The Customer Now Rules
In the past, companies ran their own marketplace activities and entirely controlled their products and services. Today, customers rule. Numerous factors have aligned to put the emerging generation of consumers in charge, most notably the power of technology and the Internet, which provide comprehensive product data instantly and enable consumers to buy anything any time, and to comment on everything all the time. The millennial generation – also called generation Y – runs commerce today. This generation followed generation X, which in turn followed the baby boomers. Members of gen Y grew up in a fully digital world. They are becoming the world’s biggest consumer group. They have huge expectations, are extremely demanding and have little patience for companies that displease them. If generation Y doesn’t want what you offer, doesn’t like how you operate or feels negative about your products or services, its consumers will quickly call public attention to every failing. Often this means enthusiastically wreaking havoc on the organizations they target. Many victims could appear under that “rest in peace” sign, including Circuit City and Borders. The first electronics superstore, Circuit City, went bankrupt in 2009. Former chairman Alan L. Wurtzel says it died because it failed to listen to its customers. Having 500 US bookstores did not protect Borders from bankruptcy and liquidation in 2011. Rick Newman of U.S. News & World Report notes that Borders’s sin was failure to adapt to changing customer expectations. “Customers are now in the driver’s seat,” write George Colony and Peter Burris of Forrester Research. Former GM CEO Rick Wagoner agrees: “We used to ‘own’ the customer. Now we hope and pray that they want to ‘own’ us,” he says. Firms that can’t regain control of their businesses will die, undone by the slow decomposition of their consumer base.
Gen Y has an outsize influence, in part due to its members’ tendency to broadcast their displeasure via online social networks. Companies can foment this dislike simply by too overtly trying to influence how gen Yers think, feel and act. If your gen Y target market learns that you’re campaigning at them, “they will object, they will drop you and they will tell their friends.” Generation D Gen Yers are frightening enough, but the next cohort, generation D, is downright terrifying. Gen Ders are the envoys of the looming “customerpocalypse.” If you fail them, Gen Yers might want nothing to do with your products or services. But if you get on the wrong side of ferocious gen Ders, they may go out of their way to bury your firm. Think of the D in generation D “as ‘doom’ or ‘death’ or ‘destruction’; gen D may well be the “discover, devour” and “demonize” generation. Unlike generation Y, which merely creates “suck sites” to denigrate the companies that disappoint its members, gen D challenges such firms and may put them out of business. While generation Y members may dislike the idea of being your targeted customers, generation Ders don’t consider themselves anyone’s customers. They don’t want any company to sell products and services directly to them as targets. Customer relationship management has no relevance to gen Ders. Here is a typical gen D tweet: “Never doing business again with –– bank totally [ruined] my account went to –– bank and switched accounts...you should do the same!” When such messages are retweeted again and again to thousands of people, the brand damage can be irreparable. If your brand generates a traditional narrative about its offerings, just one “influential blogger” can destroy your credibility by listing facts that contradict your claims. That refutation will be retweeted by millions until it becomes news and the traditional media report it. Disgruntled Gen Ders will recruit their friends to bring down a company. For gen Ders, a friend is “everyone they’ve ever known, or who is known by someone they know, or who they have no relationship with other than what appears to the rest of us to be the narrowest sliver of obscure commonality.” Gen D represents the future of the marketplace and the future of your firm. Chasing Gen D’s Love On the plus side, gen Ders avidly praise, support and buy the goods and services they like, such as Apple and Google products. They seek “radical authenticity” and insist on “trust, transparency and total openness.” Gen Ders turn customer loyalty on its head; they demand “your loyalty to them.” To establish relationships with them firms must offer rewarding, seamless customer experiences. For most, this requires a dynamic transformation of business processes, most notably digital operations, and it calls for the complete integration of a company’s business side with its information-technology side. Companies must teach employees game-changing mind-sets. Thanks in part to Frederick Winslow Taylor’s “scientific management” approach, most companies work to reduce costs, often at the expense of their customers. Consider Ryanair’s 2010 decision to charge passengers for using the restrooms and First National Bank of Chicago’s decision during the mid-1990s to charge customers $2 to speak with live customer-service representatives. Such decisions don’t endear companies to their customers.
