The #1 Secret to B2B Sales and Marketing Alignment That No One Tells You About

Sales and marketing alignment in the enterprise space (aka complex sales) is tough to achieve. Yet, organizations that can do that show a whopping 36% higher retention rate(3), and an even higher sales win rates of 38%(4) overall. That’s fascinating. And although this study was not entirely focused on complex B2B sales, these are still meaningful numbers.

However, as any practitioner knows, there are complex factors at play, and many of them are not just about process and data. If it was easy, everyone would do it. So for this post I’m taking a different approach. I’ll highlight what I believe is a fundamental underlying issue and and I’ll show you how to address it without having to boil the ocean.

sales and marketing alignmentFirst, let me come right out with it before we examine the background and strategies to solve the equation.

The secret is … … … during planning, both sales and marketing forget (or ignore) what is bringing home the moolah right now (or soon), and how they can drive it together. We don’t build from the foundations. Instead we dream from the top down.

I’ve been there too.

Here’s how it normally goes down. At the beginning of the year, both sales and marketing agree on how they can work better together. They set lofty goals, agree on what a qualified lead is, and determine what the journey should look like on both sides. They develop key buyer personas and brand messages. They come clean with each other and clear the air on what has happened in the past. And finally someone always sprinkles in some sexy marketing automation pixie dust to top it all off.

Sounds familiar? This strategic planning looks, sounds and feels great. The sales and marketing alignment sessions lead to a spirited launch of a new program. Happy new year everyone!

But then it falls apart. The presentations and journey maps are forgotten, only to be picked up when everyone has less pressing issues at hand (hint: these issues are about making money, exactly the purpose for which the exercise was started).

That’s because we try to start top down. In addition, marketing often think in terms of “changing the conversation”, or are unduly influenced by the promises of database marketing automation that are difficult to achieve (hint: don’t let anyone who hasn’t done it make the plan…e.g. sales people). On the other hand, sales has a different set of challenges. These range from competitive advances,  meeting short term targets, aligning multiple client stakeholders, to being able to price and position the product and / or services (hint: same as before but replace sales with marketing).

In the end, this simple but well-intended misalignment ends up with both teams looking to satisfy and meet two different sets of objectives. They seem to be working together, but they actually don’t, and won’t.

I think you will identify with the above. I’ve been through all this countless times. Having played both roles before – as a sales lead and also as a marketing lead – I often successfully managed to ignore this secret myself.

So the secret to sales and marketing alignment that works is….during joint planning, both sales and marketing should not forget (or ignore) what is bringing home the moolah right now, and how they can drive it together.

But what do they do instead: (it’s natural so don’t be embarrassed):

  • They focus on what should be, rather than focus on what is and how to expand it. What’s going to bring in the revenue this quarter is not necessarily sexy in the enterprise space
  • They try to reach the destination instantly. However, just as it takes time to change gears and client perceptions, it also takes time to modify outreach capabilities, and have conversations differently with (different) clients. Have you ever wondered how the same dated messages get presented even when you have decided to modify them – it’s called inertia and comfort zone of the field.
  • Both sides forget that they have have limited time to be integrated, tailored and customized. Regardless of the level of sales and marketing automation you put in, ultimately you need to qualify, pursue, and sell in person. As soon as that deal seems likely, everything else takes a back seat.

And through a thousand such cuts, the sales and marketing alignment ambition gradually takes a backseat. The metrics that each of wants to measure start diverging, and become less and less relevant to the other.

In fact, this is the familiar story of marketing RoI and sales performance.

So here’s an approach that can help you overcome this challenge. First and foremost, analyze the pipeline for deals that have happened, and those that are high on the sales radar in the immediate future. Don’t discount them in favor of the ideal that should be. Acknowledge the client interest in what you have, and all the effort that has gone in to make that happen.

And then focus on improving and expanding. Try to improve the probability of deal conversions, and expand the impact with a defined game plan around client engagement. The Principle of Customer Interaction is a good one to remember – connect your emotional branding with the physical interactions.

