Trends from Customer-centric Visionaries
On May 9-10, 2007, we held our semi-annual get together of
“Patty’s Visionaries”—a handpicked group of customer-centric executives in a
cross-section of industries, each of whom has impressed me with his/her
accomplishments in designing their businesses from the outside in. This two-day
meeting is always a treat for me. It’s relaxed, casual, reflective, and gives
us all good insights into what’s up with customers, business, and technology and
how we’re doing in harnessing technology to deliver a great customer experience
and to grow our businesses. Everyone came away with actionable insights—several
of which have already been put into practice!
Eight Key Patterns and Themes
Here are eight topics that rose to top of mind for me after
swimming in this rich conversational soup. I suspect each Visionary may have
had a slightly different set, based on his or her own context. Here are the
themes that are still reverberating with me a week later:
1. Outcome-based
ecosystems
2. Customer
communities
3. The
primacy of search
4. The
disappearing home page
5. Cloning
capabilities across channels
6. The
opportunities and dangers of serving baby boomers
7. Online
gaming, virtual worlds and kids’ innovative behaviors
8. Driving
organizational change thru operational customer metrics
Customer-Centric Visionaries
Design Customer-Outcome-Based Businesses and Ecosystems
We spent a fair amount of time talking about our customers’
real goals, e.g., retire comfortably, be physically fit and healthy, find the
best car for my current situation, have a great family vacation, design a
successful product and gain marketshare, have everything I need to run my small
business, etc. As one Visionary explained, “the most successful businesses are
the ones whose purpose is to meet customers’ goals.”
The more clarity everyone in the organization has around
customers’ end-goals, the easier it is to get all the stakeholders pulling
together. Whether the goal is to prevent people from becoming diabetic, to
increase kids’ proficiency in engineering and science, or to make it easy for
them never to run out of ink toner for their printers, everyone in the company
can understand how success is measured and how their job supports the customers’
goals.
The most interesting aspect of the “design our business
around our customers’ goals” theme was that, in each case, the resulting
organizational structure becomes a vibrant ecosystem of partners and suppliers
all aligned around the same outcomes. This approach to business design is already
redefining entire industries.
Customer Communities Are Strategic
One of the topics that we had all agreed we wanted to drill
into at this meeting was how to create and nurture vibrant online customer communities.
I was happy to find and recruit (with our community guru, Matthew Lees’s, help)
some true "best practitioners" and veterans in leading and managing
online communities. In each case, these executives have full time
responsibility for their online communities. It's clear that evolving, growing,
nurturing, and policing a customer community is both a full time, and a
strategically important, job. Our customer community leaders report into the
top of their businesses. They are key members of the strategy team.
These community leaders (and the customers they represent)
push the envelope in a number of areas. Community members question the company's
policies and business models. Online customer communities present unique
challenges to the firm's legal team. Customers' opinions may be challenging or
offensive to advertisers and sponsors. Customers' ideas may fall on deaf ears
among the members of the R&D team. In a mature, vibrant online community,
customers embody and drive the brand experience. Customers amplify the firm’s
marketing outreach. Customer-created content and ratings quickly become an
invaluable business asset. Customer-answered questions and tips form the backbone
of the company’s self-service strategy.
Marketing Is Dead; Long-Live Search
Our Visionaries quickly agreed that "marketing" is
"dead," and that most of their online efforts revolve around search.
While many firms find TV advertising effective to promote their brands and to
promote new products and categories, they don’t find much value in traditional
"marketing campaigns," with the exception of print catalogs and
newspaper circulars to drive traffic online or to the store. Direct marketing
campaigns—elaborate programs designed to launch, promote, and drive purchasing
behavior for a specific offer—are out. Push is out. Pull is in. Customer pull
"customers" explicitly looking for something—is enabled by search and
navigation.
So all of our Visionaries have made significant investments
in the skills and technologies required to continuously optimize the ability
for customers to find what they're seeking, both through search engine
optimization and, even more, through improved site search and navigation.
