Forrester Research Inc Analyst, Josh Bernoff, released a report recently entitled, “Competitive Strategy in the Age of the Customer.” The report discusses the only sustainable competitive advantage in the current customer-centric era: engagement. Below are some highlights from the report.
- Key takeaway: Companies need to adjust their business strategy from being customer focused to customer obsessed. The proliferation of social media has disrupted every industry and created empowered consumers. They now have the tools to rave about your products, complain about your customer service, or follow your brand within the interconnected social web. Customer obsession should be business’ #1 priority over any other strategic imperative.
- Value versatility over lock-in. Focus your strategy, energy, and budget on processes that improve knowledge of and engagement with customers that take priority over maintaining traditional competitive barriers. Don’t back your “loyal” customers into a corner through contracts and proprietary technology. Instead, aim to create authentic advocacy by adjusting to customer needs. Enthusiastic repeat business is much more valuable than content customers (who might actually be detractors) that are stuck in a contract.
- We are now in an empowered-customer-centric era. Shift your thoughts and budget accordingly. As Ian Wolfman of imc2 said, “Stop using ads to cover up a weak reputation and unhappy customers. Prioritize Word of Mouth over mouthing off.” Bernoff suggests cutting 10% of your traditional advertising budget and reallocating it to strategies that include a viral potential like social, devices, and content. Ads are far more effective when consumers are primed to believe them through the influence of their peers.
- Find ways to sell more to current customers and get them to recommend your brand to their networks. New customers are more expensive to acquire than repeat customers; and repeat customers are much more accessible. Let your current customers, particularly you’re Advocates who are willing and ready to spread their enthusiasm, be your customer acquisition force by making it easy for them to recommend your brand.
- Measurement is key. Prove your word of mouth marketing efforts are successful but measuring results. Appropriate metrics will vary across companies, but companies must measure campaigns that can tie back to business results such as leads, database sign-ups, inbound clicks, etc.
Brands- Stop thinking that all eyes and ears are on you. All eyes and ears are actually on your customers. Download “Competitive Strategy in the Age of the Customer” here.