May 12, 2016

Building a future-proof customer strategy

Over the past year, I have had the pleasure to visit more than 200 companies to talk about their customer strategy. These companies are based in Silicon Valley, New York, Shanghai, Singapore, Belgium, Netherlands, Dublin, Berlin and London. Most companies are new style businesses, organisations with a customer approach that is more advanced than what we are used to ourselves. I have summarised the findings of this fascinating journey in the following slide deck.

{alt_text}

It is not about the technology itself, but about the consequences of the technology

Technology is a central part of tomorrow’s customer relationships. In recent years, new opportunities have emerged that allow us to approach customers in a way that is better than ever. This trend will continue in the coming years. The main question remains: how does the market handle this technology? And more importantly, how is technology changing the market’s expectations? In other words, what matters is not the technology, but the consequences of the technology.

However, the reality is that if you are unable to handle the technology properly, it is difficult to win the market’s heart and business.

Based on input from 200 companies, I came up with 5 elements that are essential for building a future-proof customer strategy.

1. Mobile First

Although it seems like a matter of course, very few companies actually take the mobile first approach. Many currently see mobile first as making content available on a smaller screen, but that is not what it is about. It is about a new way of life for consumers. It is about new services and interfaces that are easier than ever before. During our visit to Zalando, we were surprised to hear that 56% of the Zalando turnover comes from mobile devices (phones and tablets together). That is pretty solid. Netflix told us that 40% of streaming takes place on mobile devices, compared to 0% three or four years ago. Why are Zalando, Netflix and Facebook so successful? Because they have truly responded to the mobile first philosophy, without any compromises.

2. Data Expertise

Traditional market research has become too slow for this fast-paced world. Consumers are also finding it difficult to assess what their behaviour will be in a certain context. Hence the accelerating trend towards consumer science: a philosophy in which the consumers are always right – not based on their opinions, but on their behaviour. Netflix is undoubtedly the best example of this. In early 2016, Netflix had about 75 million users and included all its users in a consumer test. Netflix continuously tests new templates and interfaces. The goal is to increase the number of streaming hours, because that has the greatest impact on loyalty. At meetings, Netflix does not want to find out which employees are right. It organises tests in which the consumer is always right. That eliminates any elements of ego and hierarchy from the major customers debate.

Data is now no longer just a digital product. Data is also increasingly linked to physical products. That is why it is necessary to treat our understanding of this data as a science. Soon products will actually come to life thanks to sensors. This is not a data game, it is a game in which we can understand the consumer better than ever and in which the consumer always wins the argument.

3. Boundless experiences

User experiences are independent from place and time. Experiences are frictionless. I am convinced that Uber owes a great deal of its success to its payment process. You simply don’t have to make a payment. It just happens, automatically. Invisibly. Samsung is working on its next generation of products. By 2020, all Samsung products (and they really have a lot of products) will be connected with each other and with the network. The objective is that families have to think less or even not at all about their smaller, operational household activities. Another example is US start-up company Cyanogen. This company is building a layer on top of Android to automate everyone’s lives. If you have some appointments in your calendar and Cyanogen knows you like to walk, but it has suddenly started to rain, Cyanogen will automatically order an Uber ride for you. You will 'suddenly' receive a message that your driver is ready for you. If it does not rain, the Uber ride is not ordered. This kind of automated service completely blurs the boundaries of what is physical, what is digital and what is customer experience.

4. Platform thinking

Gaining market share is more important than ever. More and more markets have become ‘winner takes (almost) all’ markets. It is crucial to grab the biggest market share as soon as possible. That is also the reason why many start-ups are not interested in making a profit during the most extreme growth phase. Market share is their biggest priority. If they succeed at that, profit will come.

The best way to gain market share quickly is to build a platform. Amazon, Bol.com, YouTube, Nest, etc. are all platform players. Nest is known as a manufacturer of smoke alarms and smart thermostats, but it is actually a very clever platform player. Just about every major manufacturer of electronic household items now works with the Nest platform. They use Nest’s knowledge to make their products more relevant and they are enabling Nest to grow faster than ever before.

Zalando’s long-term strategy is heading in that direction as well. Zalando literally says: "We want to be the Amazon Web Services of e-commerce”. Zalando has so much knowledge about e-commerce, it is going to build a platform that other retailers can use to run their e-commerce. Despite its billion-euro business, Zalando sees even greater potential in the platform game.

5. Participation

The last cornerstone of a future-proof customer strategy is the involvement of both employees and customers. The city of Palo Alto, for example, has an application that allows its residents to store information about all the city’s trees. Nowhere in the world does a city have more information on its trees than in Palo Alto. Palo Alto also set up a rescue team app that residents can activate when someone in their neighbourhood is having a heart attack. They can use the app to alert anyone nearby who is capable of providing first aid and cardiac massage. Citizen participation to save lives: beautiful.

To keep employees on board, a form of radical transparency is required. Companies like Google and Facebook organise a presentation and question time with the company founders every week. Every week! Most companies I work for have no more than 2 or 3 occasions a year when the CEO speaks to the employees, usually in a very formal setting. At Google and Facebook, anyone can have a conversation with the founders and ask all sorts of questions on a weekly basis. They get a weekly update on the company’s projects and status. This builds higher-than-average commitment.

 

And finally, sweeping ambition!

Make no mistake: if the customer service is not optimal or not keeping up with the times, it does not matter what your ambition is. The market will first judge the vitality of your customer relationship. Secondly, there is the relationship with the employees. At the end of the day, customers want to be able to follow a story. They want to follow the story of your ambition. We have now visited Space X twice, one of Elon Musk’s companies. Its ambition is to colonise Mars and get 1 million people to Mars as soon as possible. If you follow Space X and Elon Musk, it seems as though you are watching a film about the company. Good and bad news is shared. The ambition has become the company’s marketing. If you succeed at that, the market really hopes you will succeed at your larger goal. It is essential to tackle a global problem that people can identify with. A company like Bloom Technologies does this really beautifully. Bloom makes a sensor for pregnant women that allows them to monitor their baby themselves in real time at home. It wants to counter the global problem of infant mortality to keep moms and babies healthier. Now isn’t that a great goal? The market believes its story and it becomes a success.

 

Future-proof?

We hope you find some inspiration in the story. If you have other experiences yourself, feel free to share them. This is the beginning of a process of reflection. All input, experiences, additions and feedb