The Age of the Customer
The Age of the Customer is not just a passing fad; it certainly isn’t just this year’s marketing buzzword. The phrase, coined by Forrester back in 2011, refers to the massive power shift since the digital revolution exploded into our lives, and refers to how technology, social media, and mobile information exchange are affecting customer service, product development and marketing. It alludes to the fact that 40% of customers have a high willingness and ability to shift their spend. In particular, it refers to this period now in which businesses will be forced to transition in order to become more agile and customer-obsessed than ever before.
According to Michael Hinshaw, author of CMO.com’s weekly ‘Get Customer Centric’ blog, “Smart customers leverage digital devices to access information, anywhere and anytime.” This means that they have the power to make a decision about your company in their pocket. The recession meant that customers became more selective about where they spent their money; and the addition of social media and SMART technology into the customer journey means that products and services are being compared in real time and across multiple devices. In fact, as many as 88% of buyers are influenced by online reviews.
Revenue risk could increase by 25-50% in 2017 as more customers shift their spend which is the wake-up call that companies need to realise that the age of the customer is very real, and is happening now. This will serve to accelerate their customer experience initiatives.
Don’t put all your eggs in brand loyalty’s basket
Customers expect consistent, high value experiences now, across every single channel – digitally and in-person. They couldn’t care less if this is difficult for your business to provide. Put simply, if you don’t provide it, they will vote with their feet. A massive 89% of customers that switched to a competitor did so because of service. Seamless, unified customer experiences are no longer a ‘nice to have’; they are critical to a brand’s survival. The age of the customer means that brand loyalty is more competitive than ever.
However, this isn’t just a one way street in the customer’s favour. Their reward for this experience is data. Customers understand that companies are collecting data based on interactions with them; and they are happy to accept this as long as that data is used to make their interactions more relevant, and their lives easier. In fact 57% of customers are happy to provide personal information as long as it’s for their benefit. But fail to deliver this, and they will simply take their precious business and data elsewhere.
Silos – the scourge of customer experiences
Customer experiences have become a high-priority CEO-level area of focus; in fact, 63% of CEOs see customer centricity as one of their top 3 investment priorities, and more than a third of businesses in the B2C space will restructure to shift to customer obsessed operations. But business transformation is a lengthy and expensive undertaking, in no small part down to the number of functional silos that unwittingly form in companies over time.
Silos exist across channels, brands, products, business functions, and geographies. Christine Cutten, a principal at Deloitte Consulting, states that, “bridging operations with marketing, sales, and customer service is not easy to do given traditional incentives and leadership (sic)”. Getting silo owners, who are not in the habit of sharing between themselves, to change their processes and integrations across all functions is a tough and time-consuming ask, not to mention a costly one. Achieving change management is difficult for all but start-ups.
Bridge the gaps, improve the journey
In order to achieve customer centricity, two key silos that need to be tackled are processes and data. Only when these silos are broken down, and integrated across physical and digital channels, can seamless customer experiences be delivered. And since 87% of customers think brands need to put more effort into providing a consistent experience, it’s a task that you are duty bound to undertake.
Think about when, as a customer, you have arrived at the boundary of a silo. Were you forced to change context, re-enter your data, or even start your journey from scratch?
User research shows that this kind of experience is creating negative sentiment and giving customers the opportunity to rethink their options. Customers become ex-customers. Prospects never become customers. Any opportunities to up- or cross-sell are lost. Negative comments about your brand are posted online. In short, all resource and effort spent to acquire the customer is wasted.
To put it into context, Aberdeen Group Inc. claims that companies with the strongest omni-channel customer engagement strategies retain an average of 89% of their customers, as compared to 33% for companies with weak omni-channel strategies.
Process silos can be addressed using workflow tools; however, more and more enterprises are opting for intelligent journey builders worked into their existing marketing efforts as they not only deliver the best features for coherent customer journeys across multiple channels, but they can also accommodate many sources of data to produce a single, logical customer profile.
