By Ray Poynter
Why should you democratize your brand and bring customers inside the business? For some, it’s a matter of conscience – opening up the business for customer insight is simply the right thing to do. For most, it’s because it’s profitable. The growth in the number of companies opening up to customers (through sharing and collaborating) stems from hard-nosed commercial considerations. Research shows that democratizing a brand is good business.
I make the argument more fully in my recently released book “The Customer Relationship; Your Last Competitive Advantage” available from Vision Critical, but if you want the abridged version the three key points are:
- Democratizing a brand generates business benefits
- Customers are the last, good competitive advantage
- Involving the customer involves a range of approaches
1 Democratizing a brand generates business benefits
Studies such as IBM’s 2013 ‘The Customer Activated Enterprise” have found that outperforming organizations are much more likely than underperforming ones to be collaborating with customers. A study by the Aberdeen Group suggested that organizations that used social collaboration had 30 percent higher levels of customer retention and a 55 percent increase in revenue, compared with organizations that did not use social collaboration. These and many other studies make the point that working with customers can help grow the bottom line.
2 Customers are the last, good competitive advantage
In the past, brands could sustain a product difference. Some products washed whiter, some products lasted longer, and similarly, some service levels were more personal, or faster, or supportive. Today, however, parity can usually be achieved in every aspect of a product and/or service. In general, product and service differences have ceased to be a source of sustainable competitive advantage. This is why industry executives like P&G’s AG Lafley and Amazon’s Jeff Bezos have prioritized customers, because customers are a brand’s last, best source of competitive advantage.
3 Involving the customer involves a range of approaches
In the book I identify three levels of engagement that help ensure the customer is brought inside the organization. These three levels are: i) Listening to the customer, ii) Crowdsourcing innovation, and iii) Co-creating the future. This three-step process involves assembling a range of tools. Everything from social media to customer feedback and insight communities need to be leveraged in order to make changes in business decision-making. There is no silver bullet when it comes to being genuinely customer-centric. Being customer-centric requires a wide range of tools and approaches to be adopted.
Change from within
These three layers are not just a set of tools; they represent a change in the nature of business. Don Tapscott said, “Smart companies will bring customers into their business webs and give them lead roles in developing next-generation products and services.” To do this requires businesses to change, to welcome the customer, and to cede some comfort and power.
If you’d like to access the references, the thinking, the cases studies and the detailed recommendations from this work, download a copy from http://www.visioncritical.com/customer-relationships