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THE CUSTOMERRELATIONSHIP:YOUR LAST COMPETITIVE
ADVANTAGE
How to Harness Your Company’s Most Valuable Asset
Copyright © 2014 Vision Critical. All rights reserved.
Executive Summary
In the age of the empowered customer, competitive advantage is no longer defined by products, logistics or technology. Today, your last competitive advantage is your relationship with customers.
The need to build closer, more meaningful customer relationships has
never been more critical.
This book shows how high-performing companies effectively bring customers into their decision-making processes. By listening to the customer voice, crowdsourcing, and using customer intelligence platforms, customer-focused companies have increased revenue, reduced customer churn, and gained competitive advantage.
We outline how involving customers can be achieved throughout the enterprise at both the day-to-day, tactical level and at the broader, strategic level. The 7 key tips we provide in this book will help ensure that companies today are ready to truly collaborate with customers, their last competitive advantage.
Copyright © 2014 Vision Critical. All rights reserved.
TABLE OF CONTENTS CHAPTER 1
Introduction: Your Last Competitive Advantage
CHAPTER 2
The True Definition of “Customer Centric”
CHAPTER 3
The Three Layers of Customer Engagement 1. The Customer Voice: Listening 2. The Wisdom of the Crowd: Crowdsourcing 3. The Full View: True Customer Intelligence
CHAPTER 4
The ROI of a Customer-Centric Approach
CHAPTER 5
The Last Competitive Advantage Across Industries
CHAPTER 6
A Forecast on Company-Customer Collaboration
CHAPTER 7
Recommendations
About the Author & Special Thanks
61218
3442
485458
Vision Critical’s cloud-basedcustomer intelligence platform
enables companies to continuously engage with:
In order to
Build Better Products Provide Better Services
Deliver Better Business Outcomes
Learn more at www.visioncritical.com
THERIGHT
CUSTOMERS
AT THERIGHT TIME
IN THERIGHT WAY
12 3
6 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Remember the days when companies used to focus on
product differentiation? Everyone had the softest tissues,
the most effective detergent, the highest resolution
television. As customer choices increased, businesses
found that offering product advantages alone was no
longer enough.
The Customer Relationship: Your Last Competitive Advantage
CHAPTER 1
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 7
The next wave saw businesses establishing competitive
advantages at the logistical level through better
warehousing, procurement, and distribution. Remember
when free shipping was enough to attract a loyal
customer base? Now, free shipping is the rule, not the
exception. People no longer notice logistics…unless
there’s a problem.
“One by one, every corporate investment has
been commoditized. Now every company can
tap into global factories and global supply chains.
Manufacturing, distribution, and IT-oriented
technology management are all table stakes. The
only source of competitive advantage is the one
that can survive technology-fueled disruption
— an obsession with understanding, connecting
with, and serving customers.”
Competitive Strategy in the Age of the
Customer, Forrester Research Inc., 2013
8 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Today, the last competitive advantage is the customer.
The good news is that a number of widely available
technologies can facilitate the company-customer
relationship:
Social Media
Survey Tools
CRM Systems
Co-creation Platforms
Insight Communities
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 9
To win in this customer-driven era, companies must
leverage these technologies and build closer, more
meaningful relationships with customers to understand
and deliver on their needs. The business focus, internally
and externally, must be the customer.
Truly customer-centric companies:
1. Engage regularly with their customers
2. Achieve market success
3. Gain an edge over competitors.
10 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Involving readers in the future of publications
CUSTOMERSPOTLIGHT
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 11
Time Inc., (publisher of titles such as Time, FORTUNE, Real
Simple, and Entertainment Weekly) uses its five insight
communities to, “Get the consumer involved from a 360°
perspective,” in the words of Time Inc.’s Executive Director
of Consumer Insights, Lee Ann Baer.
Consumer input is reflected in every decision, from design,
product names, font type and everything in between. Lee
Ann reports that upper management constantly ask “Well,
what do [our readers] really think about this idea?”
