Traditional companies are having a hard time these days. Premium car brands are losing more than half their customers every lease cycle. The other half wonders off to one of the other ten premium brands or choose other mobility solutions. And not only in automotive, but customers also have more choices than ever. Like in telecommunications. AT&T and Verizon offer similar tariffs, coverage, and the same phones anyways. Why stay with the behemoths and not enjoy the lower prices at T-Mobile? Or think of passenger air travel. Sprint, JetBlue, and Southwest are competing on the same routes with the same planes and at very similar price points. Why stick to one if you have three similar offerings? Wherever we go, the choice is ours, and we have many similar offerings in basically all areas of need to choose from.
As customers, we once waited patiently in line to get a certain product, and we were even willing to accept technical hick-ups when we were the first to use new tech. But the tide has turned, and a different set of criteria for customer choices has evolved. Today it is important how we feel about a company. How they have treated me in the past and how they treat others. Also, what other people say about the product or service.
Customers went from the receiving end to dictating the rules, also because of the better access to information. For decades, companies had the advantage of knowing more than their customers, who at the time were widely uninformed. There might have been word-to-mouth about the qualities or deficiencies of a product. People might have read a review in a printed magazine or newspaper but making smart buyer decisions was good old-fashioned legwork. Within a few years only, the internet gave us well-informed, price-aware buyers on all levels. From a herd of willing sheep to be pushed in a certain direction, customers evolved into a wolf pack, ready to take what they want, when they want it.
This transition to what we call the ’21st Century Customer’ was three decades in the making, but it still happened too fast for large traditional industrial companies. According to a recent Gartner survey, 74% of businesses still focus too much on their product features and technology. At the same time, we know from Deloitte that customer-centric organizations are 60% more profitable than non-customer-focused organizations.
The ‘New Economy,’ a term we typically use for companies that emerged in the 21st century, was built under the new paradigm. In the 20th century, no matter the type of organization, if you had the right product at the right price and spent enough on marketing and distribution, then your chances of success were high. In the 21st century, we contend that the business is simply a trade-off between the trust our customers give us and the amount of profit we want to make. Or, more simply put, ‘the more we trust you, the more we don’t mind you making a profit!’ In that sense, the last 20 years have been so disruptive that many couldn’t and still can’t follow even to a level of not understanding what’s going on.
With mabcx, we are on a mission to help companies build better relationships with their customers.