The Wu-Tang effect – Innovation in the entertainment industry

wu 300x300 The Wu Tang effect   Innovation in the entertainment industry

Image source: WuTang Clan Twitter account

Few industries have experienced more disruption from the advancement in digital technology than the entertainment industry. From the moment the peer-to-peer music sharing service Napster came onto the scene in 1999 the writing was on the wall for the existing business models of the music, film and television industries.

They initially resisted the change but are now succumbing to the impact of digital innovation. But not all innovation potentially impacting this industry is purely digital.
Just recently I read about the model that USA based hip-hop band the WU-Tang Clan are about to try out. They have decided to combat the impact arising from the ability to instantly share music brought about by digital advances by making and releasing just one copy of their new album “Once Upon A Time In Shaolin”. What on earth they are thinking? Let’s explore.

The story starts with the Wu-Tang Clan commissioning a one-of-a-kind engraved silver-and-nickel box by British-Moroccan artist Yahya. The box will soon encase the one and only copy of the new album the band has been creating in secret for the last two years. One of the members of the band, RZA, recently said, “We’re about to put out a piece of art like nobody else has done in the history of music. We’re making a single-sale collector’s item. This is like somebody having the sceptre of an Egyptian king.”

At first sight this appears to be a monumental mistake. Even if they sell the album for a million dollars or even two this still wouldn’t match what they made from their earlier album sales. But the true genius is in what they plan to do before the album is sold. The album is going to go on a world tour, focused on around the types of organisations that normally show high profile artworks; museums and galleries. And like the exhibits that normally are the start of the show at these public buildings there will be a price to attend and listen to the “artwork” – after going through a heavy security screening of course.

Once the album has finished its “tour” then it will be put up for sale. Assuming the album is not leaked it is likely that youth culture focused brands would be the first in line to buy the album – which is likely fetch millions of dollars. And once it has been purchased the owner is free to do what they want with it. In other words the plan is to create a unique, exclusive and valuable music “property”.

There are risks to this strategy. As album’s main producer “Cilvaringz” put it: “One leak of this thing nullifies the entire concept.” But it is a bold and courageous experiment in inventing a new way for music to find value. As Cilvaringz said “I know it sounds crazy, it might totally flop, and we might be completely ridiculed. But the essence and core of our ideas is to inspire creation and originality and debate, and save the music album from dying.”

What I like most about the great Wu-Tang experiment is the fact they have clearly spent time thinking about how they can reframe what music is to their customers. It is a fact that music is social and something to be shared. But it is also a source of excitement – a special experience – especially in that moment when you hear a tune that grabs you for the very first time. What Wu-Tang Clan are trying to do is create a lot of “first times”, while also positioning their music as a work of art. They are reengineering the music listener’s customer experience.

Will it work? I don’t know. But I applaud the band for being brave in the face of an industry confronted with dramatic change. It is encouraging to see radical new ideas being tested in the market. That’s true innovation.

Now it’s up to the rest of the entertainment industry to step outside of its old world paradigms and take on the challenge to be truly innovative.

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Innovation in sport – understanding the Fan Experience

veikkaaja sports fan 300x170 Innovation in sport   understanding the Fan Experience

Few businesses get the passionate brand engagement that sporting organisations enjoy. In fact, many businesses would give their proverbial right arm to have available the intensity of fan engagement, rich sources of content and “pulling power” of sporting organisations.

So why is it that many sporting organisations are struggling financially?

Sporting organisations, ranging from clubs to high profile teams and venues ,are currently undergoing a period of rapid evolution and pressure to change the way they do things. This has become most pronounced for organisations who govern sports at a national level. As the media landscape has become increasingly competitive and fragmented many of the traditional sponsorship opportunities available to sport have become more difficult. And sponsors are now demanding much more for their sponsorship dollars than ever before. Brand exposure alone is no longer enough to warrant long term sponsorship.

To take full advantage of their significant brand assets and to stay relevant and exciting, sporting businesses need to think and act differently. The more visionary sporting bodies-and there is a number of them – now recognise that digital innovation is both their biggest challenge, and their greatest opportunity.