“We don’t want to take an idea that’s fully baked and take it to the marketplace, we need input when it is in its infancy to get us to the next
phase. The fact they have a voice in them [the magazines] matters to them – we don’t want to
ever take the consumer out of the equation.”
-Lee Ann Baer, Executive Director of Consumer Insights, Time Inc.
12 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
The True Definition of “Customer-Centric”
The term “customer-centric” is widely used today. But
for many companies it continues to be an aspirational
goal rather than a day-to-day reality. The fact that
so many businesses claim to be “customer-centric”
positively indicates the awareness that customer focus
is important.
CHAPTER 2
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 13
But the reality is that many of these customer-centric
claims are superficial; they are merely marketing
messages that pay lip service to the growing customer
movement. Organizations are involving customers in
decision making to help create shareholder value, and
to help ensure the future of the business. IBM’s 2013
study, The Customer-activated Enterprise, highlighted
the impact of listening and involving customers on the
organization’s bottom line. The benefits listed in the
report included:
So what does it mean to be truly customer-centric? A
company that is customer-centric engages regularly in
two-way communication with its customers and makes
decisions based on customer feedback. The company-
customer relationship is collaborative, with customers
filling the role of virtual board members who make
valuable contributions to the company’s decision-making
process.
76% of the C-suite aspire to know their customers better.
-The Customer-activated Enterprise, IBM Study, 2013
14 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Amazon CEO Jeff Bezos illustrates perfectly the notion
of the customer as a company insider. He famously
brought an empty chair to meetings, forcing employees
to think about an important person not in the room: the
customer. As Bezos once said:
P&G CEO A.G. Lafley is similarly customer-obsessed, known for telling his staff:
“Our business is pretty simple, the consumer is our boss.”
- A.G. Lafley, CEO P&G
“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and
we work backwards.”- Jeff Bezos, CEO Amazon
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 15
For Lafley, the customer is not only an employee but the
most important one.
In short, customer-centric companies like Amazon and
P&G consider customers as company insiders who are
part of the decision-making process. The company and
customer are collaborators in co-creating the future of
the company to benefit both parties.
Anthony D. Williams and Don Tapscott highlight the
importance of company-customer co-creation in their
bestselling book, Wikinomics:
“Smart companies will bring customers into their business webs and give them lead roles in developing next-generation
products and services.”1
- Anthony D. Williams & Don Tapscott, Wikinomics, Penguin, 2006
Engaging and Empowering Mothers
CUSTOMERSPOTLIGHT
16 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Kimberly-Clark Australia utilizes an insight community of
3000 engaged mothers to involve its customers at every
stage of the company’s product development process.
Kimberly-Clark gets valuable feedback and insight they
can use to help make better decisions.
Alla Nock, Market Research & Analytics Manager, Kimberly-
Clark Australia describes the benefits to involving customers:
“What mums get out of being members of this community is that they’re part of a
fantastic brand they helped to build.Our mums can see their feedback turn into
results when they see on shelves products and decisions they helped influence. In this way,
mums know we are really listening.”
One of the key successes of using an insight community
to involve customers has been the buy-in from key
stakeholders from within Kimberly-Clark. Alla Nock notes
that when making decisions, executives ask “Well, what
would our Mums’ say?” I.E. the members of their Huggies
community.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 17
18 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Company-customer collaboration can be achieved
through various approaches that range in the depth
of customer involvement. The level of collaboration
depends on the layer of customer engagement that is
employed.
The Three Layers of Customer Engagement
CHAPTER 3
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 19
1.
Essentially, customer engagement comes in three layers:
1. Listening to the Customer Voice 2. Crowdsourcing Customer Feedback & Ideas 3. Co-creating Through Customer Insight Communities
Most customer-centric companies use a combination
of these approaches, rather than relying on a single
technique.
