Power of the Customer
The more information customers share with businesses, the more they get in return. This give and take delivers benefits to both parties.
The evolution of the digital age, in which myriad types of information are instantly available at anyone’s fingertips, has transferred the power of business relationships from the company to the consumer. To maintain competitive advantage in this new paradigm of customer power, both B2B and B2C organizations need to understand their customers and serve their changing needs, which happens when businesses develop better relationships with those customers.
“Ten, 20 years ago that relationship was held in a series of conversations and the intimacy built between consumers and the front line staff,” says Sherif Choudhry, head of Capgemini’s U.K. Digital Customer Experience unit. “But now we know that the level of discussion about an organization’s brand and services takes place in digital areas that five years ago nobody ever would have dreamed would happen.”
Today’s information-rich and data-aware buyers can quickly and easily access insightful and actionable details about your organization, its products and services, pricing, customer service track record, competitors, partners and suppliers—any time, any place and on any device. And there’s no turning back. “We are working today with firms that are listening, analyzing and then developing effective customer engagement strategies by joining up digital and offline, both small and big data, and developing a single customer view,” says Choudhry.
Balance of Power
Customers are expecting even more from your company—a mindset that should influence how you develop, market and deliver products. “There was a period when everybody was so focused on the data strategy, about getting the data right, getting it clean, getting it all put together in one place, they really didn’t have time to think about how to use it, or what the human inhibitions were that slowed the progress of data-driven decisioning,” explains Jeff Tanner, author and professor of marketing at Baylor University.
“What data gives us is the opportunity to capture [customer] preferences, and then respond to those better,” Tanner notes. “So it’s accelerated that learning process significantly and enhanced the value of communication and the relationship for both parties.”
With the power balance now in favor of the buyer instead of the seller, organizations must empower front line employees with an arsenal of relevant and insightful data and analytics, enabling them to deliver personalized experiences easily and rapidly.
Quid Pro Quo
To better meet their customers’ needs, companies must first convince them to fully express their wants and preferences in a range of areas, including product selection and service. While they are generally willing to give companies such data, they want something in return. It’s essential, therefore, to ascertain what individuals are willing to provide and how your company can encourage them to surrender “actionable information” with every interaction. (See “Volunteered Information.”)
“We focus a lot on the customer’s motivation to use a product,” Tanner says. “We don’t focus quite as much on the motivation to engage with us in our communications, so I think that our investments really need to center on that.”
Choudhry adds that participation is often the trigger that spurs customers to hand over personal information. “We already see that in certain generations, they’re willing to give that data if they feel they want to participate [for example] in your summer club, or they want to participate in your social media forum on music. They may even become advocates of your brand, creating networks of powerful social influence.”
Today’s rapidly evolving, data-focused marketing environment is forcing business leaders into a new mindset. “We’ve had centuries of managers who had to make decisions without solid information, and so we’ve come to value things like action over reflection that aren’t necessarily, when you have the data, the best things for the organization,” Tanner says.
Data’s emerging and now almost predominant role in marketing shows nothing less than a major cultural change. “It is a shift to valuing data, to valuing the experimental design and control that brings rigor to the decision making, and really values the people who have the skills to engage in data-driven decisioning,” Tanner says.
All of this comes as a big shock to managers who have spent their careers trying to escape working with numbers. “We have whole generations of marketing leaders that chose marketing to avoid math,” Tanner says. “If they were interested in data, they ended up in finance, economics or accounting.” He notes that there’s now a “familiarity level that has to be acquired for marketers to feel comfortable and capable in data-driven business.”
It’s also critical for leaders to remember that it’s not only current and potential customers who are watching. As your company collects data, it will learn more about its competitors. And as you go about your business and put campaigns on the Web, for example, you make other companies aware of your own strategies. In fact, social media and digital channels give any company the ability to observe and collect useful information including praise, complaints, sales tactics, purchasing plans, prices, service quality and other key issues.
The Customer is Empowered. So is the Business.
The customer is now in charge. Social media and other technologies have empowered them, giving them more ownership over their data and their relationship with businesses. They also have more information than ever when they make buying decisions. This shifts personal data access and purchasing power into the customer’s hands, and organizations need to figure out how to leverage it.
By making use of the data, businesses gain more power by developing better relationships, improving marketing effectiveness, and meeting their customers’ needs and expectations. Ultimately, it’s a win-win all around.
John Edwards has covered the technology industry for more than two decades.