Delivering seamless, consistent, and engaging experiences starts with a customer-centered digital strategy. This ongoing series explores the characteristics that make up a great digital strategy and how to deliver powerful brand moments that solidify customer loyalty and drive differentiation for your organization.
As consumers, we appreciate how breakthroughs like smartphones, global positioning systems (GPS), genetic testing, and countless other inventions have evolved from complex forms to the common tools we rely upon every day. As customer experience leaders, we must understand how breakthroughs occur and apply this insight in satisfying customers’ ever-changing wants and needs.
Consumerization is the driving force behind this evolution. It’s shaping customer experience in the digital age by upending traditional value chains and influencing the transfer of innovations from one business ecosystem to another.
David Stallsmith, a Director of Strategy and Innovation in Perficient Digital, shares his perspective on consumerization and considerations for applying this idea to your digital experiences.
How do we define consumerization?
David Stallsmith: Consumerization is adapting robust, specialized systems to meet the needs of non-specialist users. Today’s consumerized digital experiences often achieve success by incorporating social, mobile, and cloud technologies to appeal to consumers’ increasingly heightened expectations. They use these features to humanize and simplify complex capabilities, making them more accessible, and in theory, more marketable.
For example, consider how the consumerization of IT swept across the landscape a few years ago. Employees began asking their IT departments to help them use their personal devices for work. Everyone had smartphones, and they wanted to check and respond to work-related emails while away from the office. Consumers brought a wave of new expectations to work, and for the most part, employers responded to their demands.
The travel industry is another good example. It’s rare that anyone calls a travel agent to book routine business trips or vacations. Travel booking systems were consumerized more than 20 years ago as the internet began growing in popularity.
Now, sectors like insurance, wealth management, and healthcare are beginning to experience the same changes. Leaders in these organizations must decide how they will invest in the consumerizing capabilities that make sense for their brands, customers, clients, and patients.
What does this mean for brands?
DS: The notion that experiences become consumerized is not all that new, but it’s still quite relevant. Innovators today borrow more freely from predecessors, reach across boundaries that previously separated industries and domains, and apply engrained consumer habits and industry standards to achieve new objectives.
Dr. Everett Rogers was among the first to study the forces of consumerization. In the 1960s, he proposed his Diffusion of Innovations theory to explain how ideas are transmitted within a society. Rogers’ theory is at the core of Geoffrey Moore’s book Crossing the Chasm, which has become a product marketing bible. Brands that understand the principles of consumerization can harness this potential and deliver value that more effectively meets customers’ needs.
Why is consumerization an important element to a digital strategy?
DS: Having a basic understanding of your customers and appealing to their needs is a prerequisite for developing any strategy – whether you’re creating a digital strategy, marketing strategy, or brand strategy. Putting your customer first will always be a recipe for success but even more so with digital. Because of the fungible nature of digital experiences, consumers carry their expectations from one brand to another, and from one industry to all industries.
When you seek to bring a new capability or technology to market, it’s important to infuse your strategy with an understanding of users’ preferences for every interaction across every touchpoint that you offer.
Based on your observation, which brands or industries innately understand the importance of consumerization?
DS: Umpqua Bank in Portland, Oregon, is a good example from the financial services industry. Borrowing the familiar directional-swipe interaction from Tinder, the bank developed and launched its Go-To app in 2018. The Tinder-like experience allows customers to browse banker profiles and review their professional backgrounds, expertise, location, and personal interests. Then, they can choose the dedicated personal banker they like the best.
Umpqua Bank could have solved the problem of connecting customers with bankers in any number of ways. However, the bank understood the value of a tool like Tinder, which has achieved a level of cultural acceptance, and decided to create a solution with familiar user interactions for its target audience.
Adopting a familiar function or process is common when seeking to incorporate innovations that are not endemic to your industry. You don’t want your customer expend a lot of mental energy understanding how to use your product or service. You want them to access your solution quickly, which is typically achieved using a known interface or a familiar, widely-adopted workflow.
