Why customer experience is the future of performance

Azlan Raj, CMO at Merkle, explains how performance marketing is changing and why brand is back

Why customer experience is the future of performance

“The first thing we need to do,” Merkle CMO Azlan Raj told an audience of marketers at Campaign's Performance Marketing 360 conference, “is transform our data.”

We know that data is a heavy part of performance marketing, he said. “But how do you start prioritising and transforming that data so that it can be leveraged in other channels, so that we can use it for information but also for experience. 

“We need to fill the experience gaps we find, making sure we have an emotive as well as an objective connection. We need to leverage that data, look at the integration of technology — and prioritise that by value.” 

And that leads to the final point: how to become more adaptive? “How do we change how we operate, to put value first in a way that isn’t just long-term brand and short-term data? We need to blend the two together, so we can manage experiences effectively,” Raj suggested.

Consumers are often left wondering if there is a gap between their expectations of a brand interaction and their actual experience, he said. And part of the problem is that advertisers focus too much on short-term performance and not enough on customer experience or long-term value.

“A lot of advertiser activity today is aimed at personalisation based on commoditised data, on the basis of just trying to sell. This has actually desensitised consumers. We’ve been focusing as brands on the next best offer. Where we really need to get to is that next best experience. How do we deliver personalised experiences over the entire customer lifetime?”

Two-thirds of consumers, Raj pointed out, care more about their experience with a brand than they do about other factors, even such as price. Marketers need to adapt accordingly. Each touchpoint provides the brand with both an opportunity and an obligation and it’s the brand’s job to use each touchpoint to deliver moments, experiences and relationships. 

This is a timely approach, Raj explained, because many of the metrics brands use to measure the success of their short-term performance-related marketing actually distort behaviour in a way that undermines long-term value. That’s because,  for the last five years at least, data-driven performance marketing has been given greater emphasis than long-term building of brands and customer value.

While performance marketing is still relevant, it needs to be better integrated into an entire range of brand-marketing activities, including those which prioritise customer experience and building brand value. The ultimate aim is to deliver a total customer experience that delivers the best possible combination of short-term conversion rates and long-term customer value.

As an example of how brands can achieve this, Raj pointed to baby foods producer Danone, which wanted to find a better way to connect with new parents. Its research found that new parents went through a “1,000-day journey” with the brand, until the child’s second birthday. Danone reorganised its brand story and communications around the key milestones of that journey. And using data, it created communications which addressed parents’ real-world concerns and aspirations at each touchpoint. The result? A 25% uplift in digital return on investment. 

“What we’ve seen,” said Raj, “is that businesses which focus on being adaptive and being able to achieve uplifts across brand awareness outperform their peers on retention, satisfaction and revenue.” In fact, organisations which deliver a data-driven customer experience, according to stats Raj shared during the presentation, achieve revenue growth 1.4 times greater than those that don’t.

You can purchase on-demand access to Raj's presentation here.