Decoding the Connected Customer

There is a new breed of human that has emerged in this millennium; one whose smartphone is a vital extension of their limbs. They run their lives on technology. They can’t be fooled by a business’s deceptive advertising, fake promises, or substandard products because, like everything else they encounter, they will look it up. They know how crucial it is to share information with the rest of their world, so they will leverage the right medium and they will make sure their opinion is heard–which could be them singing praises for a new product they just tried, or exposing and mocking the bad business or service they received. They navigate even the most complex networks of the internet like it’s a walk in the park because they’re always connected.

Although it is predicted that generation Z will account for more connected customers than the generations before them, connected customers can be found across all existing generations. In fact, they are usually identified by a common set of characteristics:

  • Connected customers are those who leverage mobile, tablets, social media, IoT devices, and other digital channels to understand a brand’s functionality, features, pricing, promises, etc.
  • Connected customers share their personal experiences and feedback on their interactions with brands and products on various social media platforms.
  • Connected customers expect swift results and time-efficient experience. Delivery times across top vendors are becoming increasingly competitive and with so many brands offering same-day delivery, customers have become spoilt for choice.
  • Connected customers utilize multiple devices to connect to their favorite sites, and expect a seamless, consistent experience between various devices.
  • Connected customers value personalization. They value brands that customize product recommendations and services keeping in mind their individual preferences and behaviours.

There is a frenzy amongst businesses to have connected consumers on their side, and for good reasons :

  • Firstly, because it is now known that evangelistic customers boost sales much more than marketing can ever do. According to Harvard Business Review, acquiring a new customer can be anywhere between 5 to 25 times more expensive than retaining an existing one.
  • Secondly, connected customers are active customers. Research concludes that having reviews on your site can increase the likelihood for visitors to make purchases; products with reviews have a 270% greater likelihood of being purchased than products with no reviews.
  • Finally–and perhaps most importantly–connected customers can empower businesses by giving them insight into their direction for growth. By virtue of perpetually being connected, they offer immense data over time that can help businesses learn about customer engagement patterns and preferences. Analysing this data, can help businesses answer crucial questions, such as what devices do customers prefer to engage on?; what products receive most engagement?; what are customers greatest pain points, and how can the company address them? Businesses can use this information to prioritize their focus.

Decline of Brand Loyalty Among Connected Customers

Although connected customers are becoming must-haves for businesses, they don’t come easy. After all, unlike people who are timid of technology, these savvy customers are aware of the spectrum of choice they have before them through the internet. Customers today are equipped with vast amounts of information and experiences thanks to the easy availability of the internet and have less incentive to be loyal than the customers of yesteryears.

However, as you’ll find in this article, there are ways to attract and retain highly valuable connected customers.

Why Connected Customers Are Vital for Businesses

In recent years, revered industry leaders and notable thinkers are vocally accepting, understanding and preparing for the Fourth Industrial Revolution, in which unprecedented technological breakthroughs and billions of people being connected by mobile devices will fundamentally alter the way we live, work, and relate to one another. We are already seeing the advent of the Fourth Industrial Revolution in the high adoption rate of the Internet of Things (IoT), and the integration of artificial intelligence with our everyday lives. IoT devices–or devices that function and connect via the internet–are becoming standard in a wide array of fields, such as healthcare (with examples like activity trackers, and sensor-enabled pills), household (smart washing machines, heaters, locks), manufacturing (digital twins), and agriculture (drones that monitor soil or weather conditions).

For e-commerce businesses, the amount of information being collected from IoT devices can be processed and analyzed to paint an accurate picture of various users and their lifestyles. Today, the number of IoT devices (not including phones, laptops, tablets) is over 7 billion, and that number is projected to cross 21 billion worldwide by 2025.

It is also common knowledge that smartphones are no longer limited to the upper strata of society. With several tech companies providing increasingly affordable options of smartphones in recent years, the number of smartphone users worldwide is over 3 billion and expected to cross 3.8 billion by 2021. This, combined with the fact that the reach of social media has been rising, is further increasing the connectivity of the world.

It has also changed the way marketing departments operate. Today, brands find it imperative to have their presence on Facebook, the most popular social network worldwide with more than 2.3 billion monthly active users. Eastern Asia and North America have the greatest social media penetration, with penetration rates of 70 percent, while the global average penetration rate is 45 percent. Social networking usage has also become increasingly mobile – in January 2018, mobile social media had a 58 percent usage rate in the United States.

