With the right budget, patience, and know-how, any marketer is able to bring in a certain number of new customers monthly. That’s a given.
However, in this scenario, we’re talking about quantity, not necessarily quality.
Driving real, sustainable growth for a business is a whole different feat.
Simply optimizing a website or running the newest A/B test you come across on LinkedIn is not enough.
The real path to success in 2024 and beyond lies in an all-encompassing, customer-focused strategy that takes into account each stage of the customer journey.
That’s why I am so excited to share a series of invaluable insights on how (and why) Conversion Rate Optimization evolved into a broader Customer Value Optimization (CVO) mindset.
Right off the bat, I want to specify that this evolution also created the need for a more experimentation-focused culture across an organization as well as a reliance on emerging technologies such as AI, which can improve our customer research and optimization efforts.
A narrow focus on website analytics or individual touchpoints is obviously insufficient in the face of growing customer demands and more complex digital experiences.
Companies have to implement a genuinely customer-centric strategy that maximizes every stage of the client lifecycle, from acquisition and awareness to retention and advocacy.
And the core of this transformation is a basic shift in the company’s culture and way of thinking.
The True Optimization Mindset Means Moving from CRO to CVO
As I’ve seen in my work as an Experimentation Consultant, the conversation around optimization has evolved dramatically in recent years.
Three years ago the focus was solely on conversion rate optimization: “please do my A/B testing on my landing pages and my checkout.”
Today, the demands are more nuanced and we’re getting more and more questions around optimizing the full customer journey.
This change in focus from CRO to CVO signals an important shift in perspective.a
Leading companies are now starting to understand that optimization needs to be done across the client lifecycle, not just on a website or in a single conversion funnel.
I see it more and more as well in the questions I receive.
Now we get more and more questions in the range of “Can you help optimize the full customer journey, including personalization, AI, experimentation throughout the whole funnel and products?”
We also get questions like, “Can you help us continue to optimize the product?”
This holistic, customer-centric approach stands in stark contrast to the siloed, channel-specific optimization efforts of the past.
I see how the traditional CRO mindset is quickly becoming outdated, as businesses realize the limitations of focusing solely on website metrics or single touchpoints.
I predict CRO will become a term encompassing more experimentation throughout the customer lifecycle.
Why a Customer-Centric Culture Truly Matters
At the heart of this shift towards CVO is a growing emphasis on experimentation and a more data-driven, customer-centric approach to decision making.
I see it as a crucial evolution, as businesses realize the limitations of relying solely on intuition or “best practices.”
Experimentation is much more also optimizing the product or optimizing referrals or optimizing ads to get more added to the website.
So it’s much broader than just CRO.
This experimental mindset requires a fundamental change in company culture and the way teams approach problem-solving.
Rather than making decisions based on assumptions or “what we think the customer wants,” organizations are starting to embrace a more rigorous, data-driven approach to understanding and serving their customers.
However, this isn’t necessarily happening now, as some organizations are still stuck in being outcome driven instead of output driven.
I still see lots of product teams having a goal of accomplishing a number of spring points instead of having a goal related to adding value to the customer and accomplishing your goals through that.
This distinction between “outcome-driven” and “output-driven” is crucial.
Too often, businesses get caught up in vanity metrics or internal goals that have little to do with actual customer needs and preferences.
True customer-centricity requires a shift in mindset – from optimizing for the business, to optimizing for the customer.
For example, if the manager of the product team gets a salary raise because he achieved the number of spring points and then created a number of new features, then he could see experimentation and customer research as slowing the process down, risking his salary increase.
Thus, he leads the team to work hard and efficiently deliver as much output as possible instead of outcome.
This is where the challenge lies.
Driving lasting cultural change within an organization is notoriously difficult.
I’m not blind.
I’m aware of the significant obstacles companies face in transitioning to a more experimental, customer-centric way of working.
Changing minds and changing way of working requires behavioral change. And that in itself is very difficult.
Just consider personal goals: shedding weight, saving more money, cutting back on alcohol, or kicking the smoking habit.
They require a behavioral change and a lot of people feel overwhelmed while trying those things.
And now we are trying to change the way of thinking and working for our colleagues and entire organizations.
How to Motivate Teams to Embrace Experimentation
How then do you pioneer this cultural revolution?
In my mind, creating “humble, likable authorities” inside the company is the first step.
I’m referring to those who are able to respectfully maintain the status quo while simultaneously advocating for the advantages of innovation and customer-centricity.
You have to be passionate but humble.
You have to show respect.
You have to show interest in your colleagues while working and try to accomplish their goals with experimentation instead of trying to accomplish your goals.
This is a crucial distinction.
Too often, optimization specialists or “customer champions” within an organization take an adversarial approach, positioning themselves as the experts who know better than their colleagues.
Be careful – this is a recipe for failure.
If you’re the “customer champion” in your organization, you need to position yourself as a collaborative partner, not an authoritarian figure.
Rather than trying to push the product team to change, the optimization specialist needs to figure out how to better align new objectives with existing ones.
This is where it’s crucial to learn about internal motivations.
We have to perform an extensive audit of the decision-makers’ performance evaluation and compensation.
They are unlikely to be open to a more experimental, customer-centric approach if their pay and opportunities for advancement are dependent on output-driven metrics such as feature delivery or website conversions.
If their goal is really output driven, then it’s going to be an uphill swim.
Again, if you’re in this position, don’t be pushy.
