I have worked in silos… too many times. When I worked in the credit card industry, my department (Online Channels) supported all credit card products: House Cards, Premium Cards, Co-branded Cards. We drove individual and cross-sell campaigns many times at the request of the individual product manager. This process was wrought with message duplication ie customers being upsold to premium products, cross-sold to ancillary features and, in some cases, being offered promotions for products they already had.
The same situation arose when I worked at Yahoo! In Marketing we managed over 16 properties at the time: News, Homepage, Music, Lifestyle etc. Each property had its own product manager. And each product manager wanted the traffic to their pages. Marketing’s role was to support individual product objectives. The marketing team was divided to ensure that each product was given a point of contact. Each product organization included representation from Marketing, Sales, and Finance. While this provided focus for each product, it also created a bigger rift between products. As everyone was building their own fiefdom, the greater organization was feeling the impact.
Performance Is Judged On A Product Basis
I remember the year-end product presentations. Each manager stood up in front of their peers, touting performance of their respective products. Acquisition numbers were always impressive. Retention numbers were harder to attribute to individual product performance since customers tended to move between products and properties. Therefore, “claiming” credit for those customers was a difficult exercise.
In banking, the term we used was “Share of Wallet”. When it came to credit, the spend per payment vehicle became an important metric. The goal for every product manager was to increase that share of wallet at the risk of cannibalizing another product.
At Yahoo! vying for audience attention was done in a similar manner. The focus on content, special events, promotions etc. was done to increase customer time spent on each property. Given the actual “attention span” for any one individual to spend time on Yahoo! it was unrealistic to grab more of the user’s attention than was readily available.
In both cases, the focus on product performance drove a culture that became increasingly competitive. In many cases, the message overload not only overwhelmed the customer/user, it also drove them away.
The competitive nature instilled in the culture continued to foster this silo-mentality. And while it drove performance in the past, over time it was clear that product managers were tripping over one another to lure customers to their respective products.
The system became more onerous and less efficient, and in the end more costly as the wasted messaging began to impact campaign performances.
Thinking Differently… And Targeting by User Propensity
I applaud senior leadership at both companies to recognize that the systems that once worked, needed some serious revamping.
At Yahoo! by understanding the target user behaviour on the site and how s/he traversed each property, the product managers realized they had only a limited window to capture their audience’s attention. By understanding customer value before product, the acquisition team was more likely to target people based on their likelihood to be receptive to any one of the 10+ card products within the portfolio. Suddenly relevance drove the targeting strategy.
One thing became readily evident: The product-driven environment perpetuated the silos, increased costs and created a competitive work environment that put customer retention at serious risk.
The customer-driven environment began to eliminate the duplication, create a shared focus on customer retention and began to change the way employees communicated with each other.
A Sustainable Organization Puts Customers First
I was lucky to be a player in the changes that were happening at these companies. I did not stay long enough to see them play out longer term but it was clear the organizations were well on their way.
Once the plan is set in motion, it stands to reason that this must extend to other parts of the organization.
- Operations needs some rewiring to understand customers holistically – e.g. other bank products they hold, transactions across all credit products in order to truly understand value
- Customer data processes need to ensure greater transparency and governance modifications to eliminate duplication
- Performance and compensation need to now measure true customer retention
These are just a few areas that will be impacted, but as time goes by, the steps to improve will bring greater clarity and focus for the company.
Today, ARCOMPANY continues to drive the message of going back to the “mom and pop shop” and truly understanding the customer first. It’s so critical in a time where the voice of the customer is much louder than the corporate voice. It’s what the market is screaming for and how the business will eventually respond, whether they like it or not.
This post first appeared on Talent Culture