What does it take for companies to survive the Customer Revolution?
That's the topic we explored in this week's live webinar featuring renowned speaker and author John C. Havens and Vision Critical SVP Marketing, Nick Stein. Havens, a frequent contributor to Mashable, The Guardian, Slate, and the Huffington Post on the topic of how technology is reshaping the relationship between companies and their customers, discussed how the widespread adoption of the Internet, social media, and mobile has empowered today's customers.
This "Customer Revolution" has changed customer expectations. Surviving and thriving in this changing landscape requires companies to explore a new approach to interacting and engaging with customers. Companies need to move beyond a one-way relationship that views customers as simple "consumers" to a two-way partnership in which customers become trusted advisors.
You can watch the webinar below. Here are four key takeways:
1. Choose your words wisely.
It's time to rethink the nature of the word "consumer." The term "consumer" emerged a few decades ago to identify those who aren't "producers." The job of consumers, according to the old paradigm, is the one-way consumption of products and services that producers put on the market. It's a model that no longer describes today's empowered customer.
To illustrate his point, John shared this excerpt from his book, Hacking H(app)iness:
Remember how I started this chapter calling you a consumer? Remember how it distanced us, putting us at arm's length? I did that to prove to you that words matter.
You have more value to give to the world than as a vehicle for consumption. You can richly contribute to other people's lives while also deeply appreciating other people's worth. You can participate in shared value on a personal level and create intrinsic happiness in our Connected World.
John later tweeted: "Using the term [consumer] enforces the us-them consuming paradigm."
- John C. Havens (@johnchavens) June 19, 2014
Words matter. How you call the people that buy from you matters.
2. Regularly engage with your customers.
To back up his claim that the word "consumer" is now outdated, John shared a study Vision Critical recently conducted with the help of two of our customers, Kimberly-Clark and Fred Meyer. We wanted to discover a better word to describe the relationship between companies and their empowered customers. Using Vision Critical's customer intelligence platform, Kimberly-Clark and Fred Meyer independently reached out to insight communities of their customers and asked them how they felt about the word "consumer."
We tapped into these communities and launched a study that applied the very best research techniques to uncover people's perceptions. Our goal was to open up the discussion over what people would prefer to be called. Within 48 hours, we gathered 3,100 responses and discovered the following:
45% felt that the word "consumer" was impersonal. People also thought that the word was commoditized (35%), transactional (32%), and negative (20%).
We asked for open-ended, qualitative feedback on how the word "consumer" made people feel, and they provided words such as "victim," "selfish," and "faceless."
Given the choice of four terms (customer, consumer, shopper and guest), "consumer" was far and away the least preferred out of the four. "Customer" easily won the day.
When asked what they would prefer to be called, people provided a wide range of suggestions, including: customer, client, valued, friend, client, loyal, and partner.
Given these stats, it's clear that companies need to ditch the word "consumer." Question is, what should we call them instead? Companies need to be open to the opportunity to learn from their customers. The study clearly showed that people prefer the word "customer" as it evokes relationship, trust, and commitment. However, other alternatives may resonate with your audience. Think of how they identify themselves - parents, individuals, people, etc - or what kind of relationship you have with them - partner, guest, advisor etc.
Furthermore, building a relationship with your customers requires more than a change in language; in trying to better your relationship, engaging with them is a great place to start.
3. Get a more complete customer understanding.
Nick spoke about the importance of customer engagement in the age of the empowered customer. The customer revolution creates serious challenges for brands. Companies that have failed to engage customers in the past have seen declining revenues, increased customer churn and reduced profit.
To get a complete customer understanding, companies need a mix of behavioral, transactional, attitudinal/emotional and social data. But many companies are missing at least one of these components. For instance, companies might have robust social listening and big-data programs but may be missing the "why" because of the lack of a customer intelligence platform.
While more CEOs are prioritizing customer collaboration, a holistic view of the customer can only come from engaging the right customers at the right time and in the right way.
4. Deliver customer intelligence across the enterprise.
The fact that customers are more empowered than ever means customer intelligence shouldn't just live in one department anymore. While customer intelligence has traditionally been the domain of market research alone, companies today need to distribute insight in all parts of the business, including marketing, R&D, strategy, sales and HR.
Using customer intelligence more strategically, companies are much more likely to deliver better products and better services for the empowered customer. The stakes are high: companies that engage customers see better business outcomes, including a 55% increase in annual company revenues and 30% higher customer retention, according to a study by Aberdeen Group.
For more information, scroll down for top tweets from the webinar or watch an on-demand recording.