Kelsey: [00:00:00] Well, thank you so much, Alan Gonsenhauser for joining the next CMO podcast. Super excited to have you on the show today would love to learn a little bit more about you and what you do at demand revenue.
Alan: Sure. I'm thrilled to be here. Thank you very much, so much for inviting me. And I've had demand revenue a little over a year, just a very quick on my background. So I was a serial chief marketing officer in general manager. Mostly last 25 years in healthcare segments, different part of the health care ecosystem.
Then I spent six years with serious decisions in Forrester as a CMO or chief marketing officer analyst and executive advisor. We're actually mentored 108 CMOs during that six-year period left a little over a year ago, and I started demand revenue and I'm really doing three. I'm an interim or fractional chief marketing officer.
I've been doing that with three companies in the last year, and I'm also a CMO executive advisor or CMO coach. And then I do some keynote presentations [00:01:00] as well, but most of what I'm doing is either interim CMO, fractional CMO, or an executive advisor to CMS.
Peter: Well, and, and Alan, of course, we've known each other for many years. And I think we got to know each other first when when you were at serious and then serious Forester, then Forrester, as they went through that brand transition, do they still use serious? Did they still use the name? I think they use the brand serious decisions inside
Alan: they don't use serious decisions anymore, but they, but some of the models and frameworks, they're calling Forrester decisions now, which has a lot of what serious decisions was. And other things that Forrester had trying to combine them.
Peter: Excellent. Well for the two people who are listening, who may not understand who serious decisions is, and and was, I guess, announced prior to Forester really incredible organization that was an advisory service for marketing leaders. I was a customer from.
Alan: sales and product [00:02:00] leaders.
Peter: Yeah, that's, that's true. Just to sales and product.
I cared most about the marketing stuff, I
Alan: I know.
Peter: I think I was a customer since about 2005 or something like that. So it probably had longterm relationship founded by John Neeson enrich LD who are both, you know, incredible. There were, I think both ex Gartner, right? Is that where they came
Alan: there were so rich Ellis was the SVP of sales. Our EVP sales for gardener and John Neeson was the EVP of marketing for gardener and they left a form series.
Peter: Yeah, so really great. And one of the things that was fantastic and is fantastic about them is that they have really, well-researched kind of frameworks and models. Fit together really nicely. And that's one of the things that I, I think that it, it's also something that Alan, I know you spent a lot of time.
Alan is sort of a framework model guy too, which is probably why you plugged in so well to a, to serious. Anyway, one of the things that we did want to talk about. With you today though, Allen is what [00:03:00] talk a little bit about, I think an area that you're super excited about these days in, in that customer experience.
Cause I know you do a lot of work with customer experience when it comes to advising CMOs and CEOs, obviously. So let's start set the table and define what in the world customer experience.
Alan: Well, thank you, Peter. And I'm very passionate about customer experience. I really think it's the most important area that companies need to focus on these days. And for so many reasons, you know, when you. Have promoters of your brand and you create remarkable customer experiences that translates into longterm financial results.
And we can talk about some of the metrics in a few minutes, but that that's something CFOs should really care about. And I've had that conversation with CFOs many times. And I also feel that that companies have over-rotated on demand. Thinking about just new logo. [00:04:00] And that marketing, you know, how many new logos and the demand function, but it's a lot easier and more productive to.
Grow your current customer relationships. If you, if you provide a remarkable experience in terms of when that starts, there's actually a prospect experience. It starts with a prospect experience. You know, if you over market to prospects and send them too many emails, or if your emails aren't. To their real needs and pain points because you haven't done segmentation properly.
So you're not relevant to what they're looking for, or you overmarket to them. There could be a really bad prospect experience upfront and you may not get the opportunity for them to become a customer. So I think it starts there, but where the real action starts after that is the post-sale customer experience.
Starting with onboarding.
Peter: Well, it's a, it's a ma it does. And and it's amazing. I, I had a, a really interesting, I think we all have had these Negative [00:05:00] experience customer experiences that we think about all the time. When we, when we talk about what we should be doing to make that a little bit better. I had one recently that was really fascinating.
