April 7, 2014
Connect with Your Customer
5 steps for creating a sustainable advantage in the connection economy
The future belongs to companies who better connect with their customers. Winning in the connection economy starts with understanding your customer. Getting more focused on a meaningful value proposition, creating innovative ways of expressing and delivering your value, and building new systems to support your platform will help create a sustainable advantage. Here are five steps to get started.
1. Get more focused
Focus is hard. Today, global commerce has likely flattened your marketplace, creating more competitors and alternatives. Customers are exposed to ever more world-class customer experiences and have higher expectations. New technologies offer more and different opportunities. Where are you going to play? How are you going to win?
Indecision leads to market confusion. It can be hard to reconcile near-term sales and longer-term market position goals. Organizations too often try to be all things to all people, a strategy which fails. Your company needs to mean something to somebody – or risks meaning nothing to everybody. Today, connecting with your customer in innovative ways is paramount.
In an era of choice, you need focus. The emerging global marketplace favors a few dominant global competitors owning the middle of the market. This means that most companies need to get more niche. Your niche doesn’t mean you have to sacrifice sales – rather, you need to focus your resources on a more tightly crafted strategy to be more meaningful to your customers than in the past. It may sound counterintuitive, but more focus leads to more opportunity.
Your focus should be meaningful to customers. A brand should not be a reflection of what you do, rather, what it means in the mind of your customer. Sooner or later, what you do is going to change. What you make, how you make it, how it is delivered, pricing, competitors, and generally how you define your market is likely experiencing – or will experience – upheaval.
Your focus should be sustainable. People's needs don’t change as quickly as markets or technology. Human needs are a relative constant, and creating a narrative focus for your company will help smooth a bumpy ride.
Your focus should be based on a human need, not your capabilities.
Like all effective strategy, getting focused is about making decisions. Steve Jobs rightly pointed out that the hardest part about strategy is saying no. How do you decide? The first step is to get out of the board room and into the heads of your customers.
2. Understand your customers better
People are complicated. Quantitative market data have become complicated, too, but it doesn’t tell you what we need to know. You can identify what customers have done, and take an educated guess about what they might do. You can ask them what they like or what they think they will do. This information is helpful. Unfortunately, it won’t tell you enough about why your customers do what they do, what they’ll do next, or really whether they’ll accept your value proposition.
Connecting with your customer means understanding them.
You can’t understand your customer completely, but you should try. All companies are founded on an unmet need. A sustainable business is dependent on understanding a customer’s evolving needs. In an increasingly crowded and confusing marketplace, this is more true than ever. Your value proposition needs to be attuned to what your customers value today.
Customer research is critical but it doesn’t have to be painful. The important thing is to better understand the context of their decision making. Too often companies act as if the customer is thinking about their brand or offering from morning to night, which we all know isn’t true. It’s important to understand what customers are really thinking about, and how they make decisions.
Qualitative user research is a well established way to get beyond a two-dimensional demographic view of a customer, and better comprehend what makes them tick. Understanding what customers value and what they are trying to accomplish allows you to create value propositions that matter.
Seeing your customers in three dimensions will allow you to make better decisions. To make value propositions stick, customers will expect to experience your brand in all dimensions.
3. Create holistic experiences
Companies that thrive in the future will master the customer’s experience.
Considering your immediate competitors isn’t enough. In today’s global, connected marketplace, everybody’s benchmark is world class. Even local businesses, tier suppliers, and B2B firms – companies which have historically had the luxury of not noticing what happens downstream or beyond their back yard – will need to consider a bigger picture to remain relevant.
Once again, it starts and ends with your customer. Think about the customer journey – how your customer experiences your brand from their point of view. Be realistic. For a moment, forget your strategic momentum, industry conventions, and what you think you know about your market. Consider what is, what could be, and what you might do next.
Organizations that have been optimized for scale employ specialists who live in different departments and are expected to divide and conquer. IT and marketing, HR and sales, leadership and research too often stay in their own corners. Cross-functional teams help bridge the gap, but different languages and metrics make it hard to collaborate.
Customers don’t care about your internal silos. They only know their experience.
To make it easier, break the customer’s experience into parts and consider each key customer interaction or touchpoint. Which touchpoints are most important? Which ones help differentiate your offering from alternatives? Which ones require people, rely on a physical environment, or are online?
Viewing your value proposition through a lens of customer interactions will cause you to reconsider your priorities at a minimum, but may in fact lead you to reconsider your offer. Are you offering the right mix of products and services to meet the needs of your customer? How might you help them to achieve the human need you identified by getting more focused? This is how a tighter focus can lead to more opportunity – new products and services can be added credibly to the mix as you aim for a focused, meaningful target.
