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Consumer insights are changing the conventional way of doing business

By Shalini Pandey

Everybody in today’s world knows that customer is the king and no business can ever survive without providing customer satisfaction from the goods or services it offers. However, how many businesses really understand their consumers when it comes to developing new products and services, or marketing those products to potential customers is the question. This does not refer to just understanding consumers in the traditional sense of how a product appeals to a specific demographic group. It means really getting down to understanding why consumers act a certain way, how they share information with each other, and what cultural influences are at work in shaping
their perceptions and understandings.

Changing consumer base

Today’s consumers have changed dramatically in terms of how they choose to work with the Companies and the brands they patronise. They have different backgrounds and cultural foundations and wish to interact on a more personal level. Businesses and marketers that do not look for consumer insights, or fail to understand their anthropological backgrounds are not able to connect or engage with prospects and fail to motivate them to become customers.

As the business industry has grown and evolved, marketers are all well aware that they can no longer try to give consumers “any colour they want, so long as it’s black,” as Henry Ford was so fond of saying. Companies now realise that they need to offer a wide variety of products, services, colours and fashions to appeal to an ever-changing customer base, which is possible only by product innovation.

Going digital

Companies born before the internet took hold face an enormous challenge: improving their online products and services at the warp speed of their online competitors. The ability to make thousands of changes every day to its online retail services has been a key reason for Amazon expanding its online lead over Walmart and other historically “bricks and mortar” retailers. Amazon e-commerce revenue growth was ten times that of Walmart’s last year in dollar terms, and 1.5 times faster in percentage terms.

Other companies that are making the transition to the Digital face similar challenges from digital natives. Newspapers, pay TV, magazines and other media companies have been losing customers in droves to digital media firms like the Huffington Post or Netflix. Virtual financial services firms such as Wealthfront and Betterment are syphoning investments from established banks through a great mobile app and website. Even companies that make industrial products like cars, medical devices, and construction equipment are increasingly competing
with digitally sophisticated firms like Tesla and Nest that regularly update their connected physical products online.

Companies are increasingly using customer insights via digital modes to improve their products and further launch new ones in the market, as they offer various advantages to the firms. The time taken to make critical product enhancements dramatically reduces and the companies gain the ability to test new ideas quickly and cheaply, run experiments, and back out if there are any problems. Going digital helps decrease the costs by eliminating the waste of fully developing features that fail in the market and rapid revenue increases from products that are continually on target, with better features and functionality every day. They also lead to improvements in quality, reductions in errors, and greater reliability.

Banks using digital services to gain loyalty

With the coming of the Digital age, firms have started to recognise the need to make the best use of the advantages that it has to offer and do so before their competitors. Banks around the world have been working furiously to improve their mobile applications and optimise their websites for customers’ smartphones and
tablets. Yet, the race has just begun. Leading banks are still learning how to take a mobile-first approach to reimagine customer experiences in everything, from buying a home to resolving an incident of fraud. By migrating customers to digital channels, banks have begun to reap significant cost savings as they drive bad and avoidable interactions (generated by errors or better routed to lower-cost and more convenient digital channels) out of the branch and the call centre. The benefits also extend well beyond cost. Mobile channels are less likely to annoy the customer than the branch or call centre experiences, leading to increased loyalty with higher customer retention, repeat purchases and referrals.

The shift entails new roles for the branch and frontline employees. Complex sales and service activities, for instance, usually start with the customer turning first to digital (often mobile) channels. Customers increasingly expect to follow up with bank staff through digital chat, video or other real-time options rather than having to visit a branch or separately call a contact centre. As a result, most branches no longer need their own product specialists, because pooled specialists can deliver better service with higher productivity. So,not only is the branch’s role in routine transactions rapidly diminishing, the configuration of sales and service in the branch network is not so clear.

Mobile is the future

Consumers continue to lead the mobile charge in most markets from Alibaba to Uber. As a quick indicator, consider that when Bain & Company’s 2015 global survey asked 114,696 consumers which they would miss more if taken away for a day, their mobile phone or physical wallet, more than half chose their phone, with the share reaching 79% in China. Mobiles have clearly advanced past the tipping point.

As more banking activities go online, a major challenge for bankers has been to identify the right priorities and the sequence of their moves—both for earning greater customer loyalty and for funding investments in digital channels through cost reductions in the branch network. Moreover, given the scarce resources, it is more valuable to focus on improving a mobile app than a website because, on an average, customers use apps almost twice as often as mobile web browsing for routine interactions, and apps are consistently more likely to delight.

“Online accounts are forever”

The anthropological approach is all about understanding the culture. Instead of trying to change behaviours, firms can learn how to play into them and utilise them to their advantage. Since building a brand is based on establishing an intellectual and emotional relationship, business planners, product developers and marketers must all take the cultural context into consideration. A greater understanding of cultural insights and anthropological factors increases the marketer’s ability to motivate action and affect behavioural change.

Owners of Tesla cars can upgrade the performance of a car they bought, online. They do not necessarily have to trade the car in for the next new model to gain greater battery life or speed. Andy Singleton, CEO at Continuous.ai, a new company bringing continuous product innovation to financial services companies, points out, “Cars and devices get thrown away, but online accounts are forever. The ideal strategy is to maximise customer lifetime value.”

The ability to continuously enhance and overhaul online products is already separating the winners from the losers among internet firms. Increasingly, it will affect the fortunes of every firm that must have a successful online offering. The world has changed dramatically and continues to evolve every day. What appeals to customers one day may not work the next day. Businesses need to wake up to this fact and improve their insights into consumer behaviour.


Featured Image Source: Wikipedia



This post first appeared on The Indian Economist | For The Curious Mind, please read the originial post: here

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