Marketing Daily has a story about a new report from Forrester Research suggesting that it is no longer enough for businesses to be “customer-centric,” but that they must be “customer-obsessed” if they are going to survive.
The story says that this is not a semantic difference: “It requires willingness to make fundamental thinking, strategic and investment shifts -- including redistributing money spent on brand advertising and other traditional dominance-creating areas ... To be customer-obsessed, a company must pull budget dollars from brand advertising, distribution lock-up, mergers for scale and supplier relationships, and invest in four priority areas, according to the report: real-time customer intelligence; customer experience and customer service; sales channels that deliver customer intelligence; and useful content and interactive marketing.”
According to Josh Bernoff, senior vice president, idea development for Forrester Research and primary author of the report, entitled "Competitive Strategy In the Age of the Customer,” a customer-obsessed company “focuses its strategy, its energy, and its budget on processes that enhance knowledge of engagement with customers, and prioritizes these over maintaining traditional competitive barriers. Previous sources of competitive dominance -- manufacturing, distribution, even information mastery -- are now just table stakes."
Among the new organizational priorities, the report says, should be “nimbleness and emphasizing speed over strength (management structures that permit rapid pursuit of customers in new markets and channels); valuing versatility over customer lock-in tactics (building true loyalty rather than blocking customer abandonment with contracts, proprietary technology, frequent-flier programs, etc.); global reach and strategy (in supply, demand and markets); and information-rich services (continuously updated information about products services with mobile accessibility).”
The story says that this is not a semantic difference: “It requires willingness to make fundamental thinking, strategic and investment shifts -- including redistributing money spent on brand advertising and other traditional dominance-creating areas ... To be customer-obsessed, a company must pull budget dollars from brand advertising, distribution lock-up, mergers for scale and supplier relationships, and invest in four priority areas, according to the report: real-time customer intelligence; customer experience and customer service; sales channels that deliver customer intelligence; and useful content and interactive marketing.”
According to Josh Bernoff, senior vice president, idea development for Forrester Research and primary author of the report, entitled "Competitive Strategy In the Age of the Customer,” a customer-obsessed company “focuses its strategy, its energy, and its budget on processes that enhance knowledge of engagement with customers, and prioritizes these over maintaining traditional competitive barriers. Previous sources of competitive dominance -- manufacturing, distribution, even information mastery -- are now just table stakes."
Among the new organizational priorities, the report says, should be “nimbleness and emphasizing speed over strength (management structures that permit rapid pursuit of customers in new markets and channels); valuing versatility over customer lock-in tactics (building true loyalty rather than blocking customer abandonment with contracts, proprietary technology, frequent-flier programs, etc.); global reach and strategy (in supply, demand and markets); and information-rich services (continuously updated information about products services with mobile accessibility).”
- KC's View:
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The report makes clear that the reason this shift in mindset is necessary is that technology-empowered customers want what they want faster, cheaper and better, and they want high service levels, and they use technology to identify where their needs can be best met ... and are perfectly willing to change allegiances if they think they’ll be better taken care of elsewhere.
Which ought to have most retailers saying, “Yikes!”
When you think about it, the notion of “speed over strength” ought to be very good for smaller retailers, who should be nimble enough to create for themselves service levels that are a differential advantage. Excellence in everything else is, as they say in the piece, just table stakes - the cost of getting into the game. Customer obsession is where you win or lose.
