The Art and Science of Creating Customers for Life

Carol Carpenter

Chief Marketing Officer at VMware

Learning Objectives

Engaging with customers meaningfully and creating the right offers will get you sales but delight buyers and you may just cinch a customer for life. In this session, we’ll walk through how making data-driven decisions and engagement will boost sales, but complementing your hard data with soft data insights will create game changing market impact. Join Carol Carpenter, CMO of VMware, to learn strategies to appeal to customers’ three reasons for making decisions: engagement, relevancy and delight.

"Engaging with customers meaningfully and creating the right offers will get you the sales but delighting the buyers will actually help you clinch a customer for life."

Carol Carpenter

Chief Marketing Officer at VMware


Hello, I’m Carol carpenter, the CMO of VMware, and I’m really excited to be with you today. I hope everyone is safe and healthy. Thank you for joining and taking the time. VMware is a company that’s committed to helping customers accelerate the business value from applications securely in a multi cloud world.

I’m going to speak today about the art and science of creating customers for life.

The term customers for life, I’m sure you’ve all heard it, it’s been used quite a bit. And it means many things to different people. I want to get beyond just the buzzwords and talk about three different ways that I’ve approached, and I’ve seen other companies approach customers for life successfully. I want to walk through how you can use data for data driven decisions, to drive engagement, boost sales, and increase revenue. Now, there’s a lot of talk about data. And I’m sure all of you hire data scientists and you’re trying to actually get gain the insights to customer behavior. It’s just not sufficient data along tells only the story you want it to tell. And so I want to also talk about the soft data insights that can create game changing marketing impact. There are three reasons that people decide to buy, they need to be engaged, they need to make believe that the content is relevant for them. And they want to be delighted. and engaging with customers meaningfully and creating the right offers, it will get you the sales. But as I mentioned, delighting the buyers will actually help you clinch a customer for life. Gartner research notes that the connection between a customer stated level of brand love and their likelihood to buy brings a potential uplift of around 13%. And love those terms. By the way, brand love, how many of you can say that your customers have brand love for you. A lot of customers will buy because it’s necessary and sufficient. But once another offer comes along, that’s slightly better, slightly cheaper, slightly more interesting, more cool. They will leave you. So what do we mean by engagement means a lot of different things, right? It means obviously, we measure engagement in social media, we measure engagement on top of TV, it means that we’re in the right place, we have the right channels at the right time, that they’re actually interested and are receptive to the messages that we want to put out there. So how do you ensure that and I’m a big believer in the data driven, the data driven model for engagement, you have to be razor focused on understanding your customers behavior and needs.

