The Make-for-Me Economy: Can Businesses Keep Up with Customer Demand?
Dreams. They drive every aspect of our lives. We dream of where we want to go, what interests us, and how we spend our money and time. If businesses want to survive in this marketplace of customization and individuality, they’ll embrace and follow the dreamers.
This week’s episode “Future of Make for Me: The Luxury of Customer Centricity” from The Future of Business with Game-Changers, a special edition series of SAP Radio, explored the customer desire for individuality and whether technology can help businesses fulfill this demand profitably with high quality. The panel featured Whitney Johnson, co-founder, Rose Park Advisors; Elizabeth Hedstrom Henlin, a senior analyst at Technology Business Research (TBR); and Reuven Gorsht, global vice president of customer strategy at SAP.
Winners know when to quit
Whitney Johnson kicked off the discussion by advising businesses to prioritize customer demand for customization. “We, as a society, live under the assumption that we know what we want and that our desires are accessible. When more is available to us, we have more choices. However, every choice does not necessarily make sense for us. If we aren’t willing to renounce incredibly difficult ambitions for ourselves, it lowers the ability to achieve the goals that are right for us,” Johnson explained.
To survive and thrive in this demanding marketplace, businesses must be able to focus onmarket – not competitive – risk and play up their own distinct, competitive strengths. Not only does this capability help customers make a decision and choose one brand over another, but it also enables businesses to provide the right products and services while staying profitable.
Johnson observed, “At the turn of the 20th century, people checked their identity at the door and became willing automatons in new factories in exchange for a hefty increase in pay. This enabled the working class to afford items that were once considered luxuries. And today, at the turn of the 21st century, we want the luxury of our individuality.”
Customers no longer desire mass-produced goods; rather, they seek individualized services. For businesses to accomplish this goal, they have to get their metrics right. In an Economist Intelligence Unit survey, 94% of respondents believed the management of intellectual capital to be critical. However, 95% mentioned that their organization did not have a system to measure the performance of relevant assets. For these businesses, a critical value driver is missing: people and their dreams.
Whenever you find yourself on the side of the majority, it is time to pause and reflect
Elizabeth Hedstrom Henlin agreed with Johnson’s thoughts and provided her own insight as it relates to the software industry. She commented, “The line of business buyer and the role of IT are converging together, forcing vendors to move from ‘made for me’ to ‘good enough’.”
On the client side, everyone has to work together to get $5 of return from every $1 of investment. As a result, customers only want to buy what they need and what’s best for their business. Opportunity exists for vendors that know how to create a package that appears to be a customized offering. For example, software vendors are providing modular packaging, rapid deployments, and application of the best of what’s around without disrupting everything else.
We’re living in a buyers’ market, where customers expect solutions that are tailored to their exact needs without having to pay a premium to get it. According to Henlin, “Market transitions to the cloud are ongoing and irrevocable, emphasizing the need for software vendors to reinvent themselves to keep customers. Everyone is relying on core strengths as a path to retain customers.”
The make-for-me economy: Customer centricity in new (and possibly better) ways
Reuven Gorsht reflected on the changing dynamics of today’s business landscape. “The bartender who knew you by name has been replaced by big brands and barcodes. The problem is that none of us is average. We crave unique experiences,” he stated. We’re all unique in our own way and want products and services to be catered to our specific needs, not a generic “bucket” created by a brand. This is apparent to anyone who has stood in line at Starbucks and listened to what people order.
With today’s technology advancements, businesses are able to store and process incredible volumes of information about their customers and create one-of-a-kind experiences based on their understanding of customer preferences, habits, and desires. For example, in 2013, Disney introduced Magic Bands, an RFID bracelet worn by its customers. This band is used for every part of the resort and park experience – from a hotel room key to ride tickets and a payment method for purchasing food and souvenirs. The data collected from customers using Magic Band is quickly analyzed and enables Disney to engage guests with a personalized experience. From making dinner suggestions and recommending a time to use their “fast pass” to shorten the waiting time for attractions, the entire experience is tailored to each customer.
The customer experience is the centerpiece of the make-for-me economy. Gorsht suggested, “Businesses need to understand what it takes to deliver a customer experience. They should know their customers’ preferences and wishes – and be proactive in catering to them. Because people are open to being
serviced in very different ways, businesses should engage with customers rather than going through the daily grind of how business is usually done.”
To listen to a replay of this edition of the Future of Business with Game-Changers series, presented by SAP Radio, click here.