Because at the end of the day, sales will always put less(er) emphasis on what can be, versus what will help them close the next couple of quarters positively. And if marketing is focusing only on the big picture, that picture will always remain lopsided. Sales and marketing alignment will remain a dream, propped up by one-off success stories. And long term positioning suffers.

Simply ground your action plan on the following 5 strategies:

  1. Plug the Gaps: Focus on closing better what sales want to close soon – even if it doesn’t seem sexy. Marketing is best positioned to translate the org strategy and capabilities to support these short term priorities. You’ll be surprised at the number of gaps you will identify that can provide solid air cover – collateral, references, case studies, 3rd party support, pursuit marketing, client showcase, awareness of a specific capability and so on. This applies to new business development too.
  2. Insert Strategic Objectives: How clients perceive you depends on what you sell to them today, not what you have on your website. So make the current portfolio the starting point of the big picture, and begin the life-cycle of awareness to closure from there, not independently. Ultimately, most stories can be distilled into a problem of cross-sell and up-sell. So translate it that way. It can start with inserting messaging about larger customer’s goals (Principle of External Reinforcement), integrating the value proposition of various parts of your portfolio (Principle of Presenting) , and expanding what you have to offer through your partners (Principle of Completion).
  3. Live in the Other’s Shoes: Try inserting marketing into the sales machine and vice versa. Take over a couple of key responsibilities and metrics from each other (yes, that’s a part of the deal). What you take over should not just be value additions, but actual, down & dirty tasks that need to get done. For example sales can take a metric on client coverage by touch-points per month, and marketing can take over a metric on producing deal specific material. This can require some trust building, so be prepared to start small and deliver first.
  4. Prioritize Tactically: Most change fails because people on the ground try to start top down (and often the top has no clue, or are trying to solve different problems). Instead focus on things you can change. Work with the people who want to work with you, and begin to show results in tactical increments. And then amplify the sharing of the results in terms of war stories. Nothing gets more attention than war stories. Slowly you will have a dashboard worth boasting about, and numbers to back them up, with people willing to attest to what’s happening.
  5. Follow High-Low: Every successful plan needs to be able to scale and grow. The sphere of visibility for both sales and marketing needs to expand. And you can’t do that if you execute only high touch activities in a narrow area. So supplement your plan with low touch activities that can provide continuity and consistency. An example of a high touch activity is a deal specific collateral. An example of a low touch activity is a monthly client update by email, or a case study that can be shared broadly. Be sure to link low touch activities to the pipeline analysis from the first step so they are relevant.

Once you start with the above, everything else will fall in place – brand messaging, your database, the campaigns and the metrics.

In the next planning round, give this approach a shot. I assure you that you will not be disappointed. In fact, as part of one big happy family, you’ll never have to prove marketing ROI again.

First next step:

Now self-assess your sales and marketing alignment on 11 key dimensions here (opens in new window). Scores are instant, and you will get recommendations on every dimension. Be sure to save your results so you can benchmark yourself against your peers, and set goals.

Connected book smallIf you take the self-assessment above, you may also get a FREE copy of my book Connected! After all, all your strategies should focus on the client. Without that as the context, everything is just meaningless mechanics.

 

 

Ref:

  1. Based on the principles in my books Dancing The Digital Tune and Connected!
  2. Image courtesy of Pixabay
  3. Sales and marketing statistics from this nice collection on ZoomInfo
  4. The study quoted was from by Align.me
BAI Beacon 2018 Manish Grover

Building The Connected Customer Journeys of the Future

It was a privilege to speak at the BAI Beacon conference in Orlando a few weeks ago. The topic of the day was digital (of course) and what banks should be doing to improve customer experience and make operations more efficient.

My session was on “creating connected customer journeys of the future” – based on my book Connected! I felt that even as we all examine the more immediate need to launch new digital capabilities such as mobile, analytics & AI, there had to be a longer term view of what the overall landscape of customer engagement looks like. So in this session tailored for banking I linked the need for these immediate capabilities to that future vision – how can we build a customer engagement powerhouse to by looking at our customers as people, instead of just account holders? How can banks be the center point of customer interactions, orchestrating instead of just providing the money rails?