So according to Gallup, fully engaged customers represent about a 23% Premium in spending over the average customer. See if I can build the slide. There you go. The fully engaged retail banking customer, for example, will bring 37% more annual revenue to their primary bank. And actually, this also applies in areas verticals like consumer electronics, where fully engaged consumer electronics customers will actually spend 29% more per shopping trip. And then to look at one more vertical fully engaged hotel guests will spend 46% more per year than a disengaged guest. So I don’t think this is News to anyone that customers who are more engaged are going to spend more means they’re more interested that we’ve hit them with some relevant messaging. not not not too surprising. So in the b2b landscape, what I’ve seen is that we often miss the mark here on engagement. We we try really hard, but we are so focused often and I’ve been in b2b marketing for over 25 years, we’re intensely focused on communicating the functional and economic benefits that we forget that we need to deliver the whole package functional economic and, and emotional benefits and value to truly engage the customer. So customers that engage b2b companies that engage they see 65% lower customer attrition, 55% higher share of wallet 50% higher productivity, but only 29% of b2b companies, or full of b2b customers are fully engaging. So why aren’t waiting And I’m speaking on behalf of b2b companies, why aren’t we doing a better job of engaging customers. And by the way, for all of you, B to C, fanatics out there, marketers, you know how to do much of this, you’ve been leading the way in terms of collecting customer data and insights and driving better experiences. And as I mentioned earlier, in both b2c and b2b, everyone is at risk. We are always at risk when our customers aren’t fully engaged, that they are one click away from a competitor. So one thing that our team here at VMware, we talk about a lot is that it’s no longer b2b. It’s no longer b2c, it’s really people, two people, p2p. I recently chatted with an loons, who is the CMO of Adobe, she’s phenomenal. And she also spent quite a bit of time earlier in her career at Intel. And you know, it turns out for those of you who follow really breakthrough advertising, she was part of the team that developed the Intel Inside campaign. And she was she was sharing that it was truly breakthrough at the time, because the whole concept of a b2b company thinking with a b2c company to engage customers, and brand is tiny component, the microprocessor was unheard of. And suddenly, consumers who didn’t know a desktop from a doormat, suddenly wanted wanted to make sure they had the Intel Inside the Intel chip inside their computers. So fun fact, and also shared that the she was responsible for the sound at the end of the TV ad. And that sound is now world renowned. So at VMware, we’re embracing the p2p concept. As I mentioned earlier, we’re a software company, but we don’t just sell to companies and the buying the economic buyer, we are selling to users. And in software in general, we’ve seen over the past few years, the emergence of buying groups and buying centers, both from the top down and the bottom up. If you think about companies like Slack, or even Salesforce, frankly, that really followed a land and expand model, where they land with a group of users who become fervent champions, and then champion them to the rest of the company, the top down and bottom up, these are humans we’re dealing with. And because users can become customers for life, you know, by taking their product loyalty and championing. It’s so critical to think about these different types of customers. So we have some VMware users who have been loyal to us from the day that we opened our doors. And they’ve been very, very useful and helpful, as we have expanded our portfolio. And as we have desired to reach new types of buyers. And you know, I we talk about it all the time that there’s now a very democratic way that companies are influencing and making decisions about software. Now, whether you’re b2b or b2c, engaging, an audience is so much harder than it’s ever been. We are all highly distracted, I’m sure in the time that I’ve been speaking to you, your email has gone off, someone has pinged you over chat, or perhaps you received a text on your phone. This distraction economy that we live in, is rampant. In fact, the intention average attention span is eight seconds, down from 12 seconds in the year 2000. So in 10 years, we’ve lost four seconds. And this attention deficit is truly a problem. So you know, we’re a society that loves sound bites and symbolic slogans. So it’s really critical to make sure that we’re engaging. So how do you get customers engaged? Well, we all know, it’s not always about selling your product directly. It’s often about influencing, driving thought leadership, setting a different framework, causing your customers to pause and think differently about what they need. There’s a great example, from the consumer world Coca Cola, they actually put vending machines near schools, not to sell Coke, but to provide Wi Fi. Because what they realized is coke realized that teens as much as they, you know, enjoy drinking soft drinks, they love their Wi Fi even more. And I’ll tell you during this pandemic, working from home and having my children around, I’ve come to appreciate that for many of us, the internet is like oxygen. So anyway, you know very clever, very creative, I love that coke example. But it is very expensive. And not all of us have the resources and means to Put vending machines out and provide free Wi Fi for prospects. Sometimes there are other simple ways to engage customers. I’m sure you all know or have heard that there’s an art to how do you send an email, an email that’s engaging, that has relevancy is coming at the right time. Turns out that using the recipients name in the subject line has a higher 22% higher click through rate. You know, we recently held a 90 minute online event for our very top partners, in which 80% of the registrants engaged and stayed on for almost 92% of the entire 90 minutes. That’s a lot to ask for 92% of 90 minutes, which, you know, if I could do the math really fast, so that’s substantial. So how did we do that? We did that with the old fashioned tactics, high touch ongoing communications with our partners prior to the event, asking them, what did they want to hear about what are their top concerns, and then engaging and communicating to them the relevant content in advance of the event? And then using online polls, asking them questions, having a live q&a. That’s how we kept them engaged.

