By Geoff Coltman, Vice Presidnt of Catena Solutions
In today’s digital environment, companies can no longer rely on product-centric, transactional business strategies. As technology changes the way consumers connect with the brands they choose, companies are demanding improved customer experiences from supply chains. In fact, 83% of companies are requiring their supply chain leaders to adapt their strategies to cater to customer-centric demands.
Supply chain leaders are being tasked with improving customer experience by adapting their strategies to cater to customer-centric demands, including customer satisfaction, loyalty and profitability metrics and harnessing customer insights from vast pools of data. To enable customer centricity in a digital landscape supply chain leaders must focus on the following four key considerations:
- Leveraging customer data
The mass amount of data available to supply chain leaders offers endless opportunities to drive change within their organizations. However, knowing where to start to effectively utilize the data can be a challenge for many companies.
For companies that want to motivate and serve consumers, focusing on three types of data is key:
- Sentiment data: What consumers say they will do. Includes product/feature preferences, price ranges, and channel preferences. For example, a customer review using positive language such as “I enjoyed the design of this product” offers subjective insights into their attitude or opinion about the item/company.
- Social data: How consumers interact and share their experiences. Includes reviews, ratings, referrals, and social media interactions. By looking at how customers interact with social platforms, they can glean insights to target users who are most likely to be interested in a product or brand.
- Behavior data: What consumers actually do. Includes purchase price, shopping behavior, return rate and brand interactions. Looking at previous interactions with clients, partners, applications and systems, companies can gain insights into their customer behaviors at each point of the customer journey.
Leveraging demographic data is another useful tool for companies to get to know their customer base and their needs to tailor consumer experiences. Looking at statistical data relating to customers’ basic information such as gender, age, marital status or location can help organizations anticipate market needs and behaviors. Customer data can provide insights into demand and buying habits, allowing companies to improve operational efficiency and optimize inventory management.
- Prioritize data protection and transparency
This influx of data may be easy to collect, but in order to maintain credibility and trust with customers, organizations must prioritize responsible, transparent data collection and usage. Data security is also a top concern for customers, as research into customer-centric supply chains found that for both business-to-business and business-to-consumer customers, data privacy and secure experiences were top customer value propositions.
Managing customer data responsibly and ethically is a non-negotiable if companies expect to be able to use consumer data to improve customer centricity. A few strategies to strengthen data privacy include investing in a reliable storing and management system, streamlining data collection and monitoring for any potential breaches.
- Improve digital experiences
Recently, we’ve seen a shift in customer expectations when it comes to their digital experience interacting with brands. Research shows that 80% of customers now consider the experience a company provides to be as important as its products and services.
These expectations include proactive customer service, an accessible digital journey and consistent interactions across departments. To attract and retain customers, creating value-driven, seamless and holistic digital experiences should be a priority when improving customer centricity. Some of the digital strategies companies can employ to improve digital experiences include implementing chatbots to improve customer service and offering different digital channels to reach consumers.
- Understand customer lifetime value
Digitalization and the expansion of e-commerce have made attracting customer loyalty a significant challenge for companies. This makes existing customers even more invaluable to the success of brands. In fact, increasing your customer retention rate by only 5% can increase profits by 25-95%.
Businesses need to invest time and resources into developing strong relationships with their customers throughout the customer journey. Advanced data and analytics can be used to help companies understand their customers’ lifetime value. Organizations can use predictive analytics to track behavior and gauge lifetime value when customers are in the early stages of the purchase journey. Offering exclusive events, creating referral and rewards programs, encouraging feedback via surveys or providing world-class customer service are just some of the ways companies can maintain customer relationships. Additionally, remaining accessible to customers is important for businesses focusing on customer lifetime value.
Incorporating customer-centric strategies into supply chain management has proven to be transformative, fostering heightened customer satisfaction and loyalty. Prioritizing visibility, data insights and a commitment to customer relationships has allowed businesses to increase profitability, streamline operations and minimize wastage. This holistic strategy not only improves operational efficiency but also forges enduring connections between businesses and their clientele, bolstering market resilience in an increasingly competitive landscape.
Geoff Coltman is Vice President of Catena Solutions, a supply chain consultancy that specializes in supporting supply chain organizations with their business initiatives including digital, financial, human capital, and supply chain transformations.