So I I'm, I'm an old guy and falling apart, so I needed to. Let's get some physical therapy
Alan: That makes two of us.
Peter: exactly. So I needed to get some physical therapy for some sore of sore back that I was dealing with. And my doctor said, great, well, go to this physical therapy chain that happens to have. An office rate in your, in your town.
So it should be easy. So I, one of the website and, you know, it was a pretty good experience on the website and I could find an appointment and set it up and and do it all online. So a nice digital experience that I had. And then I showed up for my appointment on on the day that I was supposed to show up.
And there was a sign on the door that said this office is closed due to COVID. And make an appointment at one of our other offices. So literally they allowed me to make the complete [00:06:00] appointment, set it up. You could search for the, the office, which I did on their website. And it told me to use this.
I called on the phone to try to confirm, and they said, no, one's available right now. Of course, because the office was closed. So really interesting kind of experience they, they did in the end, fix it in a funny way where I actually reached out to the COO of the company because I wanted them to know.
And, and I'm going to bring this back to how executives can deal with this. So I reached out to this gentleman, I found him on LinkedIn and a big national chain, by the way. And I said, Hey, just, I thought you should know. I had this experience. And I explained. And he was great. He replied almost immediately thanked me for it.
And and said that they're going to do better and they're going to fix this, et cetera. And then almost immediately they, they actually call back from another office and said, Hey, we'd love to have you in it. I've had a great experience from them. So he fixed it. So so, so tell me a little bit about. That's one example, but there are lots of examples of sort of hidden negative [00:07:00] experiences. How do you engage with a company when you think about trying to help them either assess or improve their overall customer?
Alan: Well, I'm actually doing that with two clients this quarter, Peter and a. First of all don't make any assumptions. Cause sometimes it's a simple stuff that matters. I mean, as you found out, you know, one hand wasn't talking to the other hand, so no one was thinking from a holistic level. Well, you know, someone's going to make an appointment, an office that they can't get to.
A lot of it is, is really common sense and, you know, treat others the way you want to be treated. Look at the whole process, you know, after the prospect experience, how do you onboard a new customers? How do you welcome them? How do you make them feel at home? How do you make sure they get value out of your.
How do you communicate with them? Are you just communicating with them when you want more business from them or you're communicating to [00:08:00] educate and help them with new features? Are you measuring usage? Do you know what the usage is? Do you have a process for determining the level of customer experience and satisfaction?
Do you use net promoter score or something like that? And we can talk about how to use and abuse it. A lot of companies are abusing it and not using it in the right way. But it's, it's really following the whole customer journey and understanding what their needs are. And, you know, it's like good marketing, understanding the personas, whether they're, you know the buyer's journey or the customer journey and understanding the jobs they're trying to get.
And what the frustrations might be simply, you know, if you have a call center and you're trying to hide your people from it, you know, not publishing your phone number and, you know, you could be pissing people off a lot that just want to talk some, some, some people will do things online and hopefully not end up with the same situation you did where the office is closed.[00:09:00]
So other people want to talk to a person and they don't want to delay. And they get really upset, you know, at all the companies that are, that are trying to hide. There are customer support number or, you know, measuring people on how quickly they can get off the phone rather than how well they support customers and making sure that they feel welcome.
So it's, it's really not making any assumptions. And it's common sense thinking about the entire customer journey and a lot of companies, the bigger they are, the more silos. And people may be trying to do the right thing in their silo, but not communicating internally and understanding what the holistic experience is from a customer standpoint, you need to,
Peter: So who should own customer experience inside the car?
Alan: You know, I've been asked that question many times and I've always said the answer is simple. The CEO should own customer experience. [00:10:00] Now he or she may deli. To a CMO or a C or, you know, a chief customer officer, but you need to have a customer centric culture. And that comes from the CEO and it comes from, you know, what the culture of the company is and how you train your employees and colleagues to be customer centered.
So that's my answer. It's the CEO, but whoever that individual wants to delegate, but the CEO needs to be involved. They need to care about this because this is their future and this is their growth or.