But how does an organisation go about ‘digital innovation’? Most sporting organisations are filled with very talented people who have a passion for the sport they represent. But this can create it’s own set of challenges. When an organisation has spent much of its time focusing on high performance athletes and major sporting events, and has never really had to battle to capture the attention of the public, then seeing the world through the customers’ eyes (in this case that of the fan base) can be difficult to do.

At Working Three we are committed to helping sports organisations drive systemic change. We usually have three key objectives in mind at the outset: to help find new opportunities for revenue; to provide better value for sponsors; and last but not least, to provide better experiences for customers.

By beginning with customer experience disciplines, and using the Fan Experience Framework that we have developed through our work with many sporting bodies, we can help them achieve these objectives.

So if you are involved in a sporting organisation what can you do? Begin with customer insights. What do you already know about your customers? What pockets of data do you have that would allow you to develop a deeper understanding of the people in your fan base? It’s often surprising how much data your company has available. Use that as a basis for building a map of the customer experience. Even at this early stage opportunities for doing things differently become clear.This should be mapped against key business objectives to provide focus for your effort.

Next find out what your fans really want. Fans are often willing to pay for more value. The trick is finding what that value proposition really is. It might be access to content and other assets that have already been created, but don’t assume that. There are other models and many opportunities for generating revenue so don’t let current thinking hold you back. Remember, you are designing a service so allow yourself the freedom to make that service as good as it can possibly be.

Validated opportunities can then be used to design an optimal fan experience and innovation roadmap. Delivering this this may require organisational change and that typically is not easy. In fact stakeholder management issues can be one of the main factors that inhibits sporting organisations from rapidly evolving. So get your people involved. Take them on the journey and spend time listening to their ideas. And ask your advisor to help you build a “stakeholder management plan” that helps you anticipate and navigate the challenges you are likely to face.

My experience tells me that the most successful organisations are those avoid the temptation to rush the innovation process. Spend time allowing everyone to come up to speed. Develop a programme that will allow your organisation to get the most out of fan engagement and smooth out the issues that can arise from focusing too heavily on a single major event. Fan experience innovation is about finding out what your ‘customer’ needs, and is willing to pay for every day – not just the day of the event.

From music to movies and television, the entertainment world has been irreversibly altered by the rapid evolution of digital technologies. Sports is one of the oldest forms of entertainment and it too is part of this changing landscape. But unlike many other industries, sport has a culture and passion associated with it that makes it uniquely positioned to benefit from these changes. The key to unlocking this gain is seeing the world through the eyes of the most important participant – the fan.

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Recognise a broken customer experience and do something about it

As a consultant I sometimes spend more than a reasonable amount of time on planes. Recently I travelled between New Zealand and Australia several times over the course of one week. During one of my many visits to an airline lounge I met the chief executive of an Australian retailer. He asked me what I did for a living. And I explained that our company is a customer experience and digital innovation consultancy. His response was as follows: “I hear people talking about customer experience a lot but don’t businesses already know everything about their customers? Isn’t the experience obvious?”

He had a point. It should be obvious. But in fact many companies have become so disconnected from their customer base that delivering a wonderful customer experience is a very hard thing to do – or even worse very low on their priority list.

It shouldn’t be. A recent report commissioned and published by customer experience software vendor SDL found that “60 percent of global consumers are willing to pay more for a product if the brand delivered a positive customer experience.” Another report by Watermark Consulting, released in April last year, showed that “for the 6-year period from 2007 to 2012, Customer Experience Leaders… outperformed the broader market, generating a total return that was three times higher on average than the S&P 500 Index.”

Clearly there is a strong business case for optimising the customer experience across a multitude of touch points. There is always something that can be done to improve the customer experience from a process perspective but currently the big wins are coming from significant innovation projects in the digital space – where new and exciting touch points can be taken to market quickly, and at scale.

Innovation can be a tricky beast to tame, especially in the digital space. It’s far too easy to get excited about ideas early on and jump into a project without understanding what impact it may have. The real trick is to find the areas of your customer’s journey that are beginning to break down and focus on innovating around these areas.

So how do you know if your organisation has a need to commence a customer experience innovation project?

There are a few key indicators that would suggest that your organisation is need of rethinking its customers’ experiences.