Given the significant presence of community banks and credit unions, this need was even more prominent. The trust and strong customer relationships were front and center, but the roadmap to enhance those, and to maintain key business metrics almost always came down to technology upgrade imperatives. Technology drives everything today so it wasn’t a surprise. But I didn’t want to make this vision dependent on large technology investments.

So, here’s how we (the audience and I) analyzed this important topic.

  1. First we looked at all the top priorities facing us today and so much in the vogue – all of the new digital stuff we need to do such as analytics, AI, mobile etc. For the lack of a better term I called it the “inside-out” plan.
  2. Then we looked at what “outside-in” is and it turns out that’s the top down strategy making – looking at product portfolio evolution, branch network optimization, customer satisfaction, distribution etc.
  3. But something was missing. We realized that both of these views did not cater to the tremendous disruption we are seeing in the marketplace today. Could both these views help counter the expanding ambitions of new entrants into the banking sector, and changing customer preferences that go beyond a better mousetrap?
  4. Turns out there is a key ingredient that needs to be added in to make this work – connected customer journeys. There’s a big difference in mindset between traditional and new businesses (or born online companies). The difference is that the new entrants we are worried about don’t have a mindset of core domain competency. E.g. define Amazon’s business, or Google’s, or Facebook’s. And that’s forcing everyone to re-examine their own models, e.g PayPal, Apple, WalMart, Uber, Marriott etc.
  5. So, to get out of the trap of domain competency, we needed to focus on what’s important – the customer and what they want, not how we want to serve them. It follows that our product and service portfolio must expand, and the most optimal way for a traditional business (e.g. banking) to expand its product portfolio that maps to the customers is not to become a new business but to become a networked organization – complementing it’s portfolio with those of other companies. In short, we needed to think about building the right ecosystem.
  6. Then, we looked at what it might take to do this. For example, we saw that we did not have an underlying connecting thread that integrates customer interactions across industries that are enabled by the bank but not orchestrated by the bank – financial advice, retail, restaurants, hotels, recreational activities and so on. This business ecosystem structure led us to focus on the purpose of our business – to improve our customers’ financial well being and make life easier for them – rather than getting trapped in the narrow identity defined by our products. We discussed a few examples of how this is being done slowly but surely in banking. We also saw that big banks with deep pockets are not the only ones doing the innovative stuff. And we looked at the analogy of how ecosystems have evolved from small stores to superstores to online conglomerates and now towards a network of businesses.
  7. Finally with this ecosystem structure and examples in mind, we put a new lens of connected customer journeys on the roadmap of building digital capabilities. For example, what should be in a mobile app for the bank, or what additional considerations must a core system upgrade look at, and how can the conversation of branch network optimization be given a new perspective. And while we were at it, I could not resist a primer on blockchain/DLT which is of course what I do now. As we went through the primer, the concept of an ecosystem operator surfaced which is – surprise – the bank!

It is unlikely that this ecosystem or connected customer journeys based structure will take center-stage in day to day business operations in the short term. But I would like to think it provided a very useful model to evaluate and shape investment strategies, partnership discussions, and execution roadmaps for the medium to long term. More importantly, I hope it helped augment in a tangible way the concept of what it takes to be a customer centric business, and the associated slogans that go with it. Last but not the least, thanks to BAI for seeding the beginnings of some great friendships with emerging leaders who will define what 2.0 looks like!

PS:

  1. Refer to the Customer Interaction Index to see the difference between businesses that have a sticky relationship versus that don’t.
  2. You can download the summary eBook here to review all of the 5 building blocks including 3-Tier loyalty and CX focused org design

 

The Failure of Plenti And The Return to the Stone Ages for Loyalty

Plenti loyalty rewards

The coalition loyalty rewards program Plenti has wrapped up operations as of July 2018. Plenti was a cross-industry loyalty network where customers could earn points and spend at multiple places. Partners included American Express (creator), Macy’s, Netflix, Hulu, Exxon, RiteAid, Chilli’s, Enterprise, Winn Dixie and others.

