Last month, Lavender overhauled its positioning and revealed itself as a customer experience (CX) agency, shedding the ‘direct agency’ moniker despite being named AdNews Direct Agency of the Year in 2014, 2013 and 2011.
Lavender is not alone. It’s telling of a shift that has been steadily creeping across the industry for some time. Mercer Bell has been calling itself a customer experience agency for a few years. LIDA, the CRM agency launched this year by M&C Saatchi calls itself a customer engagement specialist, as does Apparent. All are distancing themselves from the descriptor of direct agencies and positioning themselves as customer experience agencies.
In recognition of this shift, AdNews has overhauled the Direct Agency of the Year category in our annual awards program. We’re replacing it with ‘Customer Experience Agency of the Year’. It’s open not just to specialist agencies, but to any agency that can demonstrate it operates a model that puts data, technology and creativity at the heart of what it does to develop communications and strategies for clients that revolve around customer experience. The Agency of the Year Awards are open for entry now, the deadline is 19 January. All the details are here.
Earlier this year, we also overhauled the AdNews Agency Rankings, removing the previous ‘Direct Agencies’ rankings league table for that very reason.
Customer experience is a phrase that has been becoming increasingly prevalent over the last 12 months, referring to how customers engage with brands at every touchpoint across products, services and communications.
In Gartner’s 2015 Marketing Spending Survey, customer experience came out as the top-ranked area of investment for marketing technology, alongside digital commerce, social and marketing analytics. In the US, 97% of marketing leaders surveyed cited CX as “critical to success”. Speaking in the US last year, Steve Cannon, president and CEO of Mercedes-Benz USA, said, “customer experience is the new marketing … CX better be at the top of your list when it comes to priorities in your organisation”. The trend is in full flow.
Its roots are in direct, or one-to-one, marketing – insights and data driven, measurable and accountable. It comes back to delivering the right message at the right time to the right person, whether that’s on a one-to-one or one-to-many basis. The evolution from direct to customer experience agencies brings the best of the capabilities from legacy models of direct marketing and adds to it data, technology and even more creativity.
Direct is usually thought of as ‘below the line’, a term that in itself is practically defunct, and refers to mail-based marketing, which has become further and further removed from what direct agencies actually do. Traditional direct marketing – physical DM and mail shots – are almost a rarity thanks to the digitisation of almost everything. There was a view that the term ‘direct’ was misleading and holding back the perception of agencies that come from that background. But what does it mean to be a customer experience agency?
Phillip Smith, CEO of Apparent, says the reason for moving away from using the term ‘direct’ is because the convers-ations it has with clients are around building strategy-led customer engagement programs that can run across a number of activities and channels, often not considered the domain of marketing communications.
“This means conversations are had with broader areas of the organisation and at times we can be the conduit that brings activities back to the consumer,” Smith says.
“Customer experience has a role and can make an impact before, during or after communication activity. The activities are defined by the customer not the channel.”
For example, TV advertising traditionally was the focus for a new car launch to drive traffic to dealerships. Now though, auto marketers need to have an always-on strategy, including a search strategy, followed by a nurture program for prospects to get them into dealerships. Post-purchase, a CRM program kicks in.
MercerBell CEO Nick Bell says this whole process is customer experience at work.
“CX means that multiple channels need to work in harmony with content being deployed across all touchpoints, customer data needs to inform the message … technology is a crucial component of building a customer experience, and the term ‘direct’ probably didn’t cover the technology aspect well enough,” Bell says. “We are disentangling the customer journey and building frameworks for companies to really deliver customer-centric services which go beyond just marketing channels. The term ‘direct marketing’ does not do us justice today.”
Victoria Curro, strategy partner at M&C Saatchi’s agency, LIDA, says for some time direct agencies have been “front- line brand guardians”, making sure a brand’s promise is delivered at every point and going far beyond their traditional definition. Some of the key differences she believes between direct marketing and customer experience are the shift from selling to serving, from ‘staccato’ campaigns to always-on engagement, and most importantly the change from being one direction communications to a more circular relationship.
Curro doesn’t believe the term ‘direct’ has held back agencies under its definition, more that it has been too narrow and failed to recognise the breadth of skills these agencies deploy from data scientists, analysts, technologists and marketing automation specialists.
But even just thinking about customer experience within the advertising industry underestimates its true reach. How companies engage with customers will become paramount and as clients begin to align around CX objectives, Bell believes the role of customer experience officer will join the C-suite. Will Lavender, founder of Lavender, agrees.
“It’s much bigger than direct. CX is right across the industry, all the digital consultancies like PwC, Deloitte, digital agencies, many media agencies, system integrators like Digital Alchemy, data companies like Quantium, in fact every company that sees itself as customer driven,” he says.
“CX is bigger than adland. It’s applicable to the whole market. It’s the future, it’s certainly not just the future for the old direct guys.”
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