Are You Prepared for the Digital Tsunami?

15593472 - abstract music notes design for music background useIn a world where all of your customers carry a super computer in their pockets in the form of a smartphone that they use for virtually all communications needs, all companies must readdress their customer-facing strategy. There is a digital tsunami coming.

In addition to the availability of superior technology, there are multiple companies setting standards for ease of use, simplicity and value. If your company is not providing the same kind of customer experience, it is painfully obvious. The example that is set by Apple, Amazon, Paypal, AirB&B and Uber raises the bar for everyone. Granted these are new economy companies, but all of them had to build their businesses in the face of strong, established companies in their industries. Companies like Domino’s Pizza, Staples, Starwood, and Starbucks have made huge changes in how they interact with customers digitally, in some cases generating 70 percent of their sales today through mobile and online technology.

In the last 18 months, we have worked with dozens of companies who are rethinking their customer facing strategy from early stage growth ventures to Fortune 100 consumer products companies. They all say the same thing: “How do we connect one-to-one with our customers?”

The answers require investment in people and systems. It requires empowering leadership to rethink long-held strategies. It requires bringing in people with functional strengths from other industries that have been battling these issues creatively longer than you have. It requires a willingness to experiment and try things. It requires allowing mistakes. But ignore these trends at risk of great peril to your company.

Here are the seven secrets for surviving the digital tsunami:

1. Emphasize Customer Acquisition, Retention and Success. Peter Drucker famously proposed “The purpose of business is to create and keep a customer.” If American CEOs were more focused on this simple maxim rather than cutting costs or managing earnings per share, we’d be in a 4.0 percent growth economy. Your marketing should be measured by customers visiting the website, being driven into your stores or entering the purchasing funnel. In addition, you must help the customer be successful with your product or service. It is not enough to “satisfy” them. It is not enough for them to recommend you to their friends. You must help them achieve their goals with your product or service, whether dressing better, eating healthy, saving costs or increasing revenues.

2. Provide Excellent Access Through eCommerce. Can your customers access your products and services through their phone in a seamless, friction free environment? If not, why not? You say your products are best sold through brick and mortar retail? But someone out there (think Google or Amazon) is selling your product directly to your customers. If you are not up to speed and thinking strategically about how you address this, your company is in danger.

3. Build a Great CRM System. You must know who your customers are and where they are shopping. The information must be must richer than name, address and email. If customer by customer data is not available, then you must have customer profiles which define cohorts of customers with specific needs, desires and buying patterns. You must know where they are in their decision process, where they have already shopped and where they are going. 

4. Develop Predictive Customer Insights. We have had well established multi-billion dollar revenue companies say, “We don’t really know much about our customers.” Of course, if you sell all your products through distributors or through large retailers who own the customer, you may not have a relationship at all. However, digital technology allows data to be collected and analyzed to gain detailed insights into predicting who and why your customers are buying and where they will look next. 

5. You Must Have Great Content. Love it or hate it, modern media channels are splintered and consumers are inundated with messaging. We have become numb to advertising whether by phone, tablet, PC, TV or print. Only highly relevant and highly engaging content with a strong story will get through. Great 30-second television ads can only be part of a larger campaign. Lexus recently created 1,000 short videos for use in social media. Content must be succinct, timely, engaging, relevant and value-added. 

6. Loyalty Programs Retain Customers. Retaining good customers is much cheaper than acquiring new customers. Starbucks, Amazon, Hertz, CVS, Best Buy, Domino’s Pizza and Niemen Marcus have creative, interesting, easy loyalty programs that attract and retain customers, in some cases representing as much as 70 percent of total revenues. Rewards range from enhanced services, discounts, birthday gifts and special shopping events. And they work. Smartphones allow you to maintain and track the data and customers to track any number of programs. 

7. Location and Timing are Key. If you aren’t geo-tracking your customers and targeting them when and where they want your offer, then your marketing dollars are being wasted. Out-of-home targeted advertising is booming. Consider a company that sends a well-crafted email to the right demographic marketing stylish raincoats on a rainy day. Companies are rapidly developing the technology to target retail customers when they are getting near a retail location. There are billions of data points per day on the location of your customers – are you using these?

If you are addressing these seven survival secrets, you are preparing for the digital tsunami. If not, your company may be in danger.

Originally published at President & CEO Magizine

Ted Pryor

Ted Pryor

Ted Pryor is a Managing Director with Greenwich Harbor Partners. He focuses on senior-level executive recruiting in Media, Technology, and Digital Marketing including general management, sales, marketing, digital strategy and customer experience. He has over 10 years of experience as a senior executive at GE Capital and over 20 years in corporate finance. He has also been CFO and CEO of a venture-backed start-up company.

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