There is a schism between the way marketers used to function in the broadcast era versus how customers want to communicate with brands today, says Grad Conn, Chief Experience Officer at Sprinklr, the Customer Experience Management (CXM) platform. Grad joined Sprinklr in 2018 after being on the client-side of the business during his stint at Microsoft. Here in a freewheeling chat with Ravi Raman, Publisher of Martechvibe, he speaks about the psychology of persuasion, the changing role of the CMO and how to use modern communication tools to create a sense of belonging for brands. Excerpts from the interview with Grad:
In many ways, we are going back to the one-to-one approach of marketing, but at scale. So, why are so many marketers struggling?
One-on-one marketing is not well-understood. In the 19th century, everything was one-on-one, but it wasn’t built to scale. A customer would walk into a shop or general store, and the shopkeeper or attendant would greet you. The customer would have a long, detailed conversation about what they were looking for.
In the 20th century, we invented mass marketing. Suddenly, we had the ability to reach millions or billions of people with one message. We saw mediums like radio, television, movie theatres, magazines grow.
The problem is that it all became very anonymous. A lot of the negative things that are said about advertising and marketing came from this anonymity. People felt disconnected.
The 21st century is an amazing time to be alive because we have the ability to talk to people in a way that aligns with their interests. I like to think about it like this — I can talk to customers based on their identity, based on their values and based on their moments. This is because we know all these things about people now. These are the things that are most important to people. But there are 4.1 billion people on social media where we can connect on a public platform. So, we’ve got a ton of scale.
Where people are struggling is that one-on-one was direct marketing, mass media was broadcast marketing. What we have now is conversational marketing. Most of us grew up and were trained with a broadcast mindset. In a broadcast mindset, I tell customers how to think about my brand. That doesn’t work anymore.
In the 21st century, customers will talk to their friends and find out what they think of your brand. They will read reviews and form an opinion. You can’t tell them what to think about your brand anymore. What I see now is that CMOs take a broadcast type of communication, put it on a conversational medium like Reddit and try to push it out there. Marketers want to continue the tell strategy. But customers are not interested in that.
Bringing about that shift in mindset from broadcast to conversational is so significant. It’s also a very profound and challenging task to achieve. People will agree with me, nod their heads and then do the same thing they were doing before — send a broadcast creative into a conversational medium.
The people who are able to achieve that change in mindset will have a sustainable competitive advantage just because it is so difficult for others to adapt.
For brands to personalise, they need to gain customer insight. How can CMOs do better here?
There is a contrarian point of view here. I think the word insight is overused and perhaps misused.
I’m not sure everyone who talks about it even knows what they mean when they say insights. What you really want is to understand customer’s values, and particularly the ones that they broadcast. Let’s say sustainability is really important to a customer, then, you want to have a conversation with them about sustainability.
You also want to understand someone’s moments. If I’m about to have a baby, many people should get really excited about that. Real estate companies, car companies, people who sell baby stuff, etc. There are a whole bunch of people that should get really excited about me talking publicly about having a baby. What’s fascinating to me is that very few companies do that.
That is why I think people have themselves wrapped up in this idea of insights, but they aren’t doing the most basic thing. All these companies need to do is find people who have values similar to their brand and talk to them. Find people who have moments that are relevant to their business and talk to them because they would welcome it. You don’t have to sell anything. Just congratulate them if you want to.
I think people work too hard to do all these things with insights, whereas all they need to do is find the people who they can talk to about their interests.
Who is really responsible for delivering on the brand promise or customer experience?
This is a question a lot of companies are struggling with. I would argue at the onset that brand is everybody’s responsibility in a company. I don’t mean this as a cop-out. But for anybody who says the brand is the responsibility of those folks over there, and we’ll behave any way we want to over here — that’s not going to work.
Everybody has to be thinking about the brand and be connected to the brand. Many companies are doing this really well. Zappos is all about fanatical customer service and they embody that from top to bottom. From the lowest-paid customer service person to the CEO, they all live it. It’s actually surprising to me that the Zappos brand ideology hasn’t been more broadly adopted. They even wrote a book about it ten years ago. There is a bigger issue in organisations which is about figuring out how we all live the brand together.
