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PA OPINION

Right place. Right time. Right universe.

You’ve got the cleverly crafted brand. You’ve got a product that customers want. You’ve been working at customer experience for years. Shouldn’t that be enough to have customers banging at your door?

Welcome to Customer 4.0

It’s clear that power now rests firmly with customers. It’s very easy to tell the world what we like and don’t like, and to see what other people are thinking, feeling and doing. We can find out about the latest developments in any area, often as soon as they happen. And it’s quick and easy to make a noise or find alternatives if you’re not happy with a product or a service.

This is a world where customers have a network of people, brands and organisations that inform, influence and inspire them. To get them banging at your door, you must become part of that network. We call this Customer 4.0 and we’re helping organisations keep up – and get ahead.

Breaking boundaries

Everyone between eighteen and 30-something has grown up a digital native. They have personal devices that bundle services to educate, entertain, transact, research and so on. That has defined their expectations – technology just works. They’re social in all they do, live life in groups (physical and virtual), and share and seek opinions. They tend to collaborate and co-operate, and don’t readily recognise boundaries – including those between brands and customers. They’re driving the shift. And research has shown their significance to be profound – they’re influencing back ‘up’ the generational line to Gen X, Baby Boomers – and even the Silents.

Whichever social group we’re in, Harvard Business School professor Clay Christensen says we all have ‘jobs to be done’ as customers. We choose products and services that allow us to achieve the ‘outcome’ we’re looking for. That defines the way we measure the success of products and services. For example, many of us look for different things from a holiday: to explore, to relax, to learn, and so on. That’s what makes one customer different from another – not primarily their demographics or firmographics.

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Challenging assumptions

This view of the customer opens up new ideas for designing a business and interacting with other people and organisations in the customer’s universe. For example, if someone booking a holiday wants to learn a language, a travel company could provide courses at a local language school – or offer the chance to stay with some native speakers.

And organisations may find they’ve been making false assumptions. We helped an international airline rethink some preconceptions about their customers. They’d based decisions on the idea most ‘premium’ passengers were travelling for business, for example, but only half of them were. Creating a clearer picture of their segments allowed them to change their marketing, and opened up a £35 million revenue opportunity.

This ‘outcome-based’ segmenting identifies high potential growth spaces to innovate – giving a new way to decide on the direction to take your business. It uncovers areas of ‘important but unsatisfied’ outcomes. It’s possible to work out the scale of the opportunity by looking at the number of customers in this category. Deliveroo, the food delivery company, wouldn’t have been able to calculate a financial measure of their potential market easily. By looking at the number of customers who valued high-quality food from their favourite restaurants – but were dissatisfied with the current delivery services on offer – they identified a sizeable opportunity.

Bridging gaps

It’s time for organisations to work out what forces are at work in their customers’ universe, not just things they control like brand and promotion. And to explore ways to collaborate or contend with those forces to make their products and services relevant to the customer. What’s needed is a genuine map of a customer journey as opposed to just their interactions with the organisation itself. It’s important to identify the forces with the strongest impact on customer behaviour – and make advocates out of the best customers. This advocacy – or ‘badvocacy’ – has become a hugely powerful form of promotion.

Of course, technology has a central role to play. With data growing exponentially, more powerful and responsive analytics will be needed. The Internet of Things is bringing exciting options for services, and artificial intelligence (AI) is transforming relationships with customers. AI-powered tools allow business process automation that frees up the humans to focus on the more intimate activity that creates value for customers. AI-powered chatbots meet our expectation of instant service support, for example. Virtual and augmented reality could completely alter what you offer customers by giving them a sensory experience that captures the attention, senses and imagination.

All these technologies are opening up a world of opportunities for smarter and closer relationships with customers in every sector.

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