Ask most business why they are on the road to a digital transformation and they’ll generally cite the need to keep up with the evolution of well-established competitors’ products and services. Logical – what competitors do clearly matters -- but perhaps this focus on competition misses an equally important but different emergent phenomena. I would argue that the greatest challenge to companies today is not to keep up with or ahead of their competitors, it’s keeping up with their own customers – especially if those customers are consumers.
Because individual consumers are transforming to “digital” faster than organizations. If you think each consumer as a tiny business, it’s clear that they’ve already evolved many of their core activities (processes) to be digital. In areas like “procurement” (online shopping), “collaboration” (social networking), “research” (peer recommendations), “finance” (online banking and mobile payments) and “travel” (accommodation or ride sharing) consumers are way ahead of most businesses and the gaps are starting to be embarrassingly visible. Until businesses have evolved and transformed the equivalent processes, they look out of touch with their markets and the consumers that make them up.
Worse, those same customers have much more fluid expectations than before, changing with circumstances and no longer based on traditional boundaries between products, services and even industries. Your customers –consumers and increasingly business buyers – don’t just compare your customer service to that of your competitors. They compare you to the best customer experience they encounter – wherever that might be. The same is true for every aspect of how they interact with you – whether it’s your web site, your mobile app, your loyalty program, your brand promise – potentially even your stance on ethics, sustainability and social responsibility.
So if your customers are setting the pace that you must compete with, how can you keep up with them? You’ll have to start thinking and behaving like them, starting with the elimination of tradeoffs in cost availability and quality.
It used to be said that you could pick any two features from “cheap, good, or fast.” Today’s customer doesn’t think like that. If they can get anything that’s cheap and good and fast somewhere (and generally they can), they’ll expect everything to be that way everywhere – or they’ll go to wherever they can get it that way. As executives, we are accustomed to thinking of business strategy being about making tough decisions between competing objectives within constraints of resources time and money. But if we must start to think more like our customers., we need to focus on how to eliminate tradeoffs not on how to make them. That’s a whole different set of skills.
Here are some of the tradeoffs that are going to have to change if you hope to keep up with your customers:
- You need to be able to act big and small at the same time: It’s easy to be fast, agile and creative if you’re small, but you’ll need the reach, scale and presence associated with being big to serve a large fluid customer constituency
- You need to be able to manage both complex global systems and simple, engaging customer experiences: To the customer you’ll need to look like you’re engaging in a one-to-one relationship, but to do so is immensely complex in a digital world awash with information and regulation. Your systems will have to both mask this complexity and adapt quickly as the rules change
- You need to be present everywhere your customer might be without becoming impersonal: Deliver a consistent and satisfying interaction experience anywhere, at any time through any channel of the customer’s choosing, always in the correct context, always relevant and engaging.
Customers will no longer accept the feeling that you’re controlling them – forcing them to do what’s best for your business, rather than what’s best for them. They want their relationship with you to be based on reciprocity and transparency – to feel authentic rather than forced. If you want to keep up with your customer, you can’t be focused on what you want them to do: you’ll have to learn to help them do what they want, when, where and how they want. That means every aspect of customer engagement has to change fundamentally. You’ll have to be as agile as they are and as responsive as they expect if you are going to win and keep their business.
This is going to mean rethinking and probably reinventing a lot of established customer relationship disciplines and it’s going to be a significant shift in mindset and skill set to switch from tracking what your competitors are doing to understanding what your customers expect from you.
Creating sustainable advantage will be more elusive than ever. Customer-driven journeys will have to span constantly morphing interactions and focus on their intent, not yours, creating and maintaining much more complex relationships. The most successful companies will leverage these complex, dynamic, information rich interactions to anticipate, rather than just respond to, their customers’ needs. It’s time to stop thinking about just keeping up with your competitors, and start thinking about how to get ahead of your customers.