Each touch point is an interaction, a value exchange with your customer. Each should have an identifiable outcome. In a selling context, it’s moving the sale forward. In purchasing and use, it may be about usability and delight. Each interaction communicates, and is an opportunity to better connect with your customer.
4. Create meaningful expressions
As the saying goes, you “cannot not communicate.” The nature of each customer interaction expresses your value proposition. The narrative created by the sum total of your customer interactions is your brand.
Effective communication is harder than people think. What are you trying to say? How are you going to say it? How do you know you’re being understood?
Communication is hard because you, the sender, are only half the equation. The more you understand where your customer is coming from, what they value, and what is meaningful to them, you will be better equipped to express your value effectively.
Expression is not decoration, it’s about communicating ideas. Communications travel through media – personal, physical, or digital. Being clear about what kind of interaction you are seeking can make each initiative more focused and effective.
Personal expressions are the foundation of brand experiences and will never go away. Most transactions are no longer dependent on a handshake. Most services use people as the primary communications medium. Many brands are dependent on people networks: Retailers, dealers, reps, distributors. Each of these groups has opportunities to make or break the brand promise based on how it is expressed. People also work behind the scenes, in a sales or customer service, by phone or over email.
Wits and personal charm may only take you so far. Increasingly, training, scripts, and templates help guide these experiences. The ultimate people-based experience is with customers interacting with each other. It’s vital that their experience matches your focus.
Physical expressions like products, stores, showrooms and other selling environments speak volumes about your value proposition. Products are too often seen as the sum total embodiment of the value proposition, but connecting with customers today requires product/service platforms – holistic expressions of a meaningful value proposition. Most products come with some level of complimentary service, and many services come with complimentary products. Indeed, a key innovation trend is for product offerings to look like services, and services to look like products. Platforms, or holistic product/service systems, is a key strategic advantage for connecting meaningfully with customers.
Digital experiences are an important pain point and opportunity for all organizations. The ongoing system shock of the new can make it hard for organizations to respond quickly and appropriately. It’s undeniable that more and more customer interactions will be technology enabled, giving rise to more serious efforts on usability and the UX broadly. Communications delivery systems on screens large and small – smart phones, large-scale displays, embedded, ambient sensors and feedback loops, etc. – offer new horizons for expressing value propositions.
Expressing your value proposition through human resources, investments in the physical, and the evolving digital, can be easier to prioritize through a focus on what is meaningful to your customer. What your customer values has little to do with the way you express your value proposition unless it connects.
Maintaining this connection means coordinating disparate customer touchpoints. It means coordinating all the moving parts of a customer experience – personal, physical, and digital expressions – in a system for alignment.
5. Align teams and tools
Alignment happens in the middle, between your vision and practice. Everyone nods when the C-Suite rolls out abstract goals, but too often teams go about their usual business. Systems break down because of a lack of clarity and structure in between. The key is to identify principles which are informed by the vision and guide practice areas.
Starting at the top, make sure all customer interactions add up to the intended whole. How does each touchpoint align with your focus? How does each interaction contribute to delivering your focused value proposition? How does all this make sense in the mind of the customer?
Group touchpoints by phase. Which customer interactions are about generating awareness? Which are helping to nurture leads into sales? Which are about the product or service in use through its life cycle? Which are about extending or reselling?
Next, identify your key customer interactions. Remember that not every touchpoint is equal in value to your customer – or to you. Through each phase, there is likely one or two signature experiences that are important for sales or data collection. For example, a key metric for building awareness is recall. For selling, it’s a close. For customers, it may be repeat business or referrals. Understanding key interactions will create forward motion through a sales cycle and help prioritize and streamline each effort.
Each customer interaction has attributes: Resources, cost, media, launches, timing, location. Organize all touchpoints into like groups and sort by priority, and you have the beginnings of a customer experience plan.
You can’t do everything at once, even if you could afford to, so next you’ll want to determine phases. Start with your ideal experience and then backcast to the present. Add in your real dates, obligations, and limitations. Consider your budgeting cycle, industry shows, and launch plans. What can happen next monthly, next quarter, next year? What is a small step you can take toward the big idea?
You will need to socialize and evangelize these ideas through your organization. Documenting your customer experience principles is a discipline itself, and requires the care and attention of any communications initiative. Know your audience and what you’re really trying to say.
Systems for alignment will help avoid systemic reinvention of the wheel, and help you move more quickly and efficiently.
Systems that connect
Companies with stronger customer connections will endure market and technology shifts. The bottom line for most brands will be about creating meaningful customer experiences.
The connection economy requires new skills: A tighter strategic focus based on better understanding of your customers. Expressive personal, physical, and digital customer interactions. Systemic alignment to support a holistic experience. Together, these new competencies will allow companies to build sustainable platforms for connection, differentiation, and innovation.