The Limits and Risks of Big Data Organizations must take control of their data before the volume of the data becomes a ruinous hazard. Big data – an enormously large and complex collection of data sets – requires sophisticated management and analysis systems. The amount of data companies handle is expanding “from the terabyte to the yottabyte, which equals one septillion bytes (a septillion...has 24 zeros).” Companies use this vast information base, in part, to develop 360-degree views of their customers. A 360-degree customer view compiles a lot of existing data about a single individual. However, any one customer is not “a standalone amoeba swimming in a round petri dish.” What you need is a “1080 high-definition” view that involves data, customer intent and reorganized business processes. Focusing on data alone means exploring only the customer’s past actions. In this context, “data is who”; intent is “what and why”; and processes supply the “when and where and how.” To begin with, navigating enormous data presents certain problems. Companies must determine how to interpret data and must teach their customer service personnel how to use them. Companies that are drowning in information can even suffer “data suicide.” They must supplement big data with “syndicated market research, opinion inferred from voice and text analysis, and data aggregated from social media and websites.” Even a mountain of data can tell you only “who the customer was.” You must learn why customers seek your company, what to offer them, where they like to receive services and how to give them what they want. “Thinking in layers” can provide the context you need to understand and best serve your consumers. You can use it to identify your clients’ intent – why someone wants to do business with you. Intent encompasses clients’ personalities, “goals, desires, needs and preferences. You also want to understand and maximize your company’s intent so that you act in harmony with what it wants to achieve. “If data is memory, intent is desire moderated by judgment.” Astute judgment provides the power you need to understand your customers fully and to serve them best. Data accumulation for its own sake is self-defeating. Instead, use data to detect patterns about your customers’ future behavior. Establish hypotheses and test them to determine your customers’ intent. Combining data and customer intent will help you plot your “nextbest action,” so that you can “offer and promote the right thing to the right person at the right time.” Transform your processes to personalize your customers’ experiences so their encounters with your company are seamless, dynamic, fluid and “sticky.” Always ask, “How does my customer want to engage with me?” and adapt your processes accordingly. Vodafone answers these questions successfully. Each time a pay-as-you-go customer reloads a cellphone, he or she automatically receives a next-best-action message, a “‘daily special’ – or new individual offer” – to improve individual phone plans based on that client’s actual usage. Vodofone seeks to do all it can to “retain the customer.” The equation notes the customer’s intentions and objectives (“the who and the why”), includes Vodafone’s goals (“the what”) based on the customer’s intentions, and develops a specially tailored deal for each customer. Vodafone’s clientele loves these offers. Such an approach can bring generation Y and D customers to your company and can retain them.
The “Outside-In” Approach Senior management at Farmers Insurance decided to pursue the business-owners’ insurance market by supplying highly specific policies, each developed for individual types of businesses. Normally, this would demand extensive, time-consuming underwriting. For most insurance companies, this level of comprehensive work with specialty underwriters would make such a project prohibitively impractical. Instead, Farmers took an outside-in approach that leveraged its knowledge of its consumers. Farmers successfully developed a “seamless experience for insurance agents and their customers.” Farmers “went beyond the data to get to intent.” It focused on customers’ goals – for example, “Give me a reliable quote quickly”– as an intelligent strategy for developing context” within following the required “business rules and state and local regulations.” Farmers created a “customer-centric platform that captured its business intent and operationalized it.” This involved transforming its processes, including its involvement with its clients. “Liberating Your Organization” and Engaging Your Customers For most companies, this transformation requires changing how your culture views technology and IT. It challenges “the grips of channels and silos.” The problem is that computer programming – the bedrock of IT – is a complex mess at many businesses, mired in “zombie systems” that are impossible to change, “manual systems” using old workarounds and “rogue systems” filled with stopgaps created along the way. These systems are all flawed. The traditional approach that spawned them will never supply a solution. They will never change until personnel first change how they think about technology. Making such changes may require reorganizing certain functions. Start with the chief financial officer, since you can’t make radical changes without major investments in personnel and technology. To make this corporate change, the CFO needs to be willing to make “directionally correct decisions” to spend money in ways that are “validated by intermediate results.” Set up two new positions: chief process officer and chief customer officer. These changes will help you find new ways to engage customers for every interaction. Try to incorporate three basic principles: 1. “Democratize how you do technology” – Involve your staff in your firm’s technology by speaking the “language of business, not the programming language of the machines.” For instance, one goal might be to program computers to use business language. 2. “Think in layers” – Your technology must work across all “customers, products and jurisdictions.” 3. “Use analytics to optimize continually” – Never stop analyzing your customers or analyzing how you analyze. These changes will increase the positive expectations your customers have about your firm and its products or services, and will define what it means for them to deal with you.