Customers are complaining
It can’t be much more obvious than this. If customers are complaining about an issue or some aspect of a process then there is an opportunity to innovate. The trick is to treat complaints as opportunities and use the information they generate. And go beyond industry norms. Just because your Net Promoter Score is on par with other companies in your industry it doesn’t mean that it couldn’t be greatly increased with the right focus. Why not try and be an outlier than average?

Internal silos creating communication “black holes”
When one department isn’t speaking to another in your organisation the end result can frequently be a broken customer experience. Take a critical look at the way your organisation operates. Has there been years of organic growth within company silos? If so then there is a good chance that you may be creating communication “black-holes”.

Inconsistency across channels
How many customer facing channels does your business manage? Retailers for example may have stores, e-commerce sites and partnerships with third party retailers. Service providers may have their core service, a customer service business function, digital value adds and other key touch points. If there is any inconsistency in the way that customers are treated and managed across these touch points then the typical journey will not be a smooth one.

Social media is viewed as risky
Social media is not right for every organisation but if your company is a consumer facing one there is very good chance it will have or be having an impact. Think about how social media engagements are viewed in your organisation. If it is seen as too much of a risk because of “what people will say” then you have to step back and think about why that is and what you can do to fix the overall experience.

Internal KPI’s are not linked to customer satisfaction
Measurement and accountability create focus. Are the key leaders in your organisation measured against a customer satisfaction metric? If not you are probably developing issues for the way that customer interact with your brand.

Now that you have identified within your organisation the need to address customer experience , what do you do next? Here’s my suggested list.

Use data to develop a 360º view of your customers
The world is awash with data. Social media, website interactions, in-store behaviours, email opens, product usage and every touchpoint in-between is generating data that you can use to understand your customers from every angle. The key is to spend time knowing exactly which data points are important to the relationship between you and your customers – then collect and use them effectively.

To do this marketing, customer service and IT must work together with shared goals. And data collection and usage is not just about sending out marketing messages. It is about creating real value for the customer. Use it wisely to generate deep relationships with your customers.

Focus on behaviours first – then transactions
When you are trying to redesign your customers’ journey it is essential to think about every touchpoint your customers will interact with – and not just the ones that are generating revenue. Taking this broad, holistic view of the world is essential to viewing people as more than simply the sources of a financial transaction. To create a fantastic customer experience you need to think about the behaviours that people are currently exhibiting at each touchpoint, and the behaviours you want your customer to exhibit.

Break down internal silos
This point is important, and it won’t be the last time I comment on it. Make sure that internal silos are working together well and, in particular, sharing data and insights. This will ensure customers have a constant and reliable experience. One of the best ways to improve customer satisfaction is to ensure you meet expectations consistently.

Map the CX
A very important item on my list is ensuring that you have mapped out the entire customer journey. This means looking at the stages your customers go through while interacting with your brand, mapping out and understanding what your customers are thinking and feeling at each touch point. This map will serve as your guide to help identify and map each and every touch point. This, in turn, allows you to begin to design an innovation pathway.

Use human centred design processes to innovate
One you have mapped and understood the customer experience and decided where you want to take it you need to start designing innovations. Using design thinking or service design methodologies you can explore opportunities and build out concepts into prototypes – always keeping the customer at the centre of what you are trying to achieve.

To quote Kerry Bodine from Forrester “Unlike customer experience firms that take an approach akin to management consulting, service design agencies leverage human-centered design practices like ethnographic research, co-creation, and low-fidelity prototyping. The combination of these practices enables service design agencies to more quickly — and cheaply — identify the real customer and corporate problems that they need to address and develop effective solutions. These activities also serve as potent communication vehicles, exposing assumptions and marshalling early buy-in from employees and stakeholders.”

I didn’t explain all of this to the man I met in the airline lounge. I didn’t need to. All I had to say was “Would you pay more to fly on your favourite airline?”. That started him talking about why he loved flying with Virgin and how he would pay a extra for the privilege. I could almost hear the penny drop when he realised what value a well thought through customer experience could deliver.

And now you now know what to look for in your organisation.

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How Qantas can become a digital leader

qantas21 300x187 How Qantas can become a digital leader

Qantas has had a lot of press recently, and for all the wrong reasons. When the Treasurer signalled that the Government sees Qantas as so entwined into the Australian economy that it has become “too big to fail” the airline’s mounting debt problems became an issue for the Australian taxpayer. The question many people are now starting to ask is; what will happen if the airline does get a bail out? Could it ever regain its market leading position?

