Returning from an interesting SAP Now event in Berlin with a strong attendee focus on customer experience is the perfect opportunity to start thinking about how to thrive as a company in the age of the customer. Being busy with and at our own valantic booth and an exciting IoT-Chatbot showcase I sincerely could not attend as many presentations as I wanted to.

First let’s establish what the age of the customer means.

What is the age of the customer?

A few years ago the term ‚the customer is in control’ was coined. This was back in the first hype around social media, around the same time the term ‚social CRM’ got created. Some companies, for example Microsoft, are still using it. In the beginning ‚the customer is in control’ referred to the idea that social media put customers in a far more powerful position vs. businesses, because the higher reach that social media offered, changed the balance of powers between customers and vendors.

Or so vendors of enterprise software argued.

The ‚customer being in control’ is certainly one way to describe an age of the customer, even a very strong one.

Forrester Research is somewhat more balanced. Forrester describes the age of the customer as the combination of a shift of power from institutions to customers and the disruptive forces of digitalization. This combination would “alter market fundamentals and force companies to change strategic direction and rethink operating models”.

As part of the vivid discussion following my post Ten Questions you always wanted to ask about CX on CustomerThink, Harley Manning, VP and Research Director covering customer experience at Forrester Research added some clarification. He stated that the change from analogue media (paper, rotary phone, etc.) to digital media allows customers to more easily compare products and services online. Manning describes this as a “POTENTIAL shift of power to consumers” (emphasis his). It, however, is part of the customer’s job to use the tools they have at hand. This is something they often do not do.

In addition, companies also do (and need to) react to changing circumstances. They do this in different ways.

As a consequence there is a continuous pendulum situation instead of equilibrium. Both parties, customers and vendors, are looking for their own advantage.

In the same thread I defined the age of the customer as a vision: The age of the customer is reached when companies are consistently adopting an outside-in view and define their success based upon making their customers successful. Additionally, there are equal powers of negotiation between customers and vendors and an information balance.

As this vision is not yet achieved, there is also lacking (mutual) trust. The result of this lack of trust is often a ‘battle of tools’. Every time one side invents a new method or tool, there is a counter-invention.

A mindset for the age of the customer

The way out could be very simple and is based on businesses applying the two concepts of a trustful exchange of value and an outside-in view.

I hear you saying that a purchase is an exchange of value. Glad you mentioned this. This observation is right, or rather, it can be right. The concepts of receiving value are vastly different between customers and businesses. For a customer value comes out of the ability to achieve the desired goal out of a purchase, for a business the value comes out of the transaction.

A customer can gauge the value she gets only in use, which means well after the transaction took place. In other words: The company received value (money) while the customer appreciates value in use. This value may accumulate to the purchasing price or not. As a consequence, customers need to show considerable trust in the vendor’s product or service.

The second concept evolves around answering the question what it is that the customer expects and then delivering something as close as possible to this. An important part of it is also being true to the own brand promise and the matching brand messaging.

The consequence is the need for a customer engagement strategy. As I, as well as several others, have written, engaged customers are the better customers. Numerous studies showed that experience has a measurable impact.

And experiences can only be delivered through engagements.

Taking Action

Necessary preconditions to successfully implementing the mindset necessary for thriving in the age of the customer are building up a brand image (brand experience) and a corporate culture with a messaging that consistently transports the desired brand image.

Once this is established, it is possible and necessary to look at the two concepts that help implementing the customer orientated mindset.

About value

As said above, customers need to exhibit a lot of trust into vendors. They need to trust that they will eventually accrue the value they paid for.

One key way business can earn and maintain this trust is by knowing their customer and continuously engaging with them in a way that is meaningful for the customer. That way, it is also possible to identify what customers actually consider as value. One thing is for sure, customers’ view at value is different from a business’s view.

Why is it important? Well, simply because it helps in fulfilling the higher order customer expectations and therefore building and increasing trust in the business.

However, an important rule needs to be observed here: Only ask for data that is related to the objective that the customer has in mind and only use it for purposes of helping the customer achieve this objective.

About customer expectations

Customer expectations can be divided into three layers, which also define their value to the customers. The mere execution of delivering to a requirement fulfils the base expectation and is not as valuable as also fulfilling higher level expectations.

• Base expectations. These revolve around the fulfilment of the desire that a customer has, be it a need for information, service or an actual purchase. This is about reliability and accuracy and there is no prize to be won on this level. On the other hand, everything can be lost by not delivering on this level
• Efficiency expectations. Efficiency is about making the fulfilment of the customer desire as frictionless as possible for the customer as it can be done, given the constraints that a business operates under. However, delivering to efficiency expectations becomes increasingly important. However, their fulfilment is still not sufficient to thrive in the age of the customer. But it is a mandatory precondition.
• Joy expectations. These are the expectations that create loyal customers, if they are fulfilled. And these, together with any bad experiences, create individual experiences that remain. On the other hand, they can easily become base or efficiency expectations. That is also why they need to be used with judgement. However, it is important that the customers feel like they are treated as humans, by humans.

And that determines the way ahead. First be clear about your current situation, what you want to achieve and who the audience is. Then build your strategy, including matching KPIs that you can use to determine your progress along the way.

Implement it.

Measure your progress using the KPIs and adapt regularly.

Think big, act small.