According a recent IBM study, “The Customer-activated Enterprise,” outperforming companies are 54 percent more likely to collaborate extensively with their customers.
In other words, companies that work to better understand their customers’ wants and needs are more profitable.
Think about that for a moment...
As more and more companies work to at become customer-centric, the following three industries -- which face unique business challenges -- need customer love the most.
1. Retail superstores
Today, big box stores are having a harder time winning customer dollars and loyalty. Seldom do customers walk into a store, make a purchase and walk out.
People are shopping online at home or on their mobile devices: Purchases made using a smartphone or tablet rose 48 percent year-over-year in the second quarter of 2014, to about $8 billion in the U.S. Customers are comparing prices on their mobile devices while shopping in store, and now have many options to go to a direct seller. For instance, instead of shopping at a technology store like Circuit City (RIP), they go directly to an Apple store, Sony store or Microsoft store. As a result of these changes, big box stores are under pressure to deliver a seamless omnichannel experience so that customers feel a connected environment no matter where they shop -- whether online, in-store or though a mobile app.
As the retail market continues to evolve, big box retailers need to make an effort to understand customer preferences. Target and Best Buy are good examples of retail superstores that connect with their customer base in order to maintain relevance.
In 2013, Target invested heavily to perfect its omnichannel experience. The retailer has continued to double down and the efforts have paid off: Target’s latest earnings report showed that its sales grew at the fastest rate in three years. And, despite almost going out of business a couple of years ago, Best Buy has committed to turning itself around by understanding what problems customers face in their lives and then providing mutually advantageous solutions.
This approach is a key reason why the company has survived -- and why Circuit City failed -- in the tumultuous consumer-electronics marketplace.
2. Health insurance
Hospitals and health insurance companies didn’t anticipate the degree to which the healthcare landscape would change following the implementation of the Affordable Care Act and the challenges it posed. Following the legislation, Americans are now required to have health insurance or risk being fined. And they're given more options to select from when it comes to their healthcare provider.
The health insurance market has become more like the retail world, which means insurers need to become more customer-centric. As a result, the competition to keep members enrolled has grown more intense. In this new dynamic, insurers are rapidly learning about the healthcare consumer. They’re working hard to accommodate an increase in enrollment, keep existing members satisfied and are able to attract news ones.
Horizon Healthcare Services, a healthcare insurance company out of New Jersey, has been quick to adapt when it comes to understanding the wants and needs of its members. The company launched Talk to Horizon, a secure, online insight community of thousands of members with which it engages on an ongoing basis for feedback and insight.
Most recently, based on feedback from Talk to Horizon community members, Horizon was able to enhance its invoice form so that the information and language presented was more easily digestible for members. This saved time for members and presented a cost savings for Horizon, as it saw a decrease in customer service calls. Ahead of the curve, Horizon is a good case study of how hospitals and insurers must look to its customers for actionable insight to inform better business decisions.
3. Sports teams
There are two main trends affecting sports organizations. First, consumers have more entertainment options than ever before. From different sports game options to minor leagues, from the movies to the local play, consumers are offered many different ways to spend their time and their money. Second, no longer are TV viewing options limiting like they used to be. The 55-inch plasma TV at home or dozens scattered across a sports bar offer a communal experience that’s far cheaper and somewhat equally enjoyable. And, for a population constantly on the move, watching via mobile is a very real and growing viewing alternative.
Because of these trends, sports teams are suffering from declining ticket sales (look no further than recent MLB and NFL statistics on attendance), and weakened fan engagement and loyalty. Drops in attendance also pose a threat for corporate and media partnership. In order to overcome these challenges associated with a new consumer landscape, getting closer to fan opinions and preferences have never been more important.
A handful of teams and leagues are already working hard to engage their fans to deliver the ultimate in-game experience. At the end of last year, the Cleveland Cavaliers announced that they’re getting creative with fan engagement. The team partnered with TigerLogic to increase social interaction during games, helping extend reach and keep fans connected to their brand throughout the game and thereafter. The Cavaliers have seen strong social media engagement from the fans since the initiation of the project. In fact, the first 10 games of this season had an average of 20,000 posts per game.
No matter the industry, the underlying message is that businesses and organizations will only win in today’s fast and fickle market if they work hard at better understanding customer wants in order to give them what they need. Customer-centricity is a top business priority -- look no further than companies like Amazon, Cisco and Sprint.
By learning about customer behavior and preferences, businesses can quickly make changes and adapt in order to stay relevant and be successful. All affected by today’s empowered customer, the retail, health care and sports industries show promising examples of how companies can stay ahead by putting their customers first.