As I write this article I’m sitting in a Qantas lounge waiting for my plane to commence boarding and with the benefit of this pleasant environment here is what occurs to me.

Qantas has an amazing asset in its brand. It is one that everyone in its home country and many people around the world identify as uniquely Australian. It is both grand and powerful. But it feels like it is part of the 20th, not the 21st century.

A good example of this is the way that Qantas have handled social media over the last few years.
As many brands have discovered social media can be a minefield. Qantas learned this when it set up its Twitter and Facebook accounts with a customer service focus. One can only assume they had seen case studies from around the world that demonstrated the ability of brands to monitor social media for mentions of their name then jump in and address customer issues and complaints. For Qantas things went wrong fairly quickly. The negative interactions got all the attention and people who complained got sorted out quickly. Indeed this happened to me. I was on a delayed flight, complained on Twitter and several minutes later got an upgrade.

Qantas had created a perverse incentive. The loudest complainers got the most attention, incentivising ever higher level of complaints. Fast forward today and look at the Qantas “Follow Us” page . You can now see they are using even more social media channels – but in a much more controlled and broadcast focussed way.

Notwithstanding this progress the way that Qantas has dealt with emerging technologies and how its customers interact with its brand across all digital touch points makes it appear out of touch and slow to respond. The company has an extensive digital network of websites, apps and online promotions but they all feel like disconnected projects, detached from the needs of the customer. As a digital observer, commentator and strategist, it looks to me like Qantas has taken outdated customer engagement thinking and applied it to its online presence.

Qantas is not alone in this approach. Many businesses are now having to deal with the fact that being “customer-centric” in the highly connected, always on, social media driven world means something quite different than it did before everyone had a smart phone in their pocket.
But most of those businesses don’t have the powerful brand that Qantas does.

That differentiator gives Qantas an exciting opportunity. With a robust digital strategy that focuses on the entire customer experience it has the ability to not only match what some other airlines are doing but to leapfrog them and develop a world leading approach to customer engagement.

In particular Qantas has an asset that it could be using to change the way that consumers interact with them online – their frequent fliers loyalty programme.

When Qantas experimented with social media and it went wrong the company reverted to a command and control model. Instead it should have stepped back and asked itself, “if we have been so effective at incentivising behaviours we don’t want , what could it mean for us if we started incentivising the behaviours we do want”.

You could imagine a world where Qantas invites you to connect your social media accounts to your Frequent Flyer membership. Once you do Qantas then starts to reward you for positive interactions online. Engage with an online campaign and earn couple of air-points. Download the new Qantas app and get a few more air-points. Actively promote their pages or offers and get even more air-points. Become an influential referrer and get some status credits. You could even imagine a time where someone, who doesn’t necessary fly that often but is graded as ‘highly influential’ because of their impact on the purchasing decisions of other customers, gets the First Class treatment when they finally do decide to fly with Qantas.

There is complexity to rolling out a programme like this – but it can be done. My company, Working Three, is doing just that for a number of brands. We call it Customer Royalty and it focuses on the idea that consumer advocacy is not random and chaotic – it can be managed and developed as programme.

The rapid adoption of online communications platforms and online tools has presented a range of challenges for large brands. But it is also opening up a world of possibilities and allowing old business models to be rethought.

While managing advocacy and customer engagement is not the fix- all solution to Qantas’ woes the airline is one of those few brands with the ability to do the unthinkable. It can redirect a proportion of it’s massive marketing budget to focus on incentivising and interacting with its customers – and leave its competitors scrambling to catch up.

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Social-Business Transformation

brianSolis 300x199 Social Business Transformation

On the 18th and 19th of February a number of the world’s best social media and digital strategy thinkers met at the Recital Centre in Melbourne for the first “Social Business” event. The keynote speaker was Brian Solis, principal of USA based Altimeter Group, futurist and the author of three books including “The End of Business as Usual”. In social media circles he has become something of a prophet.

I spoke to Brian the week before to get his views on how and why social media is having such a dramatic impact on the way that businesses are evolving.

