Instagram vs. Kodak: Smart Customers Sidestep Stupid Companies

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When a pre-revenue company with about a dozen employees gets a $1 billion Silicon Valley payday, tongues wag. Did Facebook pay too much for Instagram -- the popular photo-sharing app that lets users take and customize pictures with their phones -- or not enough? Don't know.

The bigger question is why a larger, established company like Kodak didn't invent Instagram, or an app like it. They have the resources, the talent and the opportunity. What is it that stalled -- possibly fatally -- this once-smart company?

The short version is that they struggled unsuccessfully to adapt in the face of a changing digital world, filing bankruptcy even as photo-industry upstart Instagram was growing at the rate of about one million users a month.

But the real story is much bigger. Kodak, like hundreds or even thousands of otherwise successful companies, has yet to grasp this critical point: Digital innovation is enabling customers to act smarter than the firms that wish to serve them.

Unfortunately, we're guessing that about a third of Fortune 500 executives are running the next Kodak. They just don't know it yet.

Your customers' changing expectations have forever shifted the ways they expect to be treated.

A growing percentage of customers are nearly always connected. They increasingly demand access to products, information and services from wherever they are, whenever they want.

In many cases, they also want these products and services customized, with the service they get taking their preferences and desired experiences into account -- and get frustrated and impatient when companies can't meet these expectations.

Unfortunately, most established firms aren't prepared for this. Many keep data in silos, and don't use it to benefit their customers. Different parts of the company treat customers in different ways (like sales and marketing vs. customer support). They haven't leveraged technology or shifted business processes or products in a manner that permits intelligent use of customer insights.

In short, these companies act stupid.

To survive in the face of these smart, connected and digitally adept customers, established firms need to understand what's happening, and reinvent themselves to stay alive.

Four disruptive forces are altering the basic ground rules for business competition.

You already know that digital technology is getting smaller, cheaper, more powerful and more prevalent. You also know that almost everything and everyone can now be connected wirelessly. But you probably don't realize the degree to which these four disruptive forces work together to make it easier for customers to act smarter.

1. Social Influence brings social networks between a company and its customers, disrupting the customer relationship lifecycle;
2. Pervasive Memory is a result of all the data accumulating in huge volumes as we interact through digital devices;
3. Digital Sensors are the trillions of devices that see, hear and feel what is happening in our world, and;
4. The Physical Web is starting to allow us to browse, bookmark, tag and manipulate the physical world.

With thousands of entrepreneurs and bright developers leveraging these forces to provide your ever smarter customers with ever better, ever more disruptive tools, it's a certainty that game-changing innovation will come to your industry -- if it hasn't already.

The speed of this change -- the neck-snapping velocity that drove Instagram from zero to 30 million customers in under two years -- is happening faster than management teams have reacted. This is somewhat understandable. After all, larger organizations are slower to change.

According to U.C. Berkeley's Haas Business School Entrepreneurship Professor and former Sony executive Mark Coopersmith, "While large corporations talk about driving innovation, their structure and systems often inhibit it. Many don't allow -- much less encourage -- the real-time customer experimentation, fast product iteration and business model evolution that nimble start-ups embrace daily. In the face of smart customers, acting like this isn't just stupid, it can be fatal."

Without the inertia of larger, established companies, smaller companies tend to be nimbler and more innovative. Yet when a bigger company "gets it" -- such as Amazon, Apple, USAA, Zappos, and others -- they dominate. Their markets are forever changed.

The answer? Simple: Be the first to disrupt your industry. It's going to happen anyway and it's much more profitable (and way more fun) to be the disruptor. Just ask Instagram co-founders Kevin Systrom and Mike Krieger.

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Shouldn’t it be able to sense when you’ve gone to sleep?