In the past, companies ran their own marketplace activities and entirely controlled their products and services. Today, customers rule. Numerous factors have aligned to put the emerging generation of consumers in charge, most notably the power of technology and the Internet, which provide comprehensive product data instantly and enable consumers to buy anything any time, and to comment on everything all the time. The millennial generation – also called generation Y – runs commerce today. This generation followed generation X, which in turn followed the baby boomers. Members of gen Y grew up in a fully digital world. They are becoming the world’s biggest consumer group. They have huge expectations, are extremely demanding and have little patience for companies that displease them. If generation Y doesn’t want what you offer, doesn’t like how you operate or feels negative about your products or services, its consumers will quickly call public attention to every failing. Often this means enthusiastically wreaking havoc on the organizations they target. Many victims could appear under that “rest in peace” sign, including Circuit City and Borders. The first electronics superstore, Circuit City, went bankrupt in 2009. Former chairman Alan L. Wurtzel says it died because it failed to listen to its customers. Having 500 US bookstores did not protect Borders from bankruptcy and liquidation in 2011. Rick Newman of U.S. News & World Report notes that Borders’s sin was failure to adapt to changing customer expectations. “Customers are now in the driver’s seat,” write George Colony and Peter Burris of Forrester Research. Former GM CEO Rick Wagoner agrees: “We used to ‘own’ the customer. Now we hope and pray that they want to ‘own’ us,” he says. Firms that can’t regain control of their businesses will die, undone by the slow decomposition of their consumer base.
Gen Y has an outsize influence, in part due to its members’ tendency to broadcast their displeasure via online social networks. Companies can foment this dislike simply by too overtly trying to influence how gen Yers think, feel and act. If your gen Y target market learns that you’re campaigning at them, “they will object, they will drop you and they will tell their friends.” Generation D Gen Yers are frightening enough, but the next cohort, generation D, is downright terrifying. Gen Ders are the envoys of the looming “customerpocalypse.” If you fail them, Gen Yers might want nothing to do with your products or services. But if you get on the wrong side of ferocious gen Ders, they may go out of their way to bury your firm. Think of the D in generation D “as ‘doom’ or ‘death’ or ‘destruction’; gen D may well be the “discover, devour” and “demonize” generation. Unlike generation Y, which merely creates “suck sites” to denigrate the companies that disappoint its members, gen D challenges such firms and may put them out of business. While generation Y members may dislike the idea of being your targeted customers, generation Ders don’t consider themselves anyone’s customers. They don’t want any company to sell products and services directly to them as targets. Customer relationship management has no relevance to gen Ders. Here is a typical gen D tweet: “Never doing business again with –– bank totally [ruined] my account went to –– bank and switched accounts...you should do the same!” When such messages are retweeted again and again to thousands of people, the brand damage can be irreparable. If your brand generates a traditional narrative about its offerings, just one “influential blogger” can destroy your credibility by listing facts that contradict your claims. That refutation will be retweeted by millions until it becomes news and the traditional media report it. Disgruntled Gen Ders will recruit their friends to bring down a company. For gen Ders, a friend is “everyone they’ve ever known, or who is known by someone they know, or who they have no relationship with other than what appears to the rest of us to be the narrowest sliver of obscure commonality.” Gen D represents the future of the marketplace and the future of your firm. Chasing Gen D’s Love On the plus side, gen Ders avidly praise, support and buy the goods and services they like, such as Apple and Google products. They seek “radical authenticity” and insist on “trust, transparency and total openness.” Gen Ders turn customer loyalty on its head; they demand “your loyalty to them.” To establish relationships with them firms must offer rewarding, seamless customer experiences. For most, this requires a dynamic transformation of business processes, most notably digital operations, and it calls for the complete integration of a company’s business side with its information-technology side. Companies must teach employees game-changing mind-sets. Thanks in part to Frederick Winslow Taylor’s “scientific management” approach, most companies work to reduce costs, often at the expense of their customers. Consider Ryanair’s 2010 decision to charge passengers for using the restrooms and First National Bank of Chicago’s decision during the mid-1990s to charge customers $2 to speak with live customer-service representatives. Such decisions don’t endear companies to their customers.
