It seems to be common knowledge that we are living in turbulent economic times. Entire business models are at risk. New innovations and technologies are threatening existing industries, some of which have been stock market icons for decades.
Think this is hyperbole? Check out some recent headlines.
Will UPS, FedEx Lose Out to Amazon?
Who Will Build the Next Driverless Car Company?
Shifting Gears: Insurers Adjust for Connected-Car Ecosystems
Transforming Life Insurance with Design Thinking
A Digital Crack in Banking’s Business Model
As you can see from this small sample of headlines (all from 2016), no industry or business model is secure. In fact, a quote by Stephen Elop, the former Nokia CEO says it best, “Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
Increasingly company executives aren’t even sure what business they’re in or even who their competitors are. Many organizations are exploring new business models that push decision-making closer to the customer. These companies also recognize that getting close is only the beginning, they must also stay close.
In a world where products and services can become obsolete overnight, connecting with customers is the only way to survive. Successful organizations recognize that connecting and adapting require new methods and strategies.
I believe there are three key ingredients necessary to create a differentiating customer experience for hyper-connected consumers that have unprecedented choices.
These three ingredients are
Many brands have a lot of data about customers and prospects; some use segmentation to create more relevant experiences. While segmentation is very important, empathy is more about understanding the impact of the problem your product or service is solving.
Successful design thinking organizations recognize that empathy is the cornerstone of any product or service solution. David Kelly, co-founder of IDEO (probably one of the most famous design thinking organizations in the world) says, “An empathetic approach fuels our process by ensuring we never forget we’re designing for real people. And as a result, we uncover insights and opportunities for truly creative solutions.”
Empathy isn’t market research, it’s observing, talking, and interacting with real customers and prospects. Sometimes it’s helping customers find solutions they didn’t even realize were possible.
I am not against market research or segmentation; these all play an important role. For too long many employees, even senior level executives have been isolated from interacting with customers on a regular basis.
If possible, spend time with customers. If this isn’t practical, at least figure out a way to speak to them. Ask open-ended questions. Don’t just ask “How are we doing?” Instead, ask questions that invite feedback.
For instance, ask questions like:
What could we do to improve your experience?
How could we make things easier?
You can adapt these to your own situation; the key is to resist coaching the customers.
There are two sides to the engagement coin: the customer side and the employee side. I’ll start with employees. Getting close to and connecting with customers requires an engaged workforce. Most of us recognize the connection between an engaged workforce and a great customer experience.
According to Daniel Pink, the author of Drive, engaged employees are intrinsically motivated. He identifies meaning, autonomy and purpose as the pillars.
Engaged employees tend to be better problem solvers, especially if they are equipped and trained properly.
You can find out more about creating healthy employee engagement here.
Let’s talk about the other side of the coin: engaged customers. Ultimately you want customers to be ambassadors for your brand. I appreciate Raymond Morin’s take on approaching this with caution. A note of caution here: Be aware that as you aim for the goal of creating ambassadors that is doesn’t look like a program. There is no substitute for creating the kind of offering your customers will naturally want to share.
Another note of caution about loyalty programs. Loyalty is a very important outcome. If products and services are personal and relevant customers will want to continue to buy and use them. In my own experience, I have found that loyalty programs are typically geared to selling me more services, products etc.
While this is important, helping me recognize the real need for these products or services is far better. The end goal is exactly the same, to provide the most effective range of products and solutions possible. When I have been sold instead of helped, I disengage from the company because the cost exceeded the benefit.
Holly Chessman has 5 proven ways to grow customer trust, confidence, and love!
Many organizations are creating cross-functional teams to facilitate faster prototype solutions. Traditional waterfall projects tend to take a long period of time and the linear development process may not yield the optimum solution.
Creative sprints allow teams to identify customer or prospect solutions, then develop and test these ideas through rapid prototyping. This process allows for direct input from the customer and the prototypes have proven to be an invaluable feedback tool.
The concept of being adaptable is all about a customer centric, problem-solving approach to serving the specific needs of your customers. Customers want experiences that are personal and relevant.
Experimentation creates a journey mindset. Instead of viewing the experience as static, firms that experiment recognize that customer needs are changing all the time. The best way to stay relevant is to stay current.
There is another benefit; sometimes a series of rapid innovations costs far less than a major overhaul. Software, applications are products that require constant updating and monitoring. Now other businesses realize they too have to continually adapt.
One of the biggest challenges to experimentation is coming to grips with failure. It’s almost impossible to get it right all the time. Adaptable brands embrace failure, in fact, they often create a different language that supports rapid learning.
For those who may be thinking about this process, I would not recommend restructuring or changing your entire business model. I am aware of several companies that recognized the need to transform their business and started by creating an experimental cross-functional team.
Be realistic and start small. Find a team of volunteers that are energized and engaged, then provide the tools, space and guidance to allow them to experiment. It might be helpful to focus on a particular customer segment or perhaps a specific business challenge. This group will be contacting customers and prospects so mutual trust is critical.
There are plenty of prototyping resources. The key is the ability to create a reasonable representation of a product or service.
If your organization is already doing this, I’d love to hear about it in the comments below. Please share a link so we can see what you are doing. I would welcome other suggestions, questions or feedback.