Now, let’s switch perspectives. Assume you are in charge of the toner division at a printer company. What are you spending your resources on? Most likely, a good proportion goes to developing longer-lasting toner, crisper colors, better cartridges, and efficiency improvements from manufacturing to distribution. While there is nothing wrong with a firm’s striving to build better products or to drive down costs, our printer example shows how far removed those actions often are from the real pain points of the customer. Customer and firm are really poorly connected.
In this and the next chapter, we dive into the concept of a connected customer relationship. These two chapters are followed by a workshop chapter, which will help you build your own set of connected relationships. As we defined in chapter 1, a connected customer relationship is a relationship between a customer and a firm in which episodic interactions are replaced by frequent, low-friction, and customized interactions enabled by rich data exchange. What would this look like in practical terms? It surely must be different from David’s experience with the toner.
Let us first look at one experience at a time. We want to understand the process that a customer goes through of recognizing a need, requesting a solution to this need, and experiencing how the firm responds to the request. The next chapter adds the fourth R of connected relationships, repeat, and will explain how such individual customer experiences are woven together over time to create a lasting customer relationship.
Like any customer experience, the interaction in our toner example starts with a customer need. The printer uses up toner one page at a time. As long as the printouts are of high quality, the customer might not be aware of the need for more toner, even though the printer cartridge might be almost empty. But as the ink on the paper becomes weaker and weaker, the customer gains awareness of the need. In marketing language, needs of which customers themselves are not yet aware are called latent needs.
Once customers are aware of their needs, they search for options. This step can be remarkably complex, especially these days, with our ability to order almost anything from anywhere around the globe. Quite often customers will not be aware of all the options that could possibly satisfy their needs. Once options have been surfaced, a customer will have to choose from among retail channels, brand names, product quantities, and much more. Given the complexity of options, deciding which is best isn’t easy. Finding the product, paying for it, and taking it home is a time-consuming hassle.
But the interaction episode is still not complete. Our customer still has to replace the old toner cartridge with the new one. Lots of things can still go wrong at this stage—the new cartridge might leak or the plastic hinge in the printer might break, and rather than printing his letters, David is now on the phone talking to technical support.
As the printer example illustrates, even one single interaction episode between customer and firm can be a long journey. While we described this journey for an individual end customer, it is important to note that customers in business-to-business settings experience a very similar journey. We find it helpful to break up this customer journey into three distinct phases, each dealing with a fundamental question:
Why does the customer engage in the interaction in the first place?
How does the customer go about identifying, ordering, and paying for the desired product?
What products and services are provided to the customer?
Each of these three phases has a number of steps to it, as is illustrated in figure 4-1.
Moreover, each of these three phases corresponds to a key design dimension of connected relationships. As a manager building connected relationships, you need to ask yourself how you will recognize your customers’ needs (or help them recognize their needs); you need to configure activities that will help the customer identify and request the option that would best satisfy this need; and you need to put in place a system that allows you to respond with this desired option in a cost-effective way.
FIGURE 4-1
The three phases of the customer journey
We will use the printer example to illustrate the differences among the four connected customer experiences that we presented in chapter 1:
Respond-to-desire
Curated offering
Coach behavior
Automatic execution
As we shall see, these four experiences start affecting the customer earlier and earlier in the customer journey. Let’s go back to David’s experience buying a printer cartridge. To state the obvious, David’s experience was not particularly positive and reflected the total absence of any connection between him and the printer company. Though not a formal term, we might label such an experience a buy-what-we-have customer experience. The firm waits for the customer to show up, and the customer has to buy what’s available. Practically the entire customer journey was David’s responsibility. David had to realize the need for a new toner cartridge. David had to figure out which precise toner he needed. David had to drive to a store, search for the product, stand in line, pay for the product, drive home, and replace the cartridge. How can we improve this customer’s experience?
The Respond-to-Desire Connected Customer Experience
How do you think David would feel about the following customer experience? Upon realizing that he needs a new cartridge, David goes online to his favorite retailer, types in his printer model, clicks to order the correct toner, and pays with the same click because his credit card number and shipping address are already stored. Two hours later, his doorbell rings and the toner is delivered. Though David is still in the driver’s seat for executing the transaction and performing almost every step of the customer journey, this transaction is associated with far less friction, so it is much more pleasant for David.
This is the idea behind a respond-to-desire connected customer experience: firms try to provide the customer with the desired product or service in the fastest, most convenient way possible. In terms of the customer journey, firms using respond-to-desire significantly reduce the friction from the moment a customer has decided on the desired option to the moment the customer receives the product. Moreover, these firms are able to provide the customer with exactly the desired option (only a single black toner cartridge, not the multipack). To understand the anatomy of a respond-to-desire connected customer experience, consider figure 4-2.
