Reimagining Buzzwords
BRIAN ALFOND: Hello, folks. Welcome to this episode of the Reimagine Marketing podcast. I'm your host Brian Alfond. And I'm part of SAS's Global Customer Intelligence Group where I work with customers to find elegant and creative solutions to their marketing problems.
My guest today is Lisa Loftis, a CRM customer experience and business intelligent expert with over 30 years experience assisting organizations with customer strategy. She's worked with numerous organizations all over the world and across virtually every industry on all aspects of successful data governance, business intelligence, and CRM. She specializes in combining technology necessary to support customer experience and business intelligence strategies with organizational structures, executive leadership, cultural factors, and other things required to migrate an organization towards effective implementation of customer strategies. She speaks frequently at national and international conferences, has co-authored the book Building the Customer-Centric Enterprise, and is a colleague in principle on the SAS Customer Intelligence global practice.
Lisa recently penned an article I found on CMSWire entitled "Phygital-- A Confusing Neologism for a Very Real Problem," which explores in part the trouble with buzzwords, the specific definition of this one, and the difficulty in making phygital happen in the marketplace. Now, personally, I have trouble keeping up with all the new and redefined words and terms we use in language today. And I don't think I'm alone in this. And from my reading of this article, it is very evident I'm not alone in this. So, Lisa, thank you for talking to me today. And perhaps we can start hopefully simply with the definition of phygital.
LISA LOFTIS: Thank you, Brian. [CLEARS THROAT] Listening to you give me the introduction, I'm going to have to change my bio because it makes me sound like Methuselah.
[LAUGHTER]
Anyway, so the issue that I have with phygital, if we take out the fact that the term phygital reminds me of the toys fidgets. Do you remember those?
BRIAN ALFOND: Oh, yeah. Like fidget spinners, yes. [LAUGHS]
LISA LOFTIS: And they're designed to help people fidget. And fidgeting is defined as making small movements especially of the hands and feet through nervousness and impatience. And that doesn't seem to me to be a great parallel into a word that we are talking about in the CX and marketing space to begin with.
But really, the reason that I have an issue with phygital is more how it's applied because most of the shorthand definitions that we look at for phygital actually start with the fact that it's a melding of the physical and digital worlds, which is fine. I mean, that's what we're trying to do in CX when we talk about the hybrid digital/physical customer engagement model. It's when you dig deeper into those definitions that I start to have problems because if you Google them, you'll find things like this tacked onto the definition.
However, as the retail companies that have adopted this technique have underlined, the real application of a phygital structure is that of enhancing the engagement of the consumers thanks to the introduction of digital technologies inside the traditional physical spaces. Or this one. Phygital is governed by the three I's-- immediacy, immersion, and interaction. The first two I's, immediacy and immersion, come from the digital realm with the final I, interaction, coming from the physical realm. Now, what those definitions lead the reader to is that you have to be in the physical realm, the store, in order to have a phygital interaction.
BRIAN ALFOND: Well, I'm glad you got that from those definitions. I have to tell you that the second one confused me almost as much as just the term itself. But so the limitation here or one of the issues-- because I think with a portmanteau such as this, we have a number of issues besides the word itself-- is it's limiting you to coming from the physical world first.
LISA LOFTIS: Yes. Yes, it is. If it's applied only to that context, then I have absolutely no problem with it. But the problem is that it is being used now because it's a catchy term. It's being used as a substitute for the hybrid digital/physical customer engagement model. And it's a mouthful. But that hybrid digital/physical and customer engagement model is much more than simply dealing with engagements that originate in the physical space and move digital activities into that.
BRIAN ALFOND: So if I'm understanding you correctly, and tell me if I'm not, what I'm hearing is that the details of a definition like this matter and that the two that you read were rather limiting definitions of what phygital is. And if you subscribe to one of those definitions, then by default, you're almost limiting your ability to execute in the marketing space to essentially what's only in that definition.
LISA LOFTIS: Basically, yes. And I think the real issue there is you may not look far enough into what you actually have to do if you want to satisfy a hybrid digital/physical engagement. So if you look at phygital, and if you look at how you need to tune your processes, how you need to tune your technology, and you're only looking at providing a digital aspect when someone is in a physical store-- like the ability to ask Siri when you're in a store for help as opposed to waiting for a person or the ability to walk into a store with a shopping app like Target from many years ago and have the app direct you around to the most expedient way to pick up those items that you have on your shopping list. That's only one aspect of hybrid digital/physical. And if you only look at that, you will not really take advantage of digital/physical.
