The rise of the customer-led economy

The Economist Intelligence Business Unit recently interviewed 1300 executives globally and conducted a series of in-depth interviews with senior Marketing executives from leading organisations to investigate the customer-led economy and how companies are adapting.

For decades the gap between big companies and their customers has been growing, however new technologies and practices are emerging that give organisations an opportunity to rebuild an intimate sense of connection with customers. Interestingly, these same technologies have empowered customers too. Customers can now share their brand disappointments with ease and likewise they are able and willing to tell their friends and family about ‘wow’ experiences.

Emerging technologies are the principal enablers of this new customer-centric thinking, as companies strive to follow their customers as they migrate across channels. Mobile and cloud-based applications are leading this trend, along with more intensive use of social media tools and connected products.

The customer is now in the driver’s seat and not surprisingly companies are fundamentally rethinking their strategies for engaging individual customers. According to the Economist survey, the biggest motivator for enhancing the customer experience is the desire to increase customer loyalty, with competitive pressure a close second.

Most companies know that they need to radically change the way they communicate with customers. The Economist survey found the route companies mainly rely on today is their website (51%), followed by e-mail (40%). Only 23% use social media and 10% use mobile apps. Customers might have embraced social media and mobile apps, but many of the companies they interact with lag far behind.

The Economist survey results indicate that over the next three years social media will become the number-one channel, with twice the proportion of companies relying on it compared with today. Across the same period, use of apps is expected to quadruple.

Companies that cannot realign their channels to emerging customer preferences will suffer. For not only are customers better informed and better connected, they expect the companies with which they interact to be as plugged into this new world as they are.

To make the challenge harder, customers are changing their channel choices. Five years ago they would usually stick with one channel but today they can be on the web one moment, then move to social media and then pick up the phone the next. Furthermore, as customers alternate between channels, they expect an experience that is consistent and continuous.

Endi Frydman, National Practice Manager : Marketing | Product | Digital

Content taken from The Economist Intelligence Unit Limited report, The rise of the customer-led economy, 2013