Our discussion centred around how businesses are dealing with managing the changes in communication that social media has brought, and the economics of relationships at scale – a fundamental issue in today’s environment. This is not a technology issue. To quote Brian, it revolves instead around the fact that society is beginning to “rethink the nature of the transaction”. All transactions involve the trading of data and unless every party walks away from this trading with a sense of value the whole engine will stop working.

The mind sets of two broad groups of consumers are shaping the evolution of the nature of transactions. The first group is the “Pre-Digital Lifestyle” group. This encompasses Baby-Boomers and much of the Gen-X segment. This group (including myself) grew up in world before the internet and the ubiquity of smart phones. Their world view is one where privacy is a right and public notoriety is earned. To many in this group the term “data” arouses feelings of concern and even paranoia.

Then we have the “Post-Digital Lifestyle” group. This group comprises most of the world’s population – Gen-Y and everyone born after this generation. This group has only experienced a world driven by the internet, connectivity and social media. These “always on” people know that their data has value and take a dim view of brands that don’t respect that fact. To them data is currency-something to be traded.

The “Post-Digital Lifestyle” group are empowered with information like no other in history. They don’t want a to join organisations and are progressively moving through the ranks of society. They are looking for short-cuts. Their default setting is to think “I don’t care if it has always been done this way – I think it can be done better”.

This may sound arrogant and confirm the views of those who believe that “the younger generation doesn’t know how the world works”. It is nonetheless the truth and businesses need to know how to deal with this thinking, both internally and from a customer facing perspective. Dated processes and a centralised command and control mentality won’t work. The “Post-Digital Lifestyle” group are looking to be empowered. And increasingly the “Pre-Digital Lifestyle” group are now coming along for the ride.

Businesses need to build a culture that is focused on empowering their stakeholders through their brand. They need to be facilitating this change in mindset. They must focus less on control and more on managing relationships. They need to decouple themselves from the use of technology for its own sake and start deploying technology to become more human. They need to stop thinking about data as something to be collected and mined – and treat it instead as a private asset that can unlocked to provide value for your customers – if they give permission.

The world continues to evolve and businesses must strive to keep up with the pace of change. They should bear in mind a comment Brian Solis made at the outset of our discussion : “As we have become more digital we have also become more human”.

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Digital marketing models and customer experience.

customer experience strategy 300x168 Digital marketing models and customer experience.

The ever-expanding digital landscape is continuing to alter consumers’ behaviours and disrupt a broad range of industries. Some, such as retail and consumer products, are being particularly affected. Today’s customers are expecting a lot from the brands they engage with. As a recent Booz & Company report, entitled How to Choose the Right Digital Marketing Model, explain it this way: “Consumers today expect to browse, research, solicit feedback, evaluate, and push the “buy” button at their own pace, and at the time and place—and via the platform—of their choosing. Consumers also continue to engage with brands online after a purchase and to share experiences with one another.”  

Those of us involved in marketing and dealing with the complexity of digital advertising and customer engagement experience the environment Booz describe every day.

Although there is no “one size fits all” when it comes to digital marketing  a limited number of  models are now emerging and becoming more widely accepted. The Booz  report  identified four models; Digital Branding, Demand Generators, Product Innovators and Customer Experience Designers. I describe and discuss these models below and draw some conclusions for marketers.

Digital Branders are often consumer products companies, retailers or other marketers that focus on building brand equity and deeper consumer engagement. These companies are moving away from traditional linear advertising and investing in digital experiences that connect with their customers. They are focused on recruiting new consumers to the brand, increasing advocacy and driving loyalty.

Demand Generators, such as retailers, play the numbers game. They are focused on driving traffic and converting leads in the fewest steps possible. To quote the report again, “All elements of the digital marketing strategy—website design, search engine optimisation, mobile connected apps, and engagement in social communities—are tailored to boost sales and increase loyalty. Although Demand Generators also need to leverage content to drive engagement, they are more focused on driving volume and efficiency…”

Product Innovators are organisations who use digital marketing to help identify, develop, and roll out new digital products and services. Booz explain that “…these companies employ digital interactions with consumers primarily to rapidly gather insights that can help shape the innovation pipeline.”

The fourth and final model Booz identify is Customer Experience Designers. The report states that these companies focus on “reinventing how they interact with customers, and wowing them at multiple touch points; these companies hope to create an ongoing dialogue and build a loyal customer base.”

