Huge consulting firms are coming after the ad agency business — here’s how agencies are fighting back

Thank you Tanya Dua!

  • Ad companies are increasingly responding to the threat from consulting firms by making acquisitions, creating new divisions or reorganizing internally.
  • Omnicom nabbed the Dallas-based consulting firm Credera recently, while Grey launched a new global enterprise practice called Grey Consulting just last week.
  • Others, like R/GA and 360i, have also made inroads into various types of consulting services.

Ad agencies are starting to fight back.

Giant consulting firms like Accenture and Deloitte have been increasingly encroaching on agencies’ turf. In fact, several have been buying their way into advertising through creative acquisitions .

2018-02-14-144144863-Deloitte_-McKinsey_-EY_-KPMG_-PwC_-Accenture_-BCG_-IBMNow agencies are starting to respond by going down the same route.

A growing number of large traditional ad agencies are looking to lay claim to an ability to offer consulting services — promising not just to make ads and buy media, but help improve their clients’ business.

They are doing so by acquiring smaller consultancies, creating new divisions, dialing up their data offerings or reorganizing internally.

Agencies are promising clients one-stop shopping

Omnicom, for instance, announced that it was purchasing the Dallas-based consulting firm Credera last week. The next day, the ad firm Grey launched a new global enterprise practice called Grey Consulting by tapping into 150 existing technologists and creative and strategic planners to create a new global enterprise network.

WPP’s Kantar, on the other hand, streamlined its consulting services , bringing together four of its existing brands under a single entity earlier this year.

“Agencies are … not taking this [threat] lying down,” said Jay Pattisall, principal analyst at Forrester focusing on ad agencies with a research report detailing this trend coming out later this month.

Agencies are rethinking the scope of their work beyond traditional advertising

From clients cutting back on fees to taking more work in-house, ad holding companies are facing strong headwinds. Thus, with the current advertising agency model under pressure, agencies have been forced to rethink their scope of their services.

“Ads don’t transform businesses,” said Andy Main, principal and head of Deloitte Digital. “So the ad agencies are being put under major pressure to prove their value.”

One way of grappling with the current upheaval is through buying companies with capabilities that complement what agencies already do. This theoretically enables agencies to connect data, analytics, research and their creative offerings in new ways.

Omnicom, for example, acquired Credera to augment its existing creative and data capabilities by adding management and IT consulting capabilities in the mix. The aim was to have as many capabilities that help clients navigate complex technology choices better in-house, without having to outsource the process, the company said.

“We’re very much trying to reinforce and support something we are already doing, and increase the value of a service we’re already providing,” Luke Taylor, chief executive of Omnicom’s precision-marketing group, told Business Insider. “It helps us fill in some of the gaps to drive precision marketing scale for our clients.”

Another approach to establishing a consulting practice is to simply restructure internally, as Kantar did — so that different entities within the company could work together in a more integrated manner.

“We had those assets available for clients for a number of years,” said Wayne Levings, Kantar Consulting’s president. “It was about bringing them together in a way that made them even more relevant for the marketplace, and allowed us to more effectively scale and invest in this area.”

And clients are demanding a more diverse range of services too

A lot of the change is being driven by clients themselves. Marketers are asking for help and thinking that goes beyond communications more than ever, says Leo Rayman, CEO of Grey Consulting, so it makes sense to give them a more concentrated offering.

That is why Grey Consulting was created. The rationale is that the more agencies can enhance their existing capabilities, the more entrenched they can be in other aspects of the client’s businesses.

“It allows us to codify the know-how we have, weaponise our creativity by marrying it with even more commercial strategy and allows us to move upstream, providing answers to the kinds of questions clients ask long before they get to defining the creative brief,” he said.

Plus the consultancy threat means that they must adapt

Of course, consulting giants like Accenture and Deloitte encroaching on agencies’ turf is big factor, whether agencies admit it or not. 73% of marketers said that they were open to using consultancies for digital marketing work, according to a recent Forrester study.

“I think often agencies seem to think they’re disrupting consultancies, but most are in fact having to respond to the very real fact that management consultants are moving downstream into their business,” said Saneel Radia, R/GA’s global head of consulting.

Consulting firms claim that their expertise in tech and business strategy as well as data and logistics helps them meet the needs of modern CEOs and CMOs far better than ad agencies can, which isn’t entirely exaggerated, according to Radia.