Why did such an exciting proposition fail? Was Plenti a bad idea or were the issues more tactical? What does it mean for cross-industry loyalty programs?

Here’s my humble take:

1. Giving up on Plenti was a blow for customer engagement

Through Plenti the partnering brands had this amazing shot at becoming a company of the future. But it is now just a familiar story of missed opportunities for both consumers and brands. With Plenti each company could begin a new journey to becoming customer centric. They could create ultimate customer engagement by expanding the customer journeys they examined and addressed beyond their own corporate silos. Because of its cross-industry nature, Plenti would have given purpose and a larger box to guide analytics and AI based customer experiences. The relationship with customers could have been driven by context like never before. The Plenti platform could have become a customer’s platform and not the sponsors’ marketing vehicle. The issues of privacy violations could have been a thing of the past for those customers who willingly participated.

But sticking to traditional metrics of success measurement and execution did the program in. Instead of advancing the standards of customer engagement, the sponsors now have to go back to the traditional method of buying customer behavior and loyalty. We are back to a failing loyalty model of the stone age because it provides immediate “quantification of effort”. Together brands could have acted like a conglomerate such as Amazon without being one in this new digital, connected world.

2. The failure of Plenti was tactical

Even as the Plenti participants chose to withdraw, we can see airlines expanding their programs to be cross industry, Uber and Airbnb expanding to cover expanding customer journeys, and big retailers such as Amazon and Walmart morphing their original identities to cover new offerings through Plenti like loyalty and subscription programs.

The failures therefore are not a strategic market indication but were rather tactical in my view. As a Plenti customer, I felt that Plenti was a little clunky. I never easily knew where I was with my points and what my redemption options were, the customer experience model was very big company driven – instead of simply sending me texts and emails they just kept getting lost in privacy and consent issues, redeeming points needed a pin which was a pain to reset, and so on.

Short term rewards were excellent and it was a delightful experience when the cashiers announced them. But I had to rely on the store to tell me how much I had. Yes, I could have been more active with my online account but they could have also sent it by email or text and made it easier? In addition, the spending was cross-industry but the rewards were still pretty traditional. Overall, the CX layer of the program – especially cross-industry – should have been more deliberate and obvious.

3. The move to experiential & aspirational loyalty was slow

Overall the program was slow in driving customers from being points focused to being experiences and aspiration driven. That evolution would have made customers consciously look forward to using Plenti in new ways rather than the POS discount expectation that every other loyalty program sets.

The Plenti partners did create some nice innovations. I remember fitness related discounts at RiteAid that engaged customers with a broader brand messaging focused on long term goals. But for the most part, the best practices of the top brands of the world were not able to come to Plenti. If you have worked in a large organization and tried to bridge functional or product boundaries, that should not come as a surprise to you. The simplest way to put it is: we did ourselves in.

To be fair, most loyalty program don’t do experiences and aspirations today. A reasonable analogy of what an aspiration based loyalty program looks like is the airlines loyalty programs where people engage with a goal to save miles & points towards a family vacation. Another examples is when you get exclusive access to an upcoming concert, or priority reservations at a popular restaurant. These are things that “money can’t buy” to borrow from Mastercard’s awesome campaign.

Plenti was the perfect vehicle to create amazing experiences and aspiration based rewards because it was such a broad coalition – hotels, gas, grocery, etc. But it probably became hard. Balancing short term goals of each brand getting its share of increased spending was not easy. In addition, coming together to think in terms of “customer first across industry boundaries” is not in our business training DNA. So the transition to this 3 tiered loyalty model did not happen in time.

4. The “new Plenti” might be more open and ecosystem driven

The fact that Plenti got wrapped up in their own centrally managed coalition model & brand was not their fault but perhaps it did not allow them to scale quicker. Instead of focusing on on-boarding partners to Plenti, they could have become a white labeled platform allowing any company to join, brand their own program and explore coalitions of their own.

