Hi Aarron, tell us about yourself and your background and how you got to the digital transformation space?
I have a pretty diverse background across various growth roles, mainly in tech and advisory. In the early to 2010’s I started focusing on the anthropological drivers of growth as we saw that rapid shifts were occurring in society, largely in response to the impacts of tech on our everyday lives. The combination of the Internet explosion and the rise of mobile, and then of social media, all underpinned by Cloud, was a major contributor to this epic – and ongoing – transformation of culture on a global scale. So you really can’t be effective in growth strategy and execution – and that doesn’t just mean digitally – if you don’t have inputs from the social sciences. In particular, the study of futures, behavioral economics, neuroscience etc.
That took me on a journey through a few professional roles, and today I am privileged to be a part of Thunderhead, an amazing business that is equal parts social science and digital-based transformation. We’re focused very heavily on enabling brands to operationalize humanity-based customer engagement. It a really exciting space, and one that is quite literally transforming the heavily industrialized marketing profession.
Online commerce was booming in 2020, and so did consumer reviews. – How can brands better utilize this data to improve their customers’ experience?
Yes, commerce certainly took off. Look, I think one of the key things that brands get really confused about today, is any form of feedback data. Probably most commonly, they assume that you can use a survey for everything when you can’t. For instance, you get good indications of sentiment from a survey, but not the reasons behind that sentiment. And you can great user insight for product research, but it doesn’t work very well for behavioral insight. I am reminded of that great quote from David Ogilvy, when he said: “People don’t think what they feel, don’t say what they think and don’t do what they say”.
So reviews are great because unlike a survey – which may or may not be applied in the right way – a review is not brand initiated. They are customer-initiated, and usually at a time when they have something to say, and usually as a direct reaction to an interaction. So it can be very specific and help CX folk refine target interactions.
One of the big untapped opportunities I think, is in combining this type of data with behavioral data. E.g. what customers really did, and are doing, in the wild, pre and post the review, which is part of a journey or set of journeys. So understanding both the review and the wider context, creates massive opportunities for CX professionals.
In your POV – What is the ultimate checklist for a good digital transformation strategy?
There are 3 primary pillars for digital transformation, of any kind.
Culture. Culture. And culture.
An awful lot organizations never get anywhere near transformation, despite the rhetoric. Most of them simply modernize a transaction layer or a process. The best way to think about it, is like going from horse and cart to car, or from a bunch of outbound order takers to online commerce. This is just stepping through technological advancement, without genuine model change.
But actual transformation is much more than that. It is much more about bone-deep, operating model, and business model change. And that requires real leadership and cultural readiness.
As a consequence, organizations need to enable people to “see” alternative futures, to foster excitement about that, and enable that sense of contribution or ownership of the mission. But this is almost always missing, and as a result genuine transformation rarely occurs. The management guru Michael Hammer, who was mostly interested in technology project successes, introduced this formula:
OO + NT = EOO (Old Organisation + New Technology = Expensive Old Organisation).
I am less interested in the success of the tech project directly, but more in the cultural inputs that help make it successful, and then sustain the change. So we are aiming for (my formula):
NO + NT = TO (New Organisation + New Technology = Transformed Organisation).
The other aspect to keep in mind is that cultural change is often required in external stakeholders as well. So one of the big things we look to do at Thunderhead is to think structurally about the way customers are nudged toward a changed engagement.
The role of customer experience in the age of social distancing
How much has the role of customer experience changed in the social distancing era – what role digital transformation has in this crisis?
Those are two really great questions.
So first of all, I would say is that the role of Customer Experience isn’t well understood to start with. For instance, most CX professionals couldn’t explain the economic attributes of experience, compared to those of services. Which means their strategy isn’t informed. If they could, they would a lot more clarity when confronted with major or a rapid change, such as we are seeing with COVID.
For instance, if your target interaction is about providing a service, this should be as frictionless as possible. And so you have a lot of more scope of possibilities to achieve this while socially distanced. But if you are trying to deliver an experience, which is by definition designed to create a memory, this is harder to achieve when you limit physical interactions. Not impossible though!
On the question of what role digital transformation has played in the crisis, I feel like I want to turn that around and ask what role the crisis has played to digital transformation. Certainly, as supply chains have come under pressure, and trends like e-Commerce have accelerated, there has been a fresh impetus for companies to get their house in order.