Kelsey: So Alan, one thing you brought up was obviously the net promoter score NPS. I think the world is pretty much aware of, of that now. What are some other ways that you can really measure that customer experience? I would think that the customer experience is just as important as the buyer's experience in that prospect experience.
Because at the end of the day, if you don't keep your customers, your business is not going to [00:11:00] continue to grow. And I, think that falls to the wayside quite often, if you're not finding a way to measure it. So how, how, how can people measure that customer is here?
Alan: I, you know, I think to begin with NPS is a great way. I've implemented it at a number of companies and it's simple. I mean, you've got, you know, zero to 10, you've got your promoters that, you know, marketing needs to understand what, what people love about you. They can use in promotion. You've got the passives that are kind of in the middle and you've got the detractors and it's just too quick.
How likely would you be to recommend our company? And then very importantly, why did you say that? And the real beauty in NPS is taking those responses, whether they're positive with promoters or negative with detractors and driving continuous improvement, I've actually taken companies through that. And so I, you know, It's been bastardized also.
I [00:12:00] mean, I don't know if he ever had the experience buying a new car or buying a car to a car dealership. I was buying my Audi a few years ago and we finished the sale and I got the car I wanted in the SVP of sales goes, well, you're going to give us a 10 aren't you? And I said, And this, this happens all the time.
People try it. You know, people use NPS in the wrong way. You shouldn't use it for a performance like that. You should use it to understand what the customers are feeling in a very transparent way and what you need to do to act on that information. And if companies would do that, that'd be a far more successful versus playing games, which happens a lot then for.
Peter: you definitely see that island. Yeah, the,
Kelsey: would say that definitely involved the.
trust too, because if you're, you know, pushing that you deserve a 10 and not really taking into consideration, what that actual score is, people are no longer going to start to trust your business.
Alan: And what are you learning? [00:13:00] You're learning nothing. You know, you're not understanding what customers are really thinking, and that's the whole purpose of.
Peter: So let's, let's go back to step one to assess your customer experience. So. Honestly got the you've got some With the CEO, obviously around around the CEO has to set the culture. And I liked that as a strategy, but let's assume the CEO set a good culture for customer experience.
You've come in. Alan comes in and is brought in by the CEO. We're probably more likely with you the CMO to say, how do we think about our customer X customer experience and what would, should we be doing to improve it? What, what would an expert like you. Start by doing step one, to assess that customer experience.
Alan: I would look at how the organize. If they have silos, how they're measuring customer experience, how they're acting on it. Cross-functionally and what [00:14:00] the onboarding process is, what is the journey, but both what's the working with one client, you know, on the front end with the demand process, their data's not really good in terms of segmenting a prospect from a customer or segmented, you know?
So, so they may not be able to send out really relevant messages on the. And another customer. And I do CX is one of the areas I help CMOs with, but there are a lot of others, but it's just a passion of mine. But, but then looking at what's the onboarding experience, is there an onboarding process? Who does it, how long does it take to do installation?
I have one client it's over, it's taken many times over a year. It's a complex software product, but over a year to do an installation, why is it. You know, is it the customer's fault? Is it their fault? How are they setting expectations? It's really breaking down the whole process of how companies interact with customers, the metrics they're using to track continuous improvement, the management structure to [00:15:00] actually add.
On, hopefully they're getting feedback. Some aren't getting feedback, but once they are, I mean, it's not just good enough to measure NPS and look at the number. The number is really not important. It's what you do with the number and how you use that information to drive decision making. So it's the metrics, it's the process.
It's looking at, it's looking at all those things and, and usually what I start doing is interviewing some folks in different. Two of my clients, I'm working both with customer success and marketing. So there's a customer success set of roles and responsibilities. Then there's a customer marketing set of roles and responsibilities.
You know, and, and recently spoke with Fred Reichheld a couple of times who actually he's the person that Bain that started NPS. And he has a new metric I'll I'll talk about in a minute that I think is a really good one. One of the metrics that, that people should be tracking but Oh, where was I going with that?
