The Customer of the Future
by Brad Liebmann, Managing Director, Xbridge Ltd
Business Money, October 2006
The concept of 'The Customer' is changing at an unprecedented rate. Information technology, led by the Internet, is making the exchange of information faster and more efficient. With it, the development of the consumer as an informed and discerning purchaser of goods and services continues to evolve.
1995-2005: Centralised Information Exchange
During the last ten years, the Internet helped drive transparency in pricing. Aggregators like Xbridge displayed comparative pricing, resulting in better informed customers. These customers are now accustomed to comparing prices using online aggregators that display accurate prices and constantly update product offerings. Increasingly, customers are seeking to compare other elements than pricing. Customers now compare the minimum length of contract, termination fees, and other important contractual terms.
Customers don't yet have an elegant mechanism for comparing the most important element of a commercial finance facility - customer service. This will change shortly during the next evolution of the Internet.
2006-2012: Peer to Peer & the Empowered Consumer
We have recently witnessed an explosion in decentralised Internet communication, enabling anybody to make a contribution or share an opinion with everybody. This has been facilitated by more interactive software platforms and the mass adoption of broadband technology. Recent examples of empowered consumers:
In July an AOL employee was fired after being recorded handling a customer service call poorly. The call was recorded and posted online causing millions of pounds of brand damage to the Internet division of Time Warner
In August a video of a Comcast employee filmed sleeping when he should have been installing a cable line video was posted on YouTube.com, the online consumer media company. Comcast aggravated the matter by attempting to block their own subscribers from accessing the video.
In September a frustrated employee of Lockheed Martin posted to YouTube a video highlighting safety problems with military orders after being ignored by both superiors and government officials. Online whistle-blowing was born.
The message? "If you do not provide me with a service I think is appropriate I will tell my network of friends why they should not do business with you and they will tell their friends."
Focus on The Customer is the way forward
Over the next several years the Empowered Customer will gain a new and powerful voice. The above incidents are only the beginning. Each year, your current (and former) customers will find increasingly efficient ways via the Internet to vocalise opinions about the quality of service you provide. New business models will develop to provide your customers this voice, aggregating feedback and reviews from your customers and rating your business relative to your competitors.
Customer-centric companies will welcome this change. Their growth (already high) will accelerate because their customers find more and better ways to share their satisfaction. Other companies will find the era of the Empowered Customer extremely challenging. Customer acquisition will slowly or perhaps suddenly (depending on how bad the organisation's approach is) dry up as potential customers gravitate towards more customer-centric competitors. Which type of company will you be?
I would like your thoughts or experiences on the 'customer of the future. Feel free to drop me a line at ceo@xbridge.com.