SOCAP International

Commercial Innovation— What It Means for You and Your Company

It's not just about technologyThe word innovation often inspires visions of Big Bang technology like artificial intelligence, virtual reality, missions to Mars and the like. And customer care teams across consumer brands are applying technical innovation in customer engagement, operations and how they leverage their customer response data.

However, those who are most successful are also changing the game in how they brand or position themselves within their company. This “commercial innovation” could be as important as technology innovation to the long term success of customer affairs.

The opportunity for commercial innovation is not new. Most of us have had many “seat at the table” or “cost center versus profit center” conversations! But it seems that as an industry we have not yet fully addressed the opportunity to reposition our work. Step changing the customer affairs business contribution almost certainly requires incremental investment, and we see three key commercial innovations that can help make that a reality.

1. Reframe customer care in brand terms.

Like any business function, we have our own language! However, if we want to grow beyond our current scope, we need to take ownership for translating our language for other functions and areas. For example, we often describe our base of customers or audience as the number of contacts our team handles: We “handle 75,000 contacts a year,” which doesn’t easily connect to the rest of the business. So, how can we make this data more more accessible to others in the company?

  • We talk to 75,000 customers a year.
  • As percentage of the U.S. population: 75,000 customers out of 319 million people = 0.024%. While factual, it makes us look small.
  • A percentage of U.S. households makes things better: 75,000 out of 116 million U.S. HHs = 0.065%
  • Include a marketing measure: household penetration. Household penetration is the percentage of households that purchased a brand in the past 12 months. It’s a great measure of a brand’s user base and a really important marketing measure.

Let’s say our brand has 8% household penetration, that means: 75,000 customers/ (116,000,000 U.S. HHs x 0.08 penetration) = 0.0081 = 0.81%. Now we can fram customer care in a way that makes a real connection to the business: “We engage about 1% of our brand’s customers every year!”

2. Provide choices that address business objectives.

InnovationIf a business leader wants to invest in customer affairs, what are the products or SKUs customer care offers the business? This is powerful but can be difficult to answer!

There are a few questions that can help define your offering:

  • What are the brand objectives? (almost always a version of trial and/or loyalty)
  • What can customer relations “turn on” if a brand requests it?
  • What brand objectives does that serve?
  • How much will it cost?
  • How would you estimate or prove the outcomes?

Essentially this speaks to a need for a product development process for customer affairs. Addressing these questions before seeking incremental investment in customer care dramatically increases the odds of success.

For example, if your brand is planning the launch of a new line extension you could propose: “Consumer affairs will offer a trial coupon for product X to all consumers who contact the company for the first six months of 2018. We project that we will offer this to 25,000 consumers, our historical redemption rate (40%) indicates that this will yield 10,000 trial purchases. The operating expense for this effort will be no more than $12,000 plus expected coupon redemption costs of $10,000.”

This idea is certainly not breakthrough, but framing it in this way makes consumer care “investable” by clearly framing the work on terms comparable to other business choices. 

3. Take a page from agencies.

One of the challenges to customer affairs organizations in recent years came with the rise of social media. In many cases, customer care teams saw their sole ownership of 1:1 customer engagement eroded by public relations and social agencies that were hired to engage customers online.

It could be frustrating to see this work and funding allocated to outsiders who most often lacked what we see as critical assets—product knowledge, processes to handle exceptional events, approved messaging and the like.

While in most cases customer care teams have won a role in social media, it’s instructive to consider why we had to make up lost ground. In general, I would attribute this to the commercial skills of the agencies.

Agencies are masters at telling a compelling story in brand language, defining an offering that serves business objectives, and then selling it in a very polished way. It can be easy to dismiss these as simplistic, but we can’t always expect our business to connect the dots on their own. If winning growth investment in customer relations is an objective, plan on competing for that funding, which means professionalizing your communications.

There is little question that technology can and will continue to play a leading role in defining innovation for customer care. But the customer relations teams that will make the greatest contribution to their brand results will likely be those that marry new technology with commercial and business model innovation!

John StiegerJohn Stieger is CMO of Wilke Global, the leading consumer affairs software provider to CPG manufacturers. Previously he held executive roles in consumer relations, social media, brand and IT with P&G and Gillette. He also has tended bar, bagged groceries painted fences and sold shoes. He holds a MBA from Cornell University and a BA from Colgate University. You can reach him at johns@wilkeglobal.com or follow him a @johnstieger.