When Consumer Is 'Smart' King Learning from Consumers
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The world is at an inflection point where the way businesses interact with consumers, understand their user behavior, and create customer stickiness are seeing a 360° change. Among these businesses, the ones growing by leaps and bounds are in fintech space proving detrimental to traditional banking system. Clearly, next five years will be very exciting for digital businesses.
Learning from Consumers
There is the incipient trend of the learning economy emerging from the sharing economy that gave birth to businesses like Uber and Lyft. In the learning economy, the businesses that will come up will be radically different where the consumer andmarketer will have to learn from each other to create a wonderful experience. This means that companies will have to be dynamic about the way they interact with the consumers. Hence, the consumer will add a lot of learning to a business's product proposition.
If businesses were thinking so far that they passively use technology to mine consumer data, that will not happen. It will be a two-way process wherein the consumer will going to give businesses as many data points which will allow for mapping consumers' habits.
"That's how dynamic the creation process of customer identity is going to be for which businesses will have to become integrated into what the consumer believes in and what his/her beliefs are. As angel investors we have our ear to the ground to find future trendsetting entrepreneurs and invest in them. So for us trends are emerging from the ground," says Chandni Jafri, CEO, Mumbai Angels.
Om Manchanda, CEO of pathology chain Dr Lal PathLabs echoes the significance of learning
directly from consumers. He maintains, "I reached out directly to patients, andcreated the brand's consumer preference. In our case the basis for that was delivering reports on time with quality and accessibility of the brand by the consumers."
With the digital making its way, consumers have been using online channel to make an informed decision to buy a product, however the purchase happens eventually offline. This means consumers want to understand the right product and the best deal available for that product. "Brands have to be very
careful while making their online strategy as not just an e-sale strategy. Online medium is not just a sales channel. It is a very powerful and critical marketing channel even if your product doesn't get sold through this channel," says Prashant Tandon. Founder and CEO, 1mg – online pharmacy based in Gurgaon.
The "E' Connect
Branding often comes last in the to-do list of entrepreneurs launching their start-ups, at least until they are through with product development. Entrepreneurs essentially improve lives of people by solving their problems. The act of improving consumers' lives is in itself the first step of branding. "Branding means
responding to a consumer need. Hence entrepreneurs should begin with branding as early as possible instead of after developing the productat an advanced stage which is actually advertising not branding," says Sameer Desai, Chief Strategy Officer, Seagull Brand Launch Centre. The format for branding is
to co-create it with customers for which entrepreneurs should have a consumer panel. They should continuously take their feedback of whether the product is solving their problem in the right way across different stages of product development - right from brainstorming the idea to launching it. "Branding is
a scientific process. Taking consumer feedback regularly will help entrepreneurs avoidending up being a me-too product, slightly faster and cheaper than the existing product," adds Desai.
There always has to be a line between product and brand. Products are always built on rationales while brands always have an emotional connect with consumers. On the surface, Uber is simply a cab-hailing service but for Uber itself, it is a personal cab and personal chauffeur provider to its consumers who wantsto be driven around instead of driving. "Brands are about emotional connect instead of just a good name, logo and packaging. Kodak is not around today because they thought that they are in the business of photographic films instead of preserving memories. Today no one buy these films. Had they thought of putting a phone in their cameras instead of smartphone makers today putting cameras in their phones, Kodak could have survived," maintains Desai.
The onslaught on fintech start-ups on banks is quite clear when it comes to lending, payments, and personal finance on both B2B and B2C sides. It might just happen that banks over the time ends up becoming nothing more than just a repository of money, bereft of any financial services to offer. Technology is driving change in the fundamental access to banks' products and fundamental change in consumer behavior. However banks, before it's too late for them have realized the undergoing revolution.
"Banks today are no more just about withdrawalsand deposits. They are experiencing a similar revolution that retail sector Today banking has become very nimble which is also the need of the hour. In fact banks are trying to co-create solutions for consumers by partnering with start-ups. It is not unlikely to say that banks are becoming the new fintech businesses competing with any fintech start-up," says Bipin Kaul, Zonal Head – Business Banking, IDFC Bank.
Even as banks sits on humongous amount of customer data but whether they are able to mine and analyze that data innovatively can be questioned because of their complex structure. However Kaul argues, "As a basic exercise in all banks, through tools like customer relationship management, banks can gauge customers' transaction patterns, what kind of product they require etc. So data mining happens not just to enhance sales but also to pre-empt and prevent if anything wrong is happening."
(This article first appeared in the Indian edition of Entrepreneur magazine (September 2016 Issue)