By Peter Korsten
Customers today wield unprecedented power. Digital tools and an abundance of information allow the modern customer to expect incredible levels of personalization and individualized service. This power is completely transforming entire industries – including fashion, retail, media and entertainment and healthcare.
Companies have long used activities like customer focus groups to figure out how to sell customers what they wanted to offer. This one-way, nonreciprocal relationship will no longer fly. Enterprises can only succeed if they understand and provide what their customers want.
The C-suite is getting the message, judging by a new IBM study conducted by the IBM Institute for Business Value – a study which is based on face-to-face conversations with more than 4,000 CEOs, CMOs, CFOs, CIOs, CHROs and CSCOs and across 70 countries and 20 industries. According to the study, more than half of C-suite leaders surveyed said customers now have a considerable influence on their enterprises.
That’s a big difference from when IBM published its first C-suite study in 2004. At that time, CEOs ranked their own customers sixth on the list of all market factors they believed would drive the most change in their organizations. Just nine years later, 60 percent of CEOs expect customer influence to go beyond traditional activities such as developing new products. Instead, they’re ready to relinquish control of what is typically considered their domain – developing business strategy.
In fact, CEOs today feel customers have a bigger influence on their organization’s business strategy than the Board of Directors or the Corporate Strategy function.
And, according to the new study, business leaders who open up their organizations to customers and their influence are reaping the reward. High performing companies are 54 percent more likely to collaborate extensively with customers.
Turning the old focus group model on its ear, some of the most advanced enterprises are now establishing customer advisory boards to get direct input on strategic issues. These enterprises realize that their customers will be heard – whether it’s on social media or among their peers – and they want a piece of that valuable insight.
But enterprises must be ready and willing to act based on what their customers tell them – changing course if needed to pursue new strategies that provide value to both the customer and the enterprise. It seems the C-suite, for its part, is committed. Nine out of ten C-suite officers foresee extensive collaboration with customers in the near future.
For more detail, please download the study on the IBV Tablet App on Android or iOS or visit www.ibm.com/csuitestudy.