Reshaping the consumer chain with digital technology

 　　In theory, digital technology enables every business to create a great customer experience and achieve true customer-centricity. However, the reality is often very different.

　　Take this statistic as an example: 2022 research data from the Baymard Institute shows that 68.8% of online shopping cart orders will be abandoned. Even if consumers are interested in adding an item to their cart, nearly 70 in 100 people will leave without completing the purchase.

　　Think about it. Let’s say you’re a business, spending money on a great website design and marketing it to get potential customers to visit. You've laid out a variety of items that you think are clearly categorized for customers to choose from. Plus, you connect with your credit card provider for a seamless payment experience. You are also investing in the security of the system. If a customer has a question while shopping, you'll have a customer service agent ready to start an online conversation. The efforts seem to be paying off: Guests keep adding items to their virtual shopping carts, just as they are about to enter the payment phase.

　　Then, there is a scene that you can't understand.

　　Maybe it's some force you haven't yet understood that lured customers to make up their minds: "Forget it, don't buy it."

　　There are many possible reasons for this scene: You asked the customer to fill out user information, and the customer just wanted to buy That's it; the payment method you provide doesn't look perfect; the shipping fee is unexpectedly high; you can't complete the delivery within the window time requested by the customer; the customer doesn't know how to jump from step A to step B during the checkout process and simply gives up ; You do not accept the payment method selected by the customer; Your website is always having problems. No matter what the reason is, customer churn has become a reality.

customer consumption chain

　　To analyze why, I propose a practical framework called the "customer consumption chain", where customers are immersed in a series of behavioral activities throughout the consumption process that we can consider as link in the chain. The chain begins when a customer realizes that they may need a certain item, and a merchant happens to be able to provide it. After finding a solution, consider alternatives. Next, you will enter the decision to buy, pay, sign a contract and many other possible links. We can think of these behavioral segments as representative of the relationship between an organization and its customers.

　　The sub-column "Consumption Chain of Service Industry" shows that even a high-level schematic diagram of consumption experience involves many links. From the customer's perspective, this is the problem. They want to experience a complete consumption journey, with a near-natural transition from one step to the next. On the other hand, corporate employees usually only focus on the step they are responsible for. Since this is relatively efficient, we group similar activities in similar units of work, which we call "functions." Finance people know everything about credit reliability and how long it will take customers to pay; marketers may have no idea how customers might use a product or service; legal departments may know nothing about helping businesses clear future liabilities Great job, but they are totally unaware of how unfriendly the legalese they use are to clients; web designers and programmers may know a thing or two about the branding and positioning of their business, but they never learn from The customer's point of view has looked at the web pages that they have designed.

Using digital to achieve customer-centricity

　　With digital technology, we can reimagine the way we do things. Sensors can be used to monitor the progress of customers throughout the consumption chain and issue early warnings. Corresponding metrics allow organizations to focus on the right important metrics and take corrective action in a timely manner.

　　Amazon is a company with a digital DNA, and it is known for its customer-centricity. Colin Bryar and Bill Carr once wrote a best-selling book called Working Backwards around the retail giant. In this book, they explain how Amazon uses various metrics to move customers along the entire consumption chain.

　　Take the “choice” link in the consumption chain as an example. In this segment, the customer selects items and places them in a virtual shopping cart. In the early days of its expansion from books to other product categories, Amazon reasoned that more pages on its website detailing products meant more choices for customers, which in turn led to more sales. So the retail team responded to the metric with an explosion of new pages about item details.

　　But unfortunately, such a rich selection did not lead to more sales (output indicator). To make matters worse, the metrics team found that the retail team started adding items that were not in high demand just to increase the number of pages. As a result, the metrics team shifted the metric to pageviews on product detail pages. But this metric is also imperfect, as customers are likely to go to a page, view an item, try to buy, only to discover that the item is out of stock.

　　The above results prompted another iteration of the indicator, which became the number of pageviews of consumers on the inventory product page. While this metric is more effective, it misses something that the company can deliver large quantities of goods to consumers within the 48-hour delivery window -- an ability that, in many people's opinion, is exactly what Amazon has achieved the key to success.

