Adjusting the dynamic

Strategic IT use

Strategic IT use leads to increased customer loyalty and profitable growth

To meet clients’ increasing expectations and relatively greater power than previously, the demand for dynamic adjustment between IT and the business is larger than ever.

Strategic IT use

If a company wants to be competitive in a world of complexity and diversity, it must become customer-oriented by meeting customers’ increasing expectations through involvement and improved, customised customer experiences.

But what are the customers’ preferences and why? Who are the customers really? And what are their needs tomorrow? - See more at: http://implementconsultinggroup.com/3889.aspx#sthash.MaGkjZcZ.dpuf

Why only base the destiny of future products on the product development team’s idea of what the customers would like when systematic work with involved customers provides not only ideas but also data to find the answers?

To find the answers to these questions, it is essential that the CIO and the person responsible for the core business enter into a close cooperation to systematically include customers seeing that a system that handles customer involvement has steep requirements to both IT and business processes – and not least the cooperation between the two.

Systematic customer involvement sets requirements for:

  • Data and information architecture
  • Business and IT processes
  • Channel strategy

The age of the customer

From 1990 to 2010, for companies it was all about using the information streams. Today it is about the customers who have become digital and mobile, which has shifted the balance of power between them and the companies.

Via an increased transparency, for example through product channels and online reviews, customers often know more than the company itself about its products, services, competitors and price level – and the customers share their knowledge with each other via social media. In addition, the customers expect mobile accessibility everywhere and are even impatient. If a service is not offered immediately, the customer chooses a similar service from a competing company.

Loyal customers are worth their weight in gold

A strategy to avoid that the customers choose a different company’s equivalent product is to create a strong connection between customer and company. Loyal customers are often willing to pay a higher price than first-time customers. Companies that master loyalty programmes have an average of 15% lower costs than companies that do not focus on customer loyalty. One of the explanations is that the marketing budget is partly lowered because the company already has a loyal customer base.

Loyal customers do not only provide direct financial gains. Loyal customers often have a better understanding of the company and are more willing to give feedback on products and services and even suggest new products compared to disloyal customers.

Loyal customers do not only provide direct financial gains. Loyal customers often have a better understanding of the company and are more willing to give feedback on products and services and even suggest new products compared to disloyal customers.

Listen to your customers

The basic idea behind working with customer experiences is that companies that take care of its customers will experience its customers taking care of the company’s brand. Customer experience handling consists of three steps:

• Listen to your customers
• Design the customer experience
• Deliver the customer experience

Customer satisfaction, and thereby  the probability of establishing new customers, can be measured by Net Promoter Score (NPS) , which is an efficient tool to measure the daily customer satisfaction.

Growth rate for customer loyalty leader

Handling and delivering a customer experience your competitors cannot match is the secret to profitable growth. For example Apple has a Net Promoter Score of 80 in a market where the average score is 10-20. The companies that are the best at creating customer loyalty experiences more than double the annual growth rate over 20 years compared to the average.

To optimise the customer experience, the customer journey should be registered so every touchpoint with the company can be analysed.

Every touchpoint is decisive for the customer’s impression of the company. Touchpoints can for example be searching for a product on the website, an online chat with an employee, a purchase or receipt of an invoice. Insight into the customer’s journey and analysis of every touchpoint give a unique opportunity to increase the total customer experience.

Fewer touchpoints limit the possibility to analyse the customer journey

The internet has changed the traditional way of how companies interact with their customers.

The companies interact significantly less with their customers than previously. Instead of just visiting a company website, customers create their opinion of a company’s products and services increasingly from third-party websites such as product search engines, price check sites, blogs etc. An important part of the purchase process takes place without a real touchpoint with the company.

Customers have increased expectations

Companies fight to keep up with increased expectations from their customers. 55% of the surveyed business managers identified increased expectations from their customers as a high priority focus in the future, and 33% sees increased expectations as a critical priority. Implement recommends that companies strive for competitive
advantages by increasing customer loyalty by investing in systematic involvement of customers. Customers’ needs should be defined on an ongoing basis and be met by involvement and relevant offers the moment the customer’s need dictates it.

Systematic customer involvement is worth its weight in gold

Greater involvement leads to increased customer loyalty and is, therefore, immensely important to companies. Furthermore, the companies will experience increased feedback from their customers. The ability to monitor and affect a greater part of the customer journey by touchpoints accelerates two-way learning: The customer gets an insight into customised products via context-aware applications, and the company can collect data on the customer.

Customers should be involved in the design phase of new products and services, which should be used in short, quick and iterative development cycles to meet the customers’ immediate needs. In this way, the interest from the same customers is ensured, and they determine the product’s success with their purchase.

Analysing the entire customer journey in real time

The company will get to know its customers better by monitoring their interaction with the company, so the customer experience can be optimised at every touchpoint. The ability to monitor the customers’ interaction with the company on an ongoing basis is important so potential unsatisfied customers can be handled before they lose their loyalty. This customer knowledge will be achieved by monitoring, which is the very basis for offering customised products that give the customer a data-driven experience.