The figure divides the steps along the customer’s journey from latent need to the postpurchase experience that we introduced in figure 4-1 into two spheres. The upper half of the figure shows steps that are carried out by the customer, while the lower half captures steps that are carried out by the firm. Our toner example started with the customer realizing the printer had run out of toner. Note that the following steps have to happen regardless of whether the customer buys replacement toner online or goes to the local office supply store: the customer had to look at some available options (and avoid the confusion between different model numbers), the customer had to choose, and the customer had to place an order, be it at the physical or the virtual checkout.
From the perspective of the customer, what makes for a good respond-to-desire experience? One element is clearly the amount of effort expended; the less, the better! One-click checkout with a credit card on record is more convenient than going to the store. Customers like companies that listen carefully to what they want and respond to their desires quickly. Hence the name respond-to-desire.
For some respond-to-desire customer experiences, such as running out of toner, speed is the most important attribute the firm must master. For instance, being able to send a car within minutes is a critical attribute for customers of Uber or Lyft. For Airbnb, in contrast, the critical attribute affecting a customer’s happiness is the variety of options in style and price where the customer wants to visit. The speed of booking is important but not the key advantage propelling the use of the service.
FIGURE 4-2
The respond-to-desire connected customer experience
Amazon has been a pioneer in combining the order and payment process into “one click.” To further facilitate ordering, Amazon introduced Dash buttons, small Wi-Fi devices that can attach to the fridge, the washing machine, or the bathroom vanity. With the press of a button, items from bottled water to baby wipes can be reordered.
The Curated Offering Connected Customer Experience
How could the online toner-shopping experience be improved? Imagine that, after David logs in to his online account, the site suggests the correct toner cartridge based on his prior purchases, which eliminates the need for him to figure out the right type of toner for his printer. In addition, the site could also suggest reordering paper, even though David did not ask for any paper (but is about to run out—good catch!). This is what we call a curated offering connected customer experience. Amazon, for example, shows a “frequently bought together” selection and is able to make personalized recommendations, taking into account what the customer has purchased in the past and what bundles of items are often purchased together in the same transaction.
Respond-to-desire requires the customer to articulate a specific need. Sometimes, however, customers might not know exactly what they want, or it would take them considerable effort to figure out. In the curated offering connected experience, the firm becomes active in the customer journey earlier than in the respond-to-desire experience. While respond-to-desire requires customers to know exactly what they want, curated offering helps customers at earlier stages in the journey, searching for options and deciding on options. Take another example: a customer knows she wants to watch a comedy but might not know what new comedies have been released. In this case, a curated offering is very helpful. Netflix suggests comedies based on previous choices and choices of similar customers. In general, curated offering makes search outcomes much more personalized.
A curated offering thus customizes the firm’s response with a specific set of options. In doing so, this format can also anticipate needs. Figure 4-3 shows the sequence of events for the curated offering experience. Again, the activities performed by the customer are on top, with the firm’s activities on the bottom. As we can see by comparing figures 4-2 and 4-3, in the curated offering model, the firm takes a more active role in the search and selection process. Rather than expecting to receive a specific order, the firm surfaces options the customer wasn’t aware of and makes recommendations concerning which options might best fulfill the customer’s needs.
Blue Apron, or one of the similar meal-kit providers we discussed in chapter 2, is a powerful example of curated offering. Think about how Blue Apron’s curated offering differs from a respond-to-desire experience. A respond-to-desire experience would have saved you from needing to run an errand by enabling you to order online and have products delivered to your house. In fact, home delivery services for groceries have witnessed dramatic growth. All of them share the principle of “you order, we deliver.” Though this is better than spending your time in a supermarket checkout line, the burden of finding recipes, choosing one, and creating the shopping list still lies with you as the customer. And you are still stuck with the extra ingredients that did not fit the recipe’s portion sizes. In contrast, for many customers, relying on Blue Apron to organize the meals and portion sizes is more convenient, more fun, and also healthier, creating a higher-quality service compared with a respond-to-desire experience, not to mention a buy-what-we-have approach. (For another example of curated offering, see the sidebar.)
FIGURE 4-3
The curated offering connected customer experience
TRUE PERSONALIZATION
Curated offering experiences have been helped tremendously by advances in production and sensing technologies that allow customization down to the individual. The cosmetics industry was one of the early adopters of this development. The market for foundation, which is around $1 billion in the United States alone, is a good example. With all the variations in skin tone and texture, the quest for the right shade and formulation of this cosmetic has been a major pain point for customers for a long time. With Shiseido’s bareMinerals Made-2-Fit foundation, a customer can use her smartphone to download an app, scan her face, and receive a personalized foundation that matches her skin color.