The Customer Voice: Listening
Listening to customer feedback represents the most
traditional form of customer engagement. Through the
years, the methods for obtaining feedback have evolved
from customer satisfaction questionnaires that are siloed
within customer service or marketing departments to
customer feedback management (CFM) platforms that
are monitored and measured throughout the enterprise.
With CFMs, companies can obtain feedback analytics,
conduct polls, build forums, and monitor the increasing
number of third-party review sites.
20 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
One example of a CFM in action is American General
Life, an insurance company that uses a system to
get real-time feedback data in a centralized hub. As
survey responses come in, the company’s system
triggers email alerts and delivers information to case
management tools according to business rules. Having
access to real-time feedback analytics allows American
General Life to more quickly address customer issues,
resulting in decreased technology costs, reduced
expenses, and optimized processes.2
Social media monitoring is another method by which
companies can listen to feedback and provide customer
service.
Adoption of social customer care programs increased by approximately five-fold
between 2010 and 2013:
12% in 2010 and 59% in 20133
- Aberdeen Group
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 21
One company that uses social media for customer
service is Dutch airline KLM. Since 2010, the company
has recognized that social media is a great tool to
provide quick customer support. Former CEO Peter
Harman even went as far as declaring that social media
would be at the heart of the airline’s customer service.
Viktor van der Wijk, Director of Digital at Air France KLM,
tells The Guardian,
“Now we can identify passengers’ experience at check-in, in the
lounge or when they are collecting their bags. Any problems in any of these areas and we are straight on
the case via social media.”4
- Viktor van der Wijk, Director of Digital,
Air France KLM
22 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Fast-food chain Wendy’s has also employed social
media listening to improve various aspects of its
business. For example, by tuning in on social, the chain
found out that customers were concerned about the
nutritional value of what they were having for lunch.
Using that insight, the company developed an app that
provided customers with nutritional information, despite
its PR team’s hesitation.
Listening to the customer voice is the first layer in
customer engagement. It’s a good starting point to
uncover the larger trends, sentiments and topics that
you should explore.
The app was a hit, receiving more than 26,000 downloads a month after its launch—without the company investing
in advertising.5
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 23
2. The Wisdom of the Crowd: There are more smart people outside your company than within it
Before the Internet, and in particular before social media,
the prevailing business paradigm assumed the world
was divided into two groups: the small group of experts
inside companies and everybody else. Today, we’ve
seen that paradigm upended, as numerous online
crowdsourcing efforts have successfully proven that the
wisdom of the crowd can provide value more efficiently
and/or effectively than company employees.
Typically, companies initiate crowdsourcing efforts
through online mechanisms such as social media
contests, marketing campaigns, and online surveys.
Through brand-led crowdsourcing initiatives, customers
have influenced future products, from new flavors of
food (e.g., chips, gum, ice cream) to key features
(e.g., colors, design, new capabilities). They’ve also
participated in the shaping of a brand’s new logo or
product name. Crowdsourcing can attract a wide
24 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
audience. In early 2014, Lay’s announced that it was
relaunching Do Us A Flavor, a crowdsourcing promotion
that asks customers to submit original chip flavor ideas.
The promotion was reincarnated after the overwhelming
success of the first one:
Several studies demonstrate the economic benefits of
sourcing from the crowd. Most notable are those cited
in The Wisdom of Crowds by James Surowiecki, who
asserts that a group of people can be more intelligent
and have better market judgement than the smartest
individual among them.
It’s no wonder customer-centric P&G CEO A.G. Lafley,
insisted that 50% of P&G’s innovation come from outside
the company.
In 2012, Do Us A Flavor inspired almost four million submissions
(and various parodies).6
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 25
Crowdsourcing is the second, deeper level of customer
engagement. Unlike social listening, it goes beyond
listening to what’s already out there and proactively
asking customers for input.
Leveraging Iceland and its FansIn 2010 Iceland was devastated by two calamities:. the global
financial crisis and an ash cloud generated by the Eyjafjallajokull
volcano. Sentiment about Iceland went through the floor, as did
projected numbers of visitors. Worse, the budget the country had
to devote to these challenges was limited.