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I was reading David Pogue’s NY Times review of Jawbone’s Up wristband, a $100 health monitor you wear on your wrist – 24/7 – to track things such as sleep patterns, exercise habits, calories burned, and more. While the device itself is both a marvel of sensor technology and a (very) early-days preview of What’s To Come, what stopped me in my tracks was his casual assessment of the device’s lack of intelligence in one particular area: sensing the wearers sleep state.

“You have to press the metal button on the end to let it know that you’re going to bed, though, which is a little odd. Shouldn’t it be able to sense when you’ve gone to sleep?”

It happens I agree completely with Mr. Pogue’s comment; my wife and 16 year-old daughter agreed the lack of wireless and the button-pushing is a little lame.  It’s this implication that should capture the attention of companies everywhere – not just Mr. Pogue’s opinion, but that of a suburban mom and connected teen: Shouldn’t it be able to sense when you’ve gone to sleep?

After all, our phones already tell us what sales occur around us, and which friends are close by. In fact, many of us just tell our phones what we want and they comply, by setting appointments, finding contacts or digging up information. And we’re starting to expect our customer experiences to be just as intuitive and seamless, no matter what “channel” we use to interact with a company.

In this context, the premise of the talking, listening and apparently “intelligent” television discussed by Bruce Kasanoff in his November 8^th story “Mommy, Why Won’t the TV Answer Me?” doesn’t sound at all like fiction. It sounds like the reality that companies should be scrambling to create in their industry, before a competitor does.

As a result, “Bob, why can’t our ____________ be smarter?” is a question you should be asking today. Because very soon, this level of embedded intelligence and seamless customer experience will not just be expected but demanded by increasingly smart, decreasingly patient and highly connected customers across all industries and customer segments – including yours.

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Did You Know You’re Competing With Apple?

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At MCorp, we’ve conducted customer experience research with thousands of customers for dozens of companies. Across the range of business buyers and retail consumers, we’ve heard from high net-worth investors, Gen-Y shoppers, baby boomers and small company CEO’s, and everyone in between.

And in the last few years, we’ve seen that the ways customers interact with and think of companies – and the experiences they expect in return – is changing. In some cases, dramatically. Yes, technology is a big piece of this change. (You can see our thoughts on that here, in our on-demand thought-leadership webinar titled “Disruptive Technologies vs. Customer Experience.”)

But a bigger, interrelated piece is around customer expectations. Think about what your expectations are as a consumer when you deal with companies like Amazon, Disney or Virgin America.  How are they met?

Across the board, we’ve seen that customers aren't just comparing the experience of dealing with you to the best in your industry – which they are, of course – but they’re comparing you against the best experiences in the world.

• If Apple can make my mobile computing experience easy, why can’t you?
• If Virgin America can let me tailor my in-air experience (delivering food, music, movies, television when and how I want it) why can’t other airlines?
• If Amazon can get me books – heck, anything –  in two days for little or no cost, or Zappos will take 10 pairs of shoes back – and pay for the shipping – why can’t you?

Why should a B2B distributor care what Amazon does with retail customers?

While the trend we’ve seen emerging in the last few years has sobering implications for all companies, the shock has been (and will be) greatest for companies that sell to other companies. Why? Today, not only customers bring expectations from experiences like these with them when they shop for other consumer products, business buyers are increasingly bringing these expectations to work as well.

It doesn’t matter that you sell software, or cars, or that your customers are consumers or business buyers. Customer expectations of experience are based on their perceptions of what experience should be. And just as those expectations are getting higher every day, the level of patience with and forgiveness of poor experiences has dropped to near zero.

This should alarm all organizations – even companies such as health plans, utilities and telecom service providers, which often act like they’re insulated from outside competitors.

For some of these near-monopolies, not everyone has an option today. But as touchpoints, customers and your competition get smarter, new options continue to arise – and eventually they will for everyone, from international phone calls and TV on your computer to alternative power providers delivering “green electricity” over the entrenched utilities infrastructure. As that happens, smart, unfettered customers will leap at the alternatives.

And it’s not just consumers that are intolerant of what they perceive as stupidity or indifference on the part of the companies they interact with. Nor are consumers the only ones plugged into social media, highly aware of competitive options, and willing and able to tell others of their bad experiences. Today, B2B buyers are much more comfortable demanding more. After all, they’ve been conditioned to expect it.

As a consequence, no matter what business you’re in, not only are you in unexpected competition to deliver on customer experience against companies like Amazon, Apple and Disney, but any missteps on your part will be broadcast more widely, with greater amplification, across more channels, than ever before.

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Redefining Customer Experience: CRM, VRM and “Disruptive Technologies.”
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Why Understanding Your Customers is the First Step to Delivering a Better Customer Experience

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There are myriad reasons why companies treat customers poorly. One of the most common, costly – and most easily resolvable – is a lack of understanding around customers themselves.

This gets at the core of two basic business questions that many companies either don’t ask or don’t share effectively across silos and groups internally.

Who is our customer?

Knowing your customer means having a clear picture (age, income, expectations, needs and beliefs, for example) articulated in your customer experience strategy, and in the minds of your employees. Not knowing means that you will consistently fail to give your customers what they want at any given point, and will fail to grasp opportunities to satisfy or delight them, much less increase profits from them.

One tool that can help create this “vivid picture of your customer” is research-based personas. Long used in software design, companies such as Best Buy use clearly defined personae to make significant changes to customer experience in areas such as store design, products, employee training and more.

What is she worth to us?

Most companies have customers that fall into one of a series of “value buckets” or segments. Typically, the top 20 percent will deliver the lion’s share of profit, just as the bottom 20 percent will consistently cost you more to serve than the profit you can make on them.

Then, falling into two or three “middle” buckets, you’ll have customers that could be worth more – some, a lot more. Not knowing this means you’ll unknowingly push your most valuable customers away, while potentially expending massive resources to keep a customer you’re actually losing money on. Segmentation strategy through the lens of CLV (Customer Lifetime Value) is one of the most common approaches to understanding customer value.

Are you spending too much to better serve your least valuable customers?

Who exactly is your customer? And what precisely is their value to you over time? Without definitive answers to these questions, everyone in your company is essentially flying blind when it comes to driving profits and delivering good customer experiences.

Failure to effectively answer them means lots of things, none of them good. The most obvious is an inability to keep the customers that you’ve worked so hard to acquire. In short, a lack of customer understanding at the individual level makes it hard for your company to effectively give your customers what they need, when they need it. This means consistently failing to give customers what they want at any given point, and failing to grasp opportunities to satisfy or delight them.

We know that not all customers are created equally. Some are simply worth more than others; that’s why it’s so important for a company to answer these questions.

Not knowing which customers are in which buckets means that you might indiscriminately dissatisfy all your customers, not just those who may have little value, but those whose value to your company is significant. Or, you’ll over-invest in delivering experience to customers you’ll never make money on.

Balancing inside-out touchpoints, channels, products and services with outside-in attitudes, perceptions, wants and needs is a critical output of customer experience management, and will help your company to deliver the right experiences to the right customers at the right times. But you need to start by understanding who your customers are. Not just in a broad sense, but also in a segmented, prioritized sense.

The number of companies that have a hard time answering this question – most of whom have the resources and the data to figure it out, continually surprises us. Maybe marketing is using segments to target promotions, or personas are being used to design web sites. Or finance tracks customer value. Or all of the above. But when it comes to a shared view of how to serve key customers across groups or divisions, there’s often no clear picture.

Even though not all customers are created equally, they all have high expectations and strong opinions. Effectively managing their expectations can only occur after a clear understanding of what those expectations are, is articulated.  

There’s little argument when it comes to the importance of improving and better managing customer experience. But when it comes to actually doing so, looking at your customers through the dual lenses of “inside-out” and “outside-in” is where you need to start.  

After all, if you don’t know who your customers are, you won’t know what they need. And if you don’t know they need, you can’t give it to them.

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The Growing Company Advantage: Smarter Customer Experience

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It’s surprising how many large companies seem to get further and further away from the things that made them successful in the first place as they grow – like their customers.  In the environment of  “enterprise,” systems, cultures, metrics and rewards tend to focus on activities and transactions rather than on softer measures such as perceptions and relationships.

It’s with some justification that executives at smaller companies believe they are closer to their customers,  and feel that they are more deserving of their customer’s loyalty, than executives at larger companies.

In general, people feel the same way, noticing that the experience of being a customer for a smaller company tends to be better than the experience of being the customer of a big company.

Why does it seem so hard for big companies to serve their customers well?

You’d think that larger companies, with more resources, greater customer awareness and dominant market share would win this battle hands-down. After all, most big companies started as small companies. And they got bigger because – in theory – they were better able to understand their customers and their needs than their competition. At some point, they had to have had an intimate understanding of customer needs, and done a good job meeting them. Voice-of-the-customer (VoC) wasn’t an abstract research input into the customer analytics dashboard, but something management listened to and often lived with every day.

Yet as growth occurs, the distance between executives and their customers grows as well, and companies tend to turn away from customers towards things like operational efficiencies and product development.

The growing company advantage: A focus on smarter customer experiences

It’s no secret that the ways customers interact with and gather information about companies is changing. Business buyers or consumers, they demand more and get it from more places than ever.

Our world is at the early stages of a shift in customer relationships, technology and innovation. And as this shift continues, smart customers are leveraging opportunities to get smarter – and are looking to the companies they deal with to help them do so.

But big companies can’t easily bridge the multiple internal silos that deliver experiences. In fact, by their own admission, it’s the number one issue they have. Employees don’t have access to customer histories, much less their wants and needs. Their websites don’t remember what people purchased, what they did, where they looked, or what interests them.

With many companies, the experience of customers dealing with them across departments or divisions feels broken, if not downright schizophrenic. Customers are asking themselves: “Why can’t these experiences be smarter?”

And of course, they can be. This creates a significant opportunity for smaller, fast-growth companies, when it comes to leveraging the ever-more-powerful-and-pervasive technologies available to them to see, to hear, to learn from, and to speak to their customers in new and ever more intelligent ways. And in the process, delivering customer experiences that are not only tailored to customer needs, but have the ability to evolve, drive new sources of revenue, and create the kind of loyalty that most companies only dream of.

Companies like these will be leveraging disruptive forces to automate the process of building stronger relationships, sell more products and simplify supply chains through real-time, crowd-sourced social CRM data and opinion-gathering, intelligent, interactive touchpoints and products and more, giving their customers exactly what they want, right when they want it, wherever they are.

Yes, the challenges that exist in managing the transition from small and customer-centric to bigger and customer-centric are significant, but not insurmountable. In fact, we believe the companies that are most successful at leveraging these innovations to learn from their customers, that eliminate practices that waste their time, sense customer needs and simplify their lives, are those that will be the big companies of tomorrow.

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Disruptive Technologies vs. Customer Experience: Thought Leadership Webinar

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Last December, Bruce Kasanoff and I presented a thought-leadership webinar with Bob Thompson, CEO of CustomerThink.

It was the first time Bruce and I publicly and jointly articulated our long-held view that emerging, disruptive forces driven by technological innovation will increasingly impact customer experience and the touchpoints that drive it. But it won’t be the last.

When it comes to customer experience, we see that change is accelerating. Seven years ago, there was no Facebook to link friends and spread word-of-mouth like wildfire. Just over four years ago iPhones didn't exist, and neither did the 350,000 Apps they have already spawned.

Unsurprisingly, customers are eager to embrace the innovations that “disruptive technologies” like these create, and successful customer experience strategies need to take this into account.  Why? Because customer relationships and the ways that customers interact with companies are in the process of changing forever.

Sadly, many companies don’t have a clear picture of all the ways they touch their customers right now –let alone how to do so more effectively, or the avenues that will be available to them in the near future.  

Disruptive, innovative
technologies are
forever changing
the ways customers
interact with companies.
Again.

This webinar includes specific steps companies can take to better manage customer experience today, while also getting an eye-opening perspective on the forces likely to separate market leaders and losers tomorrow. Topics include:

• The six most disruptive forces at work, and how they create enormous opportunities – or dramatic threats – depending on whether or not companies are prepared;
• How these technologies allow companies – and their competitors – to provide experiences that have never before been possible;
• How executives can construct a business case for empowering customers to get what they want, when they want it;
• Why understanding social influence is more relevant (and more important) than social media;
• How executives can use this knowledge to adjust strategy appropriately to prepare for and harness, – these disruptive technologies

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The Growing Company Advantage: Smarter Customer Experience
Bridging the Brand and Customer Experience Gap

 

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Differentiating on Customer Experience: Steps to Take Today

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Picking up on my last post of 2010, customer experience isn’t defined by your company, but by how your organization is perceived by your customers when they do business with your company.  Today, many companies don’t really understand how they’re perceived by their customers. And it’s hard to do, when they often don’t understand customers as segments or groups, much less “know” them as individuals.

This isn’t surprising, since the process of Customer Experience Management can be complex. But just because it isn’t simple doesn’t mean that it can’t be straightforward.

To differentiate on experience, start today by examining “what is” – your customers, your interactions with them, and the people, processes and supporting technologies that drive these interactions –  to see what (if anything) is “broken,” and where. An understanding of your touchpoints and customer needs mapped to their journey (Touchpoint Mapping or Customer Journey Mapping) can also help you understand “what must be” to deliver the right touchpoints to the right customers at the right time, increasing engagement while driving loyalty and profitability.

For those organizations that really want to transform customer experience, this also means understanding “what should be” in the customer relationship, moving well beyond tactical fixes and incremental process improvements. It means you’re already fixing (or have fixed) what’s “broken”, and have a pretty good idea of what your customer’s want and need today – and are making sure your touchpoints effectively meet these needs, while driving customers closer to your company.

Your Interactions are at the Heart of Customer Experience Improvement

Viewed from the customer’s perspective, these interactions and their effectiveness at meeting (or not meeting) customer needs are at the heart of experience improvement, and can serve as the foundation for a customer experience improvement roadmap.

Customer centricity means interacting with your customers on their terms as well. Most of the time, companies still force customers to do business with them on their terms – carry their “loyalty card,” buy when they’re open and spend significant time repeating the most basic information – name, account numbers, passwords, and more – every time they transact, on the web, over the phone and in-person. Though the list of “poor experiences” can be long, the opportunities for identifying and prioritizing improvements based on customer perspectives and business goals are typically significant.

Despite 15 years of ever-greater technology investments meant to solve this issue, companies still struggle with internal silos, data quality and an inability to understand or deliver the kinds of consistent, well-defined customer experiences that build brand, drive customer loyalty and create barriers to competition. This is also why the strategy of differentiating on experience is going to be a challenge for many companies.

Foundational Capabilities and Core Competencies

Many companies don’t have a complete picture of their existing interactions or touchpoints today—even the ones they control. To improve them, your organization must evaluate how your brand touches, influences and serves customers by identifying, measuring and understanding the critical touchpoints that drive desired customer experiences and business results.

The foundational capabilities and core competencies required to accomplish this – ranging from customer segmentation and profitability analysis and regular Voice-of-the-Customer (VOC) programs to the ability to manage the business based on relevant, experience-driven metrics or Key Performance Indicators (KPIs) – are still goals more than reality for many companies.

But, they are goals well worth pursuing now. In fact, I’d suggest these might be the most important things you can do in 2011 to prepare for the future of your business, your customers, and your competition.
Because unless you have a clear picture of what customers want and need – and an understanding of how key events and individual customer touchpoints drive experience today – it’s going to be pretty hard to differentiate on customer experience tomorrow.

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Customer Experience in 2011: The Penalties and the Payoffs

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As the end of 2010 approaches, we’ve been thinking about the year ahead and – unsurprisingly – where and how we see customer experience fitting into the strategies and activities of companies as we move into 2011. With seedlings of hope sprouting on the economic front, 2011 has the potential to be a defining year for the rest of this decade.

However, this hoped for expansion won’t be fueled by massive increases in spending on the part of businesses or consumers. It’s going to be a pitched battle for customers and share of spend, driven “the old fashioned way,” through acquisition, retention and penetration. This means getting new customers from your competition; finding new and better ways to sell additional products and services to all; and re-engaging the customers you have, keeping them longer and increasing their value.

The Competitive Battleground: Customer Experience

The good news is, both companies and their customers have clearly defined what’s going to win this war: in a phrase, Customer Experience. It’s one of the most reliable ways to attract and retain more—and more profitable—customers, most of whom say they’ll pay more for better experience, even in a down economy.

The majority of companies understand this as well. In Forrester’s report “The State of Customer Experience, 2010,” 90 percent of executives surveyed said customer experience is either very important or critical to their future plans. At the same time, 80 percent of these respondents further state that they plan to use customer experience to either differentiate from their competition (67 percent), or differentiate from all companies – across any industry (13 percent).

Here’s where it might get ugly. Simple math (and decades of B-School cases) dictates that there will be many more losers than winners. Obviously, only a handful of firms – at most – can effectively differentiate on customer experience in any given market.

The Penalties and the Payoffs

The critical nature of succeeding on experience is increasing.  When the experience isn’t up to par, customers are voting with their feet – and they’re doing so faster than ever. In 2009, 86 percent of consumers said they’d stop doing business with an organization after a single bad customer experience, up 27 percent from 4 years prior.

This should alarm all organizations – even companies such as health plans, utilities and TV service providers, which often act like they’re insulated from outside competitors.

Yet as difficult as it may seem, it’s a mountain well worth climbing; the payoffs are significant. When it comes to keeping customers, Aberdeen Group notes that best-in-class customer experience organizations have 75% greater customer retention and 65% better customer satisfaction than the average company. And companies that pay attention to customer experience get more customers, too, with over 300 percent more leads in their sales pipeline that result in closed business.

Senior executives of these best-in-class companies are clear on the pressures driving adoption of Customer Experience Management programs, and the business benefits they expect. These drivers are led by the need to increase customer satisfaction and followed by acquiring more profitable customers, with retaining more profitable customers and building brand loyalty rounding out the top four.

We’re guessing that about 20 percent of those companies that wish to differentiate on customer experience will actually attempt to fulfill their vision, though obviously not all will succeed. After all, embracing—and profiting from—experience as a strategic differentiator starts by accepting that customer experience isn’t defined by your company.

Experience lives in the minds, attitudes and perceptions of your customers, and is based on how your organization is perceived by them when they do business with your company. That’s why if you can already measure customer experience (and improve it) based on these perceptions, you’re already ahead of the competition in the race to differentiate. And if you can’t, you should probably get started today; the penalties for inaction are significant.

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Did You Know You’re Competing With Apple?
Why Understanding Your Customers is the First Step to Delivering a Better Customer Experience
Differentiating on Customer Experience: Steps to Take Today
Customer experience isn’t a function or a department – it should become the center of everything you do.
Connected Devices Wreak Havoc on Retailers, Foreshadowing a New Era in Customer Experience (and Control).

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Connected Devices Wreak Havoc on Retailers, Foreshadowing a New Era in Customer Experience (and Control).

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'Tis the season…to get the best freakin’ deal you can.

If Christmas 2010 is any indicator, the average customer will have a great deal more to say about what they pay, who they pay it to, as well as where and when they pay it, in the years ahead.

The holiday season has long been a key indicator of overall retail sales’ strength, with over a quarter of all retail sales for the year occurring in this period. Starting with Black Friday and Cyber-Monday sales and online deals and continuing on through December, retailers fight for the largest chunk of the average household’s $1,700 share-of-gift wallet they can.

With billions in revenue at stake, big bucks are spent across all media to drive buyers to websites and retail stores every year. But what happens when your advertising succeeds in getting customers into your store…and they buy IN your store… but buy FROM someone else?

Today, customers are using smart phones to “remotely access” savings wherever they are. 

As described in “Phone-Wielding Shoppers Strike Fear Into Retailers”, a front-page story in yesterday’s Wall Street Journal and the most popular article online, there’s a retailing revolution in progress. Dubbed a “new era of price transparency” by Wal-Mart Chief Executive Mike Duke, the retailer’s traditional advantage – getting customers into their stores to buy – is quickly eroding.

After all, customers can now try your product (try it on, see it, touch it, listen to it) and decide to buy – then scan your price tag and find a cheaper product online. Adding insult to injury, they buy it on the spot (free delivery, on your customers front porch the day-after-tomorrow!).

Even more interesting, some of these Apps can also tell you – by tying in to inventory and pricing databases – how much money you can save on the exact same product by walking just a half-block to a competitor. If this trend continues (and it will) almost every retailer has the potential to be fighting a low-price battle which simply cannot be won by everyone.

Customer experience is going to look a lot different tomorrow. 

The ability of customers to get this kind of real-time pricing and availability data is a variation on one primary theme: bridging the gap from the real world – in this case, the world of retail experience – to the virtual, online world. To many, this shift might seem like science fiction, or a problem to deal with a few years down the road. But believe me – it’s real and it’s happening now.

Just one year ago, consumers using mobile devices on Black Friday accounted for only 0.1% of visits to retail websites. This year, Coremetrics reports that the number has jumped to 5.6%, a 50-fold increase in 2010 over 2009. And this is just the beginning. Over the next five years, the amount of merchandise compared, purchased and analyzed via mobile phones is going to explode.  

“Remote Access” – the ability to support on-the-fly exchange of information between customers’ devices, corporate systems and others – is just one of the “disruptive forces” driven by integrated, mobile technology that we see dramatically changing customer experience.

Growing 10-times faster than any other previous technology, the proliferation of the ever more powerful, interconnected mobile devices currently carried by nearly 137 million customers in the United States alone, is changing the face of customer experience forever.

Over the internet, through mobile devices, and on desktops, this new transparency combines with unprecedented access and mobility to ever more frequently make customers smarter about pricing, options and competition than many of the companies they buy from.

Are you looking at how this will affect your customer’s experience today…? 

Together, these trends are indicative of the changes happening everywhere. Whether you’re B2B or B2C, in healthcare, financial services, retail or anywhere between, the ways that you interact with customers tomorrow is going to look a lot different than it does today.

Yet just as customers are getting smarter, many companies still make their customers jump through hoops, driving them into the arms of their competition. Forgetting 90% of what customers tell you? Chasing after transactions instead of building relationships? Making customers tell you the same thing two, three or more times? That’s not just bad business. In this world, it’s potentially suicidal.

Disruptive forces like this are driving a flood of customer experience innovation that will cause headaches for companies in every industry – creating huge opportunities for those that recognize and react, and significant threats for those that don’t.

Read More
Did You Know You’re Competing With Apple?
Customer Experience in 2011: The Penalties and the Payoffs
The Growing Company Advantage: Smarter Customer Experience
Disruptive Technologies vs. Customer Experience: Thought Leadership Webinar
Redefining Customer Experience: CRM, VRM and “Disruptive Technologies.”

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Redefining Customer Experience: CRM, VRM and “Disruptive Technologies.”

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Last Thursday morning, Bruce Kasanoffand I did a webinar for CustomerThink’s Thought Leadership Webinar series titled “Disruptive Technologies vs. Customer Experience: What You Must Do Now to Prepare.”  The impetus for this webinar was a series of ever more engaging conversations Bruce and I have had over the last few months on the future of customer experience.

It’s no secret that the ways customers interact with, and gather information about, companies is changing. Businesses or consumers, they demand more…and get it from more places than ever.

But Bruce and I believe that our world is at the early stages of yet another shift in technology, where innovations and the disruptive forces they unleash are going to affect almost every industry (and most businesses), if they haven’t been affected already.

These disruptive forces and the technologies that drive them are changing the ways customers interact with companies – profoundly affecting customer relationships and experiences, and the way products and services are sold and consumed. In our webinar, we outlined six of these forces, and articulated ways that companies can begin to assess and harness them today.

Yet as significant as these changes are, the real story is how control of the customer relationship is shifting from companies to customers.

Customer Relationship Management (CRM) is about companies trying to manage their prospect and customer relationships.  Even though billions have been spent on CRM over the last 15 years ($9+ billion in 2008 alone), overall customer satisfaction has remained flat. Why? Because CRM primarily benefits companies, not customers. The recent rise of “Social CRM” doesn’t do the job much better. That’s companies saying, “Hey, how can we manage our customers now that they’re using social media to share more information about themselves?”

Vendor Relationship Management (VRM) is the flip side of CRM. First coined in 2006, VRM has the power to give people – individuals who recognize their value as customers, and wish to better define the terms of their relationships – the software, tools and ability to manage their vendor relationships, as well as their interactions and experiences.  Instead of being “managed” by the companies that serve them, customers can become truly empowered in the marketplace. 

In a recent post on his blog titled 1toEverything: innovation through a customer’s eyes, Bruce adapts the IDIC framework (Identify, Differentiate, Interact and Customize) first created by Don Peppers and Martha Rogers of One-to-One fame to frame the customer’s view of this ever more interconnected world. Basically, this is the framework for mapping the customer experience that customers want.

Here’s where it gets really interesting.

His post – and the ideas behind it, including the foundation for our webinar – has clearly struck a chord. As Don Peppers noted in his comment on Bruce’s post, “…applying IDIC to questions that go beyond traditional CRM and 1to1 marketing issues is a great idea, and I immediately got your logic. It makes great sense, and your illustration is perfect.”

Then Doc Searls, co-author of The Cluetrain Manifesto, and creator of Project VRMat the Berkman Center for Internet & Societyat Harvard University, picked up this connection in a comment, and ran with it in his post “1 to Every.” In it, he says: “It’s still early. What we have so far is just the beginning of what we expect to be quite huge by the time it becomes established.”

He’s right. It is early. But this is a turning point in the ways companies and customers relate. And those companies that really get this are those that will have a chance to actually “differentiate” from their competition on customer experience.

Which is where these perspectives intersect.

If we look at CRM as the corporate view of customer relationships, and VRM as the customer view of their corporate relationships, the real promise of “customer experience” as a strategic discipline comes into focus: Straddle these two perspectives and embrace the tools they enable to leverage disruptive innovation in ways that benefit everyone.

Today, many companies are working to fix customer experience one touchpoint at a time. And while this is very important – what’s broken today should be fixed – transforming customer experience means going well beyond tactical fixes and incremental process improvements. It means looking at ways to leverage experience to blow the competition away, and truly “wow” customers.

After all, in a world where technology is empowering customers to be smarter about how they interact and deal with companies, companies need to get a lot smarter about how they deal with their customers.

If they don’t, well, they’re just being stupid.

Read More
Did You Know You’re Competing With Apple?
Why Understanding Your Customers is the First Step to Delivering a Better Customer Experience
The Growing Company Advantage: Smarter Customer Experience
Shouldn’t it be able to sense when you’ve gone to sleep?
Redefining Customer Experience: CRM, VRM and “Disruptive Technologies.”

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