Historically organisations have enjoyed the advantages of geographic constraints and information asymmetries (product and price) to “push” product and service offerings to the customer.
But the market has changed:
- The internet has provided customers with the ability to seek real-time, transparent information regardless of geography
- Emerging technologies including mobile handheld devices and wireless networks have created any-time access for customers to enquire, purchase and seek support for products and services
- The rise of social media has provided customers with an unprecedented ability to exercise word of mouth effect – to learn, recommend and have a voice on their own service experience.
The result is a market whose customers are more sophisticated, more demanding and more empowered to negotiate the purchase decision that is right for them.
And this represents a paradigm shift in market forces:
- Organisations are now competing on a wider global scale for the same customer, where switching costs are low as are barriers to entry for new competitors
- They are dealing with micro rather than macro communities of customers whose behaviours are shifting rapidly toward an expectation of more personalised offerings
- They are being challenged with heightened customer and regulator expectations of 24/7, authentic and humanised service that provides a “solution to the problem”.
Failing to act risks a threefold hit to bottom line returns:
- Revenue erosion Declining share of market and declining share of wallet
- Margin erosion Product commoditisation and scaling cost of retention
- Profit erosion Declining economies of scale and increased compliance costs.
As the market changes, so too must the practices within organisations to deal with this change. It is our view that to compete effectively, organisations will require a more sophisticated level of insight about their customers than ever before, and be able to use this to become more agile in the strategic decisions they make and in the way they execute on these for driving value.
At Deloitte we are helping our clients create the connection from insight to strategy to execution across numerous business challenges:
- Customer strategy and portfolio optimisation
- Multi-channel strategy and channel optimisation
- Sales force effectiveness
- Pricing and profitability
- Branch / network optimisation
- Customer experience and segmentation
- Customer information management and analytics.