　　Of course, the percentage of detail page views for an item that is in stock and ready to ship in two days is the last metric to put in place. This metric is also known as Fast Track In Stock. Note that there is no need for an internal control report or any interpretation of the meaning of the data—employees can manage tasks themselves and deliver a great customer experience without other interventions. If we don’t have to tell employees what to do, we create an “approval-free” perspective for employees to judge what is best for customers. In this way, there is no need for the so-called management control!

Follow pending tasks

　　The customer's "jobs to be done" is another concept that goes along with the customer's consumption chain. It was proposed by Tony Ulwick and Clayton Christensen. This theory argues that what companies need to consider is not the question of customers buying (or not buying) their products, but how customers use (or refuse to use) their products to accomplish their goals.

　　For example, if the task I want to accomplish is to make a quick purchase on your website in the short window before the next web meeting, but you are forced to fill out the registration form and the time is delayed, I may will deprecate your site. From a "task-to-do" perspective, you may find that: the competition you face may even come from outside the industry; some of your assumptions about customer behavior may also be wrong; for many customers, what The "non-consumption" behavior of not doing anything is also a feasible choice.

　　Getting married is an important "task to be done" in many people's lives. Let us take this as an example to illustrate. The wedding business is booming. According to the New York Times, as many as 2.5 million weddings are planned in the United States in 2022, the highest level since 1984. While this is great news for brides and grooms-to-be, every wedding involves some level of expense. If you're trying to sell anything other than the wedding business to consumers who are in peak wedding guest years (probably anyone in their 25-35s), you're competing with the wedding business.

Segment customers based on behavior, not demographics

　　The third point in reinventing customer relationships is rethinking customer segmentation. For decades, we have routinely segmented customers based on demographic characteristics such as age, income, marital status, geographic location, and more. The problem is that customer segmentation is all about making our products targeted to solve the customer's "job to be done," but demographic segmentation rarely tells us what the customer's main task is.

　　From this point of view, Paul LeBlanc, president of Southern New Hampshire University, made a drastic overhaul of the school. He realized that offline students really valued the "adult" experience. When prospective students visit campus, they don't want to learn about program details, but ask other questions, such as, "Which fraternity clubs can I join" or "Can I tell you about other students in the school?" ".

　　By contrast, online students may have gone through almost every "adult" experience! Their studies are often interrupted by obstacles in their lives: unexpected unemployment, parenting or family emergencies that can prevent them from earning a degree. For many of them, not getting a degree is the biggest barrier to advancement. Therefore, LeBron characterizes these people's main "tasks to be done" as "completed."

　　LeBron realized they had to offer a completely different registration experience to these busy adult online students. For example, discussions about financial aid between school officials and regular high school students can drag on for months. But for busy online applicants, the registration process is best done within minutes.

start to act

　　The practical significance of the above three points is to cultivate the "spotlight" in customer insight. First, you can choose from a number of customer personas, ideally based on their primary behavior with the product. In a "task-to-do" statement, detail the key behaviors that the customer might exhibit. Then, map their consumption chains as well as possible, making sure every moment of transition that serves as an articulation is documented in detail. Pay close attention to the triggers that lead the customer to the next step, especially the obstacles that stop the customer from moving forward.

　　To fully understand the customer experience, you need to engage with many people and departments in your organization. I'm guessing you'll be amazed at the breadth of coverage, but that's exactly the experience you're creating for your customers! For each link in the chain, you need to understand what the customer wants to achieve, whether they encounter obstacles along the way, and how to make the process faster, better, cheaper, easier, more convenient Ease - or even disappear completely. Armed with these insights, you can honestly evaluate how you can use digital technologies to create a better, more complete customer experience.

　　In the digital age, the starting point for a truly customer-centric business is not technology, or even products or services. It should start with customer experience and end with customer experience. As consumers, we know this because we have been enabling or disabling various products and services all the time. Gathering insights into the entire consumption chain, digging deep into the tasks customers want to accomplish, and seeing customers through a behavioral perspective are effective ways to gain insight - and this process does not even require the intervention of information technology!