The Rise of Customer Power
250,000 UK consumers are clubbing together to run a Dutch auction for electricity supply. En masse, one company will significantly increase its customer base in return for a preferential deal. The energy suppliers have no control over the process, other than making the choice not to participate. Welcome to the world where increasingly demanding customers set the rules for doing business.
For decades, businesses have set the rules, controlled the buying process, and dictated terms to customers. Not anymore. Now, customers can flex their collective muscles and put a company on its heels with increasingly vocal comments and the dollar power behind it. This power shift is accelerating, driven by three factors: information, access, and collaboration.
- Information: The Internet and the power of search engines have exploded the information available to us. We can now quickly learn about any product of interest, understand its pros and cons, and decide whether or not to buy. Social media and review sites open up the views and experiences of others, including those we trust most. As a result, we are now better informed and often know as much as the salespeople in the store or the agent on the phone. This has enabled consumers to find the best products to suit their needs and usually at more competitive prices than ever before. Word travels fast and far on these networks, which can inspire either joy or terror for businesses. Positive comments, reviews, and fans are perhaps one of the biggest indicators for success these days. On the flip side, collective negative feedback can cause irreversible damage.
- Access: Long gone are the days when purchases were determined by physical proximity to the store. E-commerce means there are few boundaries on our available market. It also means we have far more choice. Don’t like the deal on Amazon? Then, try eBay or your local store. Can’t get what you want in your own country? Then, buy from an overseas website. Even our grandparents trust online transactions now as secure, simple, and reliable.
- Collaboration: Whether it is large-scale crowd-sourcing such as the electricity example cited above or small group buying such as eBay’s Group Gifts or Facebook fans and groups, collaboration is enhancing customer power. It has never been easier for people that share a common need or desire to group together to achieve their goals. The old constraints of proximity and slow communication are removed allowing collaboration on scales never imagined possible. And with large groups comes enhanced buying power and influence.
Respond or die
Information, access, and collaboration cause an important side-effect; they enhance customer confidence and their willingness to question the system. The “take it or leave it” attitude of some suppliers may be met with loud public rebuke. Prospects can simply say, “I’ll leave it” because another website or the shop around the corner will be more flexible. Companies have to change if they are to thrive in the era of customer power. This is the new reality, not a passing fad.
Here are five must-do’s to thrive in the world of customer power.
- Focus on customer experience. Customers know what they want and that extends beyond the product/service, vital though that is. Success requires a laser-like focus on the total customer experience: purposefully designed interactions and transactions at all stages of the customer journey. Under-pinning this is a rich “voice of the customer” program that gives a constant pulse of how well the company is doing in the things that matter most to the customer. Executing better than the competition in these areas will lead to success.
- Single view of the customer. Delivering a superior customer experience means treating customers as individuals and that requires one, widely available database of all actions and interactions with the customer. This is essential for delivering relevant messages and offers, demonstrating respect, and empowering staff to do what is necessary to win and keep customers through great customer experiences.
- Embrace transparency and honesty. Prices can’t be hidden, so publish them. Issues, including product failings, will come to light, so be proactive and tell customers what they are and how you plan to address them. Customers understand that mistakes will be made and will often be understanding if they are informed. Customers won’t do business with companies they don’t trust and trying to hide things has a corrosive effect on trust. With almost unfettered access to information, the truth will come out anyway. Better to be the good guy seeking the solution than the bad guy hiding the evidence.
- Facilitate engagement. Customers have an increasing appetite for information and want to build relationships not only with companies they like, but also with fellow customers. Providing that information, tools that help them with decision making, using the product/service effectively, and facilitating customer-to-customer interaction will help increase engagement.
- Weed out legacy mindset managers. Organizations are shadows of their leaders, so if you have managers who just don’t get it, they have to go. Competing in a rapidly changing world is hard enough without morale-sapping, performance-constraining dinosaurs who fail to see the new world view. Please note that this is not a manifesto for getting rid of the older generation. Mindset is an attitude, not age related; I know quite a few dinosaurs aged under thirty!
Let us help
Clicktools is an essential tool in the world of empowered customers helping to build the single view of the customer, making interactions across multiple channels easy and capturing the all important voice of the customer. Talk to us about how we can help.