BRIAN ALFOND: So, I mean, I see the value in an approach like Target has. And I have to admit, as a homeowner, when I go to the local big box home warehouse store, I do find it useful that there is something on the app that will direct me to the store. But I can also see what you're talking about that being very, very limiting to that marketing effort. That same big box store has something where I can take maybe something that I could buy there and through virtual reality put it in my home and look at it before I go and buy. That seems like more of a hybrid model where they're doing both in that instance.
LISA LOFTIS: Absolutely. I mean, hybrid can be anything. To go back to the definition that I didn't like, that I of interaction can take place either in the digital realm where you're bringing in physical to some extent like what you said with AR VR or the other way around. So activities like order online, pick up curbside is a mix of both. Telemedicine, especially telemedicine that's incorporating wearable devices to monitor health statistics, having the ability to click through to a real human while you are on a website trying to get support and have all of the information or your navigation path transferred to that human without you having to pick up a phone. Those plus your AR VR example are all really what we're talking about with hybrid digital/physical.
BRIAN ALFOND: We're using a true definition of hybrid. And I think of a hybrid car. Sometimes it's gas. Sometimes it's electric. Sometimes it's both.
LISA LOFTIS: Exactly.
BRIAN ALFOND: I'm a very simple man. I tend to think in simple metaphors. That makes sense. But it also sounds a little bit complicated, so maybe a little bit harder to execute for companies.
And I noticed that you wrote in your article that the digital transformation that was accelerated so much by the pandemic might have caught many organizations unaware. And they more or less applied a digital Band-Aid to their efforts. Could we talk about that a little bit?
LISA LOFTIS: Absolutely. What I quoted in the article was a CMO Council study that SAS sponsored. And it was actually a continuation of a study that we started pre-pandemic and then looked at the height of the pandemic as well with the objective of understanding what's happening in customer experience, where the sticking points are, and what customer experience is going to look like 5, 10, 15 years from now.
And one of the things that came out both in the original study and in the one that we just did with CMO Council is that two out of three marketing leaders are saying that it's extremely important to deliver hybrid CX so that they can increase personalization, innovation, and improve their customer engagement. But more than 60% of those marketing leaders actually said that they're not confident in their CX's strategy right now, their ability to win and retain customers in this new environment.
So that gives us a sneak peek into how companies are feeling. And the problem is that 71% of the consumers told CMO Council that they want this blend of hybrid digital/physical. But over half of them said that brands aren't very good at delivering that type of a seamless hybrid experience.
So what we're thinking here or what I'm thinking is that the pandemic caused brands to have to transition so fast into an almost purely digital environment that they really didn't take a holistic look at what needs to be done. They had to have websites up where you could order your groceries online and have them delivered or pick them up curbside. And that's what they looked at.
So they didn't have a chance to make those apps all that usable. They didn't have a chance to figure out that half their users were the older generation who wasn't well versed in the web to begin with and didn't really easily navigate around those websites. And they didn't connect up the channels. So they didn't connect up the physical space with the digital space. And now that consumers are used to what's happening, they're finding out that brands need to really take a good hard look at what's working and what's not.
BRIAN ALFOND: So we have a little bit of a situation where we have chewing gum and baling wire holding a lot of digital strategies together because of the panic that initiated these things, which I can understand. The pandemic caught so many of us unaware across all aspects of our life. But there's a time where you have to-- this is my approach to home repairs. Speaking of my earlier experiences, a lot of chewing gum and baling wire.
But there's a time when you have to say, OK, well, I fixed the immediate problem. I stopped the leak. But now I have to make this permanent. I have to make this a change that's going to benefit the structure of my house or whatever's going on. I think a marketer has to do that too. We have to talk about, as you did in your article-- which I love this expression "ripping off the digital Band-Aid" because I can feel--
LISA LOFTIS: [LAUGHS]
BRIAN ALFOND: --what that feels like. And it must scare marketers, CMOs, anybody in that marketing organization tremendously to have to endure that little bit of discomfort in order to get that larger benefit.
