MANAGEMENT

The five steps companies need to take for great digital customer experiences

PUBLISHED : Friday, 02 September, 2016, 9:03pm
UPDATED : Friday, 02 September, 2016, 9:43pm

Adapting to the continuing digitisation of the economy, and of society in general, is arguably the most challenging transformation every business is currently facing. Digital tools and trends are invading the business environment faster than companies can react, provoking significant changes in the way we communicate, consume, work, buy and sell.

The scale and pace of the change brought by “digital” is matched only by the large-scale industrial revolutions that leveraged coal or electricity. By removing fundamental constraints under which manufacturing operated, it energised entire industries, leading to unprecedented increases in productivity and lower costs.

Digital media and application platforms are now driving a new revolution, creating richer dynamics between people and disrupting business. But while the electricity revolution empowered and enriched businesses rather than individuals, the digital revolution has the potential to empower everybody.

Pre-digital revolution, the function of companies was to produce, the function of media was to broadcast, and consumers consumed. Branded customer experiences had a beginning, middle, and end. The marketer’s goal was relatively simple: to guide consumers smoothly down the linear path to a purchase. What happened once the customer left the store was not all that important.

These days, things are hardly so straightforward. With a smartphone in every consumer’s pocket, disruption is an ever-present possibility. In addition, digital tools have broken the monopoly of the media, enabling everyone to become a publisher and in some sectors they have broken the hold of companies on their industries, such as taxis and hotels. Companies no longer control their own narrative nor do they control the provision of goods and services.

It is about reaching 10 people, who can help to reach out to 100 people, and then further extending that reach to 1,000 people

Brands must work hard to be heard over the cacophony of conversations about them on WeChat, Weibo, Tencent, Facebook, Twitter and user forums. These word-of-mouth platforms carry more weight with digital consumers than conventional advertising. Today’s omnichannel marketing universe requires brands to be fanatical about the consistency of their messaging across all relevant touchpoints.

The classic “marketing funnel” is falling apart. Marketers should forget the purchase path of old and learn to master the far more twisty terrain. There is no universal formula for digital adaptation; the optimal customer journey will look somewhat different for each brand, but there are five general points marketers should keep sight of.

Increase your technological versatility: To keep pace with the speed of technological change, brands will have no choice but to beef up their tech portfolio – which is why a Gartner analyst predicted that by 2017, chief marketing officers’ IT spend will exceed that of chief information officers. Customer journeys are getting more complex and the number of touchpoints experienced – offline and online – when customers are making decisions is increasing dramatically. In China, for example, the average number of touchpoints make a single purchase is 14 when it comes to luxury products. The challenge here is twofold: Keeping the user experience seamless and engaging across all relevant channels and touchpoints while meeting management’s ever-stricter return on investment criteria for each channel. In the current environment, established methods such as the “last click” and third-party cookies are not agile enough.

Customisation is king: It is no longer sufficient to know merely who your customers are; marketers must know where each customer is along the journey of brand engagement. The one-size-fits-all messaging of old must be replaced by targeted interactions designed to help particular customers advance to a particular stage in their journey – whether it is downloading an app, retweeting a promo link or adding an item to a mobile shopping cart. Ideally, the connection between customer and brand would deepen at each stage, until that customer is ready to advocate for your brand online.

Balance earned, owned and paid media: These days, advocates are largely groomed over earned media (eg, online communities and social networks), rather than paid (traditional advertising) or owned (brand properties such as websites and blogs) media. That is not to diminish the importance of the latter two; paid and owned avenues should definitely be leveraged to create engaging customer experiences. But the numbers speak volumes about the dangers of relying too heavily on paid placements to win customer love online. In one recent study, 84 per cent of millennials reported that they “didn’t like” advertising. Instead they trusted their closest friends nearly twice as much as sales messages. Companies need to find the right balance between paid, owned and earned media and build communities where customers are collaborators and promotors for your brand. Top brands ranging from Burberry to Starbucks have launched successful social media campaigns centred around user-generated content.

Follow the advice of your followers: Social media monitoring tools make it easy for brands to sample the flavour of what is being said about them online. That’s a good first step, but a higher-level use of these tools involves going from passive listening to contributing proactively to digital conversations in a way that adds value for consumers. Even better would be the ability to use those conversations as a basis for meaningful, timely action. This speaks to the general need for companies to break silos in order to meet the demands of digital-era consumers, for whom delays due to bureaucratic inefficiency are tantamount to disrespect.

Understand your competition and collaborate to expand your reach: Companies have to think differently about their competition. Companies are now confronted with new competitors from outside their industries. Telecommunications companies are offering banking solutions, technology companies are building cars, or simple platforms are now disrupting the entire transport or hospitality industries. Closely linked to this is the increasing importance of collaborations. Companies should not believe that they can solve all problems on their own when trying to catch up with customers wherever they may be. We see lots of collaborations of traditional companies with start-ups. One great example is BMW’s Startup-Garage where the company is looking for start-ups with an innovative technology, product or service that can significantly advance or disrupt the vehicle industry. Other examples are the various collaborations of traditional banks with financial technology providers to optimise existing customer experiences.

These five points speak to the overall way marketing has changed since the advent of digital. The goal is no longer about reaching one million people in order to make 100 sales. It is about reaching 10 people, who can help to reach out to 100 people, and then further extending that reach to 1,000 people, and so on. Targeted campaigns should be aimed at converting online influencers into brand ambassadors within their digital communities.

At the same time digital technology has not changed the basic rules of branding. Companies like Netflix, Google, or Amazon are successful not because they offer digital products instead of physical products; but because they have embraced a management culture that is customer-centric at every touchpoint in the omnichannel consumer journey. If you integrate traditional concepts that put the customer in the centre of everything you do, and merge these with the new 21st-century realities, you will have a guiding framework that will help you manoeuvre successfully through these turbulent times.

Joerg Niessing is an affiliate professor of marketing at INSEAD and programme director of leading digital marketing strategy

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