is-it-wise-to-rob-cx-to-pay-for-growth?

When it comes to the future of B2B and CX, a trend for 2020 is coming into focus, and it’s not looking good.

Looking back, Forrester’s Predictions 2018 considered 2018 a “year of reckoning” for digital transformation. This was to be the tipping point when inaction on transformation would start putting firms at risk. One of the surprising insights was that this risk wasn’t necessarily from an inability to attract new customers. It was from churn – from existing customers leaving for better experiences.

Skip forward a year to the 2019 edition, and Forrester is telling a similar, slightly tweaked story: 2019 is the year digital transformation “goes pragmatic.” If 2018 was all about recognizing the risks of failing to digitally transform, 2019 has been about mitigating those risks by putting plans into action.

These trends will have major implications in 2020. For firms that are trailing behind on CX, going pragmatic seems like a no-brainer. But how does the customer fit into this approach? Not very well, unfortunately. The same report states that 20 percent of brands will abandon their customer experience initiatives in 2019, opting for more traditional strategies, like price reductions, to achieve short-term objectives.

As marketers, we’re obsessed with the pain points customers face making their purchasing decisions. However, in our drive to reduce friction in that buyer’s journey, it’s easy to lose sight of the post-purchase experience. Like the CEOs, CIOs, and CMOs turning to pragmatic pre-purchase strategies to capture market share, transformation of the actual product or service experience becomes an afterthought.

Unsurprisingly, these risks are not a B2C-only concern. A 2019 Episerver survey revealed that nine out of ten B2B decision-makers identify increasing digital expectations from their customers or partners as their top external threat. Even worse, 50 percent of those same decision-makers say they lack funding to execute digital transformation programs in their organizations, echoing the Forrester predictions that more pragmatic tactics such as price will be the go-to strategy to spur growth.

What gets lost in this reactive mindset is the key to keeping (and expanding) market share: existing customers.

In B2B, where purchases are both complicated and time-consuming, this post-purchase customer service landscape can be particularly barren. End-users often have their product and/or service decisions made for them by senior managers, and the customer experience itself often reflects that power imbalance. This isn’t an unknown, of course. But if everyone agrees it’s is an issue, why isn’t it a priority? Currently, 59 percent of B2Bs point to legacy or in-house software as the primary reason for not being more digitally agile. That, combined with the lack of capital expenditure, maps out a grim path to declining customer loyalty.

Expensive and complicated purchasing decisions, typically made by senior managers, leave the end-user out of the equation, which in turn means that a user’s only interaction with a brand may be in the vacuum of the post-purchase experience. For many organizations, the product and/or service experience is the brand. And if the experience is poor, the brand perception will follow suit, no matter how low the purchase price might have been.

Perhaps the subconscious hope is that users will relent to a sort of digital Stockholm syndrome, where they develop an alliance with the tools they’re forced to use. More likely, though, the lack of attention to user needs will manifest as a bottom-up revolt, cultivating resentment and ill-will toward the brand responsible for their ongoing poor experience. And when those users become decision-makers, it’s not a leap to see how this can negatively impact business relationships and long-term profitability.

Clinical research has shown that emotions impact logical reasoning. And reasoning suffers the most when emotions are negative. At its base, a brand relationship is an emotional one, formed – and continuously informed – by the customer experience. When that experience is negative, it clouds every aspect of decision-making. Your product and/or service will look unappealing no matter how compelling its feature set or stated benefits.

So, B2B brands have a choice to make: Focus on the short-term gains that traditional price and features may garner, or invest in the long term, creating emotional engagement through meaningful brand interactions that speak to the needs of not only the purchasing decision-makers but also the end-users. Because the latter won’t always be just users—one day they’ll make the decisions. 

And with 2020 on the horizon, here’s where B2B companies can take another lesson from B2C: An emotional connection is much stronger than a pragmatic one.


Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.



About The Author

Theresa is the President of McMillan, an independent creative agency headquartered in Ottawa, Canada, with offices in NYC that specializes in the brand experience for a global clientele. She’s responsible for plotting the pragmatic course of action through business development, strategic services offerings and industry partnerships that define the agency’s growth and corporate strategies. Theresa’s been a B2C and B2B marketing professional for more than 25 years, honing her craft in the consumer-packaged goods, software and advocacy sectors and is a strategist-by-trade, which has amplified her life-long passion for pulling things apart to see how they work. She brought that insatiable curiosity to McMillan in 2007, building the agency’s strategic services practice from a one-woman operation into the guiding force behind successful projects for Intuit, LexisNexis and Trend Micro, and becoming President in 2018.



twitter-ad-revenue-growth-slumps-to-8%-in-q3-even-as-user-growth-continues

Twitter reported $702 million in ad revenue for the third quarter of 2019 Thursday, an increase of just 8% year-over-year. Twitter’s total revenue for the quarter was $824 million, up 9% from the prior year, with a net margin of 4%, compared to 14% a year ago. Daily users on the platform continue to tick up.

