During the last five years, the evolution of social media and its influence on business has been unprecedented. The bottom line: the customer is no longer outside the organization; the customer is now shaping the organization. If you want to thrive in this economy as a product or service provider, evolving the business requires a customer-centric approach.
Applying a customer-centric strategy
What does being customer-centric mean? Providing a superior customer experience across an organization’s product and services, and providing the customer with indisputable value and satisfaction is the simplest form of being customer centric. One can argue that many organizations today adopt this approach, but the reality is only a handful have really embraced the concept and made gains. Others have tried and failed, and yet others probably offer more of a lip-service approach rather than a lifecycle approach to customer-centric evolution:
The biggest challenge for acquiring customers is the crucial step of creating a value quotient with the customer. In the past, this step was accomplished through multichannel marketing using mail, catalogs and coupons. That strategy was well suited for a product- or brand-driven customer strategy, but now the equation has shifted to a customer-driven product and brand creation strategy.
This fundamental shift has created the need to treat the customer as a stakeholder in the business. To get this approach correct, organizations need to understand the new customer, who is very savvy with social media and can be very influential about your products, services or both to a large network of people. To understand the social media impact and integration, you need to learn a few terms and a few important underlying concepts or surrounding themes:
Crowdsourcing: First coined by Jeff Howe in the Wired magazine article, “ The Rise of Crowdsourcing ” (June 2006), crowdsourcing is a concept in which people form Internet communities based on shared interests. The basics of the concept revolve around degrees of separation among individuals that have been reduced greatly because of the Internet, and this reduction has created a virtual crowd. Traditional crowds have long been a powerful force in creating and paving ways for a brand and its associated products and services. The new crowd based on communities forms a very powerful vehicle that can be tapped by an organization to help drive creating its products and services. The net result of such an endeavor helps foster brand loyalty and increase the market presence from Word-of-mouth marketing (WOMM).
Word-of-mouth marketing: This kind of person-based marketing is not new. Before the mass commoditization of telephones and television, a marketplace emerged in every community, and it had a wide range of products and services. The vendors in this marketplace relied on a loyal set of customers, who would bring in new customers in the form of friends and family. Today, we call this WOMM. The difference today is that WOMM behavior happens on the Internet and in community forums, and shared-interest websites and personal websites such as Facebook, LinkedIn and Tumblr. This behavior is a key trend that needs to be measured.
Long tail: As a statistical term, long tail is a disruption to the normal Pareto or Gaussian distribution, in which the larger population of the statistic rests in the tail. Chris Anderson popularized the long tail in an October 2004 Wired magazine article, in which he mentioned Amazon.com and Netflix as examples of businesses applying this strategy. The long-tail strategy is driven by volume of business at lower cost, resulting in higher profits. A number of organizations have since embraced this model.
To embrace the new type of customer, organizations need to understand these three concepts and apply them to their business models.
