Forrester's recent global survey of business decision-makers identified revenue growth as the most important initiative for the next 12 months. That requires competitive advantage. But technology has fundamentally changed competitive dynamics: Your customers, both B2B and B2C, use technology to get things faster, better, cheaper, and with a higher degree of service. And if you can't meet their needs in the age of the customer, you better believe someone else can.
Today, the only source of competitive advantage is an obsession with understanding, interacting with, and serving today's empowered customers. Leading firms, like Amazon, dm-drogerie markt, Macy's, Marriott, and USAA, do so by shifting their budgets, people, and business structure toward customer knowledge, relationships, and actions. They're working on systematic approaches to improving the customer experience. Most of your business peers already recognize this: Close to 75% of surveyed business leaders identified improving the customer experience as a high or critical priority.
Business execs across your company are now crafting strategies to gain competitive advantage by obsessing about the customer experience. They want to use intimate knowledge of customer attitudes, intentions, and overall journeys to define customer-centric business models and move away from those that focus on the silos of channels, functions, and products.
They believe in the importance of technology and the differentiation it can bring - but less than 50% of them believe the CIO and her team can meet their needs and accelerate business success.
As CIO, you need to establish a shared way of thinking with your business peers that places and keeps your customers at the centre of your decisions and conversations. As a suggested starting point we've put together a customer life cycle, which we define as the enterprise's view of the phases that a customer passes through in the course of an ongoing relationship with that company.
The customer life cycle is not a substitute for the systematic approach you'll need to design and deliver solutions that win, serve, and retain customers. Rather, it is a tool that you and your marketing, sales, service, and other business peers can use to keep the customer at the center of your strategic decisions. By understanding how technology supports each phase of the life cycle, you'll bring clarity to how you and your team can build new competitive advantage for your company. And by using the life cycle to emphasise and improve your leadership, strategy and planning, service design, and service delivery capabilities, you can craft and accelerate your business technology (BT) agenda.
Before deciding on specific technologies, you must understand the different phases of the customer life cycle and the role that technology plays for each:
- Discover. Every customer must go through a process to discover the brand, product, or service that can meet their fundamental need. Your technology must allow customers to interact with your brand on your own site, through ads, and on third-party sites like Facebook.
- Explore. In this phase, your current and potential customers review product or service literature, check ratings and reviews, visit a store (online or physical), compare offerings, and/or contact providers. Your solutions must make it easy for them to do so.
- Buy. Fail to effectively support your customers' decisions and actions here and you may lose them. Technology solutions must help them review product specs, look up inventory, and understand the checkout or sales process — and figure out what to do if there's a problem.
- Use. In this phase, customers take possession of your product and use it, forming their impressions of the product or service. Technologies here capture customer usage data — from social sites through to embedded digital capabilities — providing insight to innovate and refine tomorrow's products and services.
- Ask. Your customers can, and do, reach out to a multitude of sources to get help and assistance post-purchase. Again, your technology solutions must provide a consistent cross-channel experience to make this easy and effective.
- Engage. Customers engage with your firm — both its products and the overall brand — in numerous, and often continuous, ways. Your technology solutions need to support a long, ongoing relationship with your customers; think voice of the customer (VOC) programs and customer experience measurement.
As CIO, you can help your company establish new competitive advantage based on customer obsession by crafting and accelerating a distinct business technology agenda. Unlike traditional IT investments that focus on internal operations and users only, BT investments deliver transformative business impact by focusing on your customers' experiences throughout the life cycle. You must continue to excel at IT — the technology, systems, and processes supporting your firm's internal operations — while accelerating BT to deliver and improve customer-facing products and services, customer-oriented operations, and customer-focused employees and partners.
If you're still prioritising your IT Agenda over your BT Agenda, stop. The BT Agenda will decimate technology departments, pushing CIOs to seek lower cost solutions to IT agenda demands to re-skill. Smart CIOs will hire based on creativity and Agile skills with customer-facing technology. This structural change and the unemployment it creates could be the biggest labor retraining challenge of the 2020s.
Kyle McNabb is a vice president at Forrester Research