The role of the customer has fundamentally changed in the digital age. In a world of social media influencers and online reviews, customers have usurped the traditional salesforce, with their testimonies proving more persuasive for fellow customers than regular advertising or sales techniques. Wielding this considerable power, we have shifted from a ‘product economy’ where customers had little option but to buy what corporations had to sell. Now, that situation has been turned on its head where the individual customer has become more influential to businesses than traditional priorities such as shareholders and corporate structure. We are now firmly in the Customer Economy: this has been accentuated more in the current uncertain times where you need to know your customer is – and being talking them more not less in order to meet their needs. This highlights a role for authentic stakeholder communication including the customer’s voice.
In August 2019, The Business Roundtable, made up of CEOs from nearly 200 major US businesses including Apple, Amazon and Bank of America, issued a statement committing to a more customer-centric focus. In this statement, they redefined the ‘purpose of a corporation’ as investing in employees and delivering value to customers, rather than serving shareholders and maximising profit, underlining the new customer-centric direction in which the business world is moving.
Nowhere is this focus more evident than in US video conferencing firm Zoom, which has created a corporate culture centred entirely around the customer. The San Jose based tech company is constantly adapting its business model based on customer feedback. It uses systems designed to be intuitive and simple too, and invests heavily in its Customer Success team to improve user experience and resolve issues. This approach hasn’t just boosted customer loyalty, with annual revenues in the last year of over US$330 million, also, it has had a positive impact on employees. Zoom’s CEO Eric Yuan has been named as the highest-rated CEO on employee review site Glassdoor, with an employee approval rating of 99%. So while it’s no surprise that Zoom with its video conferencing application fulfils a need during the Covid 19 crisis, it was a well-deserved customer-led growth success story way before this.
And this revolution is not isolated to the tech industry; even traditionally profit-focused sectors such as finance are reinventing themselves to prioritise the customer. Starling Bank set itself apart from its competition with an innovative, digital platform which provided an intuitive customer journey, based on their actual usage. This approach proved to be highly effective, with Starling Bank gaining just under a million customers within three years and being voted Best British Bank by the public at the British Bank Awards in 2018 and 2019.
These customer-led organisations talk to their customers constantly where they listen well and adapt to their needs. Organisations such as Zoom, Starling Bank and Signify (formerly Philips Lighting) are able to nurture their customers as genuine advocates to a position where they are willing to co-create new solutions and services. This is achieved by talking more to customers, not the knee-jerk reaction in a crisis of battening down the hatches.
A customer-centric approach not only benefits the user; also, it will allow businesses to not only weather the storm but thrive afterwards. Recently, Forbes reported that customer-led companies which had invested heavily in improving and simplifying their customer experience outperformed those who had not. Those investing in the Dow Jones Index during the 10-year period from 2009 to 2018, would have seen their portfolio increase by 184%, those investing in the S&P would have experienced an increase of 207%. In contrast, if you had invested in the 10 companies ranked in Siegel+Gale’s World’s Simplest Brands report, you would have outperformed the average of the major indexes by a staggering 679%. Putting the customer first is no longer just about paying lip service; it makes business sense to be talking to them continually – and by doing so, it will drive profitable and most importantly, sustainable growth which will be critical going forward.
Daniel Bausor, co-author, of the recently-launched business book, ‘The Customer Catalyst – how to drive sustainable business growth in the Customer Economy’ shortlisted for the 2020 Business Book of the Year.