Knowledge is power
When you put your customers at the heart of your business, you collect a wealth of data that can be used to enhance your customer experiences, enabling you to:
- Understand your customers’ behaviour and interests
- Identify product and service opportunities
- Use their Lifetime Value to create strategic segments
The late, great Steve Jobs once said that companies should, “Get closer than ever to your customers. So close that you tell them what they need well before they realise it themselves.” Being truly customer centric allows you to anticipate your customers’ needs and delight them with products or services they hadn’t considered.
The journey mapping discussed previously has been undertaken now by 34% of companies, and can be utilised alongside triaging this existing customer data to identify and predict customer needs across different touch points.
Yvonne Genovese, an Analyst at Gartner, said in an interview with CMO.com that marketing should have the best 360° view of the customer, the target market, how the product/service is performing, and the things needed to make sure that customers’ needs are being met. Yet, only 28% of marketers reported an ability to deliver personalised customer experiences, regardless of channel.
The benefit of approaching this from a marketing perspective is that the data can be shaped into insight that can be shared with the right person, at the right time, in the right way.
Profit from your efforts
So what does your business stand to gain by investing in the shift to a customer centric culture. The answer is, quite simply, a lot!
When you consistently provide a top quality service, you earn the trust and confidence of your customers. The more that customers trust your brand, the more they will refer you within their immediate circle, as well as online. Having people talking positively about your brand gives you a front-of-mind advantage over your competitors.
There are obvious advantages of customer advocacy, such as:
- Increasing revenue – 86% of consumers say they would pay more to ensure superior customer experiences
- Profitability – customer-centric companies are 60% more profitable
- Customer lifetime value – Customers who have good experiences spend 140% more compared to bad
- Retention metrics – a 2% increase in customer retention has the same effects on profits as cutting costs by 10%
In addition, a less considered benefit is that when your customers are promoting your brand, you don’t have to!
Customer advocacy is the ultimate that any brand can hope for as it allows for an adjustment in the marketing budget – either save the money that would normally be spent on demand generation, or redistribute it towards your retention efforts and create even more delight amongst your customer base.
Also, brand-loyal customers are far less likely to jump ship when your competitor dangles the proverbial carrot. This ultimately puts your business in a strong position to ride out threats such as economic downturns.
Thrive in the age of the customer
Technology and the digital revolution are empowering customers to become brand-agnostic, so brands need to fight back with technology in order to stay ahead of their competitors and win the loyalty of the customer.
Part of the battle for customer centricity is the delivery of personalised, relevant content at each and every stage of the buying process; and 52% of digital marketers agree that the ability to personalise content is fundamental to their online strategy. To achieve this, businesses need to find a way to enrich their sales data with customer data from every one of their touchpoints, and use it to give customers what they want.
As we’ve discussed, change management, and the abolition of data silos, is a lengthy and costly process. But change needs to happen now! For this reason, brands are turning to interim technology solutions, such as intelligent journey builders, to shape how they interact with their customers.
These technologies exist and are enabling organisations of all sizes to reduce their data complexity into an action that the marketing team can take to drive a relevant campaign. They are transforming abstract information into insights that encourage collaborative, proactive, fact based decisions to be made. They are automating processes, predicting trends, and providing feedback in real time; all the while reducing time-consuming analysis and content creation from the marketers’ workload.
It’s time for a change – are you ready?
In summary, and to paraphrase a recent blog from Forrester, your business model is under attack. Not from your competitors, but from your customers.
Customers demand personalised, relevant experiences. They want new and engaging digital journeys. They believe reviews and actively look for reasons to do (or not to do) business with you. They will switch brands in a heartbeat to get what they want. In the age of the customer, becoming customer centric has to be your key strategy, or you risk being left behind, risk your revenue, and risk losing your customers to your competitors.
Give us a call if you would like to discuss further how your brand can compete in the age of the customer. We’d love to hear from you!
This industry analysis piece was commissioned by Pure360 and written by Nicola Webster; it is used on this website with their kind permission.