The way that companies relate to their customers is profoundly and permanently changing. The old sell-and-run, transactional approach to exploiting customers is slowly fading away. Today, a growing number of companies are focused on the lifetime value of their customers, and relentlessly driving improvements that meet their needs, in order to secure a long-term relationship with them.
What makes this trend possible is the emergence of the digital thread – a two-way connection that lets smart companies better understand what they're buying, how they’re using it, and what they want to do next with the goal of providing relevant customer experiences. After crunching all that data with artificial intelligence, companies can uncover ways to continuously delight their customers with new innovations and increasingly personalized attention.
For example, manufacturing companies like General Electric embed data transmitting systems in every aircraft engine they deliver, collecting performance data that can help drive improvements and help with future sales.
The carmaker Tesla also keeps a very close eye on its customers’ experience, tracking miles that are driven, power flow, battery usage, average journey time and speed, and car health metrics that identify problems before they occur. Software updates and features can be enabled remotely, without having to bring the car to a service center.
SMARTER APPLICATIONS = BETTER PRODUCT DEVELOPMENT
Applications can monitor this data to help sales and services personnel understand how customers actually use the product and identify trends and opportunities for product developers. Today, each product sale can provide a window into the customer’s psyche, giving the company a big leg up on its competitors.
The digital infrastructure to support threads linking companies and individuals has been taking shape over the last two decades. It wasn’t that long ago that music or software had to be purchased at a store, or maybe from a mail-order catalog. And when you bought a CD or a floppy disk, there was no easy way for the seller to monitor your satisfaction, or keep in touch with you. The digital thread suddenly enables a level of service that wasn’t possible before.
And while technology plays a huge role in enabling the digital thread, it’s really just a tool. The transformation starts with a mindset, a shift in the company culture that says: we want to figure out what makes this customer happy. It means embracing data, AI, and telemetry that’s centered on the customer and then showing a customer how they benefit from sharing data via that digital thread.
This kind of transformation is separate from the concept of digital transformation, which includes things like going paperless, using robotics, and updating employee workflow. You can do all of those things and still not recognize or embrace the value of the digital thread.
THE DIGITAL THREAD HELPS ORGANIZATIONS LEARN
There is a whole treasure trove of information companies can gain if they have a lens on the complete customer journey from download, to onboarding, through to launch. Over the lifetime of a customer, you can use that information to significantly increase the lifetime value of each user. By figuring out what customers need – maybe it’s more training, or you can see they are getting stuck at the same place with the software – companies can be proactive to help them be successful. Having visibility into your customers at any part of their journey helps build the unique digital thread
Of course, no one has mastered the digital thread better than Amazon. I’ve seen firsthand what they can do with 15 years of transactional data. They know my buying habits – what I buy when I buy, what my family buys. They know exactly how to promote things to me. As a result, their ability to accelerate revenue and services with me is significantly better than any of their competitors.
Apple is another great example. With millions of devices in service, they generate enormous amounts of data. Using AI and machine learning, they can conduct a deep analysis of their customers’ behavior. If millions of customers took the same six steps to search for a product or access music, they can predict that you’ll take the same six steps and optimize your experience accordingly.
THE DIGITAL THREAD JOURNEY TELLS A STORY
Few companies can draw on data that rich. But you can start building important connections by simply asking customers to tell you about their journey. For example, an app that prompts customers to share their goals and rate their experiences each time they check in can help build a tailored experience that gets them what they need faster. And you can demonstrate your commitment to their success by offering discounts or free services when they have an unsatisfactory experience.
This level of commitment may seem odd to companies that still do things the old way. The vast majority of businesses still employ the one-off transaction approach: customers come to the store, you sell them a television, and you're done. Changing that mindset, breaking a company’s DNA, is incredibly hard. But the lifetime value of a customer and the data captured from repeat transactions is far more important than the revenue from the initial purchase.
Today, we can follow our customers more closely, learning how to keep them – and other customers – coming back again and again. A decade from now, it should be easy to tell which companies have embraced the digital thread. For many industries, it will be the difference between companies that survive, and those that don’t.
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