For example, there is one major retailer here in Australia, who had thought that they could build their own e-commerce engine. But as soon as COVID hit, its homegrown system fell over under the load, and they ended up having website visitors directed to sit on a holding page until other shoppers had finished.
We see this kind of thing happen in less mature markets where IT departments propose to their business that could replicate the know-how, technological capability, scale, and the cost of ownership of major vendors in complex categories like this. And so we have this weird “buy versus build” debate. It’s like saying that you’re going to build your own car. No one does that, right? It’s solving a problem that doesn’t exist and burns vast sums of cash in the process. It’s a disastrous investment profile and a high-risk one at that.
Now in normal times, there is more leeway for this kind of immaturity. But a crisis like COVID is far less forgiving. As that retailer found out the hard way, it requires you to focus on core value. The overall trend has been an acceleration of transformation because it changes cultures around us really quickly.
What was the biggest lesson you learned in 2020?
You know, I have loved seeing more humanization of business. The likes of Zoom calls, even though they are business interactions, are now completely different. There are a lot more t-shirts, and a lot more children and animals making cameo’s. Everyone has been working from home, and everyone gets it! So there’s a little less formality and corporate curation. We accept that people are people first, with family and background noise and chaos and all of that. It’s not at all some degradation of one’s professionalism.
And so I think there are 2 big lessons from this. The first is that we can abandon some of that institutional BS within the company walls, and just be a little more real with each other. The second is that this type of authenticity is a real cultural norm now, so brands need to wake up to that and re-think some of their engagement with customers. An example? Think conversations, not campaigns…
2020 was the year of webinars and online events; what was your favorite one?
Man oh man, there were a lot! I had a few favorites. A couple of my favorite speaking gigs included unpacking the experience economy for corporate guests of the Australian Open. The Retail Leaders Forum was fun too, mainly because I got to challenge the failed personalization practices of consumer marketing today. One of my favorite topics. Both were really well-run events, which stood out because they managed to make the agenda feel quite fluid and natural.
Then there was the “CRM Battle of the Bands”, an initiative by the great analysts’ Paul Greenberg and Brent Leary, who decided to lighten the vibe for the entire CX tech industry mid-COVID. So we saw socially distanced music videos and a lot of laughs. Who knew boring old execs had such mean licks?
It looks like working from home is going to stay with us for the foreseeable future. How should Executives gear up to the changing times?
I think we live in a time that requires leaders to get excited about the change. I have thought that for over a decade to be fair, but in more recent times it has gone from a “nice to have” mentality, to table stakes. I don’t think that there are any effective executives anywhere, that are change resisters.
But a healthy mentality for change is just the first step. Like anything, you need specific skills. So to answer your question, my view is that the best way for execs to gear up for change is to study it, and not just how to react within it, but how to become authors of it, and how to manage that as a professional execution.
So I always strongly recommend the Study of Futures, or as it often called, the Practice of Foresight. This provides the skills to look at entirely alternative futures to that of your current trajectory, and to measure them against each other, and then to go get a preferred future. I was fortunate to study this under the renowned Prof Sohail Inayatullah and I always recommend him, and his groundbreaking work in the field of Causal Layered Analysis.
I see this stuff as essential to the kitbag of any leader today. You’re either a part of the change or just subject to it.
Last but not least, what is your favorite CX metric?
I am a big admirer of the great Dr. V Kumar, who is a professor of marketing at Georgia State University, along with a whole bunch of roles and distinctions in the field. He defined the models for measurement of critical areas like Customer Referral Value, Customer Influence Value, Customer Knowledge Value, Customer Collaborative Value, Customer Brand Value, and Customer Engagement Value, etc.
For me though, I believe every organization should be fluent in, and every board should be concerned about, Customer Lifetime Value (CLV).
CLV is only ever maximized to a business when the value exchange is maximized for the customer. It is a central pillar of sustainable business growth, and so it is often one of the first questions I ask a marketing organization. If they can articulate a view on their CLV it is an indicator that they are not still just mired in campaign myopia – which is where much of the industry is. It shows a more mature lens on actual growth and the critical role marketing should be playing.