What Iceland did was create a campaign where Icelanders and
previous visitors to Iceland were encouraged to crowdsource an
image for Iceland. People were encouraged to post their stories of
how great Iceland was to visit. The campaign leveraged Facebook,
Twitter, Tumblr and Vimeo.This prize-winning campaign turned
visitor numbers around. The marketing investment was about $4
million, the revenue generated was over $230 million – a
return on investment of about $60 for each $1 spent.
It’s More Fun in the PhilippinesA similar motivation, saw the Philippines launch its collaborative,
crowdsourced, social media campaign, “It’s More Fun in the
Philippines”, in 2012 – leading to record-breaking numbers of visitors and massive ROI.
26 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
3. The Full Customer View: True Customer Intelligence
Although the first two layers of customer engagement
are rich and effective, they are observational, rear facing
and incomplete. They give companies the channels to
listen and obtain data on what customers want and say,
but they are missing arguably the most important piece:
customer attitudes and opinions. They don’t uncover the
“why”.
Customer intelligence platforms allow companies to
have an ongoing, two-way dialogue with customers
in a secure and engaging environment.
These private online groups of customers allow
companies to build meaningful relationships that deepen
over time as they learn more about how customers
think and feel, and more fully understand their opinions,
attitudes, and behavior.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 27
This process also allows productive ideas and practices
to be developed over time. Customer contributions are
recognized, and this leads to greater willingness to be
innovative and collaborative. Similarly, as described by
Amber Hudson, Consumer Insights at Molson Coors,
when companies begin to understand their customers
they can begin to take risks, which can open up more
options.
When members of insight communities, for example, are
asked why they have joined and why they stay engaged,
one of the most common reasons is that:
Community members say they want to make a
difference to the companies that have invested in
building a relationship with them.
They want their
VOICE TO BE HEARD
28 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
In Australia, Village Roadshow has had years of success
with its Gold Coast theme parks and uses an insight
community to help involve customers. Recently, Village
Roadshow faced a major strategic issue, the launch of
a theme park in Sydney. Previous companies had failed
with parks in Sydney. Village Roadshow worked with
customers and potential customers to find out what was
needed in New South Wales. The result? The season
passes sold out before the park even opened!
In China, the Mandarin Oriental Hotel Group used an
insight community to determine how to best position its
brand in mainland China. The community helped them
understand the nuances that apply in a fast moving and
highly demanding market like China.
Australia
Global companies are using insight communities to involve customers in the decision-making process
China
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 29
Following its merger with TACA Airlines, Avianca, the
second largest airline in Latin America, worked with
customers and its insight community to help navigate the
merger and potential re-branding. A merger is a major
strategic issue and one which, if done badly, could cost
millions and cause the brand to lose credibility.
Companies like SingTel, Asia’s leading communications
group, are using insight communities to connect every
part of their business to customers in multiple countries,
across multiple languages, and in multiple cultures.
Involving customers has helped SingTel ensure that
product and service developments are iterative and
customer focused.
Latin America
Asia
30 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
The Apple Myth
There is a popular myth that companies that are truly innovative
do not need to ask consumers. The most commonly quoted
example is Apple, with people citing an interview with Steve
Jobs. In the interview he answered a question about the sort of
research that went into the development of the iPad, by saying,
However, as the court cases between Apple and Samsung
have shown, Apple is indeed a major user of customer
research and customer insight7 and is deeply committed
to customer participation. In addition to having customer
feedback and web pages that are extremely easy to find and
use, the Apple Support Communities website provides a forum
where customers can interact among themselves and with the
company to discuss issues pertaining to Apple products. The
forum has become a source of invaluable information.
“None. It isn’t the consumer’s job to know what they want.”
- Steve Jobs
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 31
Apple has found that another simple yet effective way
of fostering customer participation is through its online
communities of selected customers, who are asked for input
on a variety of subjects and issues. For example, Apple
Customer Pulse, initiated in 2011, involved customized surveys
sent to selected customers to study their views and the ways
they use Apple products.
