by Matt, on 15 Dec 2020
One of the questions we get asked most frequently is when a business should consider investing in an information-driven customer experience (IDCX). Or, said another way, how to tell whether a business is ready to embark on that journey.
There are six critical factors to consider, which make the difference between successfully boosting productivity and revenue and wasting a lot of time and money.
In this post we’ll briefly discuss each of the six factors and how they position your company to take advantage of IDCX.
Factor #1 / Belief and Buy-In
Unifying marketing, sales, and service teams around a single set of data, content, and tools sounds simple. In practice, those teams are accustomed to working autonomously – at least some of the time – and to holding sway over the processes they follow and systems they use.
Adopting an information-driven approach to your customer experience will mean making some changes to the way people on your team interact. If your company has been around for a while, resistance to this change could be a major obstacle.
A transformative customer experience project must be led from the top. A member of the senior leadership team must own the vision, share it throughout the organization, and champion the project throughout the ups and downs of implementation.
The entire leadership team must be ambitious about growing the business – especially the top line – and believe strongly that conventional approaches to marketing and sales aren’t going to yield the desired results.
They must have an appetite for technology and understand the power of information to disrupt and transform companies, sectors, and industries. Moreover, they should recognize that deploying the right technology isn’t an option – it’s table stakes. Companies that are slow to adapt are likely to struggle, and perhaps even fail.
If your leadership team embraces these beliefs and one of them is ready to champion the IDCX project, you’re off to a strong start.
If not, take more time to educate and inform the group on how marketing, sales, and service are changing in the information age – starting with consumer goods but spreading rapidly into business-to-business sectors.
Factor #2 / proof of concept
This factor is most relevant to new businesses following the growth journey for the first time. More established businesses that are trying to re-grow revenue – for example, recovering from the COVID-19 pandemic – or that are seeking to modernize processes for marketing and selling established products can skip ahead.
As we’ve written previously, what constitutes proof of concept depends on who is asking for it, as well as the type of concept that’s being proven.
For the purposes of this discussion, we’ll say your business should have:
- Reduced the idea to practice – i.e. made the product work
- Demonstrated valuable improvement over existing solutions
- Shown that customers will pay for the product or service
- Identified a large target customer group that will buy it once widely available
- Shown that the product can be produce profitably, at scale
If your company has checked all these boxes, you’re in position to market, sell, and support your product or service.
If not, focus on achieving proof of concept before investing time and money in building out the customer experience engine.
Factor #3 / market traction
Following closely behind proof of concept comes gaining market traction.
Selling your product or service to a few loyal supporters – or even one large customer that has sponsored the product development process – is not a guarantee of commercial success.
Demonstrating early market traction means selling your product or service to the first customers who weren’t already “on the hook” when you completed proof of concept.
These sales frequently come through team members’ connections within the target customer group. Since there’s an existing relationship – perhaps you’ve sold something to them while working at a previous venture or worked alongside them earlier in your career – the sales process can be expedited.
This factor applies equally to first-time companies and established ventures that are entering a new market or launching a new solution.
Why does this matter from an IDCX perspective?
Commercial viability is one of the first things a prospective buyer is likely to investigate as they navigate the awareness and evaluation phases of their buying journey.
Your company should be publishing customer testimonials, use cases, and relevant statistics on numbers of product sold or services delivered for buyers to find and digest as they search.
If you don’t yet have this information in hand, you’re likely not ready to take full advantage of an information-driven approach. Focus on winning and fulfilling those initial orders and gathering feedback and statistics to support future marketing.
Factor #4 / working capital
Most early- and growth-stage businesses that fail do so because they run out of working capital.
This doesn’t necessarily mean they failed to make sales. Overtrading is the unfortunate mistake of engaging in more business than can be supported by the funds and other resources available to the company.
Capital-intensive businesses – including those that carry a large quantity of raw materials, components, or finished goods in inventory – are especially prone to financial crises while trying to grow the business too quickly.
New companies that are still operating in bootstrapped mode – that is, funded by the founders and perhaps some small investments from friends, family, and other seed investors – are similarly vulnerable.