LISA LOFTIS: Yeah. And I'll tell you what. I mean, to that end, brands understand this too. So this was a surprising aspect to us of this study because we anticipated that consumers and customers were not going to be satisfied with where we sit right now. But what we did also find is that fewer than one in seven marketers told CMO Council that they think they have a mature digital infrastructure.
BRIAN ALFOND: Mm.
LISA LOFTIS: And fewer than one in five said that their hybrid models are actually mature enough to satisfy the customers. So the brands actually understand that they put the digital Band-Aid on and that they have to look at how to fix that.
BRIAN ALFOND: Well, I think some of the tips that you gave in the article are fantastic. And my favorite one [LAUGHS] by far is re-invoking the voice of the customer. Now, wait a minute. Lisa, do you mean to tell me that there is actual value in asking your customers what they want and then acting accordingly? I'm shocked.
LISA LOFTIS: [LAUGHS] Well, you'll be even more shocked if we dig into the details of this because there's a section in that report that looks at what customers say drives loyalty and what brands or marketers think drives loyalty. And there are significant mismatches, which tell me clearly that people haven't taken a good hard look at the voice of the customer lately because-- just a few examples. Low cost was the second highest driver of loyalty from a customer's perspective with 56% of the customers ranking that very highly. But brands? It was the 10th item on the list with only 21%--
BRIAN ALFOND: That is fascinating.
LISA LOFTIS: --ranking it. Loyalty programs were third in the consumer's eyes with all of 47% saying that. Brands ranked at seventh with only 24% of them saying it was important. So you can see that there's an issue here that marketers have to start to address. And I think just taking a-- voice of the customer programs have been around forever. I think taking a look at them again and maybe dusting them off and trying to get more in tune with what the customer base thinks is important is really the first step there.
BRIAN ALFOND: Here's the thing that fascinates me about that disconnect. Everybody on the brand's side is a customer of someone or something. And you would think that their personal ranking of what's important to them would provide some sort of insight into what is going to be important to the brand. But as I've been speaking with customers over the past couple of weeks, I've seen that disconnect. You'll have somebody who has a very strong opinion about what they want from an interaction with another company. But when you ask them what their customers are expecting from an interaction with theirs, it's not connected at all.
LISA LOFTIS: Part of the issue here is we're talking about marketing versus the rest of the organization. And there are only certain things that marketers can control. And some of the factors that customers ranked highly are not things those that are in the marketing vernacular. So low cost is not something that a marketer controls. But it is something that's important to CX. Service is not something that a marketer controls. But again, it's important to CX.
And one of the things that the study highlighted for us is that that cross functional coordination across every functional area that deals with CX, which includes marketing but also includes sales and service and product development, is critical. And most brands say that they're not actually accomplishing that right now as effectively as they need to. And that's an organizational thing. It's not a technology thing. It's a leadership thing. So I think that has to be addressed.
BRIAN ALFOND: It's almost like they're putting up silos as fast as we can convince them to tear them down.
LISA LOFTIS: Exactly. [LAUGHS]
BRIAN ALFOND: That can be very, very frustrating. But it's hard. Organizational change. We've spent some time in the past talking about that. That is very difficult. And I understand what you're saying about what's in the marketing realm. I think having the overall CX strategy mapped out so that even if you do have silos, you got to get them to work together. It's so important.
And once you know what the customer wants, I imagine-- [LAUGHS] your second point was about modernizing the journey maps. I imagine some of these journey maps that are out there probably haven't been touched in months, maybe years. And taking that input from the customer, you're going to have to go and look at how you're guiding them through those journeys.
LISA LOFTIS: Oh, that's absolutely true. So a journey map is defined as a way to understand how the customer navigates across various channels to accomplish a goal. And some of the objectives there find friction and pain points for the customer so you can address them, find process inefficiencies so you can correct them, and determine the appropriate metrics so that you can actually monitor your performance.
And [LAUGHS] your point of them not having been touched in months or years-- I call them shelf wear, which, in my consulting days, we used to call the massive binders of conclusions that some of the large strategy and IT consulting companies-- and they'll remain nameless to protect the guilty. But they used to turn out after six months on site with 50 consultants. And they were looked at initially and then put on the shelf.
Well, if you look out-- and I think that's what's happened. You're absolutely right with the journey maps because I just did a quick Google of journey map images. And anyone listening to this can do the same thing. They were clearly generated pre-pandemic. And they haven't changed.
