Those seeking to know their customers well are finding that this sweeping new European Union (EU) law forces a dramatic shift in how customer data can be gathered, shared, and protected. And it means that low-touch marketing by mass data analysis and inference alone likely will need to revert to the good-old-fashioned handshake and more high-touch trust building approaches that bind people to people, and people to brands.
Here to help sort through a more practical approach to marketing within the new requirements of highly protected data is Tifenn Dano Kwan, Chief Marketing Officer at SAP Ariba. The interview is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.
Here are some excerpts:
Gardner: Now with GDPR is fully in place, it seems that we’ve had to embrace the concept that good privacy is good business. In doing so, it seems that marketers have become too dependent on data-driven and digital means of interacting with their customers and prospects.
Has GDPR done us a favor in marketing -- maybe as an unintended consequence -- when it comes to bringing the human relationships aspect of business back to the fore?
Dano Kwan: GDPR is giving us the ability to remember what marketing is, and who we are as marketers. I think that it is absolutely critical, to go back to the foundation of what marketing is. If you think about the role of marketing in an organization, we are a little bit of the Picassos of companies -- we are the creative souls. We bring the soul back into an organization.
Why? Because we control the narrative, we control the storytelling, and we control the brands. Also, in many ways -- especially over the past couple of years -- we control the data because our focus is understanding the audience and our customers.
With the rise of digital over the past couple of years, data has been the center of a lot of what marketing has been driving. But make no mistake, marketers are creative people. Their passion is in creating amazing stories -- to promote and support sales in the selling process, and being, frankly, the voice of the customer.
The GDPR law is simply bringing back to the forefront what the value of marketing is. It’s not just controlling the data. We have to go back to what marketing really brings to the table. And go back to balancing the data with the art, the science with the art, and ensuring that we continue to add value to represent the voice of the customer.
Gardner: It must have been tempting for marketers, with the data approach, to see a lot of scalability -- that they could reach a lot more people, with perhaps less money spent. The human touch, the high-touch can be more expensive. It doesn’t necessarily scale as well.
Do you think that we need to revisit cost and scale when it comes to this human and creative aspect of marketing?
Balancing high- and low-touch points
Dano Kwan: It’s a matter of realigning the touch points and how we consider touch points when we drive marketing strategies. I don’t think that there is one thing that is better than the other. It’s a matter of sequencing and orchestrating the efforts when we run marketing initiatives.
If you think about the value of digital, it’s really focused on the inbound marketing engine that we have been hearing about for so many years now. Every company that wants to scale has to build an inbound engine. But in reality, if you look at the importance of creating inbound, it is a long-term strategy, it doesn’t necessarily provide a short-term gain from the marketing standpoint or pipeline standpoint. It needs to be built upon a long-term strategy around inbound searches, such as paid media search, and so on. Those very much rely on data.
While we need to focus on these low-touch concepts, we also need to recognize that the high-touch initiatives are equally important.
Sometimes marketing can be accused of being completely disconnected from the customers because we don’t have enough face-to-face interactions. Or of creating large events without an understanding of high-touch. GDPR is an opportunity like never before for marketers to deeply connect with customers.
Gardner: Let’s step back and explain more about GDPR and why the use of data has to be reevaluated.
GDPR is from the EU, but any company that deals with the supply chains that enter the European Union -- one of the largest trading blocks in the world -- is impacted. Penalties can be quite high if you don’t treat data properly, or if you don’t alert your customers if their private data has been compromised in any way.
How does this reduce the amount that marketers can do? What’s the direct connection between what GDPR does and why marketers need to change?
Return to the source
Dano Kwan: It’s a matter of balancing the origins of a sales pipeline. If you look at the sources of pipeline in an organization, whether it’s marketing-led or sales-led, or even ecosystem- or partner-led, everybody is specifically tracking the sources of pipeline.
What we call the marketing mix includes the source of the pipeline and the channels of those sources. When you look at pure inbound strategies, you can see a lot of them coming out of digital properties versus physical properties.
We need to understand the impact [of GDPR] and acknowledge a drop in the typical outbound flow, whether it’s telemarketing, inside sales, or the good-old events, which are very much outbound-driven.
Over the next couple of months there is going to be a direct impact on all sources of pipeline. At the very least, we are going to have to monitor where the opportunities are coming from. Those who are going to succeed are those who are going to shift the sources of the pipeline and understand over time how to anticipate the timing for that new pipeline that we generate.
