The Changing Rules of Customer Engagement

The crumbling of distribution as a barrier to customers has changed the nature of the investment required to get to customers (described beautifully by Ben Thompson in the article referenced below). Sales and distribution barriers have been crumbled by mobile devices, social media, courier networks, internet sales platforms and the ease of setting up sales sites. It is further emphasised by Facebooks launch of Marketplace this month.

Retail stores haven’t disappeared and won’t soon, but these changes have fundamentally changed customer purchasing behaviour. Recent Nielsen research has shown how complex the behaviours of consumers with highly sophisticated use of the internet to undertake purchases ranging from on-line research to purchase in-store through to see in store and purchase on-line while looking at goods on the shelf.

My interest is in working with business and students to adapt to the reality of the changed customer engagement environment and to learn to invest in truly integrating customer needs into business planning and product design through tools such as Value Proposition Design and Jobs-to-be-done. In working with groups to develop an understanding of the changed operating environment, we use Facebook as benchmark on these changes became embedded with consumers, which we set at between 2012 and 2015, which are the years that Facebook reached 1 billion monthly active users and 1 billion daily users respectively.

The figure below shows when various digital technologies were released and how long it took them to reach 1 billion (typically MAU’s, for the social media and active installed units for the physical media).

Year digital technologies were launched and years to reach 1 billion users (Facebook: M=1billion MAU, D=1billion users in 1 day) (D.Oemcke)

I find the embedded message of accelerating uptake of social/everywhere tools in this graph to be a powerful way of telling the story of how customer behaviour has fundamentally changed as a result of technology in the last 5 years. All businesses, whether manufacturers, wholesalers or retailers, must change their perspective from sitting within a supply or value chain, to being part of a customer purchasing ecosystem driven by the uptake of these mobile tools that now hold the keys to customer engagement.

This concept was reinforced for me by the Nielsen data showing that manufacturers web-sites are the second most popular source of information when undertaking internet research, and is growing in importance relative to retail websites.

The data above shows the acceleration in Social-Everywhere platforms getting to 1 billion users. The dates they reached the 1 billion mark are shown on the diagram below.

Year digital technologies reached 1 billion users and the time it took (D.Oemcke)

If you are interested in seeing a little more on this, I have uploaded a presentation to Slideshare that covers this material in a little more detail (http://www.slideshare.net/DarrenOemcke/customer-driven-business-planning-67235269). This slideshare presentation was prepared for a new training program developed in partnership with the New Venture Institute and Flinders University, so the last few slides are focussed on that program.

References:

Selling Feelings by Ben Thompson https://stratechery.com/2015/selling-feelings/

Information is Crucial for online Australian Shoppers By Lillian Zrim, Associate Director, Nielsen http://www.nielsen.com/au/en/insights/news/2016/information-is-crucial-for-online-australian-shoppers.html