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.