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Customer Experience and Brand in the On-Demand Economy (video)

by | Mar 1, 2016 | BIA, Blog, Conferences

The first part of the day at BIA/Kelsey Seattle|NOW focused on the technical and creative opportunities emerging from deep customer and logistical insights which are now available to virtually any business that dares to change. The challenge is change, our speakers, explained. As Laurent Burman, Chief Client Officer at digital agency POSSIBLE said: “Stories still matter and influence people and the means of telling those stories is changing quite rapidly.”

Moderated by author and innovation consultant Cecily Sommers (Think Like A Futurist), the Customer Experience and Brand — The Local Crucible session featured Burman, Tether Inc. founder and former global director of design at Starbucks, Nike and Lego Stanley Hainsworth, and John Busby, Senior Vice President, Marketing and Consumer Insights at Seattle-based Marchex. Each of the speakers brought unique and practical insights into how the on-demand, “I want it my way now” consumer can become a close ally in reshaping business strategy and process.

Sommers began the conversation with a couple stories of on-demand experience she’d had in the previous 24 hours. As a visitor to the city, she’d taken an Uber from the airport to an Airbnb apartment she rented for a few days while in Seattle. The Uber driver, who was from Mexico, had recently purchased a car in Mexico City for use by his parents to generate income from Uber.

At the Airbnb, Sommers encountered a host who was ready to move out whenever he could rent the apartment, all his belongings in a duffel bag ready to leave the place almost devoid of personal items that would distract from the renter’s experience. The host stayed at friends or worked overnight at his office, which has a shower, and he is part of a group of three people who do the same with their apartments, sharing cleaning duties across three properties.

“They are in the hustle and digging it,” Sommers said. “They have completely managed their lives to augment the jobs they already have in order to participate in this on-demand economy.”

Busby replied, saying that the original on-demand service was probably a doctor answering a telephone housecall request more than 100 years ago. And it was this idea that modern elite experience can become commonplace that defined much of the conversation. Just as a railroad baron in the 1880s could count on having a private car when traveling, today everyone has one or more private cars, and what remains of the middle class is increasingly pampered like an athlete or movie star.

Hainsworth shared his recent encounter with Hollywood super-agent Ari Gold, saying that the sensor-based assistance that will soon be on offer for consumers is similar to the entourage experience of a Hollywood star. “Those tools help us live each day in an optimal way, so we can accomplish all we want,” he said, pointing to increasingly customized and co-created products, such as Gatorade’s personal hydration program, which customizes the salts and sugars in a drink based on an analysis of a customer’s sweat.

Yet amidst all this technology, stories and human connections are critical. Hainsworth led the development of Sephora’s Tatcha skin care products, which has become the fastest-growing beauty brand in the world with very little traditional marketing spending.

“We launched [Tatcha] with zero marketing dollars, and we targeted beauty bloggers and celebrity makeup artists,” Hainsworth said. “These YouTubers have millions of people who trust them and what they say, so within six months we were in all the major magazines and we didn’t do anything, they heard about it through the all those brand fans. Now it’s the fastest growing beauty brand in the world and we essentially still have spent next to zero marketing dollars.”

At POSSIBLE, which works with brands including Proctor & Gamble, Nestle and Purina, among others, the agency is counseling clients to focus on improved transparency in supply chain and sourcing information to help consumers make demonstrably better buying decisions.

“The amount of money [POSSIBLE clientele] are investing in supply chain and where things come from at massive scale are potentially huge opportunities for them to be much more credible and transparent than their apparently more authentic competitors that have built a brand around [transparency] but don’t necessarily back it up on the backend with enough information,” Burman said. “I think it will create whole new opportunity for people to make sense of that information and become trusted brands in that making sense space. The stand-alone just ‘We are more transparent’ [strategy] is going to play out in both constructive and counterproductive ways for companies big and small in ways that are real and not real.”

Measurement and adjustments to consumer feedback will be vital to delivering real, business- and consumer-positive changes in brand experience, according to all the speakers.

“Online reviews, the Yelps of the world, have forced transparency so brands don’t really have a choice whether to invest in it,” Busby said. He “focuses less on the person who likes Charmin and wants Charmin again, again and again,” responding to a notion introduced by keynoter Robert Scoble, who predicted greater revenues for companies that anticipate and deliver consumers’ favorite products.

Busby continued: “I’m more focused on how a consumer makes the initial decision to select Charmin and then whether or not that experience is a good one. It’s like going to a restaurant, if the first time you don’t like it, no matter what anyone tells you about it, you’re just not likely to come back.”

He also pointed to the critical role of people in these decisions. A “warm greeting” by a company responded to a consumer query, literally just a polite salutation and question about how one’s day is going, can transform a problem into a consumer engagement opportunity. He also pointed to a client where 10 percent to 20 percent of calls to [retail stores] and call centers go unanswered, because people hang up after more than five rings or being put on hold.

“People are very quick to call competitors if they don’t get an answer on the first try,” Busby said. “What I’m encouraging brands to more and more is to really invest in that initial interaction — it’s super-important.”

Sommers replied, capturing the spirit of the conversation: “In on-demand you have to be there and respond.” Now is the window of time business has to react to a customer opportunity.

The immediate and intimate expectations of consumers today, empowered by social networks and access to data is “forcing big brands to really rethink where they are in the value chain and where they want to be in terms of the consumer relationship, because nobody really wants to like a brand or have a brand like them, but they do care about brands who appear to care about them and demonstrate that they are really delivering value,” POSSIBLE CCO Burman said.

“If you are a startup in this space or building a business, the two things we also see: brands still matter a ton,” Burman explained. “It’s how you drive a premium, it’s how people make most decisions, rational or otherwise, and we just don’t have that much mental capacity to absorb new things and so brands hold a strong place in our minds and our change in our behavior is very difficult. And how do you build scale? Being able to do something doesn’t mean that you can build a business doing that and disrupt whole industries. So really looking at “Am I solving a big enough problem for enough people?”

In on-demand, consumer engagement is required to begin to invert the mass-production equation, reducing inventory risk and raising the premium earned by moving customization and service as close to the customer as possible. At the local level, this is most clearly expressed in the success of on-demand services. In the enterprise and, increasingly, using cloud services, listening to consumers and giving them greater control over the experience they will have is essential to improved sales and higher profits through less wasteful production processes. The local, on-demand economy requires a rethink of every aspect of a business’ process and assumptions. The results can be profound.

There’s much more to this excellent conversation in the video. Please enjoy and ask questions in comments!