Personalization = Better Market Segmentation

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Chris Spears founded Arke Systems in 2005 and, taking advantage of the opportunity to decide “who he was in the organization,” designated himself Chief Marketing Technology Officer. The company offered back-end systems support – web platform, CRM system, and email capability development and integration – for the clients of digital agencies. 

The problem? Arke had no control over design or strategy . . . or over getting dumped when the customer-facing digital agency got dumped for failure to deliver expected outcomes. 

The solution? Five years ago, Arke pivoted and launched a long-view, strategy/results-driven, technologically integrated experience design practice, developing marketing programs with strategies and design work predicated on producing consistent, measured, and predictable desired results. 

The company had to redefine its customer base from the digital agencies that needed back-end services to targeted end users – small to medium-sized companies interested in providing better customer experience. Arke’s new clients, initially, were small companies, which provided proof of concept for the larger companies that came on as clients over the years. These small companies provided proof of concept for the larger companies that came on as clients over time.

Arke had to change the way it thought about and presented its value proposition, where it went to find customers, and how it approached them. The growth process was organic: the company researched what customers wanted, hired the best person with the relevant technical skillset to provide those outcomes, sold results to customers, and grew a team around each technology specialist. 

The company differentiates itself on its technological depth, using only a narrow selection of best-in-class technologies. This focus allows it to provide a more nuanced solution for each client or stage in the “journey,” utilizing back office data “threaded through the website,” to guide the customer and to manage and optimize results. 

Chris was interviewed at Arke’s 4th Annual CX Summit, “Transforming Digital Experiences to Digital Business.” He can be reached on LinkedIn, at Arke Chris, by email at: cspears@arke.com, or on his company’s website at arke.com.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined, live today at Arke’s CX Summit, by Chris Spears, the Founder and Chief Marketing Technology Officer of Arke Systems. Welcome to the podcast, Chris.

CHRIS: Awesome, Rob. Thanks for having me.

ROB: Great to have you here. Why don’t you start us off with an introduction to Arke and what you excel at?

CHRIS: Absolutely. I think the interesting thing about being a founder is getting to pick your own title and making it whatever you want – the Chief Marketing Technologist. I’ll say that when we began the systems integrator – I won’t even call it an agency at the time – it really looked like standing on the street corner with a sandwich board that said, “Will code for food,” and doing anything and every type of project that would come our way.

That led us into running with a bad crowd, which was digital agencies, and being the backend technology provider for a lot of different digital agencies – developing the web platform, CRM systems, email capabilities, integrating all those things, and doing none of the strategy or design work associated with it. We latched onto that category; as the idea of a marketing technologist was born, that really accelerated.

We got to a point 5 years ago now that when the agency would be released because they weren’t getting the results out of digital that they wanted, the technology partner would get released because, clearly, you get rid of everything. So, we launched a strategy, an experience design practice, and we made a mandate that it’s not about awards. It’s about results. It’s not about opinions. It’s about the data that we can leverage to say, “This is exactly why we’re going about this strategy or this design.”

That has made us not a short-term player at our customers, but a long-term, keep coming back because if revenue is growing and results are increasing, you don’t change what’s working.

ROB: That focus on experience at the time seems a little bit – not to patronize here, but ahead of the curve. You didn’t have Adobe Experience Manager as this very expensive product that people buy into. What had you seen from what you were doing that made you feel like that was a direction for growth and specialization?

CHRIS: I think what opened our eyes was really drinking your own champagne, eating your own dog food, whatever you want to call it. We recognized that the website we had for the business was interesting, but the website combined with the data that we had in our CRM system, combined with the data that we had in our marketing automation platform, made for a much more compelling story.

You look at today’s landscape and that is the story. If you don’t have those systems – the first time we produced an article around that was 2008, so well before that was something that most folks were talking about. It made for a challenge.

You say that’s interesting that we got to that experience; going in and saying to the marketing department in 2008 that we’ve got to bring sales and the CRM system that they were using to the table to be successful here was not something that anybody wanted to sign up to do. Even today, you still face, “No, that’s not my department. I don’t think about that. Email’s not in my purview. We don’t think about that.”

So getting to pick the customers that are actually desiring to create a better customer experience and not, “I’m in a silo, I want to work this channel and I don’t want to have to think about anybody else,” it’s indicative of whether or not that client’s going to be successful and they’re going to be fun to work with.