The Limits and Risks of Big Data Organizations must take control of their data before the volume of the data becomes a ruinous hazard. Big data – an enormously large and complex collection of data sets – requires sophisticated management and analysis systems. The amount of data companies handle is expanding “from the terabyte to the yottabyte, which equals one septillion bytes (a septillion...has 24 zeros).” Companies use this vast information base, in part, to develop 360-degree views of their customers. A 360-degree customer view compiles a lot of existing data about a single individual. However, any one customer is not “a standalone amoeba swimming in a round petri dish.” What you need is a “1080 high-definition” view that involves data, customer intent and reorganized business processes. Focusing on data alone means exploring only the customer’s past actions. In this context, “data is who”; intent is “what and why”; and processes supply the “when and where and how.” To begin with, navigating enormous data presents certain problems. Companies must determine how to interpret data and must teach their customer service personnel how to use them. Companies that are drowning in information can even suffer “data suicide.” They must supplement big data with “syndicated market research, opinion inferred from voice and text analysis, and data aggregated from social media and websites.” Even a mountain of data can tell you only “who the customer was.” You must learn why customers seek your company, what to offer them, where they like to receive services and how to give them what they want. “Thinking in layers” can provide the context you need to understand and best serve your consumers. You can use it to identify your clients’ intent – why someone wants to do business with you. Intent encompasses clients’ personalities, “goals, desires, needs and preferences. You also want to understand and maximize your company’s intent so that you act in harmony with what it wants to achieve. “If data is memory, intent is desire moderated by judgment.” Astute judgment provides the power you need to understand your customers fully and to serve them best. Data accumulation for its own sake is self-defeating. Instead, use data to detect patterns about your customers’ future behavior. Establish hypotheses and test them to determine your customers’ intent. Combining data and customer intent will help you plot your “nextbest action,” so that you can “offer and promote the right thing to the right person at the right time.” Transform your processes to personalize your customers’ experiences so their encounters with your company are seamless, dynamic, fluid and “sticky.” Always ask, “How does my customer want to engage with me?” and adapt your processes accordingly. Vodafone answers these questions successfully. Each time a pay-as-you-go customer reloads a cellphone, he or she automatically receives a next-best-action message, a “‘daily special’ – or new individual offer” – to improve individual phone plans based on that client’s actual usage. Vodofone seeks to do all it can to “retain the customer.” The equation notes the customer’s intentions and objectives (“the who and the why”), includes Vodafone’s goals (“the what”) based on the customer’s intentions, and develops a specially tailored deal for each customer. Vodafone’s clientele loves these offers. Such an approach can bring generation Y and D customers to your company and can retain them.
The “Outside-In” Approach Senior management at Farmers Insurance decided to pursue the business-owners’ insurance market by supplying highly specific policies, each developed for individual types of businesses. Normally, this would demand extensive, time-consuming underwriting. For most insurance companies, this level of comprehensive work with specialty underwriters would make such a project prohibitively impractical. Instead, Farmers took an outside-in approach that leveraged its knowledge of its consumers. Farmers successfully developed a “seamless experience for insurance agents and their customers.” Farmers “went beyond the data to get to intent.” It focused on customers’ goals – for example, “Give me a reliable quote quickly”– as an intelligent strategy for developing context” within following the required “business rules and state and local regulations.” Farmers created a “customer-centric platform that captured its business intent and operationalized it.” This involved transforming its processes, including its involvement with its clients. “Liberating Your Organization” and Engaging Your Customers For most companies, this transformation requires changing how your culture views technology and IT. It challenges “the grips of channels and silos.” The problem is that computer programming – the bedrock of IT – is a complex mess at many businesses, mired in “zombie systems” that are impossible to change, “manual systems” using old workarounds and “rogue systems” filled with stopgaps created along the way. These systems are all flawed. The traditional approach that spawned them will never supply a solution. They will never change until personnel first change how they think about technology. Making such changes may require reorganizing certain functions. Start with the chief financial officer, since you can’t make radical changes without major investments in personnel and technology. To make this corporate change, the CFO needs to be willing to make “directionally correct decisions” to spend money in ways that are “validated by intermediate results.” Set up two new positions: chief process officer and chief customer officer. These changes will help you find new ways to engage customers for every interaction. Try to incorporate three basic principles: 1. “Democratize how you do technology” – Involve your staff in your firm’s technology by speaking the “language of business, not the programming language of the machines.” For instance, one goal might be to program computers to use business language. 2. “Think in layers” – Your technology must work across all “customers, products and jurisdictions.” 3. “Use analytics to optimize continually” – Never stop analyzing your customers or analyzing how you analyze. These changes will increase the positive expectations your customers have about your firm and its products or services, and will define what it means for them to deal with you.
No comments:
Post a Comment