Product problems. The company attributed the drop in ad revenue to product issues, specifically its Mobile Application Promotion (MAP) product and personalization and data settings. The company said the issues potentially impacted year-over-year growth by three or more points.

“More work remains to deliver improved revenue products. We’ll continue to prioritize our ad products along with health and our investments to drive ongoing growth in mDAUs,” said Twitter CFO Ned Segal.

Ad engagements are up, costs are down. Total ad engagements were up 23% year-over-year, in line with the growth seen in the past two quarters. Advertisers are paying less for those engagements. Cost per engagement dropped sharply, off 12% year-over-year.

Slow but steady user growth. Twitter’s mDAUs (monetized daily active users) increased by 17% compared to the prior year, up from 124 million to 145 million. U.S. mDAUs grew by 15% year-over-year to 30 million, up from 26 million.

On a quarter-over-quarter basis, mDAUs grew by just 4%. A trend similar to Snap which also reported 4% growth in DAUs during the third quarter of 2019 to 210 million.

This is the third quarter Twitter has reported the mDAU metric. The company decided in February to focus on authenticated users it is able to show ads to and moved away from the monthly active user (MAU) metric after it saw a noticeable slide in MAUs after efforts to purge spam accounts from the platform.

Why we should care. Arguably, the most concerning detail for advertisers coming out of Twitter’s third quarter earnings report are the reported issues with its Mobile Application Promotion product (a suite of products designed for app marketers on the platform) and personalization and data settings.

In its letter to shareholders, the company said it discovered — and took steps to fix — a bug that affected its Mobile Application Promotion product which impacted Twitter’s ability to target ads and share data with measurement and ad partners. “We also discovered that certain personalization and data settings were not operating as expected,” wrote Twitter.

The company expects the ad product issues will have an even greater impact on its fourth-quarter results, causing four or more points of reduced year-over-year revenue growth. “The increase reflects a full-quarter impact in Q4 vs. only a partial-quarter impact in Q3,” Twitter said.



About The Author

Amy Gesenhues is a senior editor for Third Door Media, covering the latest news and updates for Marketing Land, Search Engine Land and MarTech Today. From 2009 to 2012, she was an award-winning syndicated columnist for a number of daily newspapers from New York to Texas. With more than ten years of marketing management experience, she has contributed to a variety of traditional and online publications, including MarketingProfs, SoftwareCEO, and Sales and Marketing Management Magazine. Read more of Amy’s articles.



practicing-growth-design

I identify as a Growth Designer.

A few years back, I wrote about how I see growth design. Here’s how I defined it:

A person who approaches product design through the dual lens of customer experience and business impact.

“Growth Designer” is not usually my actual job title, but I find that label useful for people to understand my skillset. It differentiates those of us who embrace data, validation and experimentation. It’s made it easier to find companies who want more from design than just interfaces. Companies that want someone who can help propel their business forward.

Chairs with one chair ghosted out.png

More importantly, it helps define a practice of design that is as much about the business as it is about the customer. You may think to yourself: “Isn’t that just design?” and the answer is very much no. Many design practitioners are unable to tie their work to business value. We talk about design as a strategic business driver and yet, we rarely prove it.

This post is for those who want to learn more about these practices so they can be designers who can demonstrate value.

Why Designers Should Care about Growth

Before we get into practices, let’s talk about why you should care about growth.

How often have you heard…

“What’s the business value of design?”

“What’s the ROI of design?”

“Do we even need design?”

The answer to all these questions lies in the demonstration of impact. Not just design that has goals. Design that measures, meets and exceeds goals.

When you join a company, you relying on their understanding of whether or not design is valuable. Designers are still paid less than their engineering, data and product counterparts. Design founders and design executives are rare. Design tends to be greatly outnumbered by engineering on individual product teams. And when the practice of growth hacking became prominent several years ago, design was barely part of the conversation and was certainly not driving it.

2019 State of Salaries Report (by Hired). Design is the bottom line.

2019 State of Salaries Report (by Hired). Design is the bottom line.

We don’t have to rely on the perception of the value of design. We can prove its value. (Growth) Designers who can demonstrate value are an emergent breed. Designers who care about business health and growth. Designers who can understand, drive and measure their impact. They exist. More and more of them are proudly owning their skills and sharing their techniques.

How Growth Design Differs from Product Design

Product Designers work across a product or service. They’re generalists with some depth in certain areas. They’re thinking thoroughly about end to end customer experience. They look for opportunities to solve pain. While they are typically driving towards a business goal, I find they’re not directly measuring them.