I agree with the overall premise of the report that the digitally influenced  consumer environment is leading to the emergence of new digital marketing models – and I like the first three models they describe although they are not necessarily mutually exclusive models. For instance a “digital brander” could also choose to adopt the approach of a “product innovator” in its marketing strategy.

But I would argue that “customer experience design” is not a fourth model but rather a discipline that should be applied across all three digital marketing models. It creates the focus for the digital interactions involved in implementing these models.

For example, using the Booz  model classification a large retail client that my company is working with would be classified as a Digital Brander. However we are using customer experience frameworks and data points to mature and evolve their activity – across mobile, e-commerce, social and in-store.

The fact is that online marketing needs to be relevant, timely and, most importantly, derived from a position directed at the value to the customer. Brands can no longer rely on interruption marketing. They must focus on value creation. They need to develop experiences and messages that connect with their customers. Going one step further and delivering valuable experiences creates  a sustainable dialogue, and ultimately costs savings.  Brands who adopt this approach are thinking beyond “spray and pray” marketing techniques and see customers as more than just database entries.

Customer experience disciplines allow brands to understand the “jobs to be done” – what their customers are trying to achieve – and innovate around that. All the best brands relentlessly focus on the needs of their customers in this way. Understand what they are really trying to do and provide a solution. That is what allows products like the iPod to come into existence.

So as you develop your marketing plans for 2014, identify your marketing model, define your objectives and then take a disciplined approach to using customer experience techniques to carve out your unique position in the market. Listen, learn, innovate and succeed.

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Customer Experience predictions for 2014

iStock 000026241972Medium 1024x1024 300x300 Customer Experience predictions for 2014

Knowing where your customers are and how to keep them happy in a low cost way has always been a challenge for business. As social media, smart phone apps and other digital technologies have moved into common usage, businesses have suddenly been swamped with an influx of customer and behavioural data. Suddenly knowing where your customers are and what they are doing is not the biggest problem. It’s now time to do something with all of the data that has been collected. Designing the “keep them happy” stage has become a major focus for many businesses.

This is why an innovative approach to customer experience strategy has become so valuable. With so many of the customer touch points becoming digital, understanding how these fit together is vital. So for those of you who are looking at your customer experience let’s explore what areas you should have on your radar for 2014.

Social media will splinter into highly specialised areas

Over the last few years most businesses have dabbled with some form of social media or another with varying levels of success. In general social media channels have been used for marketing (mostly unsuccessfully) and dealing with customer service issues (far more successfully) and distribution channels for content marketing (which is seeing positive results and maturing quickly).

In 2013, roles such as community management, social customer service, content marketing manager, social data analyst and social app developer rose to prominence. Next year these will become far more commonplace. Social media will become more than a place to simply tell your story – it will be seen as the platform to deliver a range of high value services.

Loyalty programmes will become “social”

Traditional loyalty programmes have always focused on incentivising repeat transactions. As technology has evolved, the plastic loyalty card of old has been replaced with interactive smartphone apps – now it is possible to use the same “points” mechanisms to incentivise other behaviours. Why would you not get your customers to buy the new widget AND tell all of their Facebook friends about it?

Consumer data will start to take centre stage

There is a vast amount of data being created by the average consumer. We generate data every time we use our credit card, send an email, click like on Facebook, use our smart phone or search for some thing on Google. Currently, most of this data is invisible to us. Next year there will be a lot of focus around how this data is released from the gigantic data centres and used by the very people who create it – us! Your data is about to become a new and highly valuable utility.

The smart companies will “get it”

Forrester Research not so long ago said that we have exited out of the information age and are now in the “Age of the Customer” – where commercial success comes from empowering and engaging with customers. The world’s smartest companies understand this and are moving fast to take advantage. They design customer experience maps, creating interactive customer experience journeys and create the innovations that empower their customer base.

The pace of technological change is continuing to speed up. The way that people communicate is becoming increasingly digital. This is not going to stop anytime soon and it is changing the way that consumers deal with the brands they purchase from. Shifts in market trends can now happen overnight. The customer truly is in charge. The only question is: how is your company going to deal with it?

