Who are our best customers?

I was asked this question in a meeting earlier this week—I replied by explaining how I think about understanding customer value. I realize that this post has probably been written before but I’m curious if you agree or disagree?

As companies grow they eventually have to ask “who are our best customers”? In most cases, the buck stops with the chief executive officer who has to be able to clearly articulate the answer in support of the overall business strategy. To get the answer a good CEO will engage with his/her executive team ….


The answer depends on who you ask

You chief customer officer replies, “our best customers are the ones that don’t require support!” (i.e. low cost of maintenance/support) or perhaps your CCO replies “our best customers are those that can help themselves in our community.” (nod to CMO).

Your chief product officer replies, “fundamentally, our best customers are the ones for whom the product meets their requirements” (i.e. product/market fit) though your CPO might add “our best customers are those that drive the most innovation and growth.” Finally, “our best customers are those that buy the most but cost the least to service” (nod to CFO and chief customer officer).

Your chief marketing officer replies, “our best customers are those that advocate for us and drive the most new customer acquisition,” and in alignment with the CPO “our best customers are those that drive the most innovation and growth.” Finally, “our best customers are the transactional ones for which there is no additional cost of sales” (glances: at CRO).

Your chief revenue officer replies, “our best customers are the ones the keep coming back for more,” (i.e. loyalty, low-cost of sales, and greatest lifetime-value) or perhaps your CRO replies “our best customers are the ones that drive the biggest deals,” (thinks: biggest commissions).

Your chief financial officer replies with a chuckle,”our best customers are the ones that pay on time!” The your CFO pauses and replies “actually, our best customers are the most profitable customers …. though I’ll need all your input to calculate that ….



Synthesizing the answer

These answers need to be rationalized with each other to ultimately segment your customers by value. The CFO is the best position to build such a model. Ideally it would embrace a lifetime value basis and set factors for the cost of marketing, sales, and support. In addition to that it must account for customer driven value in the form of advocacy and innovation.

Such a model can be hard to build early on because there may not be much historical data on which to base lifetime value—so it may be necessary to impose a pragmatic horizon for your analysis … perhaps three years to start. If you’ve gone to the trouble to build out the model it’s fairly easy to see how extending the horizon will impact the results.

Once you’ve collectively defined who your most valuable customers are it’s possible to use this as an input for the business strategy and resulting goals/measures that will cascade down through the management and implementations teams.

Winning Executive Buy-In for an Agile Transformation

If you’re like most of the marketers who listen to The Marketing Agility Podcast, you’re putting Agile to work in your company or group—or you’re exploring how to do so. Based on our interviews, having executive buy-in will have a huge impact on your likelihood of success—I’ll share just how much in the presentation below. So, in this post I’m sharing some content that may you win that buy-in.

For most marketers winning buy-in is a process that take time and education. There isn’t a single path to success but at a high level the journey usually starts with education and proceeds through a pilot before unlocking the resources to scale Agile to the degree that it can support business transformation. I cover this in detail in the presentation below which is executive focused.

Before watching that, however, you may want to check out a recent six part Forbes series about Agile Marketing for which I was interviewed along with some other leading Agile Marketing practitioners and advocates:

The Agile Marketers are Coming … to Moscow

Red_SquareLast week my friend and fellow Agile marketer, Jim Ewel, and I travelled to Moscow to deliver an Agile marketing training that was arranged by a Moscow based consulting firm called AgileSpace. This firm is led by Marina and Dmitry Simonovy—a husband and wife team that appear to be fermenting an Agile marketing revolution in Russia. 

This was the first time I’ve co-led a two day Agile training—or any Agile training for that matter—Jim has more experience running such trainings than I do. Typically I have opportunities to deliver shorter presentations on the value of Agile to marketing leaders but this was opportunity to dive deeply into some of the content from The Marketing Agility Podcast, my book The Agile Marketer, and into Jim’s work from AgileMarketing.net

Adapting Agile

  We had a diverse mix of participants from business owners, to Agile coaches, and marketers who were just getting started with Agile. And the participants represented a broad range of industries from banking to manufacturing and retail. At first that seemed like a challenge but in practice the broad range of perspectives made for great conversations about just how adaptable Agile is. 

There were many takeaways from the experience that will inform any future training that I am part of. Perhaps this is true of other kinds of trainings as well but I walked away with a better understanding of how to teach Agile effectively. Beyond that, the Agile trainers in the audience enriched my own understanding of some key Agile practices such as the retrospective. For example, we learned about how some teams maintain a dedicated backlog of ideas focused on how to improve their method of choice. This feeds the “start” category in the “start, stop, continue” retrospective format. 

Beyond User Stories

One other takeaway of note has to do with user stories—a topic that we discussed at length with Jim on The Marketing Agility Podcast. Marketers really struggle with user stories, a fact that became very clear when we ran exercises around user story development. I won’t go into too much depth here but I walked away with a much greater appreciation for the range of things marketers put in their backlogs from epics, to user stories, tests, and tasks. 

As I reflect on our training, I wonder if there are any rules of thumb around the balance of epics, to user stories (or tests), to tasks? Epics break up into user stories and user stories break into tasks but depending on how granularly you break things up the ratios will differ. And, I suppose that the initiative will cause these ratios to differ as well. Still, I feel like i have a gut sense of just how granular tasks to optimize one’s practice …. now I just need to find some way of translating that “sense” into a framework that others might find useful!

Agile Sales

Sometime in the not too distant future, we’ll host a Marinaconversation on The Marketing Agility Podcast with Marina that will focus on how she applies Agile to sales. In my book, I discuss how sales can support an Agile practice in marketing by helping to prototype and test collateral, messaging, packaging ideas, etc as a representation of a minimum viable product (MVP) but that’s really an extension of the marketing practice rather than a foundational sales practice. 

So what is in the sales backlog? What are the deliverables and how do they relate to the deliverables in the marketing backlog? For example, consider sales decks used in a complex B2B sale—these decks are traditionally developed by the marketing team with input from sales … how would an Agile sales team change that process or dynamic? Is Agile sales an outgrowth of companies that have not yet adopted Agile in the marketing context. I have lots of questions 🙂 so I’m sure we’ll have a great conversation. Stay tuned for that!

The State of Agile: SF Agile Marketing Meetup

For those of you who were unable to make it out for the SF Agile Marketing Meetup, here’s a recording of the content that Frank Days and I co-presented. Many thanks to Austin Waine and Paul Willard for organizing!


The Cynefin Framework Necessitates Agile

I recently had the pleasure of co-presenting to a group of senior marketers with Scott Brinker—in the session he introduced the group to the Cynefin Framework by way of explaining why Agile is increasingly being adopted for marketing. I’ve made other arguments for this in my book but I was immediately struck by the usefulness of this framework and am writing to share information about it here.

Scott’s central insight is that marketing as a discipline is shifting from the complicated to complex quadrants. This is because we are managing more experiences across more channels with more interactions between channels and with more technology in play.

In short, it’s no longer possible to gather the data and fully understand/predict what’s going to happen. Instead we must “probe” or run tests to identify promising directions which we’ll pursue. That’s just where the Agile approach fits in. Here’s a great short video that walks through the Cynefin Framework: