Harvard Business Review / Mark Bonchek and Gene Cornfield / APRIL 28, 2016
Every company these days seems to be either contemplating or pursuing digital transformation.
Most cite the need to keep up with disruptive and well-established competitors. But perhaps this focus is too narrow. We believe the greatest challenge to companies today is not keeping up with their competitors, but with their own customers.
One reason is that individuals are transforming to digital faster than organizations. Think for a moment about people as tiny enterprises. They’ve redesigned their core processes in the area of procurement (online shopping), talent acquisition (marketplaces), collaboration (social networking), market research (peer reviews), finance (mobile payments) and travel (room and ride sharing). Have you reinvented your core processes to the same degree?
Customers’ expectations are also more liquid and no longer based on industry boundaries. Customers – whether consumers or business buyers – don’t compare your customer service to that of your competitors, but to the best customer service they receive from anywhere. The same is true for their expectations of your web site, mobile app, loyalty program, branding, and even social responsibility.
So how can you keep up with your customers? You have to start thinking like them.
Customers don’t think in or; they think in and. You have to transcend trade-offs.
The adage used to be that you could pick any two combinations of “cheap, good, or fast.” But today’s customer doesn’t want to make tradeoffs. They want it cheap, good, and fast. As leaders, we are accustomed to thinking of business being about making tough decisions between competing objectives. But we need to think more like our customers. Instead of focusing on how to make tradeoffs, we need to focus on how to transcend them.
Some of the tradeoffs that are most suited to digital transcendence are:
- Big and small: Combine the speed, agility and creativity of being small with the scope, scale and influence associated with being big.
- Complex and simple: Manage the systems and processes to run a global business while creating simple and elegant experiences for customers.
- Global and personal: Achieve universal consistency and reach around the world while delivering relevant, tailored interactions to every customer.
Customers want to be empowered, not controlled. You have to act with empathy.
Business used to be about getting customers to do what you wanted them to do. But customers don’t accept this any more. They don’t like to be told what to do. They want relationships based on reciprocity, transparency and authenticity. If you want to keep up with your customer, you can’t be focused on getting them to do what you want, but instead on helping them do what they want.
This evolution from control to empowerment means a change in the basic building blocks of customer engagement.
- Funnels used to be linear processes that moved customers from one stage to the next. There was no going back until a sale was either won or lost. Now these funnels have become Escherian journeys, fluid, customer-led and multi-dimensional. It’s not about capturing and converting towards a transaction, but connecting and collaborating around a shared purpose.
- Channels used to be pipes connecting you with your customer, carrying carefully crafted messages to passive audiences. Now they are experiences connecting customers to their own desires, and communities connecting customers to each other. It’s not about promoting the features and benefits of your product, but building empathy and understanding of each customer’s intent – and helping them achieve it – as part of an ongoing relationship.
Customers don’t think in straight lines. You need to be non-linear.
To keep up with your customer, you have to let go of linear thinking. Customers today expect you to be where they are, deliver what they want, when they want it, and how they want it. If they’re browsing your website on their laptop, they will expect that when they next come to your site from their mobile device or tablet, or talk to a sales person in your store, branch or call center, you will pick up right where they left off. Business has become like that old game of Twister. You have to be flexible if you are going to win.
This requires rethinking and redesigning core disciplines:
- Strategy has to go beyond analyzing markets, making plans, and forecasting the future. Strategy also has to build capabilities, transform culture and architect for constant change.
- Campaigns have to be more than one-way communications for one-time responses. They need to initiate and expedite personalized journeys as part of ongoing conversations.
- Personalization needs to go deeper than looking simply at what someone buys. It needs to be based on the subconscious motivations of why someone buys, revealed through real-time analysis of a wide variety of data sources.
- Social can’t be treated merely as a channel for distributing messages. Done right, it’s a context for building genuine relationships that demonstrate how much they really matter.
- Loyalty needs to be more than accumulating points for rewards. To be genuine and enduring, loyalty needs to be reciprocal. If you want their loyalty, you have to be loyal in return.
- Operations need to go beyond the efficiency of the company to the efficiency of the customer. How can you optimize to help customers get more for their time and effort, not just their money?
It’s a significant shift in mindset and practice to reorient from keeping up with competitors to keeping up with customers.
We suggest getting started by assessing where you are.
- How does your transformation compare to your customers? In what areas are they moving faster or slower than you are?
- Who is setting your customers’ expectations? It’s probably coming from outside your industry.
- What kind of relationship do you want to have with your customer? Are you trying to get them to do what you want? Or figuring out how to help them do what they want?
Next, look at where to focus your attention.
- Which tradeoffs do you need to transcend? We mentioned a few above. Others include speed and scale, consistent and nimble, high-tech and high-touch.
- Where is linear thinking getting in the way? Review the disciplines outlined above and see which ones will have the most impact on your customer experience.
Creating sustainable advantage is more elusive than ever. The new game is designing customer-driven journeys across touch points to help them achievetheir intent, and to create more multidimensional relationships. To win this game, stop thinking about just keeping up with your competitors, and start thinking about keeping up with your customers.