This post is based off a podcast with Chandar Pattabhiram from Coupa. If you’d like to read the summary, you’re on the right page. If you’d like to listen to the full episode, you can check it out here and below!
What does AI have to do with color TVs?
The latter was once the new technology, much like AI and Machine Learning are today.
Though there may be some confusion on their applications in marketing right now, the savviest marketers are considering ways to leverage this new technology in every stage of their customer lifecycles from acquisition to advocacy.
When we sat down (again) with veteran CMO and #FlipMyFunnel podcast guest, Chandar Pattabhiram, he shared his thoughts on the future of artificial intelligence (AI) and marketing, as well as a killer Led Zeppelin analogy for understanding marketing’s impact on the total buyer’s journey.
Defining AI and Its Use in Marketing
Many people are using the terms AI and Machine Learning interchangeably these days. It’s important to note, though, that these terms actually refer to two different types of computer power.
You can think about the distinction this way:
Machine Learning: simulating human behavior
This is being used widely today in marketing in areas like predictive lead scoring, ideal customer profile mapping, social influence marketing and driving programmatic ad buying.
AI: emulating human intelligence
The next stepping stone in more powerfully using the large datasets with more advanced replication of human-like intelligence to analyze it.
How are AI & Machine Learning Being Used Today?
Software companies like Coupa are investing heavily in AI today to bring more value to their customers.
For instance, Chandar talked about their Prescriptive Community Intelligence platform that will apply machine learning to existing data sets, using the collective intellect of all a companies customers to improve future experiences.
“The idea is: None of us is as smart as all of us.” – Chandar Pattabhiram
What’s the Future of AI in Marketing?
Chandar recalled growing up in India in the 1980’s. He can remember when people referred to television sets as two different types: TVs and color TVs. You had to distinguish between the newer subset of technology.
Just like we now just refer to them as TVs, since all TVs are color and have been for some decades now, Chandar predicts that the same distinction will go away between business applications (including martech apps) and business applications with AI.
They will all be powered by AI.
If the use of AI in marketing were a baseball game, we’re only in the Top of the 2nd Inning. The growth of its use in business applications across departments will continue to grow. Marketing will be one of the primary drivers.
Besides AI and machine learning, what can marketers do today to leverage new technology or new approaches to driving growth within their companies?
The answer may lie in a rock-and-roll analogy Chandar shared that shapes the way he views marketing’s approach to the customer lifecycle. This analogy has followed him as he’s lead marketing teams throughout his career at Marketo and others.
Stairway to (Customer) Heaven
Over 85% of B2B marketing spend is solely focused on the acquisition stage of the buyer’s journey.
Especially if you are in a SaaS technology business, you have to look more closely at two key metrics that will contribute greatly to the overall health of the organization over the long haul:
- How are you driving higher lifetime value within your customer base?
- Are you creating enough advocates for your brand?
“If someone is staying with you longer, paying you more and shouting from the rooftop, invariably you’re doing good as a business.” – Chandar Pattabhiram
If you look for ways to enrich every stage of the customer lifecycle, your marketing efforts will have a lasting effect on the company’s growth.
Beyond acquisition, here are the rest of the steps on the Stairway to Customer Heaven:
During his time at Marketo, Chandar helped to build up the resources around Step #1 (adoption marketing). By dedicating a team to focus on adoption, you can coordinate with the Customer Success department to aid their efforts to know and use your product to its fullest.
This will lead to more cross-sell opportunities, especially as you begin to introduce more powerful AI tools to leverage data provided by your current customer base.
Figuring out the right time to cross-sell to existing customers will then increase the lifetime value of each customer and show even more of marketing’s effects on overall revenue generation, not just at the top of the funnel.
Naturally, if each customer’s experience is being enriched by Marketing, beyond acquisition and into steps 1 and 2 of adoption and cross-sell opportunities, stronger advocacy will be the next step in the staircase.
“…more and more advocates are influencing buyers as much as the vendor themselves.” – Chandar Pattabhiram
Alignment Beyond Sales & Marketing
To move past the norm of focusing only on the first step of customer acquisition, Chandar suggests that looking for ways to create alignment with other departments is crucial.
A lot is being said in the industry about sales and marketing alignment.
To really drive your marketing department’s impact on the next customer steps, you’ll need to find ways to collaborate and drive alignment with Finance and Customer Success, as well.
If your organization’s CMO can drive alignment with your CFO and Chief Customer Officer, showing how Marketing can increase renewal rates and drive advocacy in the market, proof of the methods working will be easy to show.
“Holistically you need to start looking at lifetime value as a driver for the company.” – Chandar Pattabhiram
Don’t forget about alignment with sales, though.
Ensure that you’re designing marketing metrics for these next steps in the customer lifecycle around KPIs that drive sales success. If pressure on the number of leads or accounts go down because your renewal rates are higher and you’re driving more sales in the existing customer base, spending more of Marketing’s budget on items beyond acquisition will just make sense.
Developing a closed feedback loop with more regular communication between your sales and marketing teams will also help increase your win rates. You’ll get feedback from sales on your lower funnel messaging on product and positioning.
This has to be a two-way-street with consistent communication to really improve results.