“Those organizations are quite good at understanding how to measure ROI, reduce cost, streamline process and leverage automation,” he said. “So of course [them] moving down into marketing is a pressure any advertising agency is feeling today.”

Marketing and consulting are colliding

360i president Abbey Klaassen
Michael Seto/Business Insider

To be sure, consulting isn’t an entirely new arena for ad agencies. A number of agencies, including R/GA and 360i ,have had consulting divisions for years. French advertising giant Publicis acquiring the consulting giant Sapient in 2015 at a deal valued at $3.7 billion.

And last year, Publicis teamed with tech consultancy Capgemini to help McDonald’s with its digital transformation.

“Marketing services and management consulting collided years ago,” said R/GA’s Radia. “The idea that anything is one type of company’s turf or the other is likely outdated.”

But the pace of change has accelerated more recently. Brands are seeking partners that help them drive efficiency as well as simplify efforts in an increasingly complex digital ecosystem, and both agencies and consultancies are stepping up.

The consultancies remain confident of the value they bring to the table. To transform client businesses, they say, you need everything from strategy, innovation, design, and creative to technology, analytics, organizational design, supply chain and finance — areas which they have owned for years.

“It takes years and years to build up those capabilities,” said Main. “Consultancies such as Deloitte Digital, with in-house creative and advertising capabilities, have much more to offer than ad agencies who acquire small, narrowly-targeted consulting companies.”

Traditional consultants may bring myriad analytical frameworks to the table, but agencies are also convinced that they’ll be able to tackle them head-on. According to 360i president Abbey Klaassen, consulting firms lack hands-on experience in execution and creativity.

“Part of the reason we’ve been successful in our consulting practice is because we’re not just process makers; as a creative and media agency, we’re also process users,” she said. “Being able to understand all the intricacies of a client relationship and how they come together – search, social, creative, media, leading inter-agency teams – makes us more effective as a consulting partner.”

Both agencies and consultancies must evolve their business models to meet changing client demands

Analysts aren’t so sure that agencies can suddenly match consulting firms. It is one thing to have a consulting unit, and another to attract and retain talent and even sell those services effectively, said Brian Wieser, senior analyst at Pivotal.

“That’s one of the biggest challenges for agencies,” he said. “You can do the work if you can sell through at a higher level than the CMO, and most agencies don’t have those connections.”

Agencies also need to focus on integrating their consulting practices within their broader cultural frameworks, said Forrester’s Patissall.

“Cultural integration is the hardest, Publicis is still working through the branding and positioning of Sapient and where it fits,” he said. “What they’re trying to do is build additional structures; the next step is appointing leaders to bring them together globally.”

Either way, what’s certain is that both agencies and consultancies must evolve their business models to meet changing client demands.

“We’re squarely in the era of disruption, many incumbents are investing in their own transformation,” said R/GA’s Radia. “It’s competitive, and the companies that serve as able hybrids will prosper most.”

 

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The Future of Dining: 89+ Startups Reinventing The Restaurant In One Infographic

Why you shouldn’t hire people based on “fit”

Thank you by Suzanne Vickberg and Kim Christfort

Would you enjoy being stuck in an airport with me? If after chatting with me for half an hour you don’t think so, there’s a good chance you wouldn’t choose me to be on your team. This screening technique is commonly known as the airport test, and the basic assumption behind it may be flawed. I suggest using the life-raft test instead.

If you’re lucky enough to have the budget and headcount to add a new member to your team, there are lots of ways to go about making your selection, and many of them involve some element of testing for fit. Like, do you think my working style is a fit for the role? Or, is my temperament a fit for the work environment? Or, is my personality a fit for the culture? If you think I’m a good fit and that you would, in fact, have a great time with me in the airport, you very well might welcome me to the team. But if not, best of luck to me.

This kind of selection criterion can create teams who work together smoothly and really have a great time in the process. But here’s the common problem: People who feel like a good fit are often a lot like you. You might share the same perspectives, prefer the same communication methods, and have the same sense of humor. You might also possess the same strengths and the same weaknesses, too. And I’ll bet you can see how a whole team of people with the same strengths and the same weaknesses may not be the best idea.