ROB: That transformation from being a backend fulfillment order taker to a right-in-front-of-the-customer opportunity creator seems like a material and challenging transition. What were some of the different roles you had to bring to the table, and how did you manage to have the business invest in those? Because it takes time before the revenue shows up when you’re doing that.

CHRIS: And never not feeling like an impostor, right? [laughs] Because, “That’s not how you started; clearly you’re not allowed to do those things.” I will say that it forced a change in the customer base. The customers that we had at the time could never get outside of that, “You’re a systems integrator, you do the backend technology, we’ve got other people that do the big thinking for us.”

So the transition really had to start all the way at the upfront positioning, how we attended conferences, how we talked about ourselves, that led to a whole new client base, and that client base allowed us to come in and consider strategy and experience design and technology.

From a hiring perspective, we didn’t run out and say, “Who’s the big, flashy creative director?” We weren’t really after the award-winning work. We were after the work that drove an outcome. Finding folks even from a strategy perspective that had a much more analytical mindset in those conversations – in user experience design, in the information architecture – it wasn’t what their gut told them. It was, “When I went through all the analytics, here’s what the consumers were using. When we went through the research, here’s what people were asking for.”

It was an investment, absolutely, and we didn’t try to hire everybody at once. It was one person. Like, who’s the best person that we can find that’s doing that stuff? Let’s go sell some of that, and then let’s grow a team around that individual.

ROB: Along the way, you still managed to remain differentiated with depth in the technology. How big is your team now?

CHRIS: We are right at 100 people.

ROB: We don’t talk a lot about numbers here, but when you have 100 people it’s worth talking about, absolutely. At 100 people you start to get to where you are competing with let’s say regional offices of holding company agencies. But my perception is you’re about 10 miles deeper on technical execution in marketing stacks that they also don’t know too much about. Is that fair? What would you say there?

CHRIS: I would say that was our advantage even when we were powering digital agencies. My opinion – I’ll be very careful; my opinion here – at the time, 2005-2010, an agency would have a handful of technologists that would sign up to code anything. “You need me to do PHP today and .NET tomorrow and WordPress the day after that?” It was just anything and everywhere.

We took a specific approach that said, we want to be amazing and only focus on the handful of platforms at the top of the category. It brought us the right type of enterprise clients. It brought us the level of renown that would have them find us versus us having to go beat down the doors. Then we surrounded that set of technology tools with the other best-in-class solutions – from a web perspective, a platform like Sitecore, and then Salesforce is the only CRM that you should be integrating with, and then a handful of marketing automation tools.

That technology depth, while it excludes us – you make a different technology decision, we’re probably not the right partner. You can pay us to think about strategy and some of the user experience stuff, but we’re not going to be able to help you execute. But having that depth and that specificity with the technology tooling allows our strategy and our design work to be significantly more nuanced for those platforms, for what they’re capable of. It’s [a question of] are you a generalist marketer or are you a specialist?

ROB: If we rewind a good way back, Chris, what led you to strike out in the first place and create a business and not work for someone else?

CHRIS: That’s a great question. I think if my folks were sitting in the room here, they would say that they always knew there was going to be a business. There are plenty of failed ones prior to this – in the lawn care category, in the newspaper delivery business. [laughs]

ROB: Many different things. [laughs]

CHRIS: Spreading through high school and college. At the time that we formed Arke, the opportunity that we perceived was related to a wild level of sophistication required to create digital platforms, to create engaging web experiences.

My business partner and I were doing it at the big enterprise level, and we saw the opportunity as, “Let’s go do this for the medium and small businesses.” When I say medium and small businesses, our first customer was a friend with two employees. Our second customer was three guys off of Craigslist. This is not the big monster organizations.

Now I look at that as we designed a roadmap for how we were going to grow the business. When we launched strategy, we didn’t launch strategy and go do it for an enterprise company. We did it down at the small size. One half of the business is doing big web technology implementations for the Fortune 500, and the other is doing strategy for sub-100 companies. We used the proof in that category to go to the 500 person companies, to the 1,000 person, to the 10,000 person.

