Customers are setting the business agenda

With­out doubt it is the age of the cus­tomer. They are loud­er than ever, have greater pow­er and more ways of exert­ing it. Dig­i­tal inno­va­tions have meant the con­sumer knows every­thing about a com­pa­ny, the prod­uct and its ori­gins, as well as faster and more effi­cient ways of air­ing griev­ances and singing prais­es.

While it might be ter­ri­fy­ing to think your cus­tomers know every­thing about your process­es, there’s an argu­ment for embrac­ing the move towards cus­tomer empow­er­ment. This is absolute­ly cru­cial to loy­al­ty, says Alex Chea­tle, chief exec­u­tive of lifestyle concierge and loy­al­ty solu­tions provider Ten Group.

“There is sim­ply no such thing as a cus­tomer for life any­more; cus­tomer loy­al­ty needs to be earned. Com­pa­nies must show that they under­stand their cus­tomers and are respond­ing to them as indi­vid­u­als,” he says. “A lux­u­ry cloth­ing brand can’t just give away a pair of cuf­flinks with a shirt; they need to give the cus­tomer tick­ets to the opera – because they know they like opera – in a city they vis­it reg­u­lar­ly.”

The cus­tomer isn’t just a buy­er of a prod­uct, says Mr Chea­tle, “Car man­u­fac­tur­ers such as Maserati don’t just stick extras on their cars, they think around the issue and pro­vide ben­e­fits that are per­haps unre­lat­ed to motor­ing, but are tai­lored to the per­son who is buy­ing the car. Banks will no longer just offer trav­el insur­ance or Avios [reward cur­ren­cy] – cus­tomers have no patience with por­ing over small print or jump­ing through end­less hoops for ful­fill­ment.

“Pro­grammes such as Thank You from Coutts offer curat­ed oppor­tu­ni­ties select­ed and tai­lored to their account hold­ers. The cus­tomer needs to feel in charge of the ben­e­fits they receive and com­pa­nies must use ben­e­fits to show how well they under­stand the indi­vid­u­als they are doing busi­ness with.”

KEY TRENDS

A report from For­rester, enti­tled Nav­i­gate the Future of Cus­tomer Ser­vice in 2014, out­lines a num­ber of key trends. Cus­tomers now demand an omnichan­nel ser­vice. They want to start an inter­ac­tion in one chan­nel and com­plete it in anoth­er. The report says today’s cus­tomer is begin­ning to adopt a “mobile-first” mind­set. Com­pa­nies are start­ing to move away from dupli­cat­ing their web pres­ence for mobile and instead are look­ing at the right usage sce­nar­ios to add val­ue to cus­tomers in a mobile envi­ron­ment. There is now a ten­den­cy towards a more focused user expe­ri­ence that allows tasks to be accom­plished effi­cient­ly.

Cus­tomer ser­vice is the next brand dif­fer­en­tial, and by 2020 will over­take price and prod­uct

Cus­tomers 2020, a report from US cus­tomer intel­li­gence con­sult­ing firm Walk­er, looks at the cus­tomer expe­ri­ence indus­try of the future. The report claims cus­tomer ser­vice is the next brand dif­fer­en­tial, and by 2020 will over­take price and prod­uct.

The report says to be rel­e­vant in 2020, com­pa­nies must focus on lever­ag­ing data to cre­ate a sin­gle source of truth and make cus­tomer intel­li­gence acces­si­ble. It says: “Com­pa­nies must con­sid­er ‘insight gen­er­a­tion’ as a sales enable­ment func­tion.” It also pre­dicts the like­li­hood of more com­pa­nies hav­ing “chief cus­tomer cham­pi­ons”, serv­ing one pur­pose, “to cre­ate an unre­lent­ing focus on the cus­tomer”. Data is being used to reach out proac­tive­ly to cus­tomers in the form of invi­ta­tions to chat and take part in tuto­ri­als. In addi­tion it is being used inno­v­a­tive­ly to devel­op post-pur­chase engage­ment.

Forrester’s The Busi­ness Impact of Cus­tomer Expe­ri­ence, 2014 report looks at the link between cus­tomer expe­ri­ence and con­sumers’ loy­al­ty to a com­pa­ny. Unsur­pris­ing­ly, the cor­re­la­tion is high. And the busi­ness case is strong. The research shows loy­al­ty-based rev­enue ben­e­fit for a firm going from a below-aver­age cus­tomer expe­ri­ence index score for its indus­try to above-aver­age, ranged from $55 mil­lion for con­sumer inter­net ser­vice providers to $1.6 bil­lion for wire­less providers.

And then there’s per­son­al­i­sa­tion. There’s cer­tain­ly a move towards the indi­vid­u­al­i­sa­tion of the con­sumer process. Com­pa­nies are increas­ing­ly using pre­dic­tive ana­lyt­ics to up and cross-sell to con­sumers based on their indi­vid­ual buy­ing and brows­ing habits. It’s no longer just about know­ing the customer’s name; it’s now about mak­ing sure offers are bespoke.

NEW ADVISERS

A 2013 IBM study, The Cus­tomer-Acti­vat­ed Enter­prise, says that cus­tomers are the “new” busi­ness advis­ers, claim­ing that 90 per cent of senior lead­ers expect­ed exten­sive col­lab­o­ra­tion with cus­tomers with­in the next five years. More than half (54 per cent) of chief exec­u­tives said cus­tomers now have a con­sid­er­able influ­ence on their enter­pris­es and, cru­cial­ly, the out­per­form­ers are 24 per cent more like­ly than under­per­form­ers to have giv­en the cus­tomer a prime seat at the board­room table.

The report high­lights that in the first IBM study of this kind, released in 2004, chief exec­u­tives ranked their own cus­tomers as sixth on the list of all mar­ket fac­tors they believed would dri­ve the most change in their organ­i­sa­tions. What we see today is a very dif­fer­ent sto­ry, where empow­ered cus­tomers now lead the agen­da.