Call it the Trust Economy, the Social Economy, Social Business or other, much has been speculated, theorized and debated when considering what it takes for a business to grow and thrive in whatever this “new economy” is.
The reality is that we don’t really know what this new economy is. Social Business is the trending paradigm-du-jour but wait 6 months and there we’ll probably see another great revelation about what’s next in corporate strategy. With each passing year the frequency of paradigm-shifts – real, invented or perceived – seems to increase.
Is it a new operating archetype created by the increased power of the consumer through social channels?
Is it the democratization of information enabled by the growing list of mobile and social technologies?
Is it the realities of a new post-recession world-order where foreign countries have become economic superiors?
Back to Basics [Again]
My advice to business leaders: monitor trends but never lose sight of personalized customer experiences if you wish to weather future strategy tempests. The one rule that will not change, regardless of what the future has in store for us, is that a business’ success will be measured by its ability to act as if it was the customer.
Back in the “wild-west” days, the General Store owner knew each of his customers by name, who their families were, what they did for a living. He didn’t stock his store based on trends, predictions or his own brilliant ideas but on what he knew his each of his customers would need.
This basic yet profound rule is missing from many of the blogs and whitepapers issued today that try to capitalize on the latest technologies and trends to predict “what’s next” for businesses.
Many have called this a “customer centric” approach but it goes beyond simply thinking about your customer’s needs and wants; it’s about becoming your customer and making decisions as if you were them. It’s a fine line but an important distinction.
Case in point: Amazon. Arguably one of the most unsung success stories in our economy. Their revenue (and profit) diversification is inspiring and can be credited to their ability to run a business as if they are their own customers.
Invent For Your Customer, Not Your Business
Lisa Utzschneider, global vice president of digital advertising sales at Amazon referenced their customer-first strategy at an ad:tech conference recently. When Amazon thinks about its customers, the company thinks about three things:
- the product that it wants to develop
- the ability to innovate on behalf of the company’s customers
- how to anticipate their needs
As a seller of books (among other things), when that filter was applied, the unlikely and even illogical business strategy of moving into the tablet & hardware business becomes logical. “Who could have imagined that we would get in businesses like Prime or Kindle? Who would have thought we would get into the hardware business and start building hardware?” Ms. Utzschneider said.
Don’t Disrupt the Customer Experience
When Amazon started its advertising program, they understood that advertising on web sites, apps and networks were very disruptive to the user experience. With their core philosophy in mind (remember, Amazon invented the one-click purchase), it planned how to enhance the customer’s online shopping experience through the placement of advertising.
“When we think about advertising, it’s about personalization,” Ms. Utzschneider said. “The personalization and recommendation engine is the backbone of our company.”
The adoption and click thru rates of this basic strategy is reaping rewards for Amazon, their advertisers and customers. For example, a recent partnership with Universal Studios to promote the Lorax movie, resulted in a 25 percent increase in unaided awareness and a 50 percent increase in likelihood of parents wanting to take their children to see the film, surpassing all of Amazon and Universal’s sweeps, video streams and social activation benchmarks.
Reduce Friction
In a study of top-ranked applications across iOS, Amazon and Android, Flurry Analytics found that the Kindle Fire manufacturer delivers more than three times the revenue in its app store compared to what Google generates for developers.
While the report lists Apple still reigns supreme, Amazon is not far behind. Google/Android, however, does lag behind the other two by some margin.
“The issue comes down to commerce friction,” said Flurry Analytics’ VP Peter Farago. “Amazon has all consumers payment-enabled, manages a curated store and has deep merchandising understanding.” Google has built a great app market but on the back of a leading search and advertising technology. Good for them, but for the customer – not so much.
Whichever division, strategy or tactic you look at, what has made Amazon’s so successful is their placement of the customer experience at the center of other business strategies.
So plan for social media, m-commerce, gamification, social business or whatever other business strategy you’re considering, but never forget that a basic customer experience strategy must remain at the core of each new paradigm shift you explore for your business.
Sam Fiorella – Sensei
Feed Your Community, Not Your Ego
Feed Your Community, Not Your Ego