We are absolutely going to have to make a shift. Some readjustment needs to happen. We need new forms of opportunities for business.
We are absolutely going to have to make a shift. Like I said, inbound marketing takes more time, so those sources of pipeline are more elongated in time versus outbound strategies. Some readjustment needs to happen, but we also need new forms of opportunities for business.
That could mean going back to old-fashioned direct mail, believe it or not -- this is back in fashion, and this is going to happen over again. But it also means new ways of doing marketing, such as influencer marketing.
If you think about the value of social media and blogs, all those digital influencers in the world are going to have a blast, because today if you want to multiply your impact, and if you want to reach out to your audiences, you can’t do it just by yourself. You have to create an ecosystem and a network of influencers that are going to carry your voice and carry the value for you. Once they do that they tap into their own networks, and those networks capture the audiences that you are looking for. Once those audiences are captured through the network of influencers, you have a chance to send them back to your digital properties and dotcom properties.
We are very excited to see how we can balance the impact of GDPR, but also create new routes and techniques, to experiment with new opportunities. Yes, we are going to see a drop in the traditional sources of pipeline. It’s obvious. We are going to have to readjust. But that’s exciting, it’s going to mean more experimentation or thinking outside of the box and reinventing ourselves.
Opportunity knocks, outside the box
Gardner: And how is this going to be different for business-to-consumer (B2C) and business-to-business (B2B)? We are seeing a lot influencer marketing effective for consumer and some retail; is it just as effective in the B2B space? How should B2B marketers be thinking differently?
Dano Kwan: I don’t know that it’s that different, to be honest with you, Dana. I think it’s the same thing. I think we are going to have to partner a lot more with what I call an ecosystem of influencers, whether it be partners, analysts, press, bloggers or very strong influencers who are extremely well-networked.
In the consumer world, the idea is to multiply the value. You are going to see a lot more partnerships, such as core branding initiatives that are going to rise. Or where two brands come together, carrying the power of their message to reach up to and join customers.
Gardner: As an observer of SAP Ariba and over the past several years, it’s been very impactful for me see how the company has embraced the notion of doing good and in doing well in terms of the relationship with customers and the perception of a company. I think your customers have received this very well.
Is there a relationship between this new thinking of marketing and the idea of being a company that’s perceived as being a good player, a good custodian in their particular ecosystems?
Dano Kwan: It’s a great question, Dana. I think those two things are happening at the same time. We are moving toward being more purposeful because the world simply is moving toward becoming more purposeful. This is a trend we see among buyers in both the B2C world and B2B worlds. They are extremely sensitive to those notions - especially millennials. They look at the news and they truly worry for their future.
The end-goal here is to remind ourselves that companies are not just here to make a profit -- they are here to make a difference.
GDPR is shifting the focus of marketing within companies to where we are not just seeking data to reach out to audiences -- but to be meaningful and purposeful when we reach out to our customers. We must not only provide content; we have to give them something that aligns with their values and ignites their passions.
The end goal here is to remind ourselves that companies are not just here to make a profit -- they are here to make a difference.
So, those two things are connected to each other, and I think it’s going to accelerate the value of purpose, it’s going to accelerate the value of meaningful conversations with our customers that are truly based -- not just on profit and data -- but on making a difference in the world, and that is a beautiful thing.
Gardner: Do you think, Tifenn, that we are going to see more user conferences -- perhaps smaller ones, more regional, more localized -- rather than just once a year?
Dano Kwan: I think that we are going to see some readjustments. Big conferences used to happen in Europe and North America, but think about the emerging markets, think about Latin America, think about Asia Pacific, and Japan, think about Middle East. All of those regions are growing, they are getting more connected.
In my organization, I am pushing for it. People don’t necessarily want to travel long distances to go to big conferences. They prefer local interaction and messaging.So regionalization and localizations – from messaging to marketing activities – are going to become a lot more prominent, in my opinion, in the coming years.
Gardner: Another big trend these days is the power that artificial intelligence (AI) and machine learning (ML) can bring to solve many types of problems. While we might be more cautious about what we do with data – and we might not get the same amount of data under a GDPR regime -- the tools for what we can do with the data are much stronger than before.
Is there some way in which we can bring the power of AI and ML into a creative process that allows a better relationship between businesses and consumers and businesses and businesses? How does AI factor into the next few years in a GDPR world?