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Your personal data will soon be yours

personaldata 300x158 Your personal data will soon be yours

Consumers’ desire and ability to aggregate and utilise their own data will come into focus in the year ahead. Businesses are experiencing the market backlash from the “downsides” to consumers of the heavy investment in online marketing – which makes them feel like they are being watched at every turn. And the media coverage of NSA contractor Edward Snowden throughout 2013 has further highlighted the issue about the nature of the data is being collected and used.

Developing a customer focused strategy and evolving an entire digital customer experience journey is becoming essential for the profitability and even survival of many businesses. But they need to be aware of how public opinion is shifting in respect of online privacy and personal data utilisation. This is why the developments in personal cloud technology and movements such as VRM, championed by the legendary internet commentator Doc Searls, are so interesting.

At the heart of the personal cloud movement is the concept that all of the data the you and I create as we go about our daily lives is actually our property. Currently the consumer has no ownership and usually no visibility over this information. The personal cloud is place where people can aggregate, curate and utilise that data. It is a place on the internet they can truly call their own. Unlike cloud storage facilities such as DropBox, the personal cloud is more like a virtual computer created to manage an individual’s online life. I recently spoke to Joe Pine, the author of the Experience Economy and TED presenter. We discussed the personal cloud movement and he commented that “People no longer want ads targeted at them. Companies need to use the information they gain from individual consumers to benefit those same consumers.”

Sitting at the forefront of the personal cloud movement is Dr Phil Windley based out of Utah. He has developed a personal cloud operating system, CloudOS, that allows these concepts to come into existence. He has developed technology from the ground up to give consumers the ability to store and use their own data. It is the internet of things with yourself at the centre.

Personal clouds give the consumer autonomy and power in the “data exchange” relationship. And that is of vital importance for business leaders. Adopting this technology, understanding the philosophy behind it, and becoming comfortable with using the technology to develop a relationship with customers, changes the current paradigm. The customer’s data is no longer the source of value to businesses who adopt this paradigm. What matters instead is their willingness to allow a relationship to develop.

This is a very different world from the data-driven marketing one currently dominated by Google and Facebook. It redirects the investment that many brands have made into data driven “surveillance” style marketing (much of which had done more long-term harm than good) towards customer relationships. In this world commercial dominance is not gained through control and manipulation. Instead the most valuable asset is the trust and respect of your market. In this environment good-will can be quantified and valued. It puts pressure on companies to spend less on “interruption” marketing and focus instead on delivering digital services that provide real value.

Technology naturally plays an important part in this market transformation, but while personal clouds seem like a likely catalyst for change putting technology first is usually a mistake. It is more important to develop a strategic approach that will allow your business to innovate and take advantage of these technologies as they mature. To quote Joe Pine again “Consumers are becoming orchestrators of their own experience, determining what to do when, and personal clouds are making that happen.” A well designed and managed a customer experience builds trust. Getting this right will be a top strategic priority for many companies in the coming months.

Yet again technology is generating a market shift and it is giving more power to the individual. Like every technology has evolved to directly benefit consumers when the time is right it will be adopted quickly. The rapid rise of social media saw some organisations taken by surprise and other benefit. The same will happen in the case of personal clouds.

Which camp will your company fall into?

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Personal clouds and future customer relationships

mg21829196.400 1 300 1 Personal clouds and future customer relationships

Early one morning in the not too distant future one of your customers, let’s call her Sarah, will wake up do what she has been doing for some time – she will reach for her smart device (phone, tablet or whatever). Sarah will have connected all of the data gathered about her from social networks, financial institutions, loyalty programmes, and utility providers and it will be fed to her digital personal assistant. To this will be added bits of information about her location, diet and exercise and other personal details recorded on a wide range of applications and devices. All of that information will be gathered together in one spot that she controls.

Sarah will look at her smart device and it will ask her a simple question; “What do you want to do today?” Unlike today’s smart phones, which simply display data such as calendar events, emails, Tweets and Facebook updates, the devices of tomorrow will understand all of that data means and then help you turn it into action. All the data a person creates will be centralised, not in the way it is now – primarily focused around the requirements of businesses or governments – but in a way that is useful for that particular individual. Sarah will not have to wade through masses of data. Instead she will be presented with very simple options like “relationships”, “work”, “finance” and “fitness”.

