Firms with a higher than average digitisation index have managed to increase their turnover by at least 10 percent whilst those with index values of less than 50 have experienced sales losses. What is the recipe for the success of these digital champions? What is the common denominator of their digital strategies? The answer found in the study: All successful digitisers focus consistently and radically on customers.
“The customer is the new CEO!” Hagen Rickmann, corporate customer manager, Telekom Deutschland
Customers’ expectations in terms of products and services are forever growing and changing. At the same time, consumers are becoming more confident and deciding themselves when they wish to interact with a brand or company. Two thirds of all interactions are currently triggered by customers and the trend is growing. This requires a different kind of relationship management and agile product development on the part of firms.
A recent survey by Bain & Company shows that there is a great deal of catching up to be done in this area: around 80 percent of the firms surveyed refer to themselves as “customer centric” but only 8 percent of these firms' customers agree with this statement. The closure of this so-called delivery gap is a decisive factor in terms of the success or failure of digitisation in many firms. Their digital strategy therefore depends on an in-depth understanding of their customers. Four steps have proven helpful for optimising customer centricity in our strategy sessions:
Step 1: Creating a persona
“Tom, aged 30, an estate agent, single, motorcycle freak” - in contrast to anonymous target groups, personas are fictional characters created to represent a certain type of customer. Advantage: personas give customers a “face”; they have a name, age, preferences, wishes, problems and individual purchasing behaviour. Personas help identify needs, prioritise methods and build up a consolidated picture of the typical potential customer. Focusing on four or five personas has been found to be helpful.
Step 2: Defining a value proposition
By formulating your value proposition, you answer the question of how to fulfil the expectations of your personas: How does your product solve your customers’ problems or why does it make their lives better? Why is the product better than comparable offers from competitors? In short, why is it worthwhile purchasing your product or using your service? The argument is not presented in terms of the product but from a functional point of view. A perfect example is the value proposition with which Steve Jobs made a bid for the Apple iPod in 2001: 2530Not “5 GB of memory capacity” but “1,000 songs in your pocket”.
Step 3: Evaluating customer experience maps
The customer experience describes the experiences of a certain persona with their product or service throughout the entire customer journey. A concise overview of all the touchpoints can be seen in a customer experience map. What does the customer expect? What do they receive from us? How do they behave? How do they feel? The map tells a story of the experiences of the persona, reveals weak points and opportunities and offers various starting points as to how the customer journey can be improved.
Step 4: Developing a touchpoint strategy
The target situation can be defined on the basis of the findings from the customer experience map: Which experiences would you like to offer your customer in the future with your individual touchpoints? Which methods could you use to avoid disappointment and spark enthusiasm without losing sight of efficiency? A suitable strategy can be developed based on a feasibility evaluation.
The digital transformation creates customer relationships which are more complex than ever before; however innovative technologies also offer completely new possibilities for seeing things from the customer's point of view. Strategically collected and cleverly used data provides more detailed information than before about customer's wishes and makes it easier to address customers in a more personal manner. If you would like to find out more about big data and data-driven companies, you can read part 3 of our blog series soon.