All these signs point towards an increasing number of connected customers in the future. The evidence is apparent in the digital divide between baby boomers and millennials. A vast population of the youngest generation today, Generation Z, have been navigating apps since their infancy, and are more deeply connected to the web than generations before.

Clearly, connected customers come with a set of high expectations. It can be daunting for an e-commerce business when they realize the level of effort they must invest in engaging these customers, but it would be a mistake to dismiss them, given their impact. On the bright side, connected customers allow brands to save on marketing costs by prioritizing social media advertising, which is inexpensive in comparison to traditional marketing formats, such as print, TV or radio. Brands can also benefit from the ability to communicate with consumers in real-time, in a two-way format, and they can swiftly promote new products and services through social media.

Today, given the high competition e-commerce brands face, many companies strive for customer attention and loyalty by slashing prices, but this only attracts consumers whose loyalty is fickle and price-based. While price and product quality will always be relevant, the new differentiator for companies comes down to the customer engagement experience. Customer engagement can be defined as the emotional connection a company creates in customers, based on their experiences with the company’s people — and those emotions strongly influence their buying decisions.

According to studies by Gallup CE, customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer.

Maximizing Engagement with the Connected Customer

  • Develop Emotional Connections

Far from just incorporating discounts and satisfactory customer service, companies must strive to resonate with the emotions of their ideal customers. This goes against the belief that customers’ purchasing decisions are guided primarily by rational thinking.

Higher customer engagement is driven by the customer feeling valued, the customer’s relationship with the brand representative, and the customer’s trust in your service. A good way to do this is by creating an effective loyalty program that makes your customers feel valued, or by associating your brand with certain values that you want your customers to be invested in. For example, the outdoor and recreation company REI makes a donation to the National Forest Foundation every time their customers use REI’s Co-op World Mastercard. They have seen tremendous success through their loyalty program and brand cause.

  • Leverage Technology

    As the tides of technology change, brands must keep up with tech innovation to stay ahead of the game. 59% of customers say companies need to provide them with innovative digital experiences to keep their business. Customers are already aware and impacted by technologies like cybersecurity,  the Internet of Things, and Artificial Intelligence (according to global research firm Gartner, by 2020, 85% of customer interactions will be managed without a human.). With more operations and every-day functionalities being executed online, cybersecurity is a top concern that businesses should address. Additionally, businesses should leverage Artificial Intelligence to sift through complex amounts of data and uncover relevant business opportunities.

  • Be Mobile-First

Connected customers do not want to lose access to their favorite brands when they’re on the go. A massive 79 percent of smartphone users have made a purchase online using their smartphones. Google also reiterates the importance of mobile-friendly sites and prioritizes mobile-friendly content with higher SEO rankings. All this means one thing: mobile matters.

To be mobile-first, businesses must optimize their content to load fast on mobile devices and create a consistent experience with other channels. Moreover, brands should invest in an omnichannel e-commerce platform to deliver a seamless experience across channels.  

  • Build a Community

In today’s highly individualized climate, people are finding it increasingly difficult to form social connections with others. Brands fostering a sense of community are seeing deep-rooted loyalty and emotional connections from their customers. They give their customers a common ground–online or offline–to encourage one and other in their art or athletic progress, which also allows for customers to share their experiences and provide support for other customers. For example, the athleisure brand Lululemon offers their members yoga sessions, run clubs and other classes and events, which creates a strong differentiator from other brands offering just run-of-the-mill services.

  • Deliver Personalized Engagement

Based on the immense data collected from connected customers (such as their preferences, behaviours and shopping history), brands can offer personalized customer engagement and loyalty programs that are customized for them. Afterall, everyone likes to feel special!

  • Create Experiential Events

When Red Bull offered live coverage of Felix Baumgartner skydiving from 128,000 feet, they–quite literally–took their marketing drive to new heights. Experiential marketing events like these get people buzzing for a long time. Do not fret if your marketing budget does not allow you to put a man into space; create local events and experiences that are relevant to your brand, and give your customers reasons to get excited. Not only do 98% of consumers create and share their experiences at branded events, but 74% say engaging at these experiences makes them more likely to buy the products being promoted.

When it comes to engaging customers, brands must unleash their imaginations. By using the power of data analysis, businesses today can know their audiences better than ever before. This is the key to knowing what excites customers, and how to retain them. In a world where competition and pricing are cut-throat, tomorrow’s winners will be businesses that learn how to maximize engagement with their customers. Those that don’t will be left behind.

If you have any questions or queries, do drop in a comment, and we’ll get right back to you.

Aishwarya Raman
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