The fourth industrial revolution brings some interesting changes to our world. New technologies are making it easier to connect to one another and to execute transactions seamlessly. COVID-19 has increased our desire to go about our lives with little movement and limited physical interaction. Companies can take advantage of this digital, always-on normality to create delightful experiences for their customers which in turn will lead to increased sales and greater customer retention. In fact, those companies that do not proactively reach out to customers in the right way are likely to lose business to companies that do.
The old approach
The old approach to customer engagement is when customers approach the company for a product or service that meets their needs. The company displays what they have available for sale and customer has to choose from what is available. The engagement with the customer is episodic, the company knows little about the customer and the customer could easily chose to get the product or service from a different provider.
For example, imagine Mary is hosting guests at her house when the water in her water dispenser runs out. She goes to get the second bottle but finds that it is empty too. Oops! Mary sends her husband to go for a refill. He needs to get the empty bottles, drive to the nearest supermarket, drop off the empty bottles at customer service desk, get a little ticket from customer service, pick up 2 filled bottles from the shelves (hoping they have the correct brand), go to the check out (hopefully the line isn’t long), retrieve his little ticket from his pocket (hopefully he hasn’t lost it) then load the filled bottles into his car, then drive back home (hopefully there’s no traffic) and carry the two 20 liter bottles into the house.
If his brand is not in stock, he will need to pay extra for the bottles of the brand in stock and return home with the two empty bottles he came with which means they’ll have to store 2 extra 20 liter empty bottles in their house or apartment. The supermarket in this instance had a sporadic interaction with Mary’s household. They did not connect this water purchase to Mary’s household and have gathered no useful data on Mary or her husband to keep connected to household.
The new approach
In the new approach to customer engagement, companies should seek to take advantage of technology to develop connections and relationships with their customers in a way that enables customers to expend the least amount on energy to get what they want from the company.
Let’s explore four different ways to improve Mary’s experience using technology.
This method requires companies to provide customers with services and products that they have requested and doing so as fast and as seamlessly as possible. Operational efficiency is of utmost importance. As soon as the company learns of the customer’s desire, they should deliver the product fast with minimal friction and precise execution.
Some companies, like Glovo and Jumia already do this. As soon as Mary discovers that she is out of dispenser water, she can log into an app and place an order for her water. The company will deliver the water within an hour and she and her husband will not need to leave the guests.
In this method, the company strives to help and engage the customer a little earlier. That is, after the customer has figured out that they have a need but before they have figured out how to fill that need. Companies that wish to be successful in the 4th industrial revolution need to be able to offer personalized recommendations to their customers.
In Mary’s situation, she could open an app, navigate to a place for ordering dispenser water and the app automatically suggests the right brand for her, based on her past orders. She just needs to indicate how many bottles she needs. She can then easily place her order and have the water delivered fast.
In the previous methods, the customer is required to identify their need for a product or service. But, like we’ve seen in Mary’s story, we are not always very good at identifying our needs in a timely manner. Mary found herself with guests in the house and no drinking water. This method proactively alerts customers of their need and reminds them to take action.
How might this look like for Mary? The dispenser, using IoT, can keep track of its water levels and remind her to place an order for a refill before the water runs out. This way, she won’t find herself with no drinking water for the water dispenser. Mary can be prompted by SMS or email. Moreover, an app can be provided that lets her set up when she wants to be reminded. That is, at what water level she should be reminded to order water.
This last method of customer engagement requires companies to meet the needs of customers even before the customer becomes aware that they have the need. Is that possible you ask? Yeah!
The customer would authorize the company to automatically execute something if certain criteria are met. This is how this method would work for Mary: Mary’s water dispenser would have an IoT device that keeps track of water levels. Mary would log into the company’s portal and set it up so that when the IoT device detects that the water levels have gone below a particular level, then the company should automatically schedule a delivery and debit her credit card or account. Mary does not have to keep checking how much water is left in the dispenser, she doesn’t have to place an order, in fact she will only realize her water levels are low when the delivery guy is at the door.
Further, the IoT device in the dispenser can automatically initiate a call to the servicing company to clean the dispenser when it is due for service.
The best customer engagement strategy should result in the company offering a product before the customer identifies their need.
Mary’s water dispenser situation is just one example of how customer engagement should change. The methods of customer engagement given in this post could apply to several other products and services. Which ones come to mind? Write them in the comment section below.
To achieve competitive advantage, companies must employ new approaches to customer engagement. The old approach of customer engagement is not sustainable. Companies must try to learn more and more about their customers and use that information to make the customer’s experience with them delightful.