The empowered customer: Productivity enhancements in a digital era

The empowered customer:
Productivity enhancements in a digital era The empowered customer:
Productivity enhancements in
a digital era
This is an article written by the Economist Intelligence Unit and sponsored by Microsoft
As global employment prospects lag behind a slow economic recovery, customers in many parts of the world are more cautious and better informed than ever. They have access to a wealth of information about the products and services they seek, much of it obtained from trusted sources almost immediately. Yet businesses have moved slowly to exploit emerging technologies and information sources like Twitter, Facebook and YouTube. As a result, customers often seem better informed about the products and services they buy than companies are about their customers. This imbalance presents a big challenge to companies struggling to avoid commoditisation and it could grow into a competitive disadvantage as customers demand more personalised service.
Obstacles to better customer service
Many executives say that customer service is a top priority in their business, yet their approach to this crucial function has failed to keep up with the times. Most focus on strengthening customer relationships, but too often this is little more than an add-on to the business model, not a core practice. Striving to exceed buyer expectations is important, but it does not necessarily deepen understanding of customers. As a result, many ? rms are unable truly to build their businesses around the people who buy their products and services. 1One recent Economist Intelligence Unit survey found that nearly one-half of executives identi? ed customer service as a core business strength. Yet, when asked to identify areas most in need of improvement, allocating resources to high-value customers came out on top, cited by nearly one-third of respondents. Gathering customer intelligence in the course of providing service was another top answer. In other words, although most companies believe that they deliver good customer service, many admit that they do not adequately leverage their customer relationships to gain the insights needed to personalise their value propositions. 1. Economist Intelligence Unit, Beyond transactions: This survey revealed one of the root causes of this de? ciency: customer-facing functions often Lessons from six industries work independently of each other, failing to collaborate and share information. Less than one-third on building customer partnerships, December of respondents said that their companies had established procedures for regular interaction among 2009.
© The Economist Intelligence Unit Limited 2010 1The empowered customerProductivity enhancements in a digital era
The core strength of businessIn your view, which of the following best represents the core strength of your overall business? Select only one. (%)
Customer service
Operational excellence
Product innovation
0 5 10 15 20 25 30 35 40 45 50Source: Economist Intelligence Unit, 2010.
functions to incorporate customer feedback into products and services, and only 15% said that they had broad, systematic integration of information and strategies in this area. This lack of integration has the potential to undermine corporate growth strategies as dissatis? ed customers switch their allegiance to competitors.
Boosting customer service productivityPotential drivers of productivity growth in customer service include better use of social media, effective self-service, enhanced online support, better visibility of customer support tools, improved face-to-face communications, and more sophisticated telephone operations as well as improvements in processes, tools and resources. Using all these different information sources effectively requires refocusing on the customer, where service is seen in terms of empowering customers to make the right purchase decisions and not just as an extension of the product sale. Some executives are not in favour of this strategy because they fear that empowerment sometimes involves the exchange of negative information about their products. But in an environment where customers trust product information from friends and other buyers more than what the vendor tells them, companies can no longer overpower negative information merely through an advertising campaign. A more effective response is to leverage the... [download for more]