Our search maven, Sue Aldrich, led a lively discussion and
show-and-tell. We learned that many Visionaries are doing a great job with
vertical search—search that is optimized for their particular product
categories. Many are using federated search: bringing in relevant content and
information from third-party sources. And all are focused on adding customer
tagging to their own carefully crafted taxonomies.
The Case of the Disappearing Home Page
One of the most interesting “Aha’s!” that occurred to all of
us as we compared notes was that, due to customers’ search behavior, our Web
site home pages are much less relevant today than ever before. Yet most of us
lavish incredible time, resources, and attention on our home pages. Home pages
are a corporate battlefront. Every product line and department fights for its
square inch of home page real estate. Yet, as we discussed the actual behavior
of prospects and customers using our Web sites to get things done, we all
admitted that the vast majority of Web traffic is coming from search and
linking directly to topic-specific pages. The home page is becoming increasingly
irrelevant.
Ad Blockers
Create Holes in Our Web Sites. Another related epiphany struck us as we
compared notes on the upswing in the use of ad-blocking software and browsers.
In many cases, as much as 10 percent of customers are using browsers, like the
latest version of Firefox, with ad blocking enabled. What that means is that if
you have a Web site that includes lots of ads—either sponsors’ ads or house ads—the
appearance of your site is compromised with a bunch of blank holes.
Personal aside: This
discussion took me back to the late 1970’s when Professor Ron Baecker at the
University of
The increased adoption of ad-blocking software by customers
is not only challenging companies’ revenue assumptions, it’s also impacting the
quality of the customer experience they deliver. Soon, we’ll need to design
sites that look really good without ads. Or maybe we can substitute artwork for
the ads, or customer-generated content. I was tickled to read an article about
an enterprising artist who is teaming up with Web ad-blocking software firms to
substitute artwork for ads.
Cloning Capabilities: Services, Gadgets, User Ratings, and Reviews
At the same time that home pages are becoming irrelevant and
advertising is being blocked by customers, we’re seeing an increase in the customer-spawned
proliferation of gadgets and widgets. A number of Visionaries have created
these Web gadgets or widgets in the past six months. Gadgets are interactive
tools with rich user interfaces that are usually developed in Flash or
Typically, they include some functionality that customers
would normally find on your Web site—a retirement calculator, a way to register
for a course or an event, or a way to apply for a job or a loan. Usually, they
communicate back to their “home server” via RSS, so they update themselves automatically
as the relevant information changes (data, newsfeeds, weather, etc.).
A few Visionaries have been experimenting with posting these
interactive gadgets in lieu of ads at sites that are frequented by their
prospects. Others provide gadgets on their Web site or on their beta/lab Web
sites. In either case, the gadget designers make it easy for customers to email
these gadgets to one another and/or to copy and paste them onto their own blogs
or Web sites or portal sites, or onto RSS aggregation pages, like Google
iPages, NetVibes, or PageFlakes, or onto their Mac or PC desktops.
End-Users Can
Create or Extend Gadgets and Spread Them Around. It’s important to realize
that the creation of Gadgets or Widgets is no longer the purview of geeks. It’s
actually pretty easy for non-technical users to roll their own simple gadgets
from their favorite content and functionality. You can use any content or functionality
that communicates using an RSS feed—photos, videos, text, calendars, data
feeds, news feeds, weather feeds. Give it a try. Most people start by
customizing or modifying others’ gadgets, like the ones you can find in
collections on Google, Microsoft Live, Apple, Yahoo! NetVibes, PageFlakes or
any similar sites.
To prove my point that non-techies can create gadgets, check
out my Customers.com tab on NetVibes, and copy any or all of them to your own
preferred Web location. My favorite is my Customer Experience Initiative To Do
list! Let me know if you’d prefer to have me email it to you. You can create
your own widgets or gadgets featuring your brand’s content and functionality.
You should also expect your customers to roll their own, or to extend yours by
adding their own functionality or content. (I can’t wait to see what people do
to mine!) In short, snippets of rich internet functionality can be cloned and
sent out to roam the Web. They are likely to show up on hundreds of locations—Web
sites and blogs—thus expanding the reach of your brand.
