TRUE interviews Forrester Research’s Dane Anderson. FleishmanHillard’s Don Anderson conducted the interview for TRUE in Singapore—and no, they’re not related.
Q: When you refer to a “new age of the consumer,” as you did in a recent talk in Singapore, what do you mean?
Anderson: In the past, companies would talk about the voice of the consumer and the customer always being right, but they didn’t fully understand these customers in great detail and granularity or what they valued most. So companies tried to make up for the lack of insight by serving customers better, responding more quickly, things like that.
That level of information began to change as the multiplication of connections to the consumer, whether through mobile or social or whatever, increased and gave companies real opportunities to understand their customers better. But what also has happened as these connection points multiplied, consumers began to understand the companies and their competition better, often better than the companies themselves. That’s important to recognize, because about 60 percent to 70 percent of the purchase process happens before customers even contact companies about buying. It’s about understanding how all these connections link together and how to really move to a different level of engagement with the customer, so companies can provide the best customer experience and ultimately sell more.
Q: What digital megatrend should organizations focus on?
Anderson: If you asking me which of the many technologies trumps the others when it comes to consumers, that’s easy. It’s definitely mobile. It’s become a very personal connection and consumers live their lives around their devices, the apps and service provision. Their expectation moving forward is that they will get any service or information through a mobile device. In the past companies would think about the web experience and fit it into the mobile phone. What we are suggesting is that companies start with mobile first, and not think web and other channels first.
Q: How does a megatrend like mobile relate to corporate performance?
Anderson: Everything goes back to customer experience. We have a customer experience index that measures the customer-experience success of companies by talking to their end customers. We’ve been doing this for a number of years, and what we did was take the leaders and laggards and compared their stock performance with the S&P. And not surprisingly, the leaders in customer experience considerably outperform the S&P, while the laggards severely under-perform it.
Nike is a company that has had considerable success recently connecting customer experience and mobile. Its Fuel and Plus products are really interesting in terms of the connections and understanding of their customer and ability to create community. They go from an athletic apparel seller to a community builder and lifestyle company.
This isn’t about a technology strategy; it’s about a business strategy of which technology is a component. You can no longer have a business strategy unless technology is a part of it. Technology is now baked into everything and is transforming every industry.
Q: What has that meant for the influence levels of various C-suite players?
Anderson: The CIO is really challenged today. They are being pressed everywhere, their budgets are being squeezed. We suggest they focus on transformational experiences and the end customer, where in the past what they have done too often is focus internally. They really need to be thinking about who the end customer is and how they support better experiences and the stages of customer engagement through technology. Unfortunately, only about a third of the CIOs today get this and can channel innovation and change.
What’s happening in some companies is they are splitting their IT teams. One team focuses on innovation and the customer, and the other team is focused on backend IT facilities. For the techie on the backend IT side, their salaries are lower and they are less sought after and it is more of a facilities role than a business role.
Smart CIOs are trying to create strong relationships with the business heads—the head of marketing, head of sales—engaging them and having them communicate with the CEO and the board on budgets. Those relationships can work, and the CIO doesn’t really need a seat at the strategic table. What matters is the value they are providing to the business.
These days, the adoption of digital practices really needs to start with CEOs if companies are going to be able to deliver business benefits and customer orientation. One CEO was addressing a roundtable of fellow CEOs recently and he told them that if they work for a company that doesn’t value IT in a business role, then they really need to find a new employer. I think that’s just about right.
Q: What impact has the customer experience had in Asia?
Anderson: The fact that Asian markets are becoming more competitive is and will be one of the drivers of customer experience and making businesses more social. In the past, markets like China and Indonesia were growing so quickly and were so under-saturated that the need for competitive differentiation was lower. Asian markets are still in the growth phase so businesses haven’t been pushed to be as innovative. Companies in Asia-Pacific also seem less willingness to invest in areas that don’t have as much of a direct return. To think about spending on branding or PR, these more abstract and nebulous areas where they can’t link it to revenue outcomes, is a harder thing for them. The link between customer experience and stock market return is less intuitive for many businesses. I think we will slowly see that change as markets become more competitive.