Advances in 3-D printing technology also promise unprecedented customization with respect to pharmaceuticals. With pills, for example, inventory constraints limit the number of dosages that are currently available. With 3-D printers, tablets or gummies can be created directly at the pharmacy with the desired personalized dosage. The created pills can even contain more than one needed medication (so-called poly pills), or gummies can be made in more interesting-looking shapes (dinosaurs, trucks, etc.) for children.
The Coach Behavior Connected Customer Experience
Returning to our printer example, neither respond-to-desire nor curated offering solved a basic problem: the customer realized the need to buy new toner only after the toner ran out. The firm waited for the customer to take the initiative, to start the interaction. Unfortunately, in many cases, customers are late in taking the initiative, causing inconvenience.
How can we help customers remember earlier? Perhaps the retailer could have already sent the customer a reminder to reorder last week. Such a reminder might have been based on past purchasing behavior—the customer bought toner roughly every eight weeks, and now it has been seven weeks since the last order. While reminding the customer to reorder toner, perhaps the retailer could also remind the customer to run the cleaning function on the printer to keep print quality high—another action customers know they should be doing but don’t. Either way, the firm serving the customer is more proactive than in the previous two connected customer experiences.
We call this type of connected experience coach behavior. There are many instances in which people would like to engage in certain actions, but inertia and decision biases get in the way. We would like to lose weight, but we have a hard time sticking to a healthier diet. We want to become more fit, but we can’t stick to our workout regimen. We need to take our medications, but we are forgetful. With coach behavior, the firm takes on a parental role and coaches the customer to change behavior. In the customer journey, it acts one stage before curated offering kicks in. It activates customers’ awareness of their own impending needs.
In figure 4-4, we have illustrated the coach behavior connected customer experience. Since most of the time it is a behavioral change that is desired (rather than the purchase of a discrete good or service), we have changed the labels in some of the steps. Rather than recommending a set of options, the firm recommends that the customer take a particular action (or reminds the customer to do so). The customer then decides which action to take, and ideally behavioral change ensues.
Notice how the customer experience in figure 4-4 puts more emphasis on the firm taking action. While the customer ultimately takes action (takes the pill, avoids the burger, goes to the gym), the firm watches over the customer, knowing what the customer needs now and in the long run—not just what the customer wants right now. As with the curated offering, such knowledge might come from observing many customers, or from what the customer has previously told the firm. Imagine a coach behavior experience in which a customer, to maintain a diet, tells his bank to block his credit card whenever he is within one hundred feet of a fast-food restaurant. In a respond-to-desire customer experience, the customer would get that cheeseburger whenever he desires, in the most convenient way. But the customer also knows that he would regret it twenty minutes later. So, a good coach behavior experience is indeed somewhat parental.
FIGURE 4-4
The coach behavior connected customer experience
We know that creating behavioral change can be difficult; otherwise, all of us would easily stick to our New Year’s resolutions. Peer pressure is a potent tool in this regard. As a result, a number of firms offering coach behavior experiences also facilitate the creation of peer-to-peer networks in which participants ca
n celebrate their efforts (“I did 12,000 steps today!”) and encourage each other. By borrowing tools developed by game designers to make online games engaging, if not addictive, many firms are using “gamification” to create behavioral change. Participants collect points and badges, and engage in friendly competition against themselves and peers to accomplish their behavioral goals. We will come back to these networks in chapter 7. (For more examples of coach behavior, see the sidebar.)
COACH BEHAVIOR WEARABLE SENSORS
Wearable sensors are enabling a whole range of coach behavior customer experiences. Consider the following three examples. L’Oréal has developed a battery-free wearable sensor to measure individual UV exposure. The sensor is less than two millimeters thick and nine millimeters in diameter, and it is designed to be worn on the thumbnail. It can store up to three months of data and is paired to a smartphone app to collect and display daily UVA and UVB exposure, offer personalized sun safety coaching tips, and track trends in UV behavior over time.
For individuals who want to learn or improve their yoga poses but don’t always have access to an instructor, Sydney-based Wearable X has created a solution. Its Nadi X pants have woven-in sensors around the hips, knees, and ankles that measure body positions and provide haptic feedback, guiding the athlete to the correct positions through gentle vibrations. When paired via Bluetooth to an app on the customer’s phone, further visual and audio cues break down different yoga poses that supplement the vibrations.
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