The evolution of that – we see an opportunity. Take it small was our original hypothesis. Then to be successful and to grow, it had to go into bigger and bigger companies, where one of the things we’ll say is the dysfunction of the organization drives how much consulting they need.

ROB: [laughs] Sure. It seems like several inflection points in the company have been the result of some introspection, some reflection, some very intentional moments. Do you have any habits where you take time and think about this or create these strategies? How do these moments of intentionality incubate?

CHRIS: We have always been believers in outside counsel, whether that takes the form of individual mentorship, group mentorship. There are individuals that have been with us since the inception that act as a sounding board, that are constantly sources of information. I think conferences like this, attending them and just finding the one nugget in the day gets written down, and how all those nuggets start to come together.

And then very intentionally, there are a couple of days every year we go sit in a city where we don’t have an office, in a hotel, and “If you blew the business up, what would you do next year?” If we’re not willing to target and go do those things – that’s where the category is going.

The most recent iteration of that for us is really around business model change. The work that we’re delivering, the types of resources that organizations need are still very relevant. I think the expectation is we’re 20 years into digital; why are people still paying the same amount for someone that won’t guarantee a result? The whole premise of digital was we can measure it better, we can drive a higher result. That has just continued to fall short of everyone’s expectations, from the money they spend on consultants to the money they spend on the technology platforms to how their digital media gets spent.

Our last reflection – and again, we look at our business. If somebody showed up and said X, what would we immediately hire them to do? If somebody showed up and guaranteed me that they were going to have a return on my investment in revenue dollars or charge me less, that would get them hired.

Taking that concept and that idea and turning it to our customers, to say we’re not asking you to sign up for an uncapped liability if we grow like crazy with you through digital. But if we don’t hit a specific business growth target, don’t pay us as much. If we blow way past that, pay us a little bit more. Don’t pay us an unlimited amount.

I think as a small business, getting there before the big agency holding companies and the regional office of WPP are there better positions us for that more progressive CIO and CMO that’s thinking about digital transformation and digital business.

ROB: You put on a good transition there. We are at your conference. This is, I believe, the fourth year of this conference?

CHRIS: That’s correct.

ROB: And this year you have entitled it “Transforming Digital Experiences to Digital Business,” with that focus on those results.

When we’re thinking about being able to guarantee, or at least perform, for results for a client, how do you bring that relationship between you and the client to a point where you have enough confidence in the maturity of their business and your execution together to both have comfort? Because they’ll take the upside/downside any day, but you are taking on a little bit more risk, and probably typically the smaller of the businesses. But also the upside.

CHRIS: Yeah. I would say the customers that are signed up and are in this pay-for-performance model are in the billion dollar plus category. They’re not small businesses. The dollar amounts when you create a 5% or 10% lift in their digital business is typically pretty significant.

The interesting work that happens leading up to those engagements is leading with and saying, “We have the confidence that if you give us the right data and let us look at these sets of things, we can propose a performance-based engagement.” Out of that audit – that’s our investment, that’s our cost of doing business, cost of sale – we can come back and say, “You’ve signed up, CMO, for X percent growth in the business. You need us to create X percent growth.”

It’s just understanding what’s possible. If that’s 400% more than you did last year, that’s probably not quite possible. If it’s 20% more, let’s talk about how we’re going to get there and what that path looks like.

The other thing that comes out of those audits is what I will refer to as the cost of doing business projects. If you’ve never kept your website or your customer data clean, or just any variety of things that set you so far behind that you’ve got 6-12 months of just fixing stuff before you can even begin that optimization, you’re not going to get into a pay-for-performance model.

So, it is looking at, “What is the foundation, and can I build on that foundation and truly do optimization?” Or is the starting point so far behind that you need to do a little bit of actually capitalized expenses?

ROB: This event that you put on is one of those neat events that happen in the marketing space where it’s simultaneously very generous and – not to say selfish, but there’s a clever self-interest in it. But you balance those very well at this event, if I may say so. How do you think about those things with intention? If you bring in really good speakers, it costs you probably a material amount of money, but you also I think have pretty good confidence that it’s worth it at this point.

CHRIS: Yeah. Selfishly, the content that comes out of this will get leveraged all year long. Whether that’s the image assets, the video snippets, the audio snippets, some of the presentation materials that get built leading up to this are things that we can use the whole year.