In the “relationships” setting she names a few friends she would like to get back in touch with. In the “fitness” setting she indicates she would like engage in some outdoor activities. The digital personal assistant interface on her phone knows that she used to play tennis and asks if she’d like to play again this weekend. It knows that the forecast is for sunny weather and that one of the friends she is keen to catch up with would make a good tennis partner. Sarah thinks that is a great idea and agrees – and in the background the personal assistant books the court, invites her friend and puts the match in each of their calendars.

Sometime earlier Sarah had indicated that Nike was a company that she’d like to hear from. So she now gets a message from Nike offering a free virtual tennis lesson from Roger Federer through her new Xbox. She accepts the offer and later that week begins the lessons. After completing one of the lessons she gets another message saying that, based on the way she has been hitting the ball, Nike recommends a new racquet for her. She examines the virtual racquet on-screen and, after customising the colours to suit her personal preference, buys it and organises it to be delivered to the court booked for the weekend.

Sarah is living in a world where she is no longer bombarded by marketing messages but instead hears from companies she respects. And those companies spend their time and effort focusing on building a relationship with her. The days of “shotgun” marketing are gone. She lives in a world where the data she is creating converges and is useful to her. She is not being spied upon.

This scenario may sound like some time in the distant future. In fact it is starting to happen right now thanks to rapidly developing technology called personal clouds. Gartner has listed personal clouds as one of the top 10 strategic technologies for 2014. These clouds are being designed and built to give consumers more power, control and utility over their own information.

After years of investing in big data techniques that had begun to resemble NSA style spying ploys, many of the businesses I deal with are now asking us to help shape their strategy for personal clouds. This is not about technology for the sake of it. They have realised that creating a digital service offering that uses data to provide value to customers is tomorrow’s competitive battlefield.

Each of us is creating data at an incredible rate and that is only going to accelerate. The smart businesses are now realise that trying to own that data is expensive and very difficult – but helping customers get value from it is the new competitive advantage.

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Designing the future of retail

The retail environment is quickly being turned upside down. The barriers between in-store and online channels have broken down. For many retailers fighting digital behaviours like “show-rooming”, where customers use mobile devices to find information or alternative deals on the products that they interact with in-store, has be come a priority. More enlightened retailers know that leveraging the digital tendencies of today’s customers is what they must do to remain relevant and profitable. They have had a glimpse at the future of retail and want in.

All over the world retailers are experimenting with in-store digital experiences. From virtual changing rooms, to touch-screens and location aware mobile apps. Retailers are now trying to create unique and interactive environments that embrace technology to create immersive shopping experiences to manage all aspects of the purchasing lifecycle. Put simply, the commoditisation of digital technology is forcing retailers to rethink how customers’ experience their brand.

The leaders in this integrated customer experience retail trend are not employing technology simply for the sake of having technology. Sephora is one. They have rolled out something called “Scentsa”, touch screens in-store allowing customers to explore Sephora’s range of scents. Building on that success they also introduced another touch screen experience called “Skincare IQ”, kiosks allowing exploration of another product range.

What is obvious is that the core values of the brand must be brought to fore of the digital experience to create an emotional connection with the customer. This is what it takes to build competitive advantage in a highly disruptive, consumer-centric environment. It’s not about technology, it’s about your brand and the magic that makes it unique.

So if you are a retailer, and no doubt feeling the pressure to engage with consumers in new ways, what do you do? How do you plan out the digital customer experience?

Initially it’s important to put the customer at the centre of the experience journey. This sounds obvious – and it is. But it is vital to build a culture that focuses relentlessly on the customer. New Zealand based energy retailer Powershop, who is currently entering the Australian market, is a standout example of this. The company designed the customer experience they wanted from the outset and have built a culture that constantly improving on that. And customers have responded. After only a few years in operation Powershop was one of New Zealand’s fasted growing businesses.

It is also vital that you put digital at the centre of the customer experience, not as an afterthought. It doesn’t matter how much money you spend on digital hardware, if you haven’t worked out how, and why, your customers will interact then it’s unlikely you’ll catch up to the way they use technology.

There is no one app or touch-screen that will help you build a digital experience that will draw people into your stores and keep them there. How employ technology is important of course. But far more important is how you create an emotional connection. And how you design your unique experience to turn customers into passionate advocates.

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