Smart visionary companies acquire and retain customers through IT systems of engagement and insight
We have moved from an era where the businesses is in possession of all the knowledge to today’s amazingly interconnected world where the buyer can acquire more information than the seller and thereby be in control. Thus, to remain competitive companies must incorporate the various social media dimensions and real-time analytics into their distribution, marketing and sales processes if they wish to maximize revenues and customer loyalty while minimizing risks.
Gone are the days when a company can just open its doors and offer products and services for sale. Nowadays, savvy customers are fully armed with product and pricing information long before they walk in the door and they are able to make on-the-spot comparisons using their smartphones, tablets and other devices. And at a twitch of a finger they can order online from a competitor while standing in one’s facility. But this is only half the story.
Smart visionary companies are well armed for the digital onslaughts. Some are able to change pricing periodically during the day to compete with online competitors that are doing the same. Others have know your customer (KYC), anti-money laundering (AML) and fraud software as well as upsell features built into their systems so that they can maximize sales while minimizing losses. This is the brave new world of engaging the customer in the physical and virtual environments simultaneously. It is one of the key ways companies are differentiating themselves.
Systems of Record, Engagement and Insight
Up until this millennium the only system that companies focused on was the system of record. This system holds the financial gold and is mandatory for reporting and regulatory purposes. But with PCs, smartphones, kiosks, e-watches, and other personal electronic devices (along with sensors) in heavy use today it has become necessary for companies to pay attention to how they engage with customers. To have a 360 view of a customer these days requires knowing not just what they buy and where but how they gather information, collaborate to make purchasing decisions, and what other influences go into a purchasing decision.
This knowledge comes from systems of engagement and insight. Systems of engagements are becoming mainstream in a number of industries but will be standard fare before long everywhere. They are not only used to gather data for analysis but also to get the company’s information properly contextualized, personalized, and formatted out to users across multiple channels of engagement. Business and IT executives need to know their customer base and employ systems of engagement that keep them competitive and responsive to change.
Being “responsive to change” is no easy task. Between systems of engagement and systems of record there are massive amounts of data bombarding the company daily.
Two quick examples:
According to a Baynote survey customers interact with a brand 4.2 times before making a purchase while the purchase conversion rate of all retailers is less than four percent. Using those assumptions it turns out there are more than 100 interactions to each purchase. Thus, the data to be stored from a system of engagement can exceed 100 times the actual transaction data.
In the second case, the shift from automatic meter reading (AMR) where utilities read meters once a month to advanced metering infrastructure (AMI) systems where some utilities read the meters every 15 minutes means the amount of data captured per month has leapt by a factor of almost 3000. Hence, for every 1 terabyte of data collected in the old method, the new AMI system, which is used for analytics, would have approximately 3 petabytes of data to capture, store and analyze!
To make any sense of this vast amount of data, companies need systems of insight that analyze the data. The primary purposes of these systems are to drive revenues, improve loyalty, upsell, increase productivity, or minimize risk.
The Amazon model is a perfect example of how a company drives revenues with its social media interactions, one-click purchase and easily navigable website, upsells by making personalized, in-context suggestions of add-on items, and improves loyalty through its customer service and logistics processes. The good news today is that companies of almost any size can use SaaS (software as a service) or software tools to compete with the big guys.