Companies that deliver what customers want tend to do it by
involving customers–even if they don’t choose to freely admit it.
Leveraging the power of word of mouthApple is actively exploring how to leverage the power of word of mouth
and customer participation at the same time. It measures word of mouth regularly in its stores while soliciting input from targeted
customers.
Store managers often use customer comments to initiate service failure
recovery activities, design training programs for store employees and
motivate and reward staff with positive customer comments.
In addition to trying to gauge how well it is building an army of brand
evangelists, Apple compares word-of-mouth and satisfaction scores
with customer comments and feedback to uncover the dynamics behind customer reactions and purchase behavior.
32 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Since 2011, the brewer Molson Coors has been working
with its insight community, the BeerXChange, to bring
customers into the heart of its business.
Working with“beerologists”
CUSTOMERSPOTLIGHT
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 33
“The thing we really like about the BeerXChange is
how much beer drinkers are really becoming true
advocates of our brand. They really enjoy helping out
the organization, they love that their voice is heard and
that we take their insights and their feedback and turn it
into action,” Amber Hudson, Consumer Insights, Molson
Coors.
“Prior to launching the community, we knew what our brand was all about,
we knew what our strategy was, but we needed to get the consumer voice in order to truly
meet their needs.”
-Amber Hudson, Consumer Insights, Molson Coors
Involving customers also means sometimes being
willing to take risks, Hudson commented. “We’ve done
everything from very simple forums to collages, basic
surveys to live chat and focus groups. We’ve had
members write articles and letters. We have been able
to take risks with some of the methodologies that we
have used and just have some fun as we approach the
target consumers.”
34 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Being Customer Centric is Good for Business
Although there are exceptions, the main reason
companies are democratizing their business is because
it is good business. Companies are involving customers
in decision making to help create shareholder value
and to help ensure the future of the business.
CHAPTER 4
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 35
IBM’s 2013 study, The Customer-activated Enterprise,
highlighted the impact of involving customers to the
organization’s bottom line. Findings of the report
included:
Similarly, a 2013 study of 629 companies by the
Aberdeen Group8 contrasted the performance of
companies that used enterprise social collaboration with
those that did not. Aberdeen found the collaborators
had:
Outperforming organizations are much more likely than underperforming ones to be collaborating with customers
30% higher customer retention
55% increase in revenue
96% improvement in response time to customer inquiries
36 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
According to Forrester’s Customer Experience Index
(CXi), CX leaders had a cumulative:
A great example is USAA, a provider of loans for car
purchases. After launching a seamless customer
experience for researching, financing, and insuring
vehicle purchases, USAA experienced:
43% gain in stock performance over a six-year period (2007 to 2012), compared with a 14.5% increase for the S&P 500 Index and a 33.9% decrease for a portfolio of customer experience laggards.9
77% year-over-year increase in visitors to its car-buying site15% increase in completed auto loans23% increase in vehicles sold
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 37
Customer collaboration is increasingly important to
CEOs. According to a 2014 IBM Global C-Cuite
study, customers exert more influence on business
strategy than all but C-Suite itself:
C-Suite | 78%
Board of Directors | 53%
Corp. Strategy Dept. | 44%
Customers | 55%
Non-Executive Leadership | 26%
External Partners | 25%
Parent Company | 23%
38 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
A 2013 MIT study found that fostering customer
participation can be highly profitable. “High
participation/high word-of-mouth customers were the
most loyal and attached to the brand, followed by high
participation/low word-of-mouth. Customers who did
not participate tended to be the least profitable, the
least loyal and the least attached to the organization,
regardless of whether they spread positive word of
mouth.”10
“We found that companies that are receptive to
customer input and customer participation tend to
have longer and more profitable relationships with their
customers than companies that keep customers at
arm’s length. Why?”
Because customers are more engaged when they perceive that the company
values their feedback.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 39
“This doesn’t mean that companies are obliged to
implement every customer suggestion.”