For example, Target & Starbucks could have created a joint program called RedGreen. Or Walgreens, Cigna and YMCA could have created a custom program for themselves. Other companies may have chosen to migrate their grossly complicated and expensive-to-run programs on to this platform. What’s more, such a platform can put customers in charge of selecting and customizing their own rewards across the entire ecosystem!

Technology is at a point today where this is easily possible. Especially with Distributed Ledger Technology (DLT) these coalitions are an excellent candidate because they provide high efficiency with all the benefits plus much more.  The trick is to think in terms of becoming a conglomerate by leveraging those around you.

So there you have it – my armchair analysis of this problem of Plenti. I’m sure it must have been a massively complex and difficult program to operate – and extremely painful to end for those close to it. So I do apologize for my simplistic treatment. Let me know what you think about Plenti and what the future has in store for us.

 

Efficient Commerce is NOT Omni Channel Customer Engagement

digital-marketing-1527799_640

Omni Channel customer engagement has been a hot topic for the past several years. But despite all the buzz the real status of Omni Channel has been lagging at best. The question to ask is: Are organizations themselves integrated enough to be capable of initiating and delivering Omni Channel customer engagement initiatives?

Instead of looking at third party reports and statistics, we only need to look back at our own experience. As a customer, ask yourself these questions:

  • How many times has a retailer, bank or insurer followed up with me with the full context of my relationship with them?
  • How many times do I receive advice on what not to buy, and how to achieve what I’m trying to using their product?
  • Once I buy, how often do they positively reinforce my choice?
  • Are the thick paper catalogs I receive at home aligned with my what I’ve done or want to do, or are they just better designed coupons? Do I receive relevant coupons or offers by email?
  • Why doesn’t the contact center rep or the store associate know what I’ve browsed online?
  • How is it that everyone seems to be blind to my other identities as a person – athlete, social worker, dad, mom, business person, organic food buff, fashion pro, etc.?

Why have not even the basics of Omni Channel customer engagement been met?  Lets look at some reasons first and then examine a simple approach to achieving this important objective.

Mistaking Omni Channel engagement for analytics and promotions

A lot of what we read about digital technology – mobile, IOT, social, etc. – is centered around trying to reach customers at the right moment. Whether its location based alerts or smart signage, these are single channel promotional innovations disguised as digital engagement tools. Using a digital medium such as smart signage in the store doesn’t make it Omni Channel. Moreover, these initiatives don’t create long term customer engagement. All they try to do is target and sell.

In addition, privacy concerns arise from his approach. This was amply demonstrated by Target’s gaffe, the recent Facebook fiasco, the general mistrust of Google, nervousness about Amazon’s Alexa – in general spooking customers out by trying to know too much about them without engaging them in that conversation.

These are NOT examples of an Omni Channel strategy gone bad. Instead what these stories demonstrate is that Omni Channel engagement is lacking. These issues arise from trying to improve the uplift rates of campaigns through analytics and business logic gone awry.

Focusing on commerce, not engagement

Commerce is different from engagement. Features such as order online and pick up from store, mobile payment, retargeting, shopping cart campaigns etc. are all about commerce and conversion, not Omni Channel customer engagement. Taking a user transaction and providing better options to complete it are commerce enablers, not an Omni Channel customer engagement strategy. To move beyond the faceless commodity war that we’ve got used to fighting, it is important to differentiate between commerce enablers and customer engagement. What we need in addition to commerce competitiveness is to engage the customer so we create a relationship beyond the transaction. Commerce is often the last step.

We seem to be missing the entire run up to the commerce transaction, and also the run up to the next one. Think about it.

