Blowing Up Customer Engagement

For years it’s been impossible to read a magazine or attend a seminar without having it drummed into our heads that customers are at the center of a successful business. That’s become an obvious truth. What’s not as obvious is that over the last dozen years we have actually progressed through three distinct eras of customer engagement and that the one on the horizon today is going be catastrophically disruptive.

The first generation of customer technologies established itself in the early 2000s with the advent of enterprise CRM, telecom tools, and a maturing web. It made “cheap” customer service possible. Companies saved a lot of money, and in the process made a lot of customers angry.

Fortunately, by 2007, the next generation of customer technologies had a different focus. The iPhone created an ecosystem for improving experiences. Businesses could make their offerings “better”, fueling a rush to master mobile technologies within existing business models. Progress has been great, but as this second generation of customer love reaches maturity, new market differentiation is becoming progressively harder to achieve.

This sets the stage for the coming big change. We now sit on the cusp of a new ecosystem of technologies that has the potential to invent (and destroy) business models. Big Data, Ubiquitous Touch, and Cloud Computing create a powerhouse for transformative innovation that is unprecedented in its breadth and flexibility to invent new kinds of customer “value”.

This capacity to radically reimagine the form of “value” a company offers its customer has the potential to disrupt markets in ways that far exceed the impact of the last two generations based on “cheap” and “better”. Nike, Ford, and Sears are all pursuing strategies that see interconnected ecosystems of customer insight, multiple touch points, and integrated services as the heart of their future competitive position. 

The trio of technologies offers such creative speed and breadth that many businesses will find themselves suddenly irrelevant in a marketplace that has been reimagined for them. Competitors entering from adjacent parts of the consumer’s life will create powerful new networks of value that accelerate the rate of obsolescence of established products and services.

Market opportunities will be created for those who become creative serial innovators. This is about more than being “cheap” or “better”. It will be about survival. Customer centric innovation will take on an entirely new level strategic urgency.

We’ve had over a decade to learn the lesson that customers are at the center of our business. Now we can see whether we’re ready to take those lessons to a new level of creativity and imagination.  

Watch my talk from this year's Thoughtworks Live Australia to hear more about how organisations are coming upon a crisis of value, yours too.