The age of CX data

Software-driven businesses

Writing in the Wall Street Journal in 2011; the renowned venture capitalist Marc Andreessen remarked, "Software is eating the world". He'd seen the inevitable - That all businesses are slowly becoming "software-run businesses". Software is dramatically changing the nature of the old brick-&-mortar industries too.

Uber, the world's largest car rental company, doesn't own its car fleet. The world's largest media company, Facebook, doesn't create its own content. The world's largest retailer, Amazon, doesn't own inventory. And the world's largest stay and accommodation company, Airbnb, doesn't own a single property of its own. All these companies have scaled rapidly globally and are household names.

Interface layer

Just how did these companies reach where they are? Tom Goodwin, a top executive at the French media group Havas, made an interesting observation:

The Internet, with its massively disruptive influence, broke down layers of complex industrial supply chains which connected producers and consumers. The new breed of businesses primarily writes code which serves as the "interface layer" between the suppliers (cost origins) and customers (revenue origins).

This interface layer is the source of all value and profits. What differentiates one competing interface layer from another? Quite simply, it's CUSTOMER EXPERIENCE or CX. Let's explore this deeper.

B data

With increasing sophistication of software systems, it is possible to mine hitherto unknown data about customers. Think buyer, age, location, gender, purchasing power, socio-economic background, past purchase behaviour, purchase history, brand preferences etc.

All these different data sets are necessarily quantitative and historic in nature. The data points are created AFTER a specific action from the customer. These data sets are usually stored in CRM systems and we know them as business data or "B data".

CX data

A sale is not just a commercial transaction. Beyond the numbers lie latent human emotions. Both, positive and negative customer emotions are triggered across multiple touch points before, during and after the sales process.

These touch points exist right from the tone of a salesman over the phone to the quality of the marketing collaterals to the way a customer is ushered into the retail outlet to the website to the workflow of the sales transaction, to the post-sales feedback and even during service visits.

Slipping up at one or more of these touch points can always antagonise the customer and kill the sale. Capturing of accurate customer emotions and mapping them throughout these touch points yields rich and valuable data. We call this data set as CX data or customer experience data.

A negative customer experience can lead to a failed sale even with the best offers and proposals. This is where customer communities come into play.

Customer communities

While CRM systems capture past quantitative customer data, customer communities capture the actual emotional data during a sales transaction. Buying is merely a transaction but understanding buying context is the key.

Technology is fast turning products into commodities without any strong differentiators. Brands will succeed not because of clever design, packaging or advertising but the quality and strength of their relationship with their customers and their appeal to prospects.

Customer centricity isn't yet another management fad but a brutal reality that all of us must live with. This is where customer communities make a real difference and add value to a business. They build deep, effective and rewarding customer relationships.

Rather accurate customer personae can be evolved by blending data streams from customer communities, customers' social media activities and their interactions at brand touch points. The most crucial piece of strategy remains customer communities.

Customer communities primarily have three "avatars" depending on their use cases:

Customer communities: To build customer centricity by deepening customer relationships.
Interest groups: To build highly engaged brand cults around products, services and experiences.
Social commerce: To drive e-commerce sales through referrals, reviews and ratings.

Use cases

The potential use cases of a customer community platform are virtually unlimited. Here are a few most common use cases across industries and enterprises:

The epilogue

Customers can no longer be taken for granted. With brand loyalty fast becoming history, the only way to survive a cut-throat market is to build your own flock of customers - and keep growing it.

To borrow a cliché, the future of business success lies in building strong and deep customer relationships. Customer communities help build those relationships. They also make companies good listeners. Products and services are more attuned to latent and evolving customer needs.

Vinfotech helps visionary companies succeed through its sharply focused customer communities, interest groups and social commerce solutions. To build customer centricity at your organisation, click here.