A lot of it is, is really obvious stuff. Oh, he was saying only 10% of companies are doing it right. 90% are
Peter: [00:16:00] right customer experience.
Alan: are treating their customers the way they should be.
Alan: And it's for a whole
Peter: that's actually, that's actually even better than I thought. I mean, from, from the, your personal experiences navigating the world, you, you know, it's, it's remarkable when you get an excellent customer experience and you, you absolutely remember it. And and that should not be the case. I guess there's always going to be standouts.
Maybe the bar keeps being risen, but I'm not surprised that people really struggle with, with customer experience. And some of it is there's that it's hard. And it, especially because of the, in the past, the customer experience had maybe one, maybe two channels that you have to federate and, and think about as you're developing that experience.
But as they've exploded in the ways that people can communicate, that's where things get, I think really complicate. And, and, and one thing that is, is a personal frustration [00:17:00] for me is that marketers are really good at opening up new checks. So they open up a new channel to communicate to the customer.
Usually for outbound purposes. Usually they were trying to generate new people, but they don't realize is most of those channels have two directions to them. And when you open up a new channel, you're inviting people to come in. Ask a question, get an experience. So you put
Alan: You need to
Peter: on your website for the first time.
And drift is really designed for sales primarily, but guess what support questions will come through there, you sign up and you've got a Tik TOK account. And guess what? If you're under the age of 25, you're probably spending your life on tick-tock and you'll use the direct messaging inside tick-tock to expect to ask the brand a question and get an answer and.
So have you seen this as part of the problem that marketing is good at opening up communications, but not good at listening to those channels.
Alan: Certainly I can think of one example. And I won't mention names, but [00:18:00] one client where, huh.
Peter: do tell, come on.
Alan: But, but but yeah. So marketing had a blog and was was requesting input. Oh, and, and the, the, actually it was, it was, it was customer support. So people were using the website to send a message that I can't sign on. It's not working. I, you know, I need someone to help. Me and marketing was trying to transfer that to the customer support team, whose job it was to do that.
And they said, oh, we only take direct emails. We don't take anything from the web. I said, These are customers that have a problem that needed to be dealt with. Yes, you will. You know that that's an example of siloed thinking. But yeah, I'm either more and more channels. I mean, there, there was a recent McKinsey, a good piece of research by McKinsey showing that B2B companies that have 10 or more channels grow faster.
So there's certainly a proliferation of [00:19:00] channels. But to your point, Peter, it's gotta be two way. If you open something up, you have to be ready to. And you have to think it through. I mean, most things, most things I see are really obvious, you know common sense, common sense. And there's a lot of really kind of, I don't know if I'd call them dumb things, but things that aren't aligned because people just don't think through the process sometimes.
And that's one example. I think Peter T.
Kelsey: No, Alan, I know you recently interacted with, with Fred Wrightsville, from Bain who created the NPS score over 20 years ago. Now, you know, talking about NPS 3.0, I'd love to learn and hear kind of what your thoughts are. And what do you think of a friendly.
Alan: I think he's fabulous. I think, you know, he, he brings it down to love. You have to love your customers and, and, and really obvious stuff. His new book winning on purpose. Absolutely. Fantastic. And [00:20:00] so when he talks about NPS three dot oh, one, one of the things he talks about is not abusing NPS, which a lot of folks have done.
He also talks about he's made tens of millions by investing in companies that do a good job with customer experience. Bain is tracking them. But he has a new metric that he has come out and NPS three dot, oh, it's something called earned growth. And let me break it down. Let me explain what. So some of the metrics that, you know, your viewers probably are used to our gross retention and net retention, and the differences with net retention, you add the growth from existing customers, and then there's also lifetime value in LTV to customer acquisition costs are a lot of metrics we could talk about to track customer experience that are great metrics.
He came out with a new one called earned growth. And the way this works is if you look at your net retention, And then for every new logo that you get new customer logo, brand new [00:21:00] customer, if you can ask them right away when they become a customer, why did you come to us? Was it a customer referral or some sales promotion, or some other reason why you came to us?