AI gets customers
Dano Kwan: AI is going to be a way for us to get more quality control in the understanding of the customer, definitely. I think it is going to allow us to learn about behaviors and do that at scale.
Business technologies and processes are going to be enabled through AI and ML; that is obvious, all of the studies indicate it. It starts with obvious sectors and industries, but it’s going to expand drastically because it informs more curiosity in the understanding of processes and customers.
Gardner: Perhaps a way to look at it would be that aggregated data and anonymized data will be used in an AI environment in order to then allow you to get closer to your customer in that high-touch fashion. Like we are seeing in retail, when somebody walks into a brick-and-mortar environment, a store, you might not know them individually, but you have got enough inference from aggregated data to be able to have a much better user experience.
Dano Kwan: That’s exactly right. I think it’s going to inform the experience in general, whether that experience is communicated through marketing or via face-to-face. At the end of the day, and you are right, the user experience affects everything that we do. Users can get very specific about what they want. They want their experiences to be personal, to be ethical, to be local, and regionalized. They want them to be extremely pointed to their specific needs.
And I do believe that AI is going to allow us to get rapidly attuned to the customer experience and constantly innovate and improve that experience. So in the end, if it’s just the benefit of providing a better experience, then I say, why not? Choose the tools that offer a superior experience for our customers.
I believe that the face-to-face approach, especially when you have complex interactions with customers, still is going to be needed. And the face-to-face approach, the real touch point that you have, is going to be necessary in complex engagements with customers.
But AI can also help prepare for those types of complex interactions. It really depends on what you sell, what you promote. If you promote a simple solution or thing that can be triggered online, then AI is simply going to accelerate the ability for the customer to click and purchase.
But if you go with very complex sales cycles, for example, that require human interactions, you can use AI to inform a conversation and be prepared for a meeting where you have activated data to present in front of your customer and to support whatever value you want to bring to the customer.
Gardner: We are already seeing that in the help-desk field where people who are fielding calls from customers are much better prepared. It makes the agents themselves far more powerful.
How does this all relate to the vast amount of data and information you have in the Ariba Network, for example? Being in a position of having a lot of data but being aware that you have to be careful about how you use it, seems to me the best of all worlds. How does the Ariba Network and the type of data that you can use safely and appropriately benefit your customers?
Be prepared, stay protected
Dano Kwan: We have done extensive work at the product level within SAP Ariba to prepare for GDPR. In fact, our organization is one of the most prepared from a GDPR standpoint not only to be compliant but to offer solutions that are enabling our customers to themselves become compliant from a GDPR standpoint.
That’s one of the strengths [that comes] not just from Network, but also [from] the solutions that we bring to the industry and to our customers.
The Ariba Network has a lot of data that is specific to the customer. GDPR is simply reinforcing the fact that data has to be protected, that all companies, including SAP Ariba -- and all supply chain and procurement organizations in the world -- have to be prepared for it, to work toward respect of privacy, consent, and ensuring that the data is used in the right way. SAP Ariba is absolutely partnering with all the suppliers and buyers in the network and preparing for this.
Gardner: If you’re a marketing executive and you weren’t necessarily thinking about the full impact of GDPR, do you have some advice now that you have thought this through? What should others who are just beginning that process be mindful of?
Ensuring that GDPR is well understood by suppliers and agencies -- from a marketing point of view -- is critical.
Dano Kwan: My single biggest advice is to really focus on knowledge transfer within the organization. GDPR is a collective responsibility. It is not just a marketing responsibility; the sales teams, the customer facing teams -- whether it’s support services, presales, sales -- everybody has to be prepared. The knowledge transfer is absolutely critical, and it has to be clear, it has to be simple, and equipping the field within your organization is critical. So that’s number one, internally.
But the positioning with the external contributors to your business is also critical. So ensuring that GDPR is well understood with the external suppliers as well as agencies, from a marketing standpoint, and then all the partners that you have is equally important.
Prepare by doing a lot of knowledge transfer on what GDPR is, what its impact is, and what’s in it for each constituent of the business. Also, explore how people can connect and communicate with customers. Learn what they can do, what they can’t do. This has to be explained in a very simple way and has to be explained over and over and over again because what we are seeing is that it’s new for everyone. And one launch is not enough.
Over the next couple of months all companies are going to have to heavily invest in regular knowledge-transfer sessions and training to ensure that all of their customer-facing teams -- inside the organization or outside -- are very well prepared for GDPR.