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Systematic customer involvement sets so far unseen demands for IT infrastructure

To be able to meet customers’ increased expectations, the demands for the cooperation between IT and the business are higher than ever. Systematic customer involvement sets demands for:

• Data and information architecture
• Business and IT processes
• Channel strategy

Data and information architecture

As a foundation for digital business support of systematic customer involvement, data is paramount. To convert data to business executional information, master data must be gathered, analysed, distributed and delivered.

Data on customers’ interaction with the system creates a foundation for the business’ ability to involve customers, improve customer experiences and deliver timely services that match the customers’ needs. Data should, however, also be collected from social media through listening platforms.

In order for data to be useful in a business context, it must be structured, and predictable analyses must be carried out. Data must be stored and processed to real-time customer knowledge on an ongoing basis, which will be distributed and handled continuously in close cooperation between IT and the business.

Finally, the customised product or service must be delivered to the customer who again gives feedback to be captured. In this way, the data handling process continues.

To make this process successful without being unnecessarily resource heavy, a well-developed strategy for the information architecture is essential. The information architecture must support the business in the best way possible as well as being well-structured and documented. If this is not the case, aligned digital solutions between the company’s IT systems will not be created, and data exchange between relevant stakeholders becomes costly. Last but not least the interaction with the company will not be simple and value-adding for customers, employees or partners.

Business processes and IT processes

IT processes must create a foundation of knowledge for the business’ actions. Without optimised IT processes, the analysis potential might not be fully used or the quality of the processes’ delivery is not optimal. The system support of the processes around a systematic customer involvement system makes up the backbone of successful customer involvement, and without the business processes the IT processes’ delivery will end up being nothing but information that will probably not be reacted to in time.

Systematic customer involvement sets demands to the business’ processes that should be adapted so they can react to the customers’ constantly changing preferences. The business processes must, similar to the IT processes, be geared to quick, short and agile product development cycles.

The business processes and IT must be value-adding for the customers by using the analysis potential in customer feedback as well as customer interactions with the system and customers’ actions on social media platforms. The result must constantly be anchored in customer value creation and aligned processes across the entire company. These processes must be flexible so they can adapt to changing customer preferences.

Channel strategy

When, how, where and via what media do we contact existing and potential customers? Customers must be contacted with relevant offers when their preferences dictate it and not be bothered with offers that do not match their interests. As mentioned, customer preferences change constantly and are relative in their interaction history, product development preferences, general involvement in the company and their location.

The customers are reachable via smartphone and tablet applications and can be contacted with relevant offers depending on location, geographical direction and identity. Social networks make up most of the traffic to and from smartphones and tablets, which is why apps seem ideal for facilitating product and service recommendations to customers’ networks. From here the customer’s preference can be monitored and expressed directly to the company. The American application market is said to grow from around DKK 140 to 315 billion from 2013-2015.

At Implement, we help customers with the three primary requirements for IT and infrastructure and set a team who can help in the journey towards a customer-oriented company.

Implement’s five implementation principles

Implement’s implementation principles consist of five central principles we use as guideposts when we advise on, design the process and help execute strategic changes. Following these principles will help implement systematic customer involvement in a way that ensures it has an impact on the company.

Implement's five implementation principles

Focus on both soft and hard results

The rationale behind implementing a systematic customer involvement system must obviously be an effect or specific results. Implement focuses on effect and defines goals (soft as well as hard) and establish a system for measuring that shows the improvement in the change. In this way, greater flexibility is ensured in relation to the specific activities in the change project. Instead of following the plan that has been set, it is now possible and legitimate to change the efforts if for example customer loyalty does not increase or the analysis potential from the systematic customer involvement system or if other goals for the project are not reached.

Create importance jointly – early and with an open mind

Classic change management operates with importance at two levels namely by ensuring that the changes have high priority with top management and by creating a burning platform.

To communicate the importance of the need to meet customers’ increased expectations is essential for the systematic customer involvement being used and that the potential is being used optimally. The discussion on what is important is not just limited to a small circle of people but must be communicated across the entire company.

Bring together the right people

Often the choice of who are involved as central players in a change project is reflected in what management is used to and what is most convenient when the project commences. Our experience is that there is always much to gain by putting together a varied team of central players with a set of well-defined roles which each and together support the goal of the project to meet the customers’ increased expectations. Thereby, it is ensured to have a more equal representation of different interests, and a better foundation for a common language in the company is created around the implementation of a systematic customer involvement system.

Prioritise atmosphere, timing and energy just as much as content

Even if a process has been planned down to the smallest detail, its success is often depending on whether you can successfully create the necessary energy at specific important times during the process.

That is why it is ironic that you often have a tendency to neglect energy and atmosphere. This is due to the fact that content is rationally often prioritised much higher and that atmosphere and energy are terms that are difficult to control. It is essential for a successful execution, however, that this is prioritised highly.

Be authentic, honest and create trust

A successful implementation of a systematic customer involvement system depends highly on the degree of trust the company has to the project and the people who make it. Success is also depending on the relations between the people in the project and again on their relations to the stakeholders in the company.

Authentic behaviour is one of the strongest tools when it comes to changing perceptions and improving relations in the company. That is why it is so important to be honest with yourself and your surroundings in any change. We hope that this article has contributed to emphasise the need of the necessity for IT and the business to cooperate to put the customer first in order to create profitable growth in an ever more turbulent and chaotic world.