The most innovative companies in the world place customers at the center of their business. Those companies strive to deliver a superior experience to the customer, before, during, and after a sale. They have retooled their processes and refocused their entire organization to think from the customer’s perspective. Companies like Apple, Amazon invest billions of dollars in developing products that push the envelope on how customers interact with technology, so that they can do things they’ve never imagined.
That customer obsession is nearly ubiquitous. Companies have realized that customer focus is a source of competitive advantage and a business imperative fueled by increasingly demanding customers. The ways customers communicate, socialize, and relate to companies and brands has changed, with expectations elevated by the emergence of social media channels.
Now, new challenges have emerged, especially in the subscription economy in which customers can unsubscribe at will. In the SaaS world, customer lifetime value (LTV) is realized over multiple terms and intimately tied to the extent of adoption of the solution by customers and the value that they derive from it.
This phenomenon goes beyond the world of software, and it is more pervasive than we realize.
Moreover, there is also the threat of disruptive innovations.
Let’s take a simple example. ZipCar, a neighborhood short-term car rental service, was set to disrupt the world of car ownership and hired taxis, especially in urban areas. However, its dominion was upended by the arrival of Uber and Lyft.
Companies must constantly be on the lookout for these disruptions and have a plan for how to pivot.
Now, marketers are rethinking the tools and platforms used to engage with customers at different stages of the customer journey.
Just as the Marketing Technology Stack has grown, the Customer Technology Stack is now rapidly expanding and coming into focus.
Six broad categories have emerged over the last decade in response to specific needs.
- The broadest category in the customer technology stack is Customer Relationship Management (CRM). It covers the marketing, pre-sale, and transactional portion of the customer journey.
- Customer Communication solutions simplify conversations between vendors and customers, and make it easier to communicate. These solutions emerged to consolidate the various customer channels (e.g., phone, email, fax, and Web portals) and easily add new ones, such as social media and SMS.
- Customer Satisfaction solutions enable companies to get answers to specific questions. They offer the ability to take surveys, but the solutions distinguish between themselves by the “how” and “where” (e.g. which kinds of surveys can be composed and where these surveys can be embedded on the website, inside the product, through external emails, and more).
- Customer Experience solutions are a more focused variant of the previous category. They take the pulse of customers and objectively capture their experience with a product or service. They are typically embedded within the product and emphasize simplicity and ease of use over detail.
- Customer Loyalty solutions make it easier for companies to reward their customers for specific actions that they perform. The rewards are normally awarded for specific actions, such as making referrals or responding to a survey, but can be tied to various milestones in the customer life cycle, such as renewals or purchases.
- The newest category on the block, Customer Success, has significant new investments and has been featured in Mary Meeker’s 2015 Internet Trends Report as one of the disruptive new enterprise technologies to watch. These solutions emerged in response to a need from subscription software companies to control and reduce churn, and have rapidly expanded to cover the customer relationship from end to end.
The Customer Technology Stack: From 1.0 to 2.0
Companies must find new and innovative ways to give their customers a better experience.
This change will be reflected in the evolution of the customer technology stack in the next few years in broad trends.
CRM will become the system of record. CRM holds data pertaining to the buying process. It is increasingly becoming the repository of financial and support data as well. CRM has become the official system of record, with usage increasing over time.
Customer Success will become the system of engagement every customer-facing employee and will enable Customer Success professionals to deliver the best possible customer experience.
CS will eventually take over the other categories in a consolidation that will be driven by two main forces. First, the engagement model between customers and companies is changing. Over time, the conventional approach to support that is based on tickets (or cases) will be replaced by a more intense engagement. There is a pressing need for a system that can stitch together the data and business events using previously defined processes in real time, so that customers are never left waiting for something to happen.
* * *
We are in the age of the customer, and it will not be long before big players decide to get in on the action.