Now, the second part of this, once you have engagement is, you know, a big part of engagement. Actually, these are tightly tied together is relevancy. How do you make sure your offer is relevant. So there are a few things you can do here. One is around capturing and analyzing your customer behavior, you have to understand their interests, so that you can create the right offers at the right time. There is definitely a fine line. And as marketers, as businesses, we need to ensure that respecting we are respecting our customers privacy, and that we are not collecting any information without their explicit consent. But that said, there’s a tremendous amount of aggregate behavioral data we can collect and you should be collecting with their permission, so that you can drive your customers and prospects to specific touchpoints. To build relevance for them. You need a mix of the new and the traditional media. So lots of new media, obviously, with social media, search, social organic, and there’s also a lot of traditional media, the pay per click the email, the onboarding, right, because the relationship can’t just stop once you close your sale. And of course, the timing is key. So understanding walking in their shoes, what is their day look like? What are they trying to achieve? And then ensuring that each point you are giving before you get that you are giving value? And as I said, you know, we don’t like to talk about churn here, we like to talk about how do we keep them engaged? So it’s not just about the churn? It’s about how do you keep them engaged, and keep educating and keep them wanting to learn more. And that means having the right content at the right time. I have a friend who used to work in Nikes wearables. So this is more of a b2c example. And Nike offered sensors in the running shoes in 2006. This is long before everybody had a wearable that was beeping and keeping them on task. But the sensor in the running shoes it you know, it allowed Nike to track how much were people running? What were their habits, how far did they run, and it enabled them to sell more running shoes, because they could actually analyze how many miles they have run in their shoes, and then start to offer them ideas and suggestions prior to meeting them. It also shaped their product line, because they learned that no more people were running on trails than on streets. And so it actually led them to build up their product line around trail running. And it also helped them ensure that their relationship with their customer didn’t end with the sale of shoes. Now, a lot of the Nike wearables are no longer around, it was actually outpaced by some of the other wearables fitbits the garments and frankly, the watches that are very popular right now. But it is a great example of collecting data and using it to make decisions. You know, another shining example of this is Amazon and I am an Amazon Prime addict, I will admit it, their record Amazon’s recommendation algorithm actually drives 35% of their revenue. So really critical. They collect the data they understand and they can make the offers at the right time. Engage with relevancy.

I’ll give you a quick VMware examples. We have a solution called cloudhealth. And its cloud management platform. It manages about $12 billion of cloud spend for about 10,000 customers. We were going through a pricing and packaging exam. But last year, and what we did is in the aggregate, we looked at customer usage and feedback. And in particular, we analyzed features and usage for the mid market and from enterprise customers. And what it enabled us to do was uncover some insights about their usage. And we had, we had pretty much been looking at those two different market segments, the mid market and enterprise as very similar. And what we found is that they had divergent means that there were certain features that were missing for the enterprise customers, which this data enabled us to pave the way and now we actually have more precise customer needs. And it helps us to compete more effectively in the market. Another thing we did in q1, you know, with the pandemic hitting in March, is we started to analyze, you know, what kinds of trends what, what kind of consumption is happening in the cloud, in the cloud at the macro level. And, you know, not too surprising, we saw an explosion in gaming, followed by healthcare, retail, and streaming. How many of you were at home watching a lot of Netflix?


And it enabled us with our VMware cloud health product, to pivot to creating geo based vertical content and enablement to support sales for the areas where there there was so much growth. So it’s so great, we all have all these digital marketing tools. And we can have the ability collect a tremendous amount of data. Great, right? Not always, I know from personal experience, that if you don’t do this data collection and analysis, right,

