global consultant with Tata Consultancy Services, “and that’s the place where most
businesses will fall down.”

Many large firms have forgotten what it’s like to experiment in several new markets on a small scale to determine what will stick and what won’t, says René Rohrbeck, professor of strategy at the Aarhus School of Business and Social Sciences. Companies must be able to fail quickly, bring the lessons learned back in, adapt, and try again.

SAP Q417 DigitalDoubles Feature3 Image6 Customer Retention Secrets For StartupsLowe’s increases its chances of success by creating master narratives across a number of different areas at once, such as robotics, mixed-reality tools, on-demand manufacturing, sustainability, and startup acceleration. The lab maps components of each by expected timelines: short, medium, and long term. “From there, we’ll try to build as many of them as quickly as we can,” says Manna. “And we’re always looking for that next suite of things that we should be working on.” Along the way certain innovations, like the HoloRoom How-To, become developed enough to integrate into the larger business as part of the core strategy.

One way Lowe’s accelerates the process of deciding what is ready to scale is by being open about its nascent plans with the world. “In the past, Lowe’s would never talk about projects that weren’t at scale,” says Manna. Now the company is sharing its future plans with the media and, as a result, attracting partners that can jump-start their realization.

Seeing a Lowe’s comic about employee exoskeletons, for example, led Virginia Tech engineering professor Alan Asbeck to the retailer. He helped develop a prototype for a three-month pilot with stock employees at a Christiansburg, Virginia, store.

The high-tech suit makes it easier to move heavy objects. Employees trying out the suits are also fitted with an EEG headset that the lab incorporates into all its pilots to gauge unstated, subconscious reactions. That direct feedback on the user experience helps the company refine its innovations over time.

SAP Q417 DigitalDoubles Feature3 Image7 1024x572 Customer Retention Secrets For Startups

Make the Future Part of the Culture

Regardless of whether all the elements of its master narratives come to pass, Lowe’s has already accomplished something important: It has embedded future thinking into the culture of the company.

Companies like Lowe’s constantly scan the environment for meaningful economic, technology, and cultural changes that could impact its future assessments and plans. “They can regularly draw on future planning to answer challenges,” says Rohrbeck. “This intensive, ongoing, agile strategizing is only possible because they’ve done their homework up front and they keep it updated.”

It’s impossible to predict what’s going to happen in the future, but companies can help to shape it, says Manna of Lowe’s. “It’s really about painting a picture of a preferred future state that we can try to achieve while being flexible and capable of change as we learn things along the way.” D!


About the Authors

Dan Wellers is Global Lead, Digital Futures, at SAP.

Kai Goerlich is Chief Futurist at SAP’s Innovation Center Network.

Stephanie Overby is a Boston-based business and technology journalist.


Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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