Product Designer and Growth Designer grid of skills

In contrast, Growth Designers deep dive into their impact day to day, week to week, month to month. They care about that impact just as much as they do customer experience. They understand how to use data. They seek to de-risk their ideas with evidence. Where the Product Designer is looking at that holistic experience, the Growth Designer is laser focused on finding levers for growth.

The Growth Design Toolkit

Since this post is about practicing growth design, I’m focusing on the skills that are underdeveloped in Product Designers that are key for growth. I’m not going to cover much about design itself. The design skillset is still critical in growth design. All the capabilities you expect from a Product Designer are relevant: customer research, designing flows and interactions, visual design, understanding of technology. What’s different is the focus on impact and the skills to be able to drive it.

Growth Design Toolkit

Focus

Designers who drive impact are able to stay focused on the goal.

Goal Setting

Driving outcomes is hard work. Driving output is a lot easier. Hopefully, you work at a company that sets goals. The main difference between a growth focused team and other teams is the radical focus on one goal. When you’re trying to move signups, retention, revenue, referrals, you have to laser focus on that thing. Now, as a designer, you may not be leading goal setting, but if your team is taking on five goals, you’re not going to hit them. Being able to help your team focus on the high impact stuff is critical to success. Otherwise, you fall down a rabbit hole of features and your impact is diminished or non-existent.

Learn: Goal setting techniques, How growth practitioners set goals

Resources: Hacking Growth” by Sean Ellis and Morgan Brown, “Set Product-Specific Goals” by Roadmunk

Prioritization

It’s great when you have high impact goals. Perhaps your team decided: “Yes, we’re going to drive up revenue. Let’s crush it!” But then you look at your backlog each week and it’s all random tickets that somehow made their way in there: features, tech debt, bugs, something called “design polish.” And it turns out none of these tickets are actually doing anything to help you drive revenue.

Your list of work needs to be focused on the impact you want to have. As you do planning, as you review the work that your team is picking up, as you think about what your day-to-day work is, ask yourselves: “How is the thing I’m working on going to drive our goal?” How we spend our days is how we spend our lives. What we work on determines what we will impact.

Learn: Prioritization techniques

Resource: Amplitude’s John Cutler on Why PMs Should Measure Themselves on Value Creation Not Output

Board of post-its used in discovery process

Investigate

Designers who drive impact have the ability to thoroughly unpack an opportunity.

Quantitative Research

Designers approach data from a different lens than other disciplines. They have the ability to see human behavior in data. For example, in a tool like Amplitude, you can go through and see what people are doing, where they are leaving. This is where designers can really uncover behaviors and understand how their products are being used.

Learn how to use an analytics tool. Learn about different ways to look at customer behavior. Ask a teammate to help you answer a question you have about your product.

Learn: Analytics tools, How to view reports that show customer behavior

Resources: Why Designers Need to Care about Data, Analytics for Everyone


Customer Development

Customer development is an undervalued area of skill for all designers. It is a technique originated by Steve Blank that is common in lean startup practice. The idea is that you work with your customers to understand their problems, behaviors and scenarios. You’re building along with them rather than forcing solutions onto them or waiting until you have that solution to validate it.

For growth practitioners, customer development can help you identify opportunities. When you interview people about the problem you’re solving or the situation where they might use your product, you are listening for your opportunity to solve pain or confusion. If all of your customer research revolves around solution and usability testing, you are missing the chance to find unmet needs, to solve new problems and to crack growth levers.

Learn: How to recruit real customers, How to interview customers around a problem space

Resources: “Running Lean” by Ash Maurya, “The Four Steps to the Epiphany” by Steve Blank

Competitive Research

Many designers do competitive research that’s focused around features or interfaces. There’s a real opportunity for designers to be thinking about competitors in terms of value propositions. Asking: Who’s going to come out of left field and take your company down? What are customers saying about your competitors? What do they find valuable? Who in the market is doing something exceptional that your companies should be paying attention to?

Jaime Levy offers a step by step process for this in her book, UX Strategy. She even has a free toolkit online to get you started.

Learn: How to do competitive research through the lens of both customer and business value

Resource: “UX Strategy” by Jaime Levy

Validation Methods

Ship

Designers who drive impact ship often and participate actively in the conversation about what to ship.

Validation Methods

Let’s say you come up with a vision for something. You learn that something is completely broken and it needs to be overhauled. Rather than let someone else chop that vision into phases, designers can actively participate in that conversation. Learn how to identify the riskiest part of a design. Learn validation methods like feature fakes, A/B testing, price testing, wizard of oz, landing page tests. There is an infinite number of ways to validate product direction and there are loads of blog posts about what folks have learned.