The key is to start small, demonstrate success, and gradually work your way up to influencing higher-level decision makers.
It’s also crucial to position experimentation and customer-centricity not as a burden, but as a means of helping your colleagues achieve their own goals more effectively.
Breaking Down Interdepartmental Barriers and Begin Collaboration
Driving this cultural change, of course, calls for more than just changing people’s perspectives; it also calls for dismantling the divided thinking that plagues many major businesses.
With some of my clients, I can see this happening as we begin to collaborate rather than carry out separate experiments.
So much more is understood.
We learn what works where in the full customer lifecycle, on the full customer journey as well.
This cross-functional approach is crucial.
It allows departments to talk between themselves, and gain a holistic view of the customer experience. This view reveals opportunities for optimization that may have been previously overlooked.
For example, what would happen if email marketers and digital performance teams started working together to uncover insights that inform the entire customer journey?
You can use the theories and help each other optimize the optimization process basically.
And if you document all your learning as well, you get a rich database of what drives your customers, what are their needs, what are their goals, and how you can optimize each step in the full lifecycle.
But fostering this level of collaboration isn’t always easy, particularly in large, siloed organizations.
Because of this, it’s critical to find and support “internal champions”—people who can assist in removing obstacles and promoting alignment within the company.
Ultimately, the objectives dictate the final product.
It’s about finding common ground and proving that everybody can achieve their goals more effectively with an experimental, customer-centric approach.
The Role of Education and Internal Evangelism
Promoting cultural change inside a company takes more than simply rewards and alignment; it also calls for a concentrated effort to inform and inspire everyone.
I can’t overstate the need for solid internal training and educational initiatives to guarantee that everyone is aware of the benefits and fundamentals of customer-centric optimization.
There’s a concept in the “Thinking, Fast and Slow” book, called System 1 and System 2 thinking.
System two is our rational brain.
To make a change, system two needs to know how to change. So it needs to be smart enough. You need to educate system two.
System one needs to be motivated enough. That’s our primal brain, our strong brain.
The consensus is that 95% percent of decisions are made by system one, if it’s motivated enough.
This dual-pronged approach – educating the rational mind while also appealing to the emotional, intuitive side – is critical for driving sustainable change.
So the learning process needs to be fun and engaging, rather than dry and prescriptive.
In training your teams, they need to be mindful and not frustrated.
Because this process it’s not going to happen within a week.
To make change happen, you have to make system one and system two work together.
And for that, you can either change the fiscal environment. Just like you do with customers, you change something in your pricing range to change customer behavior.
Or you can tweak the social environment, bring people together, get them involved, make it fun.
It’s right there, in plain sight – when something is satisfying and fun people will do it more often. And that’s how you can change habits.
One of the key elements of my approach is making learning enjoyable and engaging.
I can think of several examples, such as internal concept competitions that reward the most creative and customer-focused submissions with rewards, to pique the interest and enthusiasm of the entire company in the change.
I’ve discovered that by appealing to people’s innate desire for approval and reward, companies may more successfully spark the cultural shift toward innovation and customer-centricity.
Making the process interesting, enjoyable, and ultimately advantageous for all parties involved is the goal.
How to Take Full Advantage of Data and AI
No discussion of optimization and customer-centricity would be complete without addressing the role of data and emerging technologies like artificial intelligence.
I see these tools as crucial enablers of the experimental, insight-driven approach that underpins effective customer value optimization.
With AI more and more popular, our clients are asking how to use AI within CRO within experimentation.
To that I answer that CRO in itself should move towards the marketing teams and be embedded in product teams, while moving away from the CRO funnel.
I envision a future where AI and advanced analytics play a central role in powering the optimization process, freeing up human specialists to focus on higher-level strategy and decision-making.
These tools have great potential, ranging from automating the study of user evaluations and survey data to producing hypotheses and optimizing the delivery of personalized experiences.
But I’m the first to tell folks that technology isn’t enough on its own.
It must be paired with a solid understanding of the wants and behaviors of the consumer as well as an eagerness to test and iterate often.
Even as AI advances in competence, human judgment and insight continue to play a crucial part in the CVO Journey. So, it’s best advised to integrate all these elements into your strategy.
Wrap Up
It’s clear that the future of optimization and customer experience management depends on adopting an incredibly holistic, experimental mindset.
Channel-specific, segregated activities are a thing of the past.
The most successful companies are those that can:
- eliminate internal barriers
- promote cross-functional collaboration
- and continuously improve the end-to-end customer experience.
However, for this to happen inside your company, you’ll have to go through a fundamental shift in the overall mindset and culture.
Instead of relying solely on output-driven metrics, you should adopt an outcome-driven, customer-centric approach that is built on thorough experimentation and data-driven decisions.
At the same time, all organizational levels, from the C-suite to the front lines, must equally embrace and evangelize the change before and during it.
It will be vital to build extensive internal education and training programs to guarantee that everyone is aware of the fundamentals and advantages of customer value optimization.
At the same time, you’ll have to empower “humble, likable authorities” to spearhead this cultural shift.
The companies that can successfully implement data-driven optimization, consumer research, and experimentation across the whole customer journey will ultimately be the ones that flourish in the coming years.
Adopting this customer-centric, experimental mindset has enormous benefits, but it’s also a formidable challenge.
Therefore, when you consider the future of your own company, I encourage you to consider this: are you ready to move past the CRO bubble and into the bigger, more influential field of customer value optimization?
The route may not be simple, but the opportunities for growth and success have never been higher.