But you may be tempted to select teammates this way because it feels pretty good to work with people who are a lot like you. If you’re a creative type, being around other creatives can inspire you to new heights of innovation. If you’re a detail person, it can be a real relief to be around others who get the importance of the little things. But these feel good scenarios can lead to some pretty undesirable outcomes. Too many creative types together can waste a lot of time and money chasing one impractical idea after another and then abandoning each before they come to fruition. If you all see yourselves as the idea people, who is focused on execution? Likewise, too many detailed people can get trapped in a state of analysis paralysis, make very little progress, and end up choking on the dust of their competitors. If you’re all focused on the minutiae, who’s keeping an eye on the horizon and making sure you move forward in a timely way?

This is typically not a recipe for success.

So perhaps you should be looking to add some diversity to your team, right? Maybe you should even select the person you’d least like to be stuck in an airport with? Well, that might be a good start. A team of creative, big picture thinkers could probably benefit from a teammate with a penchant for thinking through the specifics of implementation. (Even if they find their minds wandering during conversations with that person.) And that detail-obsessed team could probably use some encouragement to make their way out of the weeds. (Even if the person drawing them out makes them feel like they’re caught up in a tornado.) But if you just add a teammate or two with a different perspective and stop there, you’re not likely to get the effect you’re hoping for. Because a team with a majority type tends to favor that type’s perspective and way of working, overshadowing those of any token minorities.

Take as a case in point a team I once worked on, full of high EQ types; we prided ourselves on being empathic, diplomatic, and inclusive. But we sometimes had a hard time moving forward, or even choosing a direction, because we valued everyone’s perspective so much, and we were reluctant to appear critical of anyone’s ideas.

Then a new member joined our friendly but floundering team—a more competitive, goal-focused type. And we were excited, thinking he could help us get and stay on track. And he certainly tried, but his communication style was direct, to say the least, and it rubbed us all the wrong way. When he pushed us to move ahead, we felt railroaded. When he pointed out the flaws in someone’s line of thinking, we felt offended. Looking back, I regret to say that we neither appreciated nor benefited from his unique perspective. Instead, we froze him out, thinking, how dare he?! Didn’t he understand how we did things on our team?! And honestly, no, he didn’t seem to understand. In fact, he seemed quite baffled by our reactions to his honest and straightforward approach. “Didn’t we want help making decisions and getting stuff done” he asked? Apparently not. Ultimately, feeling unwelcome, he high-tailed it to the nearest exit. So much for us being inclusive.

Okay, so a team that’s all the same likely isn’t ideal, nor is one with a few token members who are different, if the team continues to work together in a way that’s best suited to the majority. Which brings us back to that airport test, and its alternative, the life-raft test.

Next time you’re selecting a new team member, imagine you’re not stuck in the airport, because your flight is leaving right on time with your whole team on board. But the plane makes a crash landing at sea and you’re now floating in a life-raft with no hope of immediate rescue. Would you want everyone on that raft to have the same strengths and weaknesses? Probably not. Suppose you’re all great at building things out of random items (a really useful strength on a life-raft with limited supplies), but you’re also terrible navigators (a very unfortunate weakness on a life-raft). Would it make sense to select a new teammate who was just like the rest of you? You could build lots of cool stuff together, but you’d be drifting around aimlessly.

Perhaps instead you’d wish for a teammate with great navigational skills, even if they couldn’t build things. And then, instead of expecting them to do things the way you do them, maybe you’d go above and beyond to support that person in doing what they do best. That could be the deciding factor in whether your team survives the life-raft ordeal.

So next time you’re thinking about how to make your team even more successful, take a quick inventory of the perspectives, working styles, strengths, and weaknesses of your current members. And then review how your team’s ways of working may support the preferences and needs of some types more than others. Because your goal should not be just to add diversity, but also to activate and manage it by creating an environment where all types can thrive. Or alternatively, you could just search for teammates who can do it all. But I don’t think unicorn hooves are a great idea on a life raft, not to mention the horn.

Kim Christfort and Suzanne Vickberg, PhD, are the authors of Business Chemistry: Practical Magic for Crafting Powerful Work Relationships, on which this article is based.

5 Disruptions to Marketing, Part 1: Digital Transformation (2018 Update)

5_disruptions_2018_digital_transformation

At the end of last year, Scott Brinker wrote a series on 5 disruptions to marketing. This is his article. Thank you Scott!

