We’ve spent the past two months writing about the next industrial revolution as a universal phenomenon, but now the time has come to focus on the part of digitalization we specialize in, we have the skills for, and we operate in. Today I’d like to share a few thoughts with you about how we can use technology to find innovative ways to reach our customers.
In the past the sales staff did three quarters of the work and marketing only one quarter. Now the situation is exactly the opposite.
Digitalization and access to information are turning buying processes upside down. In the past we used advertising to prompt customers to go visit a salesperson (and that person knew everything, as opposed to the customers, who knew nothing), who educated and motivated them, and sold a product to them or closed a deal.
Today an ad invites customers to do more research—that is, to educate and motivate themselves—and the role of the sales staff is significantly reduced. More or less, they only perform the function of closing deals, whereas customers are now significantly more influenced by marketing. Through relevant content on the internet and in social media, and a marketing automation system, marketing now influences an individual customer’s buying decisions the most.
Without reviews and recommendations there’ll be no more purchases.
Digitalization continues, changing customer habits and thinking. Consumers have started using services that reduce the risks associated with buying decisions based on people’s recommendations. Today consumers check practically everything before making a purchase. And I’m not talking just about TripAdvisor, Booking.com, or Amazon. These three are merely the ones that have provided user reviews to us in the most convenient way. The fact is that at a certain point in the buying process customer reviews turn into key information and at a certain stage we can no longer push the customers forward, circumventing this engagement development—either in the digital or the physical world.
Even when I’m thinking about buying some new fly-fishing equipment from a local provider at a physical store, I first check my selected items on Amazon and various dedicated online forums, and in social media. It seems to me that technology could facilitate my access to this information and serve everything I need on a plate. This is the path that customer engagement systems are bound to pursue in the following years.
We can’t just keep on endlessly looking for opportunities for business development by rearranging internal relations within our company!
In a few years, there won’t be any more CRM systems like those being eagerly implemented today (primarily by IT companies). How the sales staff are organized and how they can most easily report their activities to their bosses, and those bosses to theirs, will be of secondary importance for business development. In this regard, companies will have to start focusing on customer engagement development significantly more and at a significantly higher level than today. We’ll have to digitalize the pathways to customers and determine how we can shoulder our way into the customer’s buying process. Every company should honestly ask itself whether it can ensure that it’ll always stay on the customer’s radar—that is, that customers will always think of it, too, when they have a need to meet. Can it engage customers and develop their needs?
A parable about wine
Let me give you a concrete example. As a wine lover, I hang out a lot with winemakers and like to dine in fine restaurants, which for some winemakers are the only point of sale outside their wine cellars. Can you imagine? Their business depends on how much their business partner can persuade one of its customers. This is key to them. This is why they promote their wines at restaurants and sell them below their normal price, so they can make it onto a “best winemaker of the month” list somewhere. Some winemakers even reward the waiters for every cork they return as proof that they were the ones who recommended the wine by a certain cellar. This battle is very much like the battle for shelves at Mercator.
On the other hand, the restaurant owners don’t really care which wine the customers order. Their margins are approximately the same for all of them. When the customer is in their restaurant, they already have the customer. It’s even in their interest that, from the viewpoint of creating added value from the money the customer spends, that the customer orders the cheaper “house” wine and spends more on food.
In my opinion, winemakers definitely need help in how to influence their customers. OK, they can work on their brands, even though modern consumers tend to be increasingly less susceptible to brands, plus this is far too expensive and not everyone can afford it. Only the biggest producers can make it, which is also the main point of branding. To be fair, most people can hardly list more than five Slovenian winemakers.
Modern winemakers should be innovative.
I hope I’ve described this problem well enough because I’d like to discuss possible solutions … First, the winemaker can hire IT specialists that install a CRM system for him and teach him how to use it. This may be good for something, but it won’t really have any influence on me as a guest at a restaurant. Should the winemaker start writing a blog, send newsletters, and maintain a Facebook profile? Maybe: if he wins me as a follower and I like the way he communicates, he can use this to enhance its profile. It would also be good if we met in person at some point and gained a personal connection. But all of this is only latent potential. It still depends on whether I’ll think of him and order exactly his wine from a usually pretty disinterested waiter.
He would have more influence if he managed to detect my purchasing moments; for example, when I arrived at a restaurant that has his wine in stock, he would offer me one of his wines based on the type of wine I like and the food I ordered there. He could present the right message at the right moment. If that happened before the waiter approached me, I think the winemaker would have a good chance of influencing my purchase. Certainly a better one than he has with all his current activities.
I’m not sure whether the winemaker should invest in his own mobile app that would enable this type of functionality. I see significantly more opportunities in a service or app shared by all winemakers. As a consumer, I’d definitely be more interested in an app that offered me various wines produced by various winemakers. Of course, the app would have to know what type of wines I like and what I can purchase at a specific location, and recommend only these to me. Well this is how I imagine a system that is actively built on customer engagement and that would have a better influence on wine aficionados’ buying decisions than what winemakers are using and doing today. What do you think about this?