Re-Using
Customer-Created Content Across Sites and Across Channels. Another form of
cloning or services re-use that a few Visionaries are doing or contemplating
doing is to take customer-generated rankings and/or reviews and to use them in
offline venues, such as stores, catalogs, or mobile phones. Another form of
re-using customer-generated content that is already widely adopted among our community-savvy
Visionaries is to take online discussions and sprinkle the relevant discussion
threads throughout their Web sites and on to others’ sites.
For example, on any product-specific Web page, you’re
increasingly likely to find customers’ discussions about that product, their
own reviews and ratings, and their tips and advice to other customers. You no
longer need to go to a separate “discussions” or “forums” tab. Customers can
share their points of view and their tips everywhere they go.
The Perils of Baby Boomers
About half of my Visionaries are baby boomers. We were born
during the Second World War. (The other half are younger). And many of our
companies cater to baby boomers. That’s a blessing and a curse. As one
Visionary said, “I know how to design for people like myself.” But, as many of
us agreed, as the boomers retire, our businesses may be doomed. When you have a
huge customer segment that all disappears at the same time, and you don’t have
products, services, and brand experience that are designed around the needs of
generation X, Y, and beyond, you have a major business strategy problem! This
“curse of the boomers” is true not just for e-businesses, but for all
businesses. We all need to learn how to design products and services for the
younger set.
Learning from Virtual Worlds, Online Games, and Innovative Kids
We all agreed that we have a lot we can learn from our kids
(and, in my case, grandkids). We spent some time comparing notes on our experiences
and our kids’ experiences with virtual worlds, online games, and off-line
coopetition (kids teaming together to compete and play games in both the real
and virtual worlds). We marveled at the multi-tasking and parallel processing
capabilities of our younger colleagues and offspring. We explored the ways that
some Visionaries are setting up laboratories in virtual worlds in order to
learn first hand about avatars, customer-created worlds, fashions, intellectual
property, new services, and new (and old) behaviors.
One reassuring thread that permeated our discussions of both
online games and online communities was the realization that most of the hard
work of “getting it right” is based on a deep understanding of human social
behavior. Social constructs don’t really change as people go virtual. But you
do need to have very well-honed social skills to design and shape social communities
and social networks.
Driving Organizational Change
As always, we spent a fair amount of time talking about how
difficult it often is to get everyone in a large organization aligned around
customers’ outcomes and moments of truth. At this meeting, several Visionaries
were able to share impressive examples of organizational culture change. In
each case, they had used a combination of customer-driven operational metrics
and political savvy to get everyone happily aligned around monitoring and
improving the things that matter most to customers.
Wow! Great insightful observations and questions, Jonathan....
I think that marketing CONSISTS of understanding customers' contexts and desired outcomes deeply...
I agree with you that sales is changing.. actually good sales has always been "consultative sales".. e.g. understanding the customers' context and understanding their outcomes, then positioning your products and services to be easy for customers to buy (including understanding how their buying/approval process works, whether that's consumer or business - e.g. you won't buy a car your kid doesn't want to be seen in!)..
Posted by: Patty Seybold | June 27, 2007 at 09:33 AM
Understanding customer outcomes and what a company has to do to make sure goals are met requires profound knowledge about how customers work, what they do that is successful, what they do that isn't and what problems they are blind to. Hard work to find out but if companies rely only on the "issues" or activites around their products and related services then they might miss why customers aren't meeting their goals, even with the company's extraordinary attention.
I agree, marketing is over as we know it. But marketing research, meaning, learning about customers, is not. Marketing takes on many different functions. This one, reasearch, in light of the customer powered economy, is more important than ever.
The other, related question, is "How will today's sales function change?" With customers "capable" of learning so much on their own, how will it affect the need for someone to tell me about someting they already know? Will sales be more of a product "design" function, helping the powerful customer's unique needs become real?
Any thoughts?
Posted by: Jonathan Narducci | June 18, 2007 at 11:50 AM