Digital Economy Is Not Just Customer-Centric; It’s Customer-Driven

Giuseppe “Joe” Carella is Adjunct Lecturer and Managing Director at the University of Arizona, where he focuses on executive education. His work of late has centered on how executives can lead their companies through the digital transformation.

UnboundID: As consumer brands are transforming themselves to digital businesses, what are the new rules for engaging with/interacting with customers?

Carella: I will take the example of a company that I’ve worked with, a musical instrument manufacturer that is a global iconic brand in the U.S. It used to be one of those traditional brands where the emphasis was on maximizing profits and being very product driven, with a passive approach to customer service. Their insights into what customers wanted were based on the question: “Who are my friends who play guitar and how can I get them to tell me if this product is good or not?” Like many other consumer brands, this company has had to become a lot more proactive and transition to an environment that is about maximizing market share and being more customer-centric. They are selectively targeting groups and developing factual insights about customer data, so they are overall more scientific in their approach. Most consumer brands fall in this category today.

The new economy that is emerging now, where technology and open global markets conspire to create more risks and opportunities, is customer-driven and not simply customer-centric. In a customer-centric environment, the organization focuses its efforts around its own idea of the customer. In a customer-driven environment, the customer chooses when and how to engage. I think the new rules for digital transformation from a marketing perspective are all about collaboration – not pushing but pulling information from the marketplace. It’s about maximizing lifetime value versus pushing single interactions, and rather than historical insights, it’s about predicting what is going to happen next. If you couple these elements with a service model that is more interactive and proactive, then you can get a deeper understanding of the customers as individuals, as opposed to large segments.

UnboundID: What about customer communications?

Carella: Communications should be more integrated and seamless and driven by what customers value. I see most frequently that companies put different people in charge of different segments of the customer experience. Inevitably, this leads to a situation where you have divergent views of how the organization should interact with the customer, as opposed to how customers want to interact with the organization. You can’t think about this from distinct domains like ecommerce and customer support. Instead, large companies need a customer experience officer who can manage and monitor interactions throughout the organization and who is responsible for all the channels. The big picture is how to bring together all of these customer interactions and then determine what the customer will want to do at his current stage of engagement, how the company should respond, and whom should respond.

UnboundID: Do consumer brands outside of North America differ in these practices or viewpoints?

Carella: I think it’s less a function of the regions and more a function of the maturity of the organization and their space. Luxury brands, for instance, are amazing at customer centricity.  They have an opportunity because the product they sell is so high value that they can afford to put a lot of manpower into the effort. Burberry has done a tremendous job at continuing to drive unique value for customers while at the same time building a digital presence that creates this seamless experience. That drives even further loyalty by customers. Their integration of technology is really strong, and it’s allowed them to blur the lines between physical and digital. Go into a store and you will have access to many of the same digital features you have online. They are giving consumers comfort and connection and a familiar environment that is uniquely tailored to them as individuals. Companies in emerging markets have a real advantage, however, because they can bypass the traditional models of the US and Europe. They can build digital business models from scratch, rather than having to convert older or manual processes. Customers in countries like China and Indonesia are now just as sophisticated as Western ones and have high expectations, so that strategy really works.

UnboundID: In places like Europe, privacy is more of a consideration especially from a regulatory standpoint. How does this affect e-commerce and cross channel marketing strategies?

Carella: Companies like Google have relented to the European way of doing business. A ruling by the European Court of Justice in 2014 determined that Google would have to respond to individual requests to remove personal data from search results on a person’s name when “outdated, inaccurate, inadequate, irrelevant, or devoid of purpose, and when there is no public interest.” The large majority of requests for removing links from search engines come from private individuals versus celebrities or criminals, interestingly. Ultimately the way the industry is evolving is that governments and industry will have to find a way to collaborate. I think that in the future governments will want to monitor communications and content rather than control the storage or distribution of the data. This might make it easier for companies as they try to manage multiple domains in multiple regions for different compliance needs. Any new regulations in Europe, or at least the UK, will be a bell weather of what’s to come. Currently the UK government is trying to pass a law that is focused on monitoring content and data on the Web for national security purposes while balancing the need to protect civil liberties and personal privacy.

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