The very act of encouraging and listening to feedback makes customers feel more
appreciated and part of the value creation process.
40 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
SingTel is Asia’s leading communications group,
with almost 500 million users across the Asia Pacific
region and they use insight communities in markets
as advanced as Singapore and as big as Indonesia
to involve their customers in shaping their shared
digital future.
Reaching all parts of the business
CUSTOMERSPOTLIGHT
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 41
Traditionally technical products and services have
been design-led, but SingTel have firmly embedded the
customer in the process.
Melissa Gil, Director, Customer Intelligence at SingTel
describes how the insight communities have changed
the way they do business. “Connecting with community
members has been so impactful that our stakeholders
see the significance of timely insights in their decision
making processes.”
“Every part of the business, whether its network, content, acquisition, marketing,
customer life cycle management, actively uses SingTel Digital Advisors.”
-Melissa Gil, Director, Customer Intelligence, SingTel
“People stopped seeing research and insight as a way
of blocking decisions, but instead it became a major
decision support, and people wouldn’t move without
asking ‘What did the Digital Advisors say?’ So, every
time a product manager would come up for a big
business decision a C-level executive would say ‘Have
you talked to the Digital Advisors?’ ”
42 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
The Transcendence of Customer Engagement
What does a holistic customer-engagement approach
look like? Companies from all industries are already
using social media, insight communities, and
crowdsourcing software to get closer to their customers.
Here are some examples.
CHAPTER 5
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 43
Telecommunications
In the past, apps were designed by engineers. The main
inputs into the design process were technical, e.g., what
was possible, what was considered best practice, and
what was currently in vogue. Now engineering teams are
working with customers who are testing the apps and
helping to prioritize features, functions, appearance, and
usability.
Transport
Companies like TfL, Transport for London, have
developed social media tools to allow them to work with
their travelers, learn from customers, use customers to
share information, and reduce their costs in dealing with
problems and concerns.
44 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Airlines
Baggage handling has traditionally been seen as a
logistical issue. Customers have not typically been
involved in the design and re-design of baggage
handling processes. Airlines have found that once
they have the right tools, they can start to explore
experiences, preferences, and suggestions of their
customers.
Human Resources
HR teams have found that once an insight community
is in place, they can start to explore the impact of their
programs on employees. They can also check whether
their priorities and perceptions are the same as those of
customers.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 45
Finance
Many finance companies have commented that before
the global financial crisis, they were not as customer
focused as they are now. In the past they researched
topics such as churn, net worth, and NPS. However,
these same companies are now using social media,
feedback systems, and insight communities to find
out more about how they can work together with their
customers to shape the future and ensure that the right
products are created and serviced.
Retailers
Retailers have worked with their customers to assess
big issues such as merger and acquisition strategies,
through to small issues such as signage and the ways
bags are packed.
46 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Dealing withmergers
CUSTOMERSPOTLIGHT
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 47
Latin American airline Avianca has an insight community
(VIP Chat) which they use to keep in touch with their
customers. The community allows them to gain feedback
on a variety of day-to-day issues such as meals, uniforms,
and the company magazine.
However, Avianca have also involved customers in big
strategic issues. Following the merger of Colombian-based
Avianca and Salvadoran TACA Airlines, Avianca consulted
with customers on its rebranding strategy, which helped
confirm the successful decision to brand as Avianca.
Talking about the Avianca insight community and about
involving customers, Mario Balladares, Marketing and
Customer Experience Design Director, Avianca Airlines said,
“We are achieving our three main objectives: the preference of the customer, the
satisfaction of the customer and the revenue that comes with meeting the two.”
48 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
A Forecast on Company-Customer Collaboration
Nothing stands still, and the customer revolution is well
underway. Technologies are developing, social networks
are expanding, and customers are insisting on being
involved in the creation of products and services. So
where do companies go from here?
