What is Old is New Again in Consumer Industries
The trend for companies in the Consumer Industries is to get more personalized using modern technology—to get a holistic view of the customer and offer unique recommendations that fit their needs. This is actually getting back to an older way of serving the customer face-to-face, says Steve Okun, Director at /N SPRO, who spoke on a Consumer Industries panel for SAP Game Changers radio recently.
“Our goal is to go back in time,” asserts Okun.
He provides the example of the old neighborhood record store. Once upon a time, a customer may go into the store and seek a recommendation from the person behind the desk. They’d share their preferences and the record store employee would offer a suggestion to take out the door.
That initial purchase is not where the magic happened, however, says Okun. It’s when the customer would go back to the store, excited by that first record, looking for another recommendation. The record store clerk now has more information based on what the customer enjoyed about that record and can offer even more personalized suggestions.
That record store example doesn’t much differ from what the Consumer Industries faces today, and now companies are trying to simulate that personalized experience with modern technology.
“The customer is still a human being, that’s never going to change,” says Okun. “Machines bring down the cost, but we need to bring back the human element.”
Staying Behind the Creep Line
Personalization requires knowing some information about the customer—much like the record store needed to know the shopper’s preferences in order to provide a good recommendation. Okun cautions that while most customers know companies are watching them, it’s important to exercise caution around how information is used and collected.
“Privacy is critical,” adds Okun. “You have to make sure that as you are innovating and bringing new tech into play, you are staying on the right side of the creep line.”
Crossing that “creep line” will have consequences, including a loss of consumer trust. Once trust is gone, then the greatest personalized recommendations in the world no longer hold any weight.
Taking Steps Towards Transformation
Getting to know a customer through digital means requires companies to transform business models. Okun encourages a two-pronged stepwise approach. First, take those wins that you know will improve the business but still create balance along the entire value. That’s a restrained approach that can still have positive effects.
The second approach is about taking bold steps and experimenting to discover new ways of doing business. That does mean failure will happen, but it’s important to fail in a safe way.
“You have to experiment with different business models to find out what it is that will work,’ says Okun, “You transform slowly, and it’s okay for those to fail.”
That transformation will be critical for companies in the Consumer Industries to stay competitive as we go back to a time when businesses had a personal relationship with their customers.
Be sure to listen to the whole SAP Game-Changers radio show for more from Okun. To learn what your company needs to do to transform, contact /N SPRO.