Focusing on digital features instead of supporting the journey

Digital transformation is closely linked with digital innovation. Survey after survey is reporting how organizations are faring in leveraging digital features. Charts are laid out with adoption and maturity statistics of an entire slew of innovative features. However, there are very few reports that map out a customer journey alongside how the features are integrated to support that journey. Moreover, doing even that would be supporting a commerce journey, and not really engaging the customers to bring them into the realm of commerce. We still rely on advertisements, coupons and promotions to bring customers in, and then try to provide a great commerce experience.

Fine…but how to focus on Omni-Channel Customer Engagement?

So commerce and customer engagement are 2 different sides of the coin. But how should we get started then on creating long term customer engagement and converting customers to be brand advocates? Here’s the approach:

  1. First, given the explosion of content, and the fact that the power of information asymmetry has weakened considerably, we need to think of customer journeys from the perspective of customer partnership. This means that customers journeys cannot just be thought of in terms of the traditional awareness-research-decision-purchase-support cycle. At all stages customers are looking for reinforcement and education, not just a one way sales dialog. As early as possible we need to anchor ourselves in the minds of our customers as someone who understands why customers are looking to transact, and then can help customers make the right decision. More than 50% of the customers would be glad if someone helped with the available options and would prefer to buy from the person / website who creates this relationship with them (other factors like price etc. being suitable of course).  This is also crucial because it helps on three critical fronts. First, it helps customers go through a phase of self selection improving retention and customer service costs. Second, it results in creating a platform that yields distinct customer segments allowing competition not on price and promotions, but on value (both physical or emotional). And finally, it results in a conscious evolution of products and offerings aligned with this positioning. This is a strategic decision because it defines all the marketing, operations and technology decisions. The self-service calculators, product how-to’s, customer reviews and other mechanisms on  many consumer websites are meant to solve this very problem by engaging the customer and creating stronger affinity to buy. These efforts would have greater success if they continued to keep the focus on the customer instead of jumping straight to sales. The content marketing revolution is enhancing this model tremendously.
  2. Often, the sum of parts is greater than the individual parts. A bank is more profitable when customers subscribe to multiple products. Similarly a retailer makes more profit when the shopping cart is more distributed. The customer engagement strategy must bring together products in a complimentary fashion, instead of clamoring for attention in isolation. Summer attires, back to school supplies, recipes and financial planning are some common ways for retailers and financial services to achieve this herculean task. Such an approach keeps the focus on the customer, instead of having to rely heavily on product wise outbound promotions with a focus on product features.
  3. Customers have requirements that are beyond what we are selling. These needs are often met by many different companies. Connecting these brands is a great way to embed ourselves in the underlying purpose of the customer, and create multiple entry points. the partnership of Horizon Blue Shield Blue Cross with LifeTime Fitness is a great example of rewarding exercise with reduced insurance premiums. A customer in a grocery supermarket may have been referred by a fitness center to buy organic food. Similarly a banking or mortgage transaction will lead to insurance needs…creating such digital ecosystems allows each business to create entries into other businesses, and vice versa.
  4. The right technology integration is important to enable this customer engagement platform. An enterprise is like a car. Many different parts come together in an interconnected way for the car to be able to run. Similarly, a technology architecture aligned with the customer engagement approach is very intuitively created once the focus is on educating and keeping the customer engagement during the run up to the transaction, the transaction itself and then the run up to the next transaction. The example of Retail Clienteling software solutions being sold by many technology vendors comes to mind. Such a concept allows us to have our channels be aware of each other, score the customer’s need based on constantly evolving qualification criteria, and empower the touch-points with the right analytics. We never have to worry about sending an embarrassing message because instead of a blind approach, we are now working with the customers to send them what they have consciously requested.

In summary, customer engagement must be thought of as a strong driver of, but distinct from commerce and brand awareness. In today’s environment, partnering with customers, educating them, presenting the full combined power of our products, and working with complimentary businesses to create mutual benefits, will go a long way. Finally, other than the right org design, technology is critical to support and drive these initiatives. Marketing technology and core technology choices must never be thought of in terms of products or a single do-it-all platforms. Instead its better to think of the approach in terms of simplifying and bringing together the different parts of the enterprise machinery, and aligning them to the customer engagement charter.