I wanted to look beyond the typical kind of prediction posts that we are inundated with at holiday season to scope out the larger changes underway over the next 3-5 years:

  1. Digital transformation redefines “marketing” beyond the marketing department.
  2. Microservices & APIs (and open source) form the fabric of marketing infrastructure.
  3. Vertical competition presents a greater strategic threat than horizontal competition.
  4. AR, MR, VR, IoT, wearables, conversational interfaces, etc. give us digital everything.
  5. Artificial intelligence multiplies the operational complexity of marketing & business.

Now that we’re one year along this journey, let’s revisit how those trends are progressing and consider what we’re likely to see with them in the year ahead. These aren’t “predictions,” but rather “updates” on the big multi-year themes that are reshaping marketing as we know it.

As with last year’s series, I’ll break this up into five parts for easier digestion.

1. DIGITAL TRANSFORMATION (2018 Update)

Total Customer Experience: Marketing + Sales + Customer Service + Product

The essence of digital transformation is that marketing, sales, service — and most of all — product are all being entwined together under the banner of “customer experience.”

Naturally, that makes sense from the customer’s point-of-view. How much delight or disgust do customers feel across the entire spectrum of engagements they have with your company, from the very first touchpoint onward?

Their whole end-to-end experience is the product.

The five things that make this transformational are:

  1. All of these touchpoints are either digital or digitally-supported.
  2. Orchestrating these touchpoints is inherently a cross-organizational mission.
  3. Marketing is increasingly at the center of that orchestration.
  4. Marketing is embedded in the product (and, vice versa, product in the marketing).
  5. The resulting end-to-end experience for customers is how smart companies are disrupting their competitors — e.g., Uber isn’t the car ride, it’s the whole seamless experience.

A report produced a couple of months ago by the CMO Council asked CMOs to identify one — and importantly, only one — top mandate that they had for the year ahead. As shown in the chart below, 67% reported a cross-organizational mandate on growth and/or customer experience.

Marketing's Top Mandate for 2018

Of course, it’s one thing to talk about customer experience, another to actually effect it.

But as Barry Levine wrote on MarTech Today a couple months ago, “At our most recent MarTech Conference, there seemed to be a transformation percolating throughout the sessions and presentations. After several false starts in previous years, it seemed to me that ‘marketing’ is now clearly becoming something bigger.”

In many ways, marketing is looking, sounding and feeling less like its traditional role of “demand generation” and more like “experience management.” — Barry Levine

Aetna: Customer Experience as Marketing

David Edelman, CMO of Aetna, emphasized in his keynote at MarTech how marketing was now deeply engaged in helping to shape customer experience — including pioneering mobile and wearable touchpoints that innovate the very nature of the relationship between the company and its customers.

Successful marketing-led customer experience projects and programs shared by other speakers at MarTech included:

  • Keurig Green Mountain, launching connected coffee machines that enable a whole new kind of digitally-augmented customer experience with their products
  • Staples, using marketing analytics to map and improve steps across the customer journey that spanned traditionally separate teams within the firm
  • Dr. Martens, implementing omni-channel personalization seamlessly across email, their e-commerce site, and social media in ways that genuinely amplified their brand

And that’s just a representative sample. The thing that they all have in common: marketing is being embedded into the product/service and the end-to-end customer experience.

Last year I wondered whether marketing would continue to rise to the challenge of this scope explosion — from communications to experiences. Over the past year, I’ve been excited to see so many marketing teams embrace this opportunity in the charge of digital transformation.

Marketing as Customer Experience

But there’s another aspect of digital transformation in marketing that I’ve noticed over the past year: the changes in what marketers were actually doing. Not just shifts in their mission — i.e., delivering delightful customer experience. But shifts in what they’re building with their hands and minds to achieve that mission.

Empowered by a plethora of marketing technologies that are widely accessible to and usable by non-technical, “generalist” marketers, ordinary citizens of the marketing department have increasingly become do-it-yourself wizards in crafting digital interactions with customers, digital workflows throughout their organizations — beyond marketing, into sales, service, finance, etc. — and dynamic data dashboards, models, and reports.

I use the phrase “citizens of the marketing department” quite intentionally, because these wizard-like capabilities that marketers are acquiring align with three big IT-democratization movements:

Citizen Developers on the Rise

  • CITIZEN DEVELOPERS — who use no-code or low-code tools to create web apps, mobile apps, interactive content, bots, and other kinds of functional experiences for staff, prospects, and customers
  • CITIZEN INTEGRATORS — who use iPaaS and other workflow automation tools to create business processes on-the-fly, intelligently routing data and triggering activities across multiple teams
  • CITIZEN ANALYSTS or even CITIZEN DATA SCIENTISTS — who easily pull together business intelligence data from a variety of sources on demand, analyze it, visualize it, tease out insights, and even automate decisions around it

That’s not to say that these “citizens” have eliminated the need for “experts” wholesale. There is still plenty of work that requires professional developers, systems integrators, and data scientists. But the scope of what individual marketers can build on their own is astounding — and unprecedented.

This is digital transformation in a company’s internal ecosystem. The kind of power that would have taken teams of experts and weeks of work to implement an idea even just 5 years ago is now in the hands of individual citizen marketers to instantiate almost immediately.

And as marketing technology continues to race forward, their power to create only grows.

The Transformation of Selling: How Digital Enables Seamless Selling

A preview of new, very cogent, research from Altimeter, a Prophet Company. One of my top 10 digital content and thought leadership inspiration sources.

EXECUTIVE SUMMARY

While “social selling” is a key idea that has emerged over the past few years,  it is clear that something larger is afoot. Keeping up with fast-moving and  well-informed customers requires sales departments to focus less on the hard  sell and more on adding value to the experience and relationship via digital  channels. Moreover, selling must become seamless, bridging traditional  department silos like Marketing, Sales, and Service to meet customers  wherever they may engage an organization.

This report examines the transformation of selling in complex transactions,  such as those typically done in business-to-business (B2B) sales or high-  consideration consumer sales. Three types of transitions drive the digital  transformation process: Platform Integration, Organization, and Culture.

Notably, while digital technologies may drive the transformation, the strategic  focus for sales teams must include changing organization and culture such that  customers become the core of the selling process.

INTEGRATION OF DATA, INSIGHTS, AND CONTENT PLATFORMS LAYS THE FOUNDATION.

Digital Transformation of Sales 3 Transitions

On the surface, integration appears to revolve around technology platforms. But Jerome  Thiebaud, Director of Global Digital Workplace Marketing at Avanade, pointed out a subtle  difference, saying, “It’s not because you have technology that you are going to be successful  in the marketplace. It’s because you have technology that allows you to focus more on the  customer, and on the human interaction.” Most companies have an overabundance of  technology but lack the integration between those platforms to keep customers at the center.

Maureen Blandford, CMO of Software Improvement Group, affirms, “Integration is the  new black. We’re trying to build as small a technology stack as possible, with optimal  integration.” Here are some of the top integration efforts organizations should prioritize to  transform selling.

PUT THE POWER OF DIGITAL DATA AND CONTENT IN THE HANDS OF EMPLOYEES TO ENGAGE PARTNERS AND CLIENTS.

At the most basic level, digitizing Sales means more than getting them equipment and loading them up with software and content — it’s about making sure that these enabling  technologies are tuned to drive better engagement with customers. At CBRE,  one of

the world’s largest commercial real estate firms, a key goal was to enable salespeople  to demonstrate their deep understanding of their clients’ businesses by using digital  to establish and scale thought leadership and thus trust. CBRE took all of the paper  materials its salespeople used to hand out to clients and put them on iPads. They built  a proprietary iOS app called Engaged, enabling corporate, 400 local offices and 75,000  employees to quickly access relevant assets digitally. The app enables salespeople to  add interactive and engaging content, like video, to their presentations and pitches on

the fly, without having to go back to IT for help. At the same time, CBRE recognized that  social media was becoming a more important force.

“If you’re looking for [real estate] space, you’re not going to be looking on Twitter,”  acknowledges CBRE’s Trey Tubbs. “But our clients, prospective clients, and people in our  industry follow us on social media. An article will go out and be well-received by people  we never expected to be interested.”

LEVERAGE EXISTING TOOLS RATHER THAN SEEKING OUT NEW ONES.

Rather than try to select, install, and adopt a new technology, sometimes it’s faster and easier to tap an established one and modify existing processes instead.

