On November 8th, Research VP within the IT Leaders & Tech Professionals team and customer experience expert Jenny Sussin gave a presentation on "The Two Digital Threats Most Likely to Disrupt Your Relationship With the Customer of the Future". During the Barcelona Gartner Symposium/ITXpo, she shared her knowledge and results of her studies with the audience composed of CIOs and Senior IT Executives.
Jenny Sussin started her presentation by highlighting on key figures: by 2030, there will be 8.5 billion people worldwide and 4.5 billion will have internet access. "By then, the majority of your customers will be urban, digital natives. Today, we know our customers through CRM, we track them. But they are getting smarter and smarter, and more and more do not wish to be tracked, use VPNs, etc" she stated. Moreover, by 2030, there will be more than 25 billion smart things. These connected devices are capable of making customer decisions. Therefore, by then, things will be our customers, as well as people. "One third of the customers won't exist in the way they do today, as they will have disappeared from company databases" she added, before continuing: "Yet, these are the biggest issues…"
Anticipating the customer experience of the future
Gartner analysts used the scenario planning method, a structured way for organizations to think about the future. A group of executives sets out to develop a small number of scenarios —stories about how the future might unfold and how this might affect an issue that confronts them. The process goes from defining focal issue and time frame, reviewing past events, to identifying driving force and critical uncertainties, to discussing implications and paths.
Going through this entire process, Jenny Sussin and her team came up with two plausible digital threats which would affect and even redefine customer relationship: algorithms replacing experts and shared access replacing ownership.
While the first aspect focuses on value creation, shifting from the notion of expertise, to automated creation through algorithms. "From no human involved in day-to-day value creation to no analytical technology involved in it – the two most extreme scenarios – the truth probably lies in between: experts can be supported by analytics – for instance, when it comes to sales forecasting – and algorithms can be supported by experts, in the case of air traffic controllers" added Mrs Sussin. Where does value come from?
When it comes to access, extremes involve, on the one hand one individual benefitting from ownership of the product or service, or, on the other hand, a shared access to the product or service being available to all. " Between these extremes, there are many cooperative, shared ownership and shared access models. Traditional variants like privately owned property, rented property or hotels are being joined by new variants such as Airbnb" clarified Jenny Sussin.
The plausible scenarios for future customer-centric businesses
"What would the future look like?" asked the Gartner analyst, before explaining the four scenarios, ranging from ownership to access, and from being expert-driven to algorithm.
"Nowadays, 70% are traditional businesses, but in 2030, this figure will drop to 40. We will then find 20% of programmatic businesses, 15% of platform businesses, 10% of artisan businesses and 15% of subscription businesses. Therefore, in 2030, 30% of businesses will have shifted" she added. Jenny Sussin then shared her recommendations for all four platforms:
• Platform Business: Model your customer's journey as an ecosystem, determine where you currently fit, and plot where you'd like to fit. Create urgency by commissioning a competitive analysis that identifies each competitor platform business model. Build momentum by running a workshop that focuses on how to apply platform business models to each LOB.
• Programmatic Business: Identify the Top 3 potential starting points and market opportunities for things as customers. Focus AI on problems that have rankled the organization historically. Factor in extensive experiments and piloting to learn quick lessons for tangible results.
• Subscription Business: Challenge executives to be clear on what value the customer is getting from subscribing vs. ownership. Keep in mind that just because it can be done, doesn't mean that customers want it or are willing to pay for it. Think through the full consequences of moving to subscription before starting. Set expectations for investors about the revenue stream in the transition to the new model.
• Artisan Business: Focus on connecting designers, creators and makers directly with customers. Invest in personalizing communication, pricing, packaging and other interactions. Use Six Sigma to aid in continuous refinement on the never-ending road to perfection. Make the creation and production process as transparent as possible to customers.
To conclude, the Gartner Analyst, shared her action plan for CIOs who first need to conduct a self-assessment to acknowledge which type of business they are today, and which one (or more) they are most likely to be, or want to be, in 2030. Then, they need to build out the series of sign-posts and early warning signs that your organization would see on a road to each future world and decide who will monitor for them, engage the operating committee in an organization-specific version of the Customer Scenario Planning analysis in this presentation and adjust your organization's long-term IT investments to match the ambition of the executives. Finally, CIOs will have to invest in partnerships in areas of emerging technology where they do not have in-house skills.