In terms of whose shoulders it falls on, I do see it falling on the CMOs’. But you can’t think of it as the CMO’s job. Instead, the CMOs function here is to work across their peer group and get everyone to work in a brand-centric way. It throws CMOs into a highly collaborative role across the organisation, which is very interesting though that does make the job complicated.
This is also why some of the digital transformation and cross-company projects tend to fall under the CMO now. More than any other group, the CMO plays the role of someone who delivers cross-team integration by breaking silos because it’s the only way to really deliver a good customer experience.
Data is getting a seat at the table for a few years now. Do you see CX getting one?
Recently, data is being expressed in a CX way. I’m not sure if we can separate the two. For example, cart abandonment is something we have been looking at for a long time across industries. But why is the cart being abandoned? What led to it? Getting the double click on that and answering that question tends to drive the experience.
There was an interesting study I read, which explained that when customers see an empty field for a discount code, and they don’t have one, in 80 per cent of the case, it will lead to cart abandonment. Customers will leave their carts to see if they can find a discount. Of course, there may not be a discount available, or they may not find it. So, they don’t end up going back.
Why would a retailer carry this empty field that creates doubt in the mind of the customer? It grabs the customer’s attention and tells them that they are spending more money than they should be. It makes them feel like they are missing out. Instead, it would make sense to keep the field hidden and only let those with the code unlock it.
This is a common problem if you go into any checkout flow today. Interestingly, this is not the case with Amazon.
There are some simple things like which marketers can optimise so that the checkout flow operates seamlessly and it creates a better experience. Marketers need to look at the symptoms like cart abandonment and look at the underlying reasons for the same. When you find out what’s causing the disease, you can treat it. That is how you use data to gain insights and make the business grow.
Take us through Sprinklr’s journey.
There is the journey of the company and then there is the journey of society. There were two things going on at the same time back then. Sprinklr was founded in 2009, but it didn’t really onboard its first customers till 2011. I was one of the very first customers when I worked at Microsoft.
In those early days, the way we were interacting with social media and the way companies were interacting with it was very limited. We had people working on it called Community Managers. It was reflective of the mindset at the time. We thought we needed managers to run this thing like a message board. Today, we are thinking about conversational commerce, selling and a ton of customer care through social. This is because these channels have become the primary way for customers to communicate.
Today, Sprinklr pulls in about 400 million different data sources, including all broadcast TV, radio, magazines, and newspapers. There was a Mary Meeker chart released in 2019 where she showed how customers preferred to communicate with businesses based on their age. Older people (over 70 years) prefer to use the phone, they want synchronous connections. But as you move to younger generations, even Gen X prefer asynchronous connections like social and messaging.
For the last year-and-a-half, we’ve all been forced into a context where we are online all the time and also in meetings most of the time. So, it’s become more important to communicate asynchronously because customers don’t have the time to make a phone call. If I have to phone a company, I will hire someone to do that. I know that they are going to be on the phone for two hours. I just don’t have that kind of time.
This societal change has carried Sprinklr along. We’ve been adding functionalities along the way as and when companies have needed those capabilities.
CX has been defined as the experience a customer has with your brand. If the new primary communication channels to talk to your customers are social, then Customer Experience Management (CXM) is about managing those channels really well. At Sprinklr, we benefited from the growth of those dominant channels and then developed the tools to help companies deliver a great experience.
Is it true that many product innovations were based on your requirements as a client?
Yes and no; I can’t take all the credit for it. Sprinklr’s CEO Ragy Thomas has this great philosophy that a lot of companies can learn from. If a customer is willing to pay for a feature, he will build it.
There is a statistic for Saas B2B software that claims that about 50 per cent of the features developed are never used. That’s tragic. That’s half of the engineering resources. Engineering resources are finite, difficult to find and expensive. It teaches us that half the engineering resource is wasted on features that people don’t want. What Ragy has got is a very efficient methodology where he is only building what people will pay for.
As a client, I could say I would like a button that makes everything blue. Ragy would ask, how much are you willing to pay for that. If I say that I don’t really want to pay anything for it, Ragy will say he’s not shipping it. But if I say I want a button that makes everything red and I’m willing to pay a hundred thousand dollars for it. Ragy would say, okay, we’ll roll it out in two weeks.
