Question

You've been asked by your CEO to find out the changes you need to enact to your on-line strategy in order to best cater to the needs of your customer base. Explain how you could use different types of experimental designs to test the changes that would best indicate the changes you'd use.

Answer 1

1. Master the art of the possible.Because technological breakthroughs are now common in nearly every industry, customers expect big changes to be a regular occurrence. The most successful companies continually experiment with innovations that make life better for customers. Customers appreciate companies that can do this effectively, time after time. That doesn’t mean asking your customers what they will find indispensable in the future; they can’t tell you. Consumers also don’t know what they want from new innovations, and they don’t always anticipate what will happen when they adopt them. They often know what they want only after they see it.

No one, for example, asked for ride-sharing apps before Uber appeared, followedby Lyft, Sidecar, BlaBlaCar, Haxi, and other similar services. Digital and mobile devices are now endemic to customer experience, and new kinds of apps (for example, for mobile payments) emerge regularly. No one knew these apps were indispensable until they were, suddenly, everywhere.

Therefore, when launching innovative products and services, develop your own informed judgment about technology. Carefully consider which new technologies will appeal to your customers at just the right time, in just the right way, so that customers become more loyal. This is particularly important for digital and mobile technologies, which continue to fundamentally alter the ways people interact with businesses and the types of products and services they favor.

2. Know your customers at a granular level. Leading companies are moving beyond traditional quantitative segmenting. They’re developing much more sophisticated customer analysis that draws from a variety of sources, including customer behavior and psychographic data gathered online and offline, real-time information collected from sensors and other tracking mechanisms, and geographic and mapping data. Business leaders understand how critical this shift is. The executives we surveyed rated “segment and know your customers” as the second most important principle of developing a great customer strategy.

3. Link your company’s customer strategy to its overall identity. Every successful company has a strong value proposition that distinguishes it from rivals. It consistently offers something for its customers that no competitor can match. To deliver on this promise, it must develop and deploy a group of interrelated, distinctive capabilities. All of these must work together across the full portfolio of products and services. This combination of value proposition, capabilities, and offerings, when they all fit together in a coherent way, gives the company its identity. The company’s customer experience can be thought of as the visible edge of that identity: the way in which people interact with the company and learn to appreciate it.

4. Target customers with whom you have the “right to win.” When your company has a strong identity, you don’t need to compete in every marketplace — only in the categories where you are reasonably confident of succeeding. Your value proposition will be consistent enough to appeal to a group of customers whom you can serve profitably. This is where you have the right to win — that is, a reasonable expectation that you can compete effectively against rivals.

If you try to grow your business where you don’t have the right to win, you risk investing time and resources on indifferent customers. You can and should branch out to other customers and markets. But those new customers and markets should be reachable with the same capabilities that gave you an edge with your base.

5. Leverage your ecosystem. Your company exists in a broad network of relationships that form an ecosystem. These relationships are not just with customers, but also with suppliers, distributors, retailers, industry associations, institutional partners, and government agencies. You can tap into this ecosystem to engage your customers in ways that go beyond what has been relevant to your business relationship in the past. A broad ecosystem can provide data on your customers' interests, thereby opening up ideas for new product and service offerings and growth opportunities.