The CIO In The Age Of The Customer
The power of consumers to access new information, compare products and services, and seek advice and recommendations amounts to a cosmic shift in the way businesses deal with their customers.
In the age of mobility and social media penetration the current period is definitively the age of the customer. In no other period in business history have consumers gone about their day with a supercomputer in their pocket that they can use to criticise, berate or simply defame companies that ignore their needs, wants and desires. The power of consumers to access new information, compare products and services, and seek advice and recommendations from friends amounts to a cosmic shift in the way businesses deal with their customers.
In a report released by Gartner, the mobile products industry can expect at least 2.5 billion new devices to be sold in 2014. The business implications and productivity dependency on these devices continues to grow year over year. For businesses themselves it also serves as a critical area within which to provide value for their customers and any mistakes in their applications can prove deadly in the new age of customer centric service.
Already the results of technological failures in customer engagement are becoming tangibly alarming. Sales and marketing losses to the tune of $ 12,967,600 have been recorded due to mobile application errors, according to research from software maker Compuware.
The technology failure in customer engagement and service are no longer exclusively in the domain of social media marketing. Synergy between a company's IT department and its consumer facing products or services is fast becoming a critical aspect of success in building a relationship with the customer.
Dawn Of The Age Of The Customer
This shift in consumer-business relations changes the dynamics in radical ways. Businesses become less in control of their brands, which is reflected in terms of negative impact reports and poor user experience stories. The consequences for which become even greater for companies that have consumer facing products which work their way up the supply chain. The fundamental change is that every participant in the business operation is immediately invested with the success of the product in the marketplace. Not even B2B relationships are immune to this phenomenon.
In order to explore the consequences of these relationships, Watermark Consulting tracked customer experiences on a yearly index based on modeled portfolios of public companies and compared them to the S&P 500. The index is derived from a catalogue of questions that are presented to consumers in general and the customers of these companies specifically, to gauge their Consumer Experience rating. The results showed that leaders on the Consumer Index rating outperformed the top companies in the S&P 500 by over 300 percent and left the laggard enterprises way behind.
The certain correlation between customer experience and profit building makes customer engagement a critical aspect of the strategic concerns of any CIO and CEO in planning. In such a period where the smallest misstep or social media faux pas can significantly damage or jumpstart a company’s brand equity, the question arises: how can Indian CIOs and their compatriots in the C-suite prepare to ride the waves of change?
Understanding The Journey Of The Customer
“IT departments haven’t always held customer experience as a priority. It hasn’t been on the radar for most CIOs but that is changing,” says Nigel Fenwick, Vice President, Principal Analyst at Forrester Research. “But as companies make customer experience a strategic priority, CEOs are looking to their CIOs for customer experience strategy from an IT perspective.”
As a component of this new collaboration, CIOs are required to become inter-disciplinary jack-of-all-trades in the business organisations. Understanding marketing concepts such as journey mapping and touch-point analysis is the next key step towards making technology a driving force towards meeting business outcomes. The technology underlying the tools of marketing, such as touch-point analysis only becomes a valuable operations driver when they are incorporated into strategic planning.
For the uninitiated: a touch-point is any moment when a potential customer encounters your business’ product or service. It is more than the moment when they are considering purchasing your offering, but all those other moments such as when they see your brand in an advertisement or they hear it mentioned by a friend. “Every time you, as a consumer, are conscious of a brand’s existence - that is a touch-point. It’s a moment of truth,” says Fenwick. “It’s where consumers can decide to engage further with the company or choose to go to a different provider. This journey defines your product.”
The customer’s journey is filled with many such touch-points where behind each point lies a system of engagement where the company can touch the lives of its customers. The role of the CIO is to provide the most efficient systems of record that operate behind these systems of engagement so they can leverage the resulting data to drive business outcomes.
Companies that rank highly on Customer Experience Index are seen to employ a significant amount of co-design and synergy empowerments to their teams and encourage inter-departmental collaboration. CIOs are often obsessed with analytics, seeking to measure time use, budget breakdowns and other data points to enhance consumer experience metrics. Successful CIOs tend to position their entire customer facing systems under one team so they can view and analyse their customer’s entire journey and find ways to control it from a systems perspective.
Such modular and inter-departmental customer facing teams are found to be more agile and adaptable to change. They engage with customer needs at a rapid pace and work towards building a service-oriented architecture to increase the positive outcome for their consumers. “The boundary between IT and business is artificial. Technological capability isn’t just restricted to that department and digital businesses show that expertise needs to be embedded in every aspect part of the business,” says Fenwick. “Digital, mobile and social technologies are central players in enabling business. CIOs take on a consultant type role, driving technology towards transforming business outcomes.”
The Golden Rules Of Customer Engagement
In a Compuware survey that studied the financial loss from technology failure, 45 percent of businesses suffered losses in market share and brand equity. Respondents said that customer experience and service domains were the most technology-dependent segment of their business.
“This demonstrates our reliance on IT and the direct impact on revenues, relationships and reputations when technology does not work as it should,” says Michael Allen, Director of Application Performance Management at Compuware. “The figures really are eye watering - especially when you consider the fact that these are not isolated events.”
Measures of mobility and digital engagement from a customer experience perspective exist on two dimensions - time resource benefit and the pain/pleasure incentive. The key question any CIO needs to consider when setting up a customer facing solution is - does this solution save customers time or cost them time, and does it increase their pleasure or reduce their pain?
By subjecting front facing products to these simple tests of integrity, CIOs are able to make their customer’s journey more pleasant and efficient. A CIO needs to deploy technological solutions that are able to save their customers’ time and provide desirable outcomes for pain and pleasure. If they can control these two dimensions they stand to become a very disruptive force for their competition.
“For Indian CIOs, yesterday was all about sustainability, availability and in some cases connecting with your customer,” says Arun Gupta, CIO at CIPLA. “Tomorrow starts from the customer. You have to start looking outward. And the moment you start doing that, the possibilities are endless.”
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