The economic downturn has caused business not just to retool their market strategies, but also to fundamentally rethink the existing business model. And this must focus on service to the customer.
To survive in the current business environment, enterprises must do something radical. It's not enough to be agile and flexible, responding to changes and shifts as they occur. The nature of business has changed, demanding entirely new strategies. Enterprises need to start breaking things to gain advantage.
More than 10 years ago, up to 90% of work was operational. Today the average organization still spends 70% of its annual budget just "keeping the lights on," leaving a scant 30% for innovation. That ratio must be flipped. Even if a business is surviving, the business model is probably based on outmoded assumptions that won't generate results much longer. Here's why:
- Change is no longer a periodic disruption. It's the new stasis, an ever-shifting state.
- Although "business as normal" may be comfortable, it's not where value is created.
- Enterprises must be flexible and react quickly, or get left behind.
In a world where social media and technology have made the relationships between businesses and their customers more immediate and porous-and, by extension, companies more accessible-customers expect that the brands they do business with truly care. Or, at least, that they try to. So says Ann Handley, the Chief Content Officer of MarketingProfs and the co-author of the upcoming book, Content Rules.
What does that mean for business? It means an emotional connection with customers--understanding what they need, and how a business product helps customers accomplish their goals and fits into their lives. Expressed in a different way, this means that serving has become the new selling.
A consumer trends analysis company, Trendwatching.com, tagged a new trend called "brand butlers," which in essence describes how businesses are marketing themselves and making themselves relevant. Trendwatching argues that today's wired, no-nonsense, impatient and empowered customers increasingly expect personal and immediate access to more supportive offline and online services, particularly self-service. Trendwatching claims that business brands need to hone their "butlering skills" to help people make the most of their lives, as opposed to the old business model which has tried to "sell" people a specific lifestyle.
Handley points to some examples of the butlering:
- Taxi2, a cab-sharing effort from Virgin Atlantic, which matches people traveling to nearby destinations from the same airport
- The Nike + running system, which offers an online dashboard for recording workout data, and includes the ability to set goals, join challenges and make contact with other runners
- Charmin's tool for helping New Yorkers gain access to free and clean restrooms in Times Square during the holiday season.
The rise of smart phones and other mobile devices is a driver, of course. "For brands," Trendwatching says, "this means that there are now endless creative and cost-effective ways to deliver on this need for assistance, for 'butlers.'" But what about smaller companies, which might not have the resources to develop expensive microsites, iPhone apps, or to plop toilets in the middle of Time Square or "help booths" in Zurich and Heathrow airports, like Zurich insurance did? Being a butler who offer relevance and utility is more about an approach than it is about the depth of your pockets.
One of Handley's tenets in Content Rules, holds that if everyone with a website is a publisher, and everyone is the media, brands increasingly need to position themselves as reliable and valuable sources of information. Businesses need to create value for their customers by sharing a resource, improving their lives, or making them smarter, wittier, better-looking, taller, better-networked, cooler, more enlightened, and with better backhands and cuter kids. In other words: Business brands must increasingly share or solve, not shill.
Michael Wooden, of ACS, a Xerox Company, says that the advent of Web 2.0 and the explosion of social media applications, leading the way to a fundamental shift in power between companies and customers. With wikis, blogs, online communities, and social media sites like Flickr, Facebook, YouTube, and Twitter, consumers are finding their voice and sharing their opinions any way they can-rating and reviewing products, services, and companies; talking about brands and companies in communities of interest; and more.
Wooden argues that with almost 74 percent of consumers choosing brands based on the customer experiences their peers share online, there are huge benefits gained from using social media to enhance customer experience and extend brand reach and value. It's not enough for businesses to just eavesdrop on or participate in the conversations taking place within social media sites. Organizations must capture and distill those ‘conversations' into knowledge that can be used to improve customer service. Of course, doing so involves considerable challenges.
The end of the economic downturn will not mark a return to "business as usual." Those days are gone, and the smart businesses will realize a business model focused on service to their customers, and intelligently using the power of social media, will make a much stronger recovery.
Follow me at http://raywilliams.ca and on Twitter @raybwilliams