Learn: Different validation methods, What’s worked for other teams who run experiments, Experimentation tools

Resource: Validating Design Decisions

Follow Through

Once you’ve shipped something, reflect on why it worked or didn’t work. How did customer behavior change? What did you learn? What do you need to learn next? Take a moment as a team to think about that. It’s really hard to do this in today’s Slack-email-meeting-document-slideshow mode of operation. But if your team doesn’t make a thoughtful effort to learn from their actions and iterate, you will leave money on the table.

Learn: Reflection techniques, How to run effective meetings

Resource: Principles of Experimentation Flow by David Bland

Instrumentation Example

Measure

Designers who drive impact know how to measure their work.

Instrumentation

Instrumentation is a particularly empowering skill for designers. Instrumentation is the code that your team writes to decide what gets tracked about user behavior. Depending on how big your team is, designers may not have to define instrumentation, but it’s useful to understand this is a step that has to happen. The more you participate in it, the clearer the data becomes. Learn how this process happens at your company. Learn how you can see everything that’s been instrumented. Learn how you can ask for additional instrumentation.

Learn: What instrumentation is, How your team instruments events

Resource: Segment’s Analytics Academy

Behavioral Analytics

The closer you are to the data, the more clear it is how to impact the business. From the design lens, you can help dive beyond a vague measurement like conversion and help your team understand the humans on the other side of it. Learn what tools are available at your company. Learn how to look at user journeys in analytics tools like Amplitude and Mixpanel. Learn how to slice data in different ways. Learn how to measure whether or not your design was successful.

Learn: Some of the more exploratory data tools that offer stories behind the charts

Resource: Amplitude’s Pathfinder Tool

———

toolkit.png

If you learn and empower yourself with the tools above, you can own the value of design. Not just for yourself, for design as a field. When we prove the impact of design, design becomes a strategic business driver. Companies that make this connection invest more in design and in designers.

Keep in mind that while this post is focused on design, growth is a team sport. You need cross-functional collaboration to make companies successful. Historically, designers have not made their contributions and value clear. Expanding your skillset can help set you and your team up for success. And I’ve got to tell you—it’ll get you a raise.

If you’re interested in learning more about growth design, check out the resources at growthdesigners.co and join our Slack channel.

facebook-reported-strong-ad-revenue-growth-in-q2,-instagram-ads-continue-to-drive-impression-growth
second quarter of 2019, a 28% increase year-over-year. Facebook CFO David Wehner said the strongest ad growth on a regional basis belonged to North American and Asia-Pacific, both up 30%.

The company’s total revenue for the quarter was 16.9 billion. More than three times what the company has to pay as part of its settlement with the FTC over privacy violations.

Ad prices down, impressions up. Wehner reported that the average price per ad across Facebook’s services decreased 4% during the second quarter, while ad impressions served were up 33%.

“Similar to last quarter, impression growth was primarily driven by ads on Instagram Stories, Instagram Feed, and Facebook News Feed. The year-over-year decline in average price per ad reflects an ongoing mix shift twoards Stories ads and geographies that monetize at lower rates,” said Wehner.

Ninety-four percent ($15.6 billion) of Facebook’s ad revenue came from mobile ads.

DAU growth remains flat. Facebook’s daily active users (DAUs) saw another quarter of single-digit year-over-year growth at 8%, with 1.58 million DAUs during the second quarter. Wehner said lifts in daily activity was led by growth in India, Indonesia and the Philippines.

andWhatsAPP), the company reported 2.1 billion people visited, at least, one of its apps every day, and more than 2.7 billion visited, at least, each month.

Regulatory impact on Facebook. Earlier this month, Facebook received a $5 billion fine from the FTC as part of a larger settlement around privacy violations going back to a 2012 consent decree requiring the company to better protect user privacy. The company must also pay the SEC $100 million.

“These efforts will require significant investments in compliance processes, personnel, and technical infrastructure,” said Wehner regarding steps need to comply with the FTC agreement, “In addition, these efforts will make some of our existing product development processes more difficult, time consuming, and costly.”

And it continues to face ongoing investigations, as the company noted, “In June 2019, we were informed by the FTC that it had opened an antitrust investigation of our company. In addition, in July 2019, the Department of Justice announced that it will begin an antitrust review of market-leading online platforms.”

Why we should care. In spite of Facebook’s comments about having to slow down on product development processes, the company is still connecting advertisers to their audiences — driving ad revenue forward and designing new ways to bring e-commerce to its platforms.

“When I look at the kinds of private interactions we can make easier, payments may be the most important for the long term,” said CEO Mark Zuckerberg, “In the future, we’ll enable people to use the same payments account to send money to friends and businesses on WhatsApp, shop on Instagram, or make transactions on Facebook.”

Zuckerberg said being able to send money via its family of apps will be as easy as sending a photo, opening up new opportunities for businesses.



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