Following is a blog authored by SAP as a responsive musing on the napkin’s content:
The Importance of Value Exchange in the Modern Business World
In any business it is important to build a relationship with your customer. These days, people are being bombarded with branded content, particularly over the last few years as social media has developed a huge presence.
But this connection is more than just a commercial one; it needs an emotional element too, with both sides aware of their roles and the mutual benefits of the relationship.
This association is commonly formed in three stages:
- The exchange of money for products and services
- The sharing of data by the customer in return for some kind of reward
- The guarantee of a continued, positive consumer experience
Businesses are recognising the importance of an emotional connection with their customers, but it’s a two-way process. Customers need to be able to trust that the information they share is being used in a way that enriches the service that they get in return. A study of over 2000 consumers showed that 59% think that providing basic login details in return for personalised offers and information is a fair deal.
Brand interaction can be enhanced by studying the available data and using it to gain valuable customer insight. The customer gets an improved service or product and bespoke offers and discounts, while the brand has more exposure, improved reputation and continuous revenue which in turn can be channelled back into improving the product or service offered. It’s an exchange.
This relationship can be built up in a number of ways, the main aim being to understand what customers value the most when making a transaction. Customer information can be accumulated through direct data gathered from things like loyalty schemes, or obtained from observations of buying habits. This can include the kinds of products a customer purchases or returns, the kind of brands they prefer, or the time of day they’re most likely to make a purchase.
As social media continues to develop, and more people shop online and on personal devices, the opportunities for observation of customer habits and needs are increasing. Big data management is becoming a major part of any enterprise; a study in 2013 showed that 62% of companies expected their big data budgets to increase in 2014.
It’s clear that value exchange is a long-term concept that will continue to evolve as customers demand more from their brands in return for the increasing amount of information they make available.