In my case, Microsoft was an early customer that scaled quickly and became a big one for Sprinklr. Microsoft had a model that was a customer experience centre, which was at the heart of what they did, so they centralised the function. This created a rapid innovation cycle between Sprinklr and Microsoft. The client was a definition partner on so much of what you see on Sprinklr now. For example, Microsoft ran ads on social and needed an ad module which Sprinklr built. There was a real reciprocal relationship. But, always, because the client paid for it.
Today, apart from brand building, CMOs are also being judged on revenues. Is that the right approach, and how can CMOs prepare for this new reality?
I think it depends on the industry. Sometimes, CMOs are evaluated on the pipeline if they are in the B2B sector.
It’s true that CMOs are being judged more precisely on numbers versus soft metrics like brand awareness nowadays. There was a study that said that 80 per cent of CMOs carry a number like their sales counterparts. Only 10 years ago, that number was in the 20s. I think this is a good move for marketers because marketing really does have a big impact on the company.
Depending on the type of company, marketing has different scale motions. Sometimes, it involves selling to a lot of customers in a scaled manner. Other times, it requires selling to a niche group of customers in a direct way.
When marketing is able to put a value on what they deliver to the company, they become more valuable. It makes it easy for the organisation to invest in marketing. Alternately, when marketing can’t define its value, it’s very difficult for people to fund it.
Classically, marketing has been one of those functions that management will cut right away in downturns. It’s easy to take that money because it doesn’t seem to be doing anything. In the past, people were investing in marketing based on a whim or belief.
When you know that if you take a dollar, you will lose 50 cents or a dollar or even two dollars, suddenly it’s a very different metric. When you look at the sales productivity model, you can say that if you don’t hire these sellers this is how much the revenue is going to drop. This is why sales teams or sales budgets don’t get cut. In fact, in downturns, sales teams often get more investment.
That’s a mistake. The scale motion of marketing adds a lot of value to the company. Marketers who can attach themselves to a number that the CEO cares about are more likely to be invested in. They are more likely to build a function in a way that will help the company grow quickly.
The Middle East is seen as an emerging market. How do you gauge the responsiveness or maturity of a market?
Entering an emerging market requires a brand to explore a lot of different issues. You don’t only need to think about your branding and marketing, maybe you need to revisit your packaging. In some emerging markets, the packages are much smaller because of the income distribution, the way people are paid, the amount of disposable income they have. When you compare this to the Costco model in the US, where people buy in bulk and load the car — it’s completely unrelatable.
There are a lot of things to consider. There are markets where people buy groceries every day. They may want it fresh, or they might not have space to store extra — all of these things play a factor. So, when you think about emerging markets, you have to think about all the customer realities, and you may need to change your formulation, product, packaging, pricing, etc.
When you think about your marketing channels, you have to think about how they can help your brand to stay hyperlocal and hyper-relevant. How do you make sure that people know that you’re there, that you thought about them, and that you make sense to them? Marketers need to make the product relevant to the culture of the place. They need to have advertising communication that connects on a personal and cultural level.
This is where modern channels can be powerful. You can have conversations with people in that culture, in their language. Suddenly, people feel like this brand is a part of where we are, a part of who we are. It starts to feel more local. If you don’t do that, if you just swoop in with a one-size-fits-all, it won’t work.
Tell us about a book that you recommend.
The book I would like to recommend is Albert Lasker’s The Man Who Sold America. He was one of the great innovators in advertising, Claude Hopkins and John E Kennedy worked for him. These were the people who invented orange juice, the feminine hygiene product line and political advertising. The book explores the shift that advertising made since J Walter Thompson invented it. The early agencies wanted to aggregate media buys, a big innovation, a big idea. It’s how the 15 per cent commission came to be. But that was where it stopped.
Albert and his team believed that if they created more effective advertising, clients would buy more. By extension, agencies could sell more ads and make more money. They were the first to look at creative assets to create a sustainable competitive advantage.
They did a lot of work to understand how to sell at scale. The lessons that they learned, the way they thought about humans and the psychology of persuasion are as relevant today as they were then.
I encourage anyone in marketing to read this book because it’s very important to understand the history of marketing to understand how to take it forward.