CHAPTER 6
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 49
Mass customization/personalization
The way companies produce products and deliver
services has changed, widening the options for
customers to be involved. Technologies such as
3D printing and print on demand books, along with
services such as Amazon and Expedia, are changing
the commercial landscape. These changes are
enhancing the ability of customers to shape their world.
Technologies are making deeper collaboration between
companies and their customers a natural and embedded
part of day-to-day commerce and consumption.
The collaborative/sharing economy With the growth of services like Airbnb, eBay, and
Kickstarter people are showing that they want to
participate actively with the companies from whom
they buy. Customers want to play a role in the supply
and creation of products and services as well as the
consumption of them. The collaborative economy is now
estimated at $26 Billion, and brands that ignore it will find
themselves out of step with today’s customers.11
50 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Big and mobile data
The amount of data about customers is growing
exponentially. Transactional data about what people buy
and mobile data about what people do are two of the
most crucial elements of the data explosion. However,
to make sense of big data, organizations need to
understand questions such as “Why?”, “What else?” and
“What if?” The successful companies of the future will
be those who can use their customers to leverage big
data. One of the most exciting developments has been
the emergence of applications that engage customers
on their mobile devices for the purpose of collaboration.
One of the most exciting developments has been the emergence of applications that
engage customers on their mobile devices for the purpose of collaboration.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 51
And it’s not just commercial organizations!
The City of Surrey, Canada, with a population of
approximately 500,000, uses an insight community to
involve citizens on an ongoing basis. Dianne Watts,
Mayor of Surrey, Canada comments,
“The City of Surrey is the first municipality in North America
to undergo such a comprehensive and long-term online consultation
process. We believe that connecting and engaging our citizenry is the
cornerstone of our service.”
- Dianne Watts, Mayor of Surrey, Canada
52 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
UK retailer ASDA has been using its insight community,
Pulse of the Nation, since 2010 to get closer to customers
and it currently has about 30,000 members.
One key element of Pulse of the Nation is Mumdex, a sub-
community of UK mothers who help ASDA understand
their lives and priorities.
The pulse of the nation
CUSTOMERSPOTLIGHT
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 53
As a result of the actionable intelligence they’ve received
from their customer community, ASDA have been able
to influence UK policymakers. CEO Andy Clarke recently
shared intelligence from their customer community in a
session at the British parliament with leading journalists
and the three major political parties. Through close
collaboration with their customers, ASDA has been able
to highlight the £37 billion impact of their work to the UK
economy.
Describing how ASDA have moved to this advanced level
of working with their customers Andy Clarke (CEO) says,
“Not only have we listened to, and responded to their views as a business – we’ve also been
able to amplify those views and make sure other decision-makers hear them too.”
54 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
Recommendations
The customer revolution is showing no signs of slowing
down. This revolution requires companies not only to keep
up with new technologies, but also that they listen to their
last competitive advantage: their customers.
CHAPTER 7
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 55
Key Tips
Whether you’re the CMO of a global company or a
marketer from a startup, here are important strategies to
keep in mind:
1. Treat your customers as partners. Ensure that the
whole business—not just the customer-facing teams—
involves customers in its decision-making. Continuously
connect with customers in both day-to-day issues and
bigger, more strategic decisions.
2. Don’t rely on just one approach to listen to your customers. Companies have many ways of
involving customers in decisions. Get a complete
picture and understand the “why” by using social media,
crowdsourcing software, insight communities and other
approaches.
3. Analyze customer data and insights, and make decisions based on that data instead of gut feeling. Ask for input earlier in the innovation or marketing
process, and then involve your community as you iterate.
56 THE CUSTOMER RELATIONSHIP : YOUR LAST COMPETIT IVE ADVANTAGE
4. Share what you’re doing with the customer feedback you collect. Tell customers how their input
and participation has shaped specific business decisions.
5. Thank and reward customers for their participation. Show that you respect their time and
occasionally delight them with gifts.
6. Stop asking stupid questions. Don’t ask your
customers questions you’ve already asked in the past.