A sudden requirement to pay for materials, equipment, or people to fill orders can drain the company bank account more rapidly than revenue is collected – especially when large corporate buyers demand extended payment terms (sometimes settling their accounts 90 days or more after receiving the goods or service).
If your company has raised working capital and can confidently accept and fill a rapidly growing order book without risking a cash crunch, you’re in good shape to light a fire under the marketing and sales process.
If you are conserving cash and the prospect of too many orders coming in at once leaves you awake at night in a cold sweat, focus on properly capitalizing the business before turning up the growth rate.
Footnote: it is much easier to raise capital when you don’t need it than when your back is against the wall, so be proactive. Having enough liquidity to cover 12-18 months of projected operations is a good rule of thumb.
Factor #5 / marketing basics
Although an IDCX implementation affects all of your marketing, sales, and service teams, it’s frequently the marketing team that lacks bandwidth for the project.
This is symptomatic of a wider issue: B2B companies regularly undervalue – and consequently underinvest in – marketing.
The tendency to think that marketing can be handled by an intern or junior team member reporting to the sales manager is common and misguided.
In today’s B2B marketplace, where the buyer is firmly in control and old-school sales techniques are less effective, marketing is gaining prominence. At a minimum, marketing and sales should be seen – and managed – on an equal footing.
For an IDCX project to succeed, your company should have at least one person with full-time responsibility for marketing. This should be a member of staff, not a consultant or agency, and they should have enough experience to understand the processes and tools needed to market the business effectively.
If you’re still operating without a full-time marketing person – e.g. managing marketing within the sales team or as a part-time or junior role – then it’s too soon to make the leap to IDCX. Instead, focus on raising the profile of marketing within your organization and making the case for the full-time position. Until your leadership team recognizes the importance of having in-house marketing capabilities, they aren’t going to fully embrace IDCX – refer back to Factor #1!
Factor #6 / allocated resources
Finally, while it’s one thing to aspire to delivering an information-driven customer experience it’s another to actually allocate resources to making it happen (hat-tip to {Bonin Bough} for the aspire vs. allocate distinction).
Companies that are ready to embark on the IDCX journey have budget and staff time ringfenced for the implementation project, associated software license fees, and ongoing marketing spend.
The cost of each component will vary widely according to the size and complexity of your business, product or service, and target market. However, it’s a fatal mistake to only budget up front for part of the overall cost – for example, forgetting that the company will need to pay for the software tools on an ongoing basis after the implementation project has been completed.
You can read more about how to estimate these costs in our related posts on estimating the total cost of ownership of a HubSpot implementation and how to set and allocate a marketing budget.
If your company has passed the working capital test (Factor #4) and begun investing in marketing (Factor #5) but isn’t yet ready to commit the necessary capital to designing, implementing, and leveraging an information-driven customer experience, then don’t pull the trigger. Wait until it’s more than just an aspiration.
If, however, you have budget and time allocated for each of the components, what are you waiting for? Let’s get started!
Bringing it all together
In summary, to verify that your company is ready to embark on implementing an information-driven customer experience you should answer the following questions with a definitive “yes”:
- Is your leadership team ambitious about growing the business, convinced that conventional approaches to marketing and sales aren’t going to work, clued in on the power of information to disrupt your sector, and is one of them ready to champion the IDCX project?
- Has your company achieved proof of concept for the product or service you’re trying to sell?
- Have you begun selling to customers on the open market and publishing customer testimonials, use cases, and statistics on products sold or services delivered?
- Has your company raised working capital so that it can confidently accept and fill a rapidly growing order book without risking a cash crunch?
- Does your company have at least one person with full-time responsibility for marketing, and do they have the experience to understand the processes and tools needed to market the business effectively?
- Does your company have budget and staff time ringfenced for the implementation project, associated software license fees, and ongoing marketing spend?
Say “yes” six times and give us a call! We’d love to discuss how implementing an information-driven customer experience can fuel your business’ revenue growth.
Photo Credits
Photo by Sanjeevan SatheesKumar on Unsplash
Photo by William Iven on Unsplash
Photo by UX Indonesia on Unsplash
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