And if you can bifurcate the new logo customers that came to your company because of a customer refer. And you add those bookings or revenue to your net retention. He's calling that earned growth, which is the value, the business value of having promoters and retention and growth of existing customers, which I think is a great metric.
So you just need to get a
Peter: is it's tricky. It's, it's tricky to mess to measure. I was just going to say, I mean, it's, as you were saying that it's a th the, the downside of that is it's tricky to measure. I think it's a it's a great consultant model because theoretically it's not. I think it's really, really good. It would be really helpful.
[00:22:00] And actually this, this, this would be a good opportunity for you, Alan. Cause I know you help a lot of customers developing sort of the systems and practices around how to put that in place. So it can actually happen. I think that would be really compelling. And, and I'm also a big believer in at least if you understand the concept behind it, even if you can't measure it precisely you, you should at least have some general sense.
The potential value of those, of those kinds of things. Because it, it obviously can be massive. And, but there's so many things that are difficult to measure in, in March. It, it, it is a real challenge, obviously. In fact, we, we, from time to time, we hear, I know there are a number of customers who joined us because they heard about us first because they listened to the podcast as an example.
But it's really difficult to do to when someone interacts lots of different ways with a company and they'll often say, oh yeah, I heard about you guys. First of the party, Or I read your book or [00:23:00] something like that. That's how people tend to get introduced to us. But but finding that can be can be a little tricky.
So, so we w we talked a little bit about the sort of the, the bad form NPS. So the, Hey, can you give me a good grade kind of thing? Are there other sort of bad practices that people should look out for when it comes to either NPS or other kind of measurement systems that they're using to try to assess customer experience?
Alan: Well, do things for the right reason, be transparent, you know, and if their issues work, the issues I can, I can give you one example. I was CMO of north America for a comp a Swiss company Straumann in the dental implant. And we looked at NPS globally. We had an outside consultant doing, which is good because we were in an oligopoly of five or six different players, major players in that space.
And we had NPS not only on us, but on our competitors, which, which is kind of rare. I think that's a, that's a best practice, but it turns out we were [00:24:00] worst of all of our competitors. And so I put a cross functional team to get. I had responsibility for marketing and operations, but you know, had sales and had finance and had all the different functional areas support.
And we looked at the NPS data and found out what the issues were. It was related to communication and invoice and some things we may change as we analyzed the data we were getting, which a lot of companies aren't doing, they may be asking the question and then sending reports. But not doing something with the information, you have to do something with what the customers are telling you.
You have to demonstrate you're taking action and you're making progress. And, and they're, they're, they're giving you information for a reason or they'll stop giving it to you because they'll think it's a waste of time. But we did that. And actually in a year, we went from last to first in north America.
So and I have that blog up on my website. It's a it's it's one of the examples, one of the blogs I have in my web demand revenue, but. But I, I, you know, I know I keep [00:25:00] repeating myself, but a lot of it is obvious, you know, do it for the right reasons, you know, do it because you want to find out what your customers really really think.
And if they say you suck in certain areas, then drive action and make decisions based on that information. And that's the only way to turn passives into promoters, but there's such a value of promoters in terms of your long-term. Profitability valuations, everything else that it's worth it.
Peter: Yeah. A couple of things that, that that, that makes me want to follow up with Alan w one is the one is the idea of this followup with the customers to prove that you're actually listening to them. So how do you recommend that people do that in a scalable way? I mean, you can see that in a smaller company where you have not too many customers, but if you've got thousands, tens of thousands, millions of customers, how do you think.
An organization [00:26:00] should provide evidence that they're listening to their customers and communicate back to them. The progress that they're making based on customer.
Alan: I think two ways. I think, you know, your customer success organization, to the extent they handle larger customers and, you know they can do it on a one-on-one basis, but that should be in your marketing committee. No, you can, you can do a lot more volume market look, w w we're doing this NPS four or this, you know, we asked you your opinion for a reason.
This is what we found, frankly, frankly, here are some issues we had, and this is what we did about it. And, and do some broad communications, you know, demonstrate that you're being customer centric. Marketing can do that easily. And then you, you can communicate that in different channels, but I mean, There's an arrogance that, oh, you know, we're so great.