Use technology that will allow you to keep track of what
information customers have already provided.
7. Engage the right people in the right setting. Instead of always asking for the general public for input,
build a relationship with customers who already know
your products and services. Working with a community of
customers, you can reduce the noise and harness more
meaningful input while building a stronger relationship with
customers.
HOW TO HARNESS YOUR COMPANY’S MOST VALUABLE ASSET 57
Closing RemarksIn the customer revolution, competitive advantage
doesn’t begin with products, logistics, or technology.
It begins and ends with the customer relationship.
Companies that are willing to let customers in—
especially those that integrate the customer voice in
all aspects of the business—are in a good position to
harness their most valuable asset, the customer.
About the Author
Ray Poynter is the Director of Vision
Critical University, Vision Critical’s center
for knowledge, learning, and training.
Ray has over thirty years’ experience in
market research and is one of the best
known speakers, writers, and workshop
leaders on the international circuit. Recent appearances
include: Amsterdam, Auckland, Bangkok, Cyprus, Hong
Kong, London, Melbourne, New York, Shanghai, Singapore,
Sydney, Tokyo, and Valencia. Ray is regularly cited by
Research-Live as one of the most influential researchers in
social media. You can follow him @RayPoynter.
Ray is the author of “The Handbook of Online and Social
Media Research” (published by Wiley in 2010 and by
GMO Japan Market Intelligence in Japanese in 2011),
and joint editor of ESOMAR’s “Answers to Contemporary
Market Research Questions.” Ray is also the founder of
NewMR.org, author of modules for the University of Georgia’s
Principles of Marketing Research course, contributor to the
GRIT report, and the independent expert producing the last
four ESOMAR Global Prices Study.
Special Thanks We’d like to extend a special thank you to the following
companies for supplying us with case studies, quotes,
and examples.
ASDA
Avianca
City of Surrey
Kimberly-Clark
Mandarin Oriental Hotel Group
Molson Coors
SingTel
Time Inc.
REFERENCES 1 D Tapscott & A Williams, Wikinomics, Penguin, 2006
2 The Next Generation of Enterprise Feedback Management (EFM) Solutions, J. Schuster, Call Center IQ: http://www.callcenter-iq.com/customer-experience/ articles/the-next-generation-of-enterprise-feedback-managem/
3 Social Customer Care: Secrets to Build a Winning Strategy, Aberdeen Group, 2013
4 How to use social media listening to get real-time insights about your brand, The Guardian: http://www.theguardian.com/salesforce-partner-zone/how-to-use- social-media-listening-to-get-real-time-insights-about-your-brand
5 How Wendy’s online audience influences its decisions, Ragan.com, A. Sernovitz: http://www.ragan.com/Main/Articles/How_Wendys_online_audience_influences_ its_decision_46837.aspx#
5 Wendy’s app puts healthy fast food at your fingertps, Direct Marketing News, A. Schiff: http://www.dmnews.com/wendys-app-puts-healthy-fast-food-at-your- fingertips/article/260491/
6 Doing Lay’s a flavour: Frito-Lay benefits from crowdsourcing,Marketing Tech, 2014: http://www.marketingtechnews.net/news/2014/feb/13/doing-lays-a-flavor- frito-lay-benefits-from-crowdsourcing/
7 Apple does do market research. It always has, B Tarran, Research-Live, http://www.research-live.com/apple-does-do-market-research-it-always- has/4007940.blog
8 Enterprise Social Collaboration: The Collaborators’ Advantage, Aberdeen Group, 2013
9 Forrester Perspective: The Business Impact of Customer Experience, Forrester Research Inc., 2014
10 Why Customer Participation Matters, MIT Sloan Management Review, 2013 http://sloanreview.mit.edu/article/why-customer-participation-matters/
11 A Schwartz, “The collaborative economy is exploding, and brands that ignore it are out of luck”, http://www.fastcoexist.com/3027062/the-collaborative-economy- is-exploding-and-brands-that-ignore-it-are-out-of-luck
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