Forward-thinking organizations, regardless of industry, are reorganizing their business strategies to be customer-centric. But why?
Businesses of the past operated and prospered by focusing primarily on the needs of shareholders, leaving customers at the mercy of the business’ view of the customer — or lack thereof. Without the resources to explore options or to research the quality and culture of a company before the point of purchase (PoP), customers were constrained by location, with limited access to information. Purchasing within this restricted, merchant-regulated space gave businesses the ability to dictate the customer experience. All that changed with the emergence of digital technologies and the influence of the millennial generation.
The Digital Influence
Digital technologies created customer awareness, enabling product and brand research and broadening purchase options. A new wave of discounts and convenience offerings created a large consumer demographic of cost-conscious, quality-seeking researchers. Commoditization with access to high-volume information has empowered customers to define what they want out of the purchasing process.
Customers have shifted from loyalty to a brand to a search for brand experience. They’re less loyal to brands, more loyal to their own search of personal experiences that fulfill their needs and expectations. This shift has resulted in rapidly increasing consumer demands for brand awareness, personalization, production ethics, quality assurance and politically correct consumer environments.
The Millennial Influence
With the majority of millennials currently in the workforce, they are now in command of the economy, with an estimated $1.3 trillion in annual consumer spending (1).
Millennials are predisposed to being cost-conscious because of their age/earning capacity, the recent recession and student loan debt. Within this context, millennials realized the full potential of digital and have been the driving force in commoditization and increasing competition in the economy. This cost-conscious characteristic may seem counterintuitive, given their annual consumer spending, but the disparity comes from this generation’s value of experiences over possessions. While older generations spend time and money on services or products, millennials spend their time and money on experiences.
With millennials now accounting for over one fourth of the total U.S. population, their focus on experiences supports the growth of an economy driven by the consumption of experiences (2).
What does this mean for businesses?
Traditionally, experiences were lumped in with services. With the millennial-influenced shift from material satisfaction to psychosomatic gratification (sensory and emotional needs), experiences have become a distinct economic offering. To realize the magic of digital in the eyes of the customer, organizations must adapt to the experience economy or risk falling behind.
Embracing the Digital Space
While it’s no secret that digital is a disruptive innovation on a titanic scale, it is not biased against the existing marketplace. Quite the opposite; the digital space (the word “space” was chosen deliberately because of its seemingly limitless potential) carries with it the power to transform businesses.
The digital space provides an unbounded channel to deliver positive, personalized customer experiences. It provides an unprecedented opportunity and platform for businesses to: express brand voice; engage and build trust with new customers and millennials; deliver personalized experiences; nurture customers to PoP, and continually support the customer relationship. Digital technologies fuel the evolvement of business strategy, providing the necessary data to produce a 360 view of the customer in an ever-changing marketplace.
With 360 views of your customers and expanding avenues to reach them, you can deliver the experiences your customers now expect. Digital is the foundation on which you can build those great customer experiences.