Traditional businesses are poised to the threat of incumbent companies entering the same space with a simpler product and an even simpler statement: we value our customers. As a result, consumption behaviours will change adapting to a new offering and uplifted expectations, rendering the traditional offering out of scope.
Business used to be straightforward. Large companies formed around a specific offering, they gained traction by selling a product that no other companies could offer because of regulations, market size, entrance cost and many other outsmarting strategies. Once large companies became too big to fail, smaller companies could not pose a threat — they were out of the market and behavioural changes had a lot of friction. People didn’t trust small companies.
I believe it was the Internet to explain that everyone could learn or transmit information to other people as equals, with zero distribution costs and a reputation score that the few using the online could easily keep track of. There were bulletin board systems, then Usenet, then forums, then blogs, then aggregators and alas social networks and media.Once we figured that other humans were teaching us for free, we started pretending more. We questioned newspapers and the mainstream media. The result is mostly bleak–too many people are unable to keep track of reputation or make a sense of it. Thus all the media industry troubles.We also had another Eureka moment when incumbent products and services started to be offered by makeshift companies around the simple idea of making it better, more useful, to the point. These companies couldn’t afford to lose one single hard-earned customer and would rely on word of mouth for growth (we say organic growth on the online). They could also not afford enterprise sales, sales managers, sales motivational meetings, the throwback of a sales-driven operation. So they started focusing on one simple area: User Experience (again, we say UX). Part of the User Experience is care.
Customer care is the most powerful marketing message. It says it all. “We are a company that cares about its customers. We do everything we can to keep you happy, and if possible, to make you even happier so you will decide to show your trust in the company by purchasing the newest product, subscribing to the newest offering, and telling your friends.” These are the companies that will thrive.
Ratings are ubiquitous and there are plenty of ways to check them, form an idea and choose to buy or to move over. People are learning that spending a bit more for a product with great customer satisfaction is worth the additional money. Referral programs are on the rise across all industries, including the most traditional: banking, real estate, insurance, enterprise IT services.Since monopolies started falling (I guess GM/FCA would have never thought of having a competitor in the man who once founded PayPal. They should have probably listened more carefully) competition grew exponentially. The differentiator isn’t the feature list or the celebrity endorsing the product–we call it influencers on the online– nor the price point. It’s the customer experience sending out a message that can’t be steered nor stopped. Unhappy customers are the nightmare. The new small companies are doing everything they can to have as few as possible. They are also taking care of the most important metric: churn rate.
Whereas gaining customers is a well-established litany involving getting known, building brand recognition, negotiation and a well-refined product offering, the rate of losing customers seem to be in a much more shady place. Some companies don’t really know why they lose customers, some others do but don’t act on clearly marked action items, some others simply don’t care. I recall reading about mobile carrier networks being willing to lose demanding customers–or unhappy, prone to complain–as it would be simply too expensive and outside the scope trying to actually help them and retain their business. For some of these companies it proved easier to just spend on marketing and promotion to get fresh ones and lock them in for as long as possible.Problem is, there are now incumbent companies taking their market share away.
Fintech is a great example. Small startups fill the void between humans and banks with carefully tailored services that just work. They tend to do so by offering a limited feature-set, being fanatic about the on-boarding process and customer support, and provide tutoring on how to use the product at its best. When the first phase is sorted then onwards to the second phase: 1 or 2 new features, on-boarding, care, repeat.Meanwhile large companies struggle with their business and stress the same-old-story. Sales become a burden of exponential marketing costs, clashes between support reps and sales reps, unhappy customers left in the middle of company fights and shrinking budgets.
I welcome the future being an early adopter of smart new products that make our lives easier myself. I experienced the best customer care service I have ever had when my shiny-new Model S had a minor fault just 3 days after delivery. I was used to dealing with large car companies where premium comes with more expensive leather seats, but the same old BS, so I rage-called the customer service and got the Tsar treatment. The customer care operations manager of Tesla showed at my door 4 hours later with another brand new car and took mine in for service. I got the upgraded full-spec car for 5 days while support was doing its job and I was calm, happy, willing to tell my friends (which I did). They turned a setback into an opportunity, they sold another car.
Now companies design products for personas, customer communication and information organisation platforms like Zendesk, Freshdesk, Salesforce, etc build up services to deliver happiness. The tactics may vary, but the strategy of focusing the company culture around organic growth fuelled by customer success is the one that will prevail.We should just find the way of transforming companies culture. If they are too big to fail or too big to change, then, disruptors be welcome.