On the folks that we decide to bring into the event, it’s people that we also want to hear from, to continue that selfish chain. It’s folks that we want to hear from. We bring a large number of our team to this as well just so that they can get that experience. It’s almost like employee appreciation at the same time it is customer and partner appreciation.

The balancing act is with some of the sponsors. We’ve got four sponsors. They all wish they could get up and do a 1-hour presentation about their product or service and that’s the whole day. Obviously, we say, “Look, you can participate at a table, you can have some signage, but this is about education.”

Beyond both of those things, I think the mix in how we form the tables of people in different industries with different types of roles – we’re very intentional about the table formation – just gets you talking to people that you otherwise wouldn’t get insights from or hear ideas from. That idea of just connecting the Atlanta community.

ROB: That’s great. I imagine you’re planning to put this on next year. If we’re sitting here in a year, what do you hope we will be talking about in the sessions? What do you hope will have changed? Do you hope that more people will be thinking more about this performance model? What will change in customer experience, do you hope?

CHRIS: The word on my mind as I look to next year is going to be “nuance.” I think the maturity of the category means that you can go to a food website – think online ordering or digital travel – and it’s the small nuances between how well they understand the customer, how they push them forward to that next step that’s going to be the big driver of results.

So, I think next year very much will be a “What have you done to create results?”-type conference. If the last couple of years have been “You should do customer experience; here’s some tactics for doing customer experience,” this year is “You should measure and prove the results of customer experience.”

Next year is going to be, “Okay, if you’ve done these things, what are the small nuances that you have to optimize every week to continue to move up that opportunity chart so that you’re getting higher conversion, so that you’re more efficient with your media spend, so that you convert more opportunities to revenue?” It’s not going to be the big sweeping changes.

ROB: I think what may be either unclear or overwhelming for some people who are thinking about this overall customer experience thread, you’re talking about in many cases very significant companies with very significantly adaptive web experiences. You’re talking about fundamentally transforming and changing, inception-style, the landscape through which someone navigates a website. This is not “this page does this and this page does this other thing.”

Concretely, what are some examples of what this looks like and how it’s actually practical? Because it sounds like a great idea, and for a lot of people, I think they feel small and overwhelmed by it. You’re dealing with clients who really can put the time in and think about it, so what does it look like when it’s done well specifically?

CHRIS: We do workshops at the beginning of the day, and one of those workshops today was around personalization. I opened that at my table by saying that is just the new big fancy word for segmentation. We can call it whatever we want, but it is better segmentation.

Again, to the table, I said no one is going to get to the audience of one where the machines are writing the copy and picking the image and running the ad, and then all of a sudden Chris buys the thing because they know everything about me. That’s not reality, even for the biggest of organizations right now. Maybe we get there. Maybe that’s what we’re talking about 3 years from now.

But today, it is those unique sources of data that only your organization has access to that can influence the customer journey, and how you do personalization around that. Does personalization have to be to an individual, or could it be to the stage in the journey you’re at? Not so much speaking to Chris as a male in Atlanta with this kind of background, but speaking to Chris as the person that we can identify at this stage of the journey.

What do I think that looks like? One of my most common go-to’s is everywhere that your organization is interacting with the customer or the prospect. An example that we recently used for a hotel brand is related to the call center. You’ve got this digital booking engine; why isn’t each page of that engine a different phone number for the call center? And when I come in off of that phone number, why don’t we have the list of the five questions that get asked by the individuals to the agents on the Check Availability pages?

The personalization in that stage is you’re the only ones with that information from your call center. Use that to power the digital experience. That’s personalization for that individual in that stage. And sure, you can get more sophisticated. The U.S. group of questions than the European group of questions. That’s where you add additional dimensions of personalization.

I think the other category is just in those initial acquisitions – and this is a little bit more of a B2B message – leverage the data sources that you have to say Chris is in professional services versus Bob is in real estate versus somebody else is in retail hospitality, and the imagery. These are the simple case studies that we’re still not executing on. But I can go buy that data from 35 different sources about every single IP address in the country to at least get directionally correct. “I know you’re in this industry.”

I very much go after the pragmatic approach, because even at the billion dollar level, they’re saying, “We’re not spending money on this. We’ve got fruit laying on the ground we should be picking up before we go chase some of this stuff.”