In healthcare, the online psychotherapy provider TalkSpace is one of several platforms that uses text messaging and online video to deliver mental health services. The company also borrows from the familiar “good-better-best” pricing structure to offer patients a straightforward choice of plans. By baking these types of consumerizing features into its operating model, Talkspace is making licensed therapy accessible to new audiences.
B2B sales is another sector feeling the impact of consumerization. The boundaries of traditional B2B sales are disappearing as text and chat conversations overtake formal means of communication like email.
Forrester has classified a new type of enterprise buyer as “B2B Consumers.” These buyers represent a convergence of traits. They simultaneously exhibit the anonymity and emotional sensibilities of consumers along with the interdependent and considered purchase patterns of traditional B2B buyers.
B2B consumers expect that the brand experiences they encounter in their professional lives will have the same sophistication and consistency as those they experience in their personal lives. (Forrester)
With these types of expectations, the typical B2B customer experience is embracing more consumer-like characteristics. It’s shifting towards more visual and easy-to-use features that maximize personalization, interactivity, and search.
How much does innovation play a part in consumerization?
DS: Developing new innovations for the customer experience is significant. Innovation may reuse an existing model and adapt it from one industry or one context to another.
We talk to clients about disruptive innovation versus sustaining innovation; brands need to strike the right balance for their customers. Think of disruptive innovation as something that is revolutionary. It has either never been seen or significantly changes the dynamics of competition.
For example, Talkspace delivers traditional psychotherapy in a disruptive way. It claims to have more than 1,000 therapists and 300,000 active users. (Contrast this with Betterhelp, a competitor that claims in excess of 1,000,000 patient sign-ups). Though e-therapy services existed before Talkspace, its pricing model and mobile-based interaction paradigm has allowed the company to reach underserved markets and scale quickly.
Sustaining innovations move the needle to a lesser degree, but as a marketer (or product marketer), you will want to have a portfolio of sustaining innovations to deliver to your customers. Revisiting the example of Umpqua Bank, the sustaining innovation was using a new interaction model for searching and choosing a personal banker. The bank didn’t change its business model or the ability to use its website or other digital properties to find a personal banker. Umpqua Bank improved upon a new channel for finding that individual, making the process easier and more useful.
How does “Now, New, Next” relate to consumerization?
DS: Our Now, New, Next framework enables innovators to compare product and service features with those offered by other firms, both inside and outside of industry boundaries. It categorizes elements based on prevalence of features and suggests where leadership should focus or commit to investment in each category. The framework is based on the idea of adopting features and capabilities from one industry or market and adapting them for use in a new or improved product.
Consumerization is a force that drives the items in New and Next. When creating an innovation portfolio, marketers can use Now, New, Next to harness the forces of consumerization to better understand when to develop a new process or capability, or when it’s time to move on to the “Next” and develop something that’s truly disruptive. Having a better understanding of how consumerization works and knowing the history of it provides the lens for using it to evaluate new and next capabilities.
How can CMOs obtain buy-in from other leaders on the importance of consumerization?
DS: Anything that demonstrates the idea, such as visuals, prototypes, or a representation of the future state, is valuable for getting buy-in. Stories are also persuasive, including how a brand’s users will embrace new technologies or innovations. As previously mentioned, it’s important to reference examples of other industries or companies that successfully leveraged the innovations for their own use.
Finally, be ready to test everything to prove the innovation is worthwhile. You must have feedback from your own customers to ensure they’re ready to embrace that idea or application.
What’s one key takeaway you would share with a CMO?
DS: You should not expect your situation to be unique or that your challenge has never been solved. Spend time in the culture and with your customers to understand how they solve problems. How do they interact with other brands, even those outside your industry?
It’s important to put out feelers into the culture and determine if your problem has been solved somewhere else in the world. Then, bring that insight back to your organization and leverage it as much as you can.
Creating a stand-out digital customer experience that attracts, engages, and retains customers is a tall order. Perhaps you’ve already done some of the foundational work, and you need help with the next step.
When working with clients, we take on the responsibility to make sure you know your customers and understand their journeys. Through design-thinking tools, industry research, and pragmatic ideation to execute from end-to-end, you will have what it takes to deliver experiences that surprise and delight your customers.
Ready to get started with your digital strategy? Dive in for more resources.