The customer is King! Just about every CEO talks about how their company revolves around the customer, but few companies actually achieve a customer centric organization. What does it mean to be truly customer driven? It starts with continuously listening, sharing insights across the organization, and creating a culture that encourages customer interaction. When brands stop listening, they risk getting surprised by new competitors and losing market share.
When it comes to product development, opinions differ on whether to ask customers what they want, or instead create the best product you can and hope for a good response. Of course, customers weren't asking Apple for an iPod, but they were massively successful. Steve Jobs famously said "People don’t know what they want until you show it to them." The truth is, this "if you build it, they will come" approach only works if you really, truly understand your customers. You know how they operate, what their biggest challenges are, how they prioritize, what they value… Only when you have a deep knowledge of your customer can you innovate, build something they have never seen before, and be confident they will buy.
An important element of customer centricity is monitoring customer interaction data for mentions of competitors. There are no shortage of start-up companies looking to use technology to disrupt industries. These start-ups are obsessing over customers and trying to create the best experience possible. B2C brands like Amazon are taking their superior customer experience to the B2B space. What seems to be common across industries is how these innovative companies surprise their more established competitors who apparently did not see it coming. Here are two examples of industries who have recently seen their market shaken up by new competitors.
Not too long ago, companies were storing their data and running applications on huge servers. This hardware was expensive to buy and maintain, and it was difficult to get just the right amount of capacity.
When Amazon Web Services came along in 2006, it changed the way companies managed data. Storing on the cloud was cheaper, more reliable, and easier to scale. Any business can run their applications on Amazon’s platform and it has become a $25B business with over 30% market share. It took years after AWS launched for any meaningful competitor response. Amazon dominated this market in the beginning because they found an innovative solution to customer needs, and they continue to maintain such high market share because they are focused on the customer. Over 95% of AWS features and services are built from direct customer feedback.
IBM meanwhile, needing to catch up and reclaim lost market share, developed a new approach to development. In order to respond very quickly to changing customer demands, they take an aggressive approach to software development they call “continuous delivery” which allows for lots of changes to be made quickly. They also implemented a “design thinking” approach to application development that aims to bring user input into design, up front. Designers work closely with end users to find out how they actually work in order to develop products that make their jobs better. Listening to the customer has paid off; businesses within IBM that have implemented this customer-first approach are growing by double digits.
The hotel industry has gone through many changes in the digital age with sites like Expedia forcing price transparency and review sites giving power to consumers. Currently, they are trying to compete against a competitor offering something decidedly different: Airbnb.
Hotels in big cities had long relied on peak travel dates where rooms would sell out so prices could skyrocket, and lucrative business travelers. With the rapid growth of Airbnb offerings, the inventory in popular cities can expand with the demand, keeping prices lower for consumers. Airbnb is even courting business travelers and finding success by marketing spaces to collaborate and “experiences” for team building. In 2018 Airbnb reported that over 700,000 companies had employees who booked business travel with the site, growing 3x year over year. Many consumers like that they can save money and often get a more authentic experience by spending time with their host. With over 4 million listings, Airbnb has become real competition for traditional hotels. And the hotel industry is fighting back by lobbying the government to place restrictions on Airbnb hosts.
New competitors are always a potential threat, but if you are listening closely to your customers to find out what they want, what they are unhappy with, and which new competitor they are excited about, you may be able to make the changes needed to keep your customers, whatever the market looks like. ThunderAct makes sure you know what customers are saying by collecting all customer interaction data in one place and alerting you to trends that will affect your business.
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