Let me know what you think. And do connect with me on Twitter @manishgrover. Image Credit : Pixabay

More Resources on This Topic

  1. Download the abridged e-version of my book Connected! here to learn more about building ecosystems and customer loyalty.
  2. Read the 5 Principles here – eliminate the need for external reinforcement to create strong customer engagement

 

The Future of Payments – Setting The Right Frame

ecommerce-2140603_640There’s a lot of ongoing debate regarding future of payments which includes a discussion on credit cards, wallets, loyalty, banking, among other related topics.

Meanwhile, we need to ask if the current financial services players have really made progress preparing themselves for the future of payments (or banking for that matter). I believe we still need to work on “setting the right frame” for the changes in the industry. The context is similar to the red herring I pointed to in the case of Amazon and physical retail. The real battle there is not between physical stores and online. It’s about engaging customers by being able to provide a broader set of services that helps create an ecosystem.

Similarly, there are several similar issues with setting the right frame for various issues in payments. Let’s look at a couple of examples:

1. Will Credit & Debit Cards Fade Away?

There is a fierce debate underway about the death of credit cards when we discuss the future of payments. However, to make any headway on this debate we need to change the frame of evaluation from “credit card as plastic” to “credit card as a spending pattern”.

The solution to this innovation problem is to think of how most people with access to banks use credit cards – to earn loyalty points (or airline miles and cash back), get purchase insurance (among many other types of coverage), receive exclusive concierge services, and for the ability to maintain a balance month to month in times of crunch. In fact, almost 44% of US households carry credit card balances, a trend that is catching on in emerging economies such as India & China too.

In addition, the solution to prepaid plastic cards has nothing to do with the plastic itself, but with the fact that it is an instrument (digital or physical) to make cash accessible to scenarios (and customers) that don’t fit a credit card.

However, none of the current innovations even come close to addressing these popular reasons for using credit or prepaid cards. Even if customers had a bank payment or digital wallet facility ubiquitous around the world, most will still use “cards” to make payments – whether they are hidden behind PayPal or Apple Pay.

When friction in customer experience is low, customers will maximize the value they can receive. So innovation in payments need to more actively start addressing these real world use cases to fully realize the future of payments. Most of these problems are not hard to solve with digital alternatives. We just need to set the right frame for the problem so we can look for the right solutions. Consumer behavior and habits will not be easy to change (or predict) – a risk for those with inertia, and an opportunity for innovators.

2. Applying Digital Innovation To Connect Experiences

A similar issue with defining the right problem is with the advances in digital. Banks are busy making changes to their digital properties such as websites and mobile apps. They have been experimenting with chatbots and AI. These provide great value, but we still can’t get a personalized experience either online or in the mail.  Even amazon has been reportedly trying to upsell burial urns to customers for months because of its “You bought that so you’d like this” algorithm. While there are many nice changes and technology innovations (e.g. asking Alexa to make a payment for me), they fall far behind when it comes to emerging customer use cases.

The solution to this innovation issue is to understand the change that digital is bringing. The customers of tomorrow don’t want to look at their banks as just their “financial money holder and transaction facilitator” – or at least the banks shouldn’t consider themselves to be just that. Because that game is over. Instead customers want to be able to service multiple needs with one account including retail shopping, travel, services etc. Banks have all the right capabilities – bill pay, card-linked offers, co-branded cards, PFM, branches, retirement services, and so on. But if they can’t bring them together, then Amazon Cash might gladly pick up the slack, especially when it’s linked to the Amazon Prime Store Card, and is now going to offer white labeled checking accounts too.

How to Set The Right Frame

The future of payments will not be determined by the mode of payment alone or where it is held. It will be driven by the broader ecosystem enabling the connected customer experience. We just need to think in terms of how connected customers will behave in a connected world. And we need to start building those supporting ecosystems.

In short, instead of building a “digital strategy”, we should build a “strategy for a digital world”. Download the principles in Connected! to see how to think in terms of cross-industry customer journeys and loyalty models.