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Two Meta Trends Shaping the Competition

📄 Contents

  1. Meta Trend #1: The Customer First Revolution
  2. Meta Trend #2: The Subscription Economy
Why is mastering the art of customer success delivery so important and so urgent? Simply speaking, it’s because we believe it will be an indispensable capability for thriving in the face of two meta trends of the next decade: the Customer First Revolution and the Subscription Economy.
This chapter is from the book
  • “A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.”
  • –Henry Ford

Though it may seem like an old-school truism, it has taken businesses quite a long time to realize the importance of “putting customers first.” But they are starting to finally get it. Indeed, as we’ll explain shortly, they may have no other choice if they expect to survive the onslaught of two “meta trends” we describe in this chapter.

Over the years a lot of companies have spent significant sums in their effort to understand their customers. Many were inspired by the ideas of Don Peppers and Martha Rogers, whose groundbreaking book, The One to One Future,1 introduced the world to the concept of customer relationship management.

Peppers and Rogers were followed by authors like Frederick Reichheld of Bain & Company, whose seminal works The Loyalty Effect and The Ultimate Question introduced now-standard concepts such as customer loyalty, and promoted creative strategies for retaining customers.

Although these pioneering works provided motivation for a generation of business leaders to turn their attention squarely on the customer, we propose that companies today will need to do even more—indeed, to think about customers in an entirely new way—if they expect to reap Henry Ford’s supersized profits.

That new way of thinking about the customer is embodied in a set of principles and techniques we call customer success delivery. Specifically, we define customer success delivery as the ability to quantify and communicate the value of your product or service consistently and continuously, from before the sale to long after, while measuring and delivering on the promise of enabling business outcomes.

Why is mastering the art of customer success delivery so important and so urgent? Simply speaking, it’s because we believe it will be an indispensable capability for thriving in the face of two meta trends of the next decade: the Customer First Revolution and the Subscription Economy. In this chapter, we will explore both of these uber-trends—along with a handful of derivative movements—that are rapidly defining the competitive landscape for the near- to midterm future.

To better serve their customers, more companies are forming teams specifically focused on driving customer success. Signaling the strategic importance of the effort, companies are now placing these teams under the direction of top-level company leadership. A great example is Oracle’s customer success program guided by our co-author Jeb Dasteel, Oracle chief customer officer.

Meta Trend #1: The Customer First Revolution

As the title of this book suggests, we’re in the midst of a revolution—one that is shaping up to be one of the biggest forces influencing how you compete for customers—indeed, how you run your whole business—over the next decade. We call it the Customer First Revolution.

If you’re an earlier-generation business, the Customer First Revolution changes the rules of the game completely. Sure, you’ve always wanted to nurture great relationships with customers, but at the end of the day, you’ve always been the one who sets the terms of the sale and the direction of the relationship. What the revolution decrees is the opposite: Now (for reasons we’ll explain below), it’s the customer who sets the rules of engagement. In other words, after decades of subservience to the seller, the customer has finally become the proverbial king!

Customer First Companies Perform Better

Business-to-consumer (B2C) companies were the first to see the tables turning when social media and other digital channels burst onto the scene a decade ago. These new tools and tactics, which customers eagerly adopted as a means to level the playing field against sellers, forced B2C companies to radically rethink their marketing and sales strategies.

Market analyst Forrester Research, which coined the term “the Age of the Customer” to describe our revolutionary era, discovered an interesting fact about this trend: B2C companies that learned to embrace these next-generation tactics—and used them to improve the customer experience—gained a dramatic performance edge over those that didn’t. Indeed, they outperformed the average company by a considerable margin and outperformed laggards by more than a factor of three (see Figure 1.1).

Figure 1.1

Figure 1.1 Customer First companies outperform the rest.

Mastering Your Digital Identity Is Critical

The Customer First Revolution puts a premium on all things digital, and for good reason: Increasingly, your customers are digital animals, and they increasingly relate to your business and brand on a digital terrain. It’s no exaggeration to say that your customer to a large extent defines your brand through digital vehicles and channels such as Facebook, Foursquare, Twitter, LinkedIn—the list grows longer every day.

It is now estimated that some 15 million consumers engage with their brands through social media before making a buying decision. And that number is fast-growing, with B2B customers trending similarly.3

In the digital- and social-powered Customer First Revolution, consumers will interact with your digital identity even before visiting your brick-and-mortar location. It is also a world where relevance and authenticity trump prepackaged, one-size-fits-all content. Companies that master the art of creating and managing a compelling digital identity will have the upper hand in the Customer First Revolution.

Local Beats Corporate

Delivering relevance and authenticity will mean that it’s not enough to have a slick corporate website. In the Customer First Revolution, your local digital identity matters more. That refers to all the social media activities and chatter tied to your neighborhood stores, franchises, and branches—the places where your customers shop, eat, and hang out.4 This is where opinions about your brand are formed, and then shared far and wide over the digital airwaves. Nowadays, before you dine out—or sign up for a health club—chances are you’ll check the customer reviews on social media and get directions while you’re at it.

So crucial is this local angle that we’re seeing a new discipline emerging around managing a company’s local digital presence, or “digital place identity.” And it is serious business. We recently talked to a national restaurant chain that initially failed to pay attention to the Facebook pages of its local eateries. As a result, it left a digital brand vacuum that was filled by “rogue” pages filled with a hodgepodge of negative and even false reviews cooked up anonymously. Its digital brand had been hijacked, and sales suffered for months.

B2B Customers Are Seizing Power

Although consumer-focused companies were the first to be swept up in the Customer First Revolution, we’re now seeing this same shift in power spreading into the business-to-business (B2B) universe. And we are seeing the same advantages accrue to B2B companies that embrace the shift to customers’ digital experiences—for example, by launching social channels targeting key customer segments. Parallels to the consumer sector abound, though with some subtle differences. Instead of Facebook or Yelp, for example, business buyers prefer B2B-oriented channels such as LinkedIn and IT Central Station.

Buying Happens Even Before the First Phone Call

The revolution is leading more B2B buyers to shun vendor sales reps in favor of company and independent websites. In a recent survey by Forrester Research, B2B buyers said by a margin of three to one that gathering information online is actually superior to interacting with a sales rep. Furthermore, these same buyers said by a margin of 59% to 19% they did not want to interact with sales reps as their primary source of information.5 Three quarters of B2B buyers in another Forrester survey said they researched half or more of their work purchases online, with the top source of this research being vendor websites.6

With the lion’s share of research being done online, it’s estimated that 70% or more of the buying decision happens before the company is contacted directly. Armed with intelligence and candid insights gleaned from social media, the Internet, and analyst research, business decision makers are more likely to home in on one or two providers that can meet their needs. This makes it even more important for sellers to develop a compelling value proposition and disseminate it strategically across digital and social media networks.

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