Tuesday, October 27, 2015

Customer Decision Journey, Digitized

Digital technologies over the past decade has empowered the consumers  and in response the retailers have scrambled to develop big data and analytics capabilities in order to understand their customers better and gain back the control.  Leveraging the emerging technologies, processes and organizational structures, companies are restoring the balance of power and creating new value for brands and buyers alike. Rather than reacting to the journeys the customers themselves devise, companies are increasingly managing journeys as they would any product.

Thinking about the customer journey as a product is leading to a major shift in how product investments are determined, prioritized, funded and measured. Firms are focused on how an investment improves economics of delivery a products and journey to the customers and how powerfully it reinforces engagement rather than just how it drives sales and reduces cost. Today, winning brands owe their success not just to the quality and value of what they sell but to the superiority of the customer journey they create.

Customer decision journeys are broadly describes as how people move from initially considering a product or service to purchasing it and then bonding with it. Narrowly it can also be defined as the sequence of interactions consumers have before they achieve a certain aim.

A typical customer journey can be broken down into various steps a customer takes during the decision process. The customer starts with the ‘consider’ step, follows an extended ‘consideration’ phase and ‘buys’ the product before entering the loyalty loop. In the loyalty loop the customer ‘enjoys’, ‘advocates’ and ‘bonds’ with the product.

In the classic journey, customer engages in an extended consideration and evaluation phase before entering the loyalty loop or proceeding into a new round of consideration and evaluation that may lead to purchase of a different product. The new digitized journey compresses the consider step and shortens or entirely eliminates the evaluation step, bringing customers directly into the loyalty loop and locking them within.

Companies that are building the most effective journeys master the following four interconnected capabilities:

  1. Automation: It involves the digitization and streamlining of the various steps in the journey that were previously manual. For example, before ATM made it possible to deposit checks directly through them or by taking pictures of the checks through cell phones, customers had to make trips to the bank. Superior automation, which is highly technical, is turning complex back-end operations into simple engaging, increasingly app based front-end experiences.
  2. Proactive Personalization: Based on the automation capabilities, companies should take customer information to instantaneously customize the shopper’s experience. But remembering customer preferences is just the beginning. At the moment the customer engages the companies must analyze the customer’s behavior and tailor its next interaction accordingly. On the retailer Kenneth Cole’s website some people see more product reviews, while others see more images because the company’s algorithm learns which content works best for the customer over time and renders the site accordingly, in real time.
  3. Contextual Interaction: This step involves using the knowledge about where a customer is in a journey physically (entering a hotel) or virtually (reading reviews) to draw him forward into the next interaction the company wants him to pursue. Starwood hotel is rolling out an app where the customer gets her room number upon physically entering the hotel, checks into her room with a thumb scan and then unlocks the room though the contact of the app with the room door. Once inside the room the app sends timely entertainment and dining recommendations.
  4. Journey Innovation: Innovation occurs through ongoing experimentation and active analysis of customer’s needs, technologies and services in order to spot opportunities to extend the relationship with the customer. Delta Airline’s app, for example, has become a travel management tool from booking and boarding to reviewing in-flight entertainment to ordering an Uber car upon landing. Key to these expanded journeys is often their integration with other service providers. Carefully handing off the customers to another firm can enhance the journey’s stickiness.


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