At Intel, the Marketing group leveraged the  existing Brand IQ platform, rather than create a new tool, to create a content aggregator,  which became a one-stop shop for anyone to post and share content. Different Sales  roles would share different types of content that they found helpful.

Danielle Miller, Global Social Business Strategist and Manager at Intel, recalls, “We  were finding that everybody likes the bright shiny tool. ‘Let’s just get a tool!’ But there  needs to be recognition that we look at the internal processes so that it serves as a  solid foundation for the future, because we knew there was a limit to how many tools a  salesperson can manage.”

DISTRIBUTE  CUSTOMER DATA AND LISTENING THROUGHOUT THE ORGANIZATION. DATA IS A GREAT WAY TO OPEN WINDOWS BETWEEN SILOS.

Selling transformation silos

The avowed goal of many digital transformation efforts is to have a perfect, 360-degree view of everything a customer does, on and off your site. The reality is that this will take years, and you can’t afford to wait. Several  organizations we spoke with described how they took a first basic step of integrating  operational and social media data about customers into their CRM profiles.

At thyssenkrupp Elevator Asia Pacific, digital was the way to open windows between the  silos, enabling the organization to look at its customers through the same customer data  lens. The company has diverse customers ranging from sophisticated building managers  in Singapore to first time developers in China, altogether using 250,000 elevators,  escalators, and moving walkways throughout Asia Pacific. The first step was to put all  sales brochures and materials on tablets so that relevant assets were easy for teams to  access and for Marketing to update. In addition, the tablets gave thyssenkrupp’s teams  direct access to data on equipment breakdowns and on how quickly service issues were  addressed. They could then create customer-specific presentations to demonstrate the  value of their products and services.

Similarly, thyssenkrupp sources data from social listening that identifies problems at  customer sites before they become major problems. That data flows into various CRM  systems and can proactively trigger a visit by thyssenkrupp to the customer.

“We’re generating leads from what we can observe in the public social space,” explained  Kelly Truax, VP of Service Support at thyssenkrupp Elevator Asia Pacific. “We have full-  time people in place who monitor social channels, looking for our competitors’ unhappy  customers, but also watching out for any of our own customers who may need assistance  before they approach us.”

TAP INTO ANALYTICS AND ARTIFICIAL INTELLIGENCE TO IMPROVE CONTENT CREATION AND ENGAGEMENT.

Given the rising digital sophistication of buyers, Marketing can’t get away with creating “one-size-fits-all” collateral anymore. The problem with most content isn’t that there isn’t enough, but rather that there’s too much of the wrong kind. A study  by Docurated found that a third of a sales rep’s time is spent searching for or creating  content — time that could have been spent engaging in sales conversations. To address  this, organizations are using marketing technology to support the content needs of  salespeople. For example, Dun & Bradstreet uses digital intelligence to perform lookalike  modeling that identifies the next best action and then programmatically creates and  delivers relevant content — either to the salesperson or directly to the customer. On  larger accounts, Marketing works closely with Sales to deploy the right set of tactics —  such as  architecting workshops, creating custom content, or designing events.

Machine learning can also provide context, discerning and anticipating what customers  are looking for. IBM uses artificial intelligence to answer basic questions or offer free trials  based on interactions with customers. When the conversation gets to the point where the  customer is using buying language or asking deep technical questions, the program will  engage the appropriate sales or technical rep.

“A tool like this can nurture thousands of prospects all at once who are all driving towards  the same goal,” explains Jeannette Browning, worldwide manager of IBM Watson’s  Digital Client Cognitive Evangelism team. “It’s an interesting combination of tech support  and learning, while providing key digital assets.” Machines will become smart enough to be able to interact with humans — and also realize when it’s necessary for a human to  take over and enact the “escalate to human” sub-routine.

A complete 10 page report overview can be found on SlideShare.

Thank you Charlene Li, Altimeter.

Don’t settle for the best customer experience in your industry, deliver the best one—period. Carmax

Jim Lyski Oct 2017

Carmax_mm1.1

In an environment of rapidly changing customer expectations, if your team isn’t testing and learning daily to improve the customer experience, then you’re likely already behind. Change is no longer happening over months or even years—it’s happening now. Customers expect to be “wowed” from the moment they start shopping on their mobile device to when they step foot in your stores.

