The age of the customer has well and truly arrived and it will be the companies that recognise this that will get ahead in 2016.
That’s the key takeaway from a recent report from US-based Forrester Research, which has named the 10 critical success factors that will determine “who wins and who fails in the age of the customer” in 2016, reports B&T.
While Forrester says many companies are developing and executing strategies that centre on customers, “the problem is one of magnitude and speed”.
“Many companies have underestimated the magnitude of change needed to operate a customer-obsessed business and the speed required to catch up to dynamic customers and disruptive competitors,” Forrester says.
And the gap between the “customer-obsessed leaders” and the laggards will only widen in the new year, the research firm says.
“Leaders will take on the hard work of shifting to a customer-obsessed operating model; laggards will aimlessly push forward with flawed digital priorities and disjointed operations,” the report says.
Here are Forrester’s 10 critical success factors that will help your business get ahead in 2016.
1. “Personalisation is the new bar”.
In 2016, the companies that will get ahead are the ones that deliver a high level of quality, personalised experiences, says Forrester.
“Customers expect to be treated as individuals in their moment of need,” the company says.
“They expect that each encounter will be informed and enriched by current and accurate information about their accounts, history and preferences. They will reward companies that can anticipate their personal needs and wants – and punish those that clumsily have to relearn basic customer details at each encounter.”
2. “Small CX thinking will destroy financial results”
Delivering high-value, personalised experiences means thinking big when it comes to customer experience (CX), says Forrester.
Rather than focusing CX work on only “constructing customer journeys”, Forrester says successful companies will focus on “driving change above and below the visibility line: from aligning the brand promise to transforming operations”.
3. “Who leads matters more in 2016”
Traditional leadership structures need to be broken down in 2016, according to Forrester.
“Leading companies will have CEOs who drive change and can put the right person in the right role to take on a rapidly changing market,” Forrester says.
“Laggards will try to maintain old leadership structures while compensating for gaps with titles that have little real authority and unworkable governance structures.”
4. “Culture is a critical path to business success”
Having the right culture is no longer just a luxury, says Forrester.
“Culture fuels change; it is not a by-product of change,” the company says.
“Culture drives speeds and efficiency, creating instincts, norms and new muscle memory to shift to a customer-obsessed operation and work at the speed of dynamic customers and disruptive competitors.”
5. “Traditional companies stand up to disruptors”
Disruption is now the norm for many businesses and leaders will need to fight back against the disruptors in 2016, according to Forrester.
“Laggards will hold on to legacy business practices, respond poorly to market threats, and witness a dangerous gap form between themselves and their customers,” the company says.
6. “Loyalty programs focus on participation”
Gone are the days of loyalty programs that simply offer coupons or discounts, Forrester says. Customers now want to participate and share a purpose with a brand, such as helping to design the pair of shoes they want to buy.
“In 2016, loyalty programs will increasingly do things with their customers, not simply for their customers,” Forrester says.
7. “Analytics becomes a key competitive weapon”
In 2016, it won’t be enough to just access big data, businesses will increasingly need to use algorithms and analytics to anticipate and deliver value to their customers.
8. “Digital dabbling is a fatal strategy”
Leading companies will “embed digital into all parts of the business” in 2016, while laggards won’t look deeper than “shiny, front-end digital objects”.
9. “Privacy is moving from niche to value prop”
Customers care about their privacy and are willing to act to protect their privacy more than ever, according to Forrester.
In turn, leading companies are now starting to think about protecting their customers’ privacy as more than just a legal or risk factor and instead as a marketing goal.
10. “Operations becomes the nucleus of value”
The final factor that will be critical to success in 2016 is developing a “customer-obsessed operating model”, says Forrester.
This involves four core principles: “obsessing” about the value and personalisation of customer experiences; using analytics instead of big data to deliver those experiences; moving at the same pace as customers and disruptors; and applying this logic across all the functions of a business.