Following the age of manufacturing (1900 – 1960), distribution (1960 – 1990), and information (1990 – 2010), we have now entered a new era that Forrester calls the Age of the Customer (see figure).

While companies have always tried to be customer-centric, this Age is different.

The Age of the Customer is not about customer-first thinking or even the notion that the customer is always right.

Instead, empowered by the Internet, social technologies, and the general consumerization of technologies, customers now have the strength to demand that firms deliver on their age-old promises.

The only source of competitive advantage in the Age of the Customer is an obsession with understanding, delighting, connecting with, and serving customers.

In the age of the customer, companies that thrive — like Best Buy, IBM, and Amazon — are those that turn their investments toward customer knowledge and relationships, and toward flexible and rapid respond to customer needs.

One by one, every traditional bastion of competitive dominance has been digitized and commoditized — from manufacturing lock-in, to distribution control, to information ownership — making brand, manufacturing, distribution, and IT into table stakes.

Now any company can tap into global production, supply chains, and markets — and huge IT investments are no longer required as the Internet cloud provides the computing resources companies need.

Forrester believes that to succeed in the Age of the Customer, companies need to become customer-obsessed. In this Age, empowered customers are rapidly redefining the CIO's investment agenda in successful firms.

Wielding unprecedented power through social, mobile, and other technologies, these customers are driving a new customer-obsessed business model.

Companies using this new model leverage net-based businesses and communities — like E-Trade,, Twitter, and Facebook — to disrupt the more traditional business models that have locked out competitors by controlling manufacturing capacity, retail locations, market share, and product or service information.

This is not just jargon — as was usually the case for customer-centric firms.

Customer obsession is about tangible results. A customer obsessed company focuses its strategy, its energy, and its budget on processes that enhance knowledge of and engagement with customers, and prioritizes these over maintaining traditional competitive barriers.

IT becomes vital
Armed with information and backed by tens of thousands of their friends, the empowered buyers are rapidly shifting their business from stodgy, high-priced, self-absorbed companies to those customer-obsessed firms that give their customers what they want.

Led by the CIO and the CMO, these firms can deliver the new classes of service, quality, and responsiveness the empowered customers demand.

CIOs provide agile analytics end-to-end across complex supply chains.

CMOs drive change to product and service delivery as the Net-powered world blows away barriers to entry, enables easy channel and supplier substitution, gives buyers knowledge and power, and rapidly informs competitors about everyone else's tactics and methods.

Information and agility fuel success
For their firms to thrive in the Age of the Customer, Forrester believes that CIOs and CMOs must work together.

Technology underpins firms' customer-obsessed competitive capabilities and, to succeed, companies need to learn continuously about their customers, molding their business to match.

They emphasize speed over strength and versatility over lock-in.

They operate globally, taking advantage of any and every supplier and market.

They deliver smart products and services.

These firms:

1. Invest in real-time insight to build products and services customers will embrace.
For example, they use social technologies to listen to their customers and to gain real-time insight — transforming slow market research into fast customer intelligence.

They then respond quickly, building products and services based on needs their customers can't yet articulate.

2. Spend more on customer experience and service to build and maintain relationships.
Interactions between customer-obsessed firms and their customers aren't arm's-length, taking place through script-driven call centers.

Instead, these companies invest in customer-obsessed services, delivering rich and responsive customer experience consistently across channels.

3. Fund sales channels that deliver intelligence about customers and don't just push products.
In the age of the customer, firms succeed based on the customer's experience of value — not production and delivery. These firms obsess about repeat business more than new business.

They create, maintain, and leverage customer connections, prioritizing the end user customers over their channels.

4. Shift marketing funds from one-way ads into useful content and interactive marketing.
One-way information delivery no longer works. Successful firms in the age of the customer don't just embrace social applications — they focus on them as a foundation for connection, measuring their impact.

These firms are generous with content in their interactions with customers — like delighting customers with mobile devices that supply information instantly.

Many of today's emerging technologies enable customer obsession, but CIOs have to take a strategic approach to these technologies, addressing technologies like business information (BI), big data, cloud, and mobility in the context of the customer.

It's time for CIOs to place the Age of the Customer front-and-center for IT strategies, working with their CMOs to make IT's investments meet customers' needs.

Bobby Cameron is Vice President and Principal Analyst at Forrester Research

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