1052-CarMax-Executive-Perspective-Download

The auto industry, like most other verticals, has seen a drastic change in shopper behavior. Ten years ago, the average used-car buyer visited five to seven dealerships before selecting a car. Now, with online research, the average buyer doesn’t even make it to two. While nine out of 10 CarMax customers start their experience online, almost all of them finish in store.

As an omnichannel retailer, we are focused on interacting with customers whenever and however they want to shop.

Held to new standards

People don’t evaluate their experiences by vertical anymore. It used to be, “I’ll compare CarMax against all other used car dealers,” or “I’ll compare Nordstrom against all other clothing retailers.” Now customers are taking the best experiences from one industry and demanding a similar or better experience in others.

At CarMax, this means we’re not competing against the best experience consumers have ever had buying a car, we’re competing against the best experience they’ve ever had—period. A customer can order a very personalized cup of coffee every morning. Why can’t she have an experience that’s customized for her when she buys a car?

That means everything must be personalized, from the mobile marketing messages to the in-store experience. For us, that requires anticipating customer needs. Is her priority researching the best car for her needs? Is it speed or convenience? Is financing the first step in her car buying process?

Use search to identify needs

Search and user data are great identifiers to discover unique needs. Based on their behavior on CarMax.com, we can use anonymized visitor-level data to determine whether a customer will be more suited for standard messaging related to CarMax’s customer offers, or messaging related to financing. Then we can personalize accordingly.

Connect the online and in-store experience

Customers expect a seamless shopping experience, and we see the mobile device as the bridge between the digital and physical. Synchronized browsing will be an important part of the CarMax shopping experience of the future.

Let’s say a customer is coming into the store to check out a Toyota Camry, but we also know that she did a lot of searching for other Japanese sedans. With that in mind, the Toyota Camry would be ready at her appointment, but the Nissan Altima and a Honda Accord would also be available and ready for test drives. By knowing more about the customer and her pre-purchase research, we believe it’s possible to develop a better informed and seamless car buying experience.

Another way synchronized browsing could come to life is through pairing mobile devices with iBeacon solutions on our lots. If a customer has her mobile device in hand as she’s walking and browsing, it can become her guide to inventory as mobile alerts pop up with guidance.

Test for better results

Providing stellar experiences requires testing and constant iteration.

We conduct experiments incessantly, with discovery and delivery going on concurrently. Having a constant cadence of little discoveries is not only a faster way to deliver new experiences to the consumer, but it’s actually a much lower-risk way to deliver innovation to market.

A few years ago, we realized that we weren’t meeting rising customer expectations for car photos. Google Analytics data showed that fewer than half of the photos for individual cars were being viewed. Our employees often took many photographs of the vehicle, but not necessarily the photographs customers cared most about. To solve this issue, we surveyed customers and began tagging photo types to learn more, then tested and refined a new photo-capture process to improve the images for a consistent experience.

Analytics also help us see which photos customers clicked, in what order, and for how long of a duration. This allows us to tell which pictures are most engaging for the consumer. For example, when people are buying an SUV, they want to look at a photo of the trunk of the vehicle so they can see how much storage space there is. Now we can make sure that SUV listings have clear photos of the storage areas.

As a result of our improvements to our photo capture and display process, 20% more customers now look at a dozen or more photos in a series, making them better informed and more likely to purchase.

Empower your teams

Whatever vertical you’re in, the more you can anticipate customers’ needs every step of the way, the happier they’ll be. To achieve this, it’s critical to empower your teams to analyze and learn as well as test and fail.

At the core of each of our product teams is a product manager, a lead UX designer, a business analyst/data scientist, and a lead developer. We never tell these teams how to solve a particular problem—just what to solve, providing them KPIs to work toward and empowering them to solve for customer needs. The teams develop a hypothesis, run an experiment, analyze the results, and identify if their solution will improve the customer experience while delivering business results. They are constantly iterating as they work toward their goal.

We’re willing to try almost anything. If it improves the experience, we’ll implement it, and if it doesn’t improve it, then we move on to the next experiment.

Who cares if you tried and failed? As long as you’ve learned something, then you’re always getting smarter about your customers and how to meet their needs.

Online Travel Industry: Stats & Business Opportunities

The Future for Online Travel Startups is Growth Oriented #InfographicYou can also find more infographics at Visualistan

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