It is an execution of the fundamentals, so it’s not a very fun sale. We’re not going out and saying Ai is going to solve all of your problems and “Look at this!” It’s “You’re not doing the basic blocking and tackling as an organization. Let’s help accelerate you through those things through our experience so that you can get to the more fun.”

ROB: It sounds like a much broader expansion. I think a hot category still is the account-based marketing thing, and then what you’re saying is, here’s the industries we’re talking to, here’s the stages in the process. It’s the same message, but it sounds like in many cases when you actually have the back office data threaded into the website, you’re in a much better spot to personalize that than trying to match a bunch of email addresses against Facebook ads. Is that accurate? What are some of the obstacles still in the world that you see?

CHRIS: If I’m going to go directly into ABM – and I can apply this to us – I wish when I changed the stage for an organization in my CRM system, that that promoted a whole different set of ad campaigns and content, so much so that I could say, “This is what I talked to that CIO about when we were in their office. This is the message. I want to follow everyone in his IT department around for the next 6 months until they invite us back.” Get it to the next level of creepy, not “I can target IT at this industry size at these specific companies.”

The more that those kind of messages get stitched together, I think that is going to – if we look at sales and marketing, again, specifically in the B2B space, I think that that is going to continue to collapse into marketing demand. Closing that business is really getting closer and closer and closer together versus further apart.

The influence that I can take off of a phone call that a prospector set up gets fed back into all of the campaigning that’s happening – because they don’t close after that first call. There’s all the nurturing that goes along behind it. Those are where some of those feedback loops are the data that only I have that’s going to drive personalization.

ROB: That’s a great key. You think about it every day. What is the thing that only you have? It’s your personal knowledge. Sometimes it’s plenty of things about consumers.

CHRIS: Yeah.

ROB: Looking back a little bit now, what are some things along the journey of building Arke that you might do differently if you were starting over today?

CHRIS: I think we made a lot of the right big bets. I don’t think I would change any of the really significant bets that we made around technologies that we pursued or when we opened new lines of business. Maybe some of those bets should’ve been made a little bit earlier that I could look at.

One of the things that we’ve continued to invest in, and every year gets harder – it’s not what I would change, but more what I would make sure I don’t change – the things that we do around employees. I feel as we’ve moved into almost negative unemployment land that that has allowed us to do much better at retention.

The idea that as a service organization, at the end of every month, the money that makes its way all the way to the bottom of that P&L is what I have to reinvest. Our asset is the people. I’m not buying hotels, I’m not buying planes. I don’t do office furniture. The asset that I can reinvest in to make sure that money makes its way to the bottom of the P&L the next month is the people. And they can leave at any time, and there’s nothing holding them there.

So I think when we’ve neglected that, it’s harder on us than when we’ve really paid attention to that is the asset. None of this IP, none of this methodology, none of this marketing and branding – that’s all nice, but the individuals that are delivering really are where it’s powered.

And if I rewind to 10 years ago, you’d sit down in a marketing thing and everybody would say their people are their differentiator. That’s not good enough. You need to come up with some other kitschy thing to say to be a differentiator.

I think the world of consulting now, though, it is those individuals. They are the differentiator, and folks that are used to getting sold by the A Team and delivered by the C Team – which has also been getting said for a decade – are done. They want to know the people that they’re going to be working with.

ROB: I think it’s correct, but it’s correct when it’s personal. I think that’s what keeps people around, too – when there is a personal element to the work that they’re doing, when they are personally invested, when they are personally valued. Not just a bucket of people who you give a thumbs up to and say they are “great” and “good job.”

Chris, when people want to find you and Arke, where should they find you?

CHRIS: Where they should find me is on LinkedIn, at Arke Chris. Also, just cspears@arke.com. The website is arke.com as well.

ROB: Did you have the four-letter domain when you started?

CHRIS: No, we picked that up a couple years in when we got an alert that it had become available.

ROB: Wow.

CHRIS: Got lucky.

ROB: [laughs] That’s fantastic. Chris, thank you for joining the podcast. Thank you for hosting this event. It’s great. If you ping Chris, he might let you get invited next year, and I recommend you attend if you’re listening. Thank you so much, Chris.

CHRIS: Thanks, Rob.

ROB: Take care.

Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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