The first one was called Jumping Jamie, someone who wants to change a mobile plan. And the steps in that journey map were she sees a TV ad for a competitor. She researches the options that she has available, all the competitors on the website. She calls her current carrier to tell them that she is shopping around. She calls the competitors to get quotes. And then she calls the current carrier to tell them that she's switching. And then she has to go through all of the other steps necessary to switch from one carrier to another.
BRIAN ALFOND: All over dial up, of course.
LISA LOFTIS: [LAUGHS] The retail journey. I mean--
BRIAN ALFOND: Yeah.
LISA LOFTIS: --they look at the options on the phone. And the customer feedback is it's difficult to compare the options using the phone. They go to the store and make a purchase after they see them in the store. And the customer feedback is the cashier wasn't very helpful. And then they used the product. And the customer comment is they had to call for support. And they said, I'm so glad you answered the phone with a live person.
It's like these journey maps are from before digital transformation ever even happened. And those are the first ones you see. So it's clear that that's either fallen out of favor or people aren't going back to those. But I think they need to.
And it clearly will not be linear. Almost all of them are linear if you look at the images. And it won't be linear. It'll be very zigzaggy. [LAUGHS] It'll be a combination and a melding of the two channels so that you can compare things with AR VR so you don't have to go to the store to touch and feel. They're antiquated. And I think people need to reevaluate them.
BRIAN ALFOND: And, Lisa, I'm thinking for an organization, it might be intimidating, too. But that's OK. You just have to start wading through it. If what you said is-- and I believe you obviously. What you told me about the study where you said 71% of consumers want these type of hybrid experiences or they want this type of customer experience-- well, if you don't do it, then I don't really know how you're going to advance in today's market.
So as you said in ripping off the digital Band-Aid, it starts with listening to your customer. You're going to modernize those journey maps. You have a point in here about walking the privacy tightrope because that affects the journey maps. And that's definitely something from a customer's perspective that's becoming more and more prominent in what I as the customer am expecting from my interactions with an organization.
LISA LOFTIS: Absolutely. And the reality there is it's an issue. I like to call it the perfect storm. And this hits marketers square where they live in the data because, on one hand, you have increasing privacy regulations. You have third party cookies going away. You have consumer expectations in terms of privacy. And I know you and I have talked about this because you turn off all tracking anytime you have the opportunity to do it. But you're not the only one that does that.
When Apple introduced their privacy dashboard, which allows people to see how they're being tracked on the internet and giving users the option to opt into tracking versus having to turn it off-- the latest statistic that I saw-- and this isn't very old-- was only 25% of those consumers are doing that or opting in. So it's becoming harder and harder to get data to use in personalization. But on the other hand, if you want that consumer satisfaction metric to go up, you have to provide personalized experiences, which require data, especially digital data in today's hybrid digital/physical world.
So it's a conundrum. Brands recognize that too. So they're looking at changing their data collection policies. They're looking at providing transparency to the customers and consumers in terms of what they're collecting and how they're using it.
And they're really looking for ways-- and I think this is the critical part. And it's a teaser for the next article I'm going to write, which is technically how do brands fix the issues that they have? How do marketers fix these issues? They're actually looking at providing a value exchange. So how do you take the data that a customer gives you or gives you permission to use and provide enough value back to that customer that they continue to allow you to do it and that they do not opt out of tracking for you.
BRIAN ALFOND: Lisa, I think that's a great point to wrap this particular episode up. But I would love to have you back on after that second article comes out or the next article comes out. That will also be on CMSWire I assume?
LISA LOFTIS: Yes.
BRIAN ALFOND: Fantastic. And, folks, do go to CMSWire and read the article that we're discussing because it does lay out the problem perfectly. The article is called "Phygital-- A Confusing Neologism for a Very Real Problem." Do check that out on CMSWire.
If you enjoyed today's show, or even if you didn't, you can head on over to sas.com/reimaginemarketingpodcast-- all one word-- and join in the conversation. You can subscribe to the series on your favorite podcast platforms, too. Just search for "Reimagine Marketing." If you have topic or guest ideas, please email us at Reimaginemarketingpodcast@sas.com where, once again, "Reimagine Marketing Podcast" is all one word.
I appreciate you listening. And I hope you'll consider joining me next time. Until then, this is Brian Alfond for Lisa Loftis hoping all the important things in your life are good.
