Amid uncertain economic conditions, enterprises are focusing on growth more than ever. Therefore, the value of engaging customers is increasing for all concerned.
Up to now, CIOs have largely focused their attention almost exclusively on internal customers of IT services.However, some CIOs are focusing on increasing their “touch” with external customers, the ultimate consumers of the enterprise’s products and services. Companies can choose from five customer engagement models that align with enterprise growth strategies. From least to most engaged, they include:
• Transactional: Improve business processes.
• Demographic: Expand into new markets or geographies.
• Personalized: Target new and existing customers more effectively.
• Contributing: Expand current customer relationships.
• Partnering: Enable new growth through innovation.
Higher levels of engagement require greater levels of mutual value exchange. The value for the enterprise in every engagement model is support for the growth strategy, while the value for the customer varies depending on the type of engagement model.
Not all of these engagement models are supported equally by CIOs. The first two are supported – the transactional and demographic models – and involve a passive customer who does not contribute directly to the enterprise beyond buying its products and services. The other three involve an active customer and seem to be in the province of only a few CIOs.
The personalized customer gives the enterprise permission to observe him in terms of transactions and related contexts. The contributing customer directly initiates and participates in topic discussions and provides personal information beyond what can be inferred from transactions alone.
Finally, the partnering customer is invited by the enterprise to directly participate in its plans for product and service offerings.
INTERACTING WITH THE ACTIVE THREE
The indirect channel of observation can be very powerful. CIOs can learn a great deal by observing customers wherever the company does business, including online.
Passive transactional and demographic customers have relatively simple needs satisfied in most cases by different combinations of price and availability. The CIO’s role is to provide data to internal users, such as sales and marketing, for targeting customers. The CIO can learn much just by observing external customers in person or via their electronic interactions with the company.
This standoffishness is not for the active customer. Insights for the personalized customer are gathered using IT-supported tracking mechanisms, such as magnetic-stripe loyalty cards, online cookies and cell phone geo-location tracking. Personalized customers often don’t have complex needs in using IT to interact with the enterprise and its products, so there is little value to them having direct contact with IT.
The operating environments, and products and services contributing customers deploy are complex and dynamic, often requiring help to use the enterprise’s offerings effectively. When IT is the source of complexity, the role of the CIO and IT team is to engage directly with the customer to provide support.
Problem solving and process integration are the essence of the customer partnering model. Touch-points are generally fixed and formalized at multiple levels, including senior management. Ideally, IT is involved from the start and at multiple levels from the CIO down.
The right engagement role for the CIO and IT is one that supports the enterprise engagement model and value proposition for a particular customer segment.
When the customer makes a contribution, the enterprise makes an implicit promise in return: to acknowledge who the customer is and what the customer needs within the boundaries defined by the engagement model. If the promise is kept, the result is growth.
Each of the five customer engagement models implies different technology and organizational capabilities. In general, these capabilities are cumulative, from least to most engaged.
Observing customers increases the CIO’s business understanding and credibility and offers opportunities for enterprise growth via targeted offers.