Blog

When we ask managers to list the drivers of their customers' willingness to pay, their main focus is usually on material and immaterial aspects of their products or services such as quality features and brand. These are important factors, of course, but a customer's willingness to pay can be affected by a much broader group of drivers.

Every transaction that your customer has with you is actually an entire trip, and every step of the way you can either delight your customers or inflict a pain point on your customers. We find it helpful to differentiate between three phases of the customer journey: Recognize – the part of the journey on which a latent customer need arises and which either the customer or the company is made aware of; Inquiry – the part of the trip where the need is translated into a request for a solution to the need; and finally answer – the part of the journey where the customer receives and experiences the solution.

Our research into networked strategies has revealed four different approaches that companies use to reduce the friction of this customer journey – in other words, four different networked customer experiences. These customer experiences differ in which part of the customer journey they affect. The customer experience associated with customer needs begins at the point on the journey where a customer knows exactly what he or she wants. The company's aim is to make it as easy as possible for customers to order, pay for and receive the desired product in the desired quantity. The curated customer experience offers on the way upstream by helping the customer find the best possible option that meets their needs. Both responding to requests and the curated offer can only work if customers are aware of their needs. Companies that create a customer experience in coach behavior help their customers precisely on this part of their journey: they sensitize them to needs and make them act. Finally, if the company is able to recognize a customer need before it is known to the customer, it is possible to create an auto-execution customer experience in which the company proactively solves the customer's need.

We would like to reiterate that automatic execution should not be considered the most desirable customer experience for every transaction. Customers differ in how much agency they prefer, and for some transactions, the risk that an automatic execution will fail outweighs the benefits. While technologists may view automatic execution as nirvana, a good old-fashioned understanding of the customer is required to give your customers the most relevant experience, so you may need to create a series of connected customer experiences.

Overall, each of the four connected customer experiences has its own merits and works well in certain use cases and for certain customers:

1. React on request works best when customers know what they want and the company is able to deploy it quickly. The problem is that meeting a random customer request like "I want to eat a bacon cheeseburger now, even though I'm in a vegetarian restaurant and it's three in the morning" can be expensive or impossible. The main skill of the company is operational: fast delivery, flexibility and accurate execution. Customers who like to sit in the driver's seat and have full control are happy to respond to requests.

2. Curated offer This is useful when customers don't know exactly what they want because they don't know all the options available. In this environment, a company can delight its customers by offering them a product that best suits their needs and gain efficiency benefits by proactively directing them towards something that is easy to deploy. The key function here is the recommendation process. Customers who like to make the final decision, but still value advice, benefit from a curated offer.

3. Behavior of the trainer is of great value for latent needs that customers know, but which are difficult to follow due to sluggishness or other behavioral reasons. Yes, the customer wants a cheeseburger with bacon, but as soon as he is reminded of his cholesterol level, he is ready to order a salad. For this to work, the company needs to know the needs of its customers well. This is often based on a comprehensive flow of information from the customer to the company via automatic hovering. There must also be a balance between customer loyalty and loyalty and parental and restrictive attitudes. Customers who do not mind passing on personal data if they see a clear amortization with regard to the achievement of personal goals are ready to engage in a customer experience in coach behavior.

4. Automatic execution The related relationship of choice should only be if the company can understand the user so well that it is better able to make buying decisions (or others) than the user himself. It also requires an attitude in which mistakes are not allowed have consequences. Customers who are familiar with a continuous stream of data from themselves (or their devices) to a company and trust that the company will use the data to meet their needs at a reasonable cost are most open to a customer experience with automatic execution.

Contribution to the Branding Strategy Insider by: Nicolaj Siggelkow and Christian Terweisch. Extract from the networked strategy: Establishing continuous customer relationships for competitive advantages (Harvard Business Review Press, May 21, 2019) Copyright 2019 by Harvard Business School Publishing Corporation. All rights reserved.

The Blake project can help: Meet the new competitive advantage requirements in the Branding 4.0 Business 4.0 workshop

Brand Strategy Insider is a service from The Blake Project: A strategic brand consultancy that specializes in brand research, brand strategy, brand growth and brand building

Free publications and resources for marketers