You know, you don't want to say anything negative, but, but, you know, emotionally people respond to [00:27:00] warmth and honesty. And if you say that, look, you know, we had some of these issues, this is what we've done about it. And please tell us if you've seen, you know,
Peter: Yeah, it's interesting. I saw it. It was a Stripe or recently was responding. A some negative stuff in the, in the market, some sort of accusations of kind of predatory approaches. And it was really interesting because the, the CEO of Stripe did an amazing job communicating back and really reframing, saying he listened to people who had some concerns and saying, well, this is what we're doing.
We don't think that was a problem in particular, but in the future, That I saw from that communication was incredibly positive. So it's a, it's amazing what what's happening.
Alan: It's very human.
Peter: It. Absolutely. And by the way, I love it reminds me, I love the idea of winning on purpose. I love double entendres. Right? So th the, the idea of the idea of focus on focusing on that [00:28:00] purpose, and I assume the purpose should be it should be, it's not only just winning deliberately, but focusing on that
Peter: of loving your customers and making sure that they're, they are they are actually.
Getting the success that they signed up for at the end of the day. So one last question before cause we're almost at the end of our time before Kelsey maybe takes us out with our final final question, is they given the fact that we're headed into some market turbulence inflationary times, et cetera, what do you think CMOs should do when it comes to.
There their mix of focus between acquire new customers, delighting existing customers and focusing on that customer experience. How do you think that changes the equation for cm?
Alan: I always say, treat your customers well first cause that's where you can get the easiest growth from, and you get the valuations over time. And if you can, you know, make your customers into promoters, [00:29:00] your lifetime value is going to be better. Your financials are going to be better. During COVID we saw.
honest, being empathetic, helping them in ways that you can help them became very important. And it was much more focused on the current customer base, then that new business new business, new logos depends on the business that you're in and the stage that you're at. I mean, you know, if you're a newer organization, obviously you have to focus more on new logos.
You don't have as much of a customer base to draw from, but I would always prioritize current customers first. And I think a lot of. For depth that especially during turbulent economic times, you know and if there are certain segments or certain customers, like I know, you know, during times of COVID the, obviously the cruise industry and the travel industry and, you know, and, and hoteling, we're going through terrible times.
And, you know, there was some organizations that did their best to try to help their customers through that and that behavior. [00:30:00] Is a big part of their brand and what people will remember and drive loyalty over time. As if we go into more turbulent times with everything going on in the world, and hopefully it won't be too bad, but we'll see You may want to watch spending a little bit and be a little bit more productive. I, I'm a big believer also, and that's not the subject for today, but really good marketing operations, you know, and, and, you know, marketing isn't about spending money. It's about driving relationships brand and demand productively, and how you do that efficiently and operational excellence.
And obviously. Time's operational excellence is even more important, but it shall always be important.
Kelsey: All right. Last question. I know we're just about at time. So what advice would you give to those that are CMOs are aspiring to be one.
Alan: None of us knows everything. None of it. We have certain skills. We have certain abilities. We've learned certain things that are, [00:31:00] you know, valuable in our career, but that power of your network is really, really important to people. You know, don't assume you know, everything, you know, that can be really dangerous.
None of us do. So build a network of colleagues, not only within your company, but outside of your company, people you can draw from people. That'll tell you that. You know, a coach or, or anyone that you, that you trust. And that's how you get some innovative ideas too. I've been in different industries and I've taken ideas that, you know, from one industry to another, where it was very, very foreign to the industry.
I was taking two, but I knew it worked because I had that experience from another, another advantage point that worked really well. So just don't assume don't be arrogant, you know, be open to other ideas and build your name. People you trust so you can get good information from, does that make sense?
Kelsey: Absolutely. Well, this has been great. Alan really appreciated our conversation today. Make sure to follow [00:32:00] the next PMO and plan out on Twitter and LinkedIn. And if you have any ideas for topics or guests, you can email email@example.com. Have a great day, everyone. Thank you.
Alan: me. They care.
Kelsey: Thank you.