You are going to end up with too much data, which was super expensive to gather, takes forever to process and ends up as shelfware, that you actually have so much so many dashboards, that you’re overwhelmed. And it’s actually difficult to distinguish the signal from the noise. But I want to share some of the best practices that I’ve learned some of it the hard way. First, you need to think about, do I want to build a data warehouse, because to actually do this correctly, it cannot be done in Excel sheets, as one might hope it’s difficult to do in some of the existing martec marketing technology tools that are out there. You have to make the decision that you are committed to building and maintaining and refreshing a data warehouse, which is not a life decision. Lots of solutions on the market. I’m not going to go through that here. Secondly, you have to decide what kind of data do you want to collect. You have to work with your legal and compliance teams to ensure that you can strip out any of the personally identifiable data, and to ensure that you are getting the correct permissions from the end users, and, and so on. So that’s a big commitment. But you know, once you do all that, and you’ve said, okay, we are going to collect data. The second question is, what kinds of data do you need? What questions are you trying to answer? And it’s almost worth spending the time to map out. If I knew x, then we would do y. So understanding like, if I did understand what time these customers were coming to my website to look at products, I would make more offers at this time. If I understood how many times they visited us, then I would offer a sales rep to speak to them, like understanding what what you’re actually trying to solve for. The next step is really understanding what are the natural triggers that are going to help you collect the data? For example, and I mentioned this before, like, if someone visits your website three times, is that a trigger that then you want to offer a salesperson or someone to speak directly with them via chat or phone? If someone abandons a shopping cart, that would be a natural trigger. If somebody actually attends an event that you’re hosting? Would that be a trigger? I mean, some of these are the obvious ones. But understanding what are the natural triggers? And you have to instrument to collect the right data from those different trigger points. And then finally, how are you going to use the data I talked earlier about almost starting with your problem that you’re trying to solve, but getting really specific. And so there are two ways two big general buckets of how you can use data and I really encourage you to think through this with your team. The first is the obvious one, providing a personalized experience to your prospects and customers. And we’ve been talking about that personalized with high roller vincey to drive engagement. The second bucket is around improving your own product, improving your digital experiences. And this is where I was talking about, you have to have this telemetry data and you have to have the instrumentation. So we all know how this works for some online products. So we all use Google search, every time you search, you are adding to the algorithms that they use to actually improve the product. And in our business, one of the things we offer VMware is security solutions. So our security solution actually, it looks at for each of our customers, it identifies threats, whether it’s at the network or the endpoint, all of that threat data becomes aggregated and comes back to VMware at an aggregate level, it enables us to strengthen our threat protection, and then push that kind of data back out. So really important, and this is an area where, frankly, it just becomes a virtuous circle in terms of improving the product and the experience. And, you know, especially assassins scription products, it creates that natural flywheel of customer connection. Now, let’s talk about the last piece here, which is, you know, something where collecting more data is definitely not the answer. delight. Data is critically important. It helps you drive engagement and relevancy. And, and those today are becoming table stakes for most of us. That’s the science. What’s the art, and let’s face it, marketing, it’s it’s a mixture of science and art. And depending upon your business, you have a little more a little less of age, the art of delighting the customer. And this is where marketing can create game changing impact.

To lighters create 10 times more word of mouth than detractors. You don’t want your customers just to be satisfied. You want your customers to be delighted. Apple does this really well. I was fortunate I spent my role the early part of my career working at Apple. And Steve Jobs was famous for always saying, you know, people don’t know what they want, until you show them. And he believed it was part of our job to figure out what customers want before they even know it.

Now, we did our fair amount of market research and customer research. But there was always an element of what did we not thought about what would change and delight this delight the customer and no amount of again of research can always get you to that answer. One example I like to share is my family grew up in West Virginia and my father was a die hard. Committed to Buchan just super committed to always buying American made automobiles. And during the time I was growing up, there was a very strong Made in America push. And as a result, we always bought American cars always. And you know, the Buicks and the station wagons. And we ended up with a Ford Pinto at one point. And which just shows you how committed he was. And then one of my brothers, and it was my oldest brother finally talked my father into buying a Honda Accord. Okay, my dad was super resistant, until he realized there was a little foot rest on the left hand side for his left foot. You know, this wasn’t about the engine power. It wasn’t about the the leather seats, it was something totally unexpected. And this was just something innovative to him that having always driven American cars, believe it or not, he was delighted by the left the left foot foot rest. So I hope this gives you a flavor of what I believe makes for great marketing these days, and how we could do this together. This combination of engagement, relevancy and delight is how we can create customers for life. I wish you all a great conference, I hope that you learn a tremendous amount. I’d love to keep the conversation going. My contact details are here. Please reach out to me. Happy marketing. Thank you

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