In my last post, I reported on the 2010 IBM Global CEO study finding that 88% of all CEOs surveyed picked getting closer to the customer as the most important dimension to realize their strategy in the next five years. This does not mean adding a few more phone lines to customer service or conducting another Internet survey asking how the interviewee rates a particular statement on a scale from strongly disagree to strongly agree. The study states ““This means CEOs must shake up their portfolios, business models, old ways of working and long-held assumptions. They have to address what customers now care about and reassess how value is generated.”

There were three themes about getting closer to the customer in the report. One is the massive shift in information and communication. Customers have never had so much information or so many options. Therefore companies must develop a deeper understanding of their customers in order to provide them with what they really want. Social media is helping companies“listen in” through many channels as customers share their impressions, use and evaluation of the company’s products and services with others. Companies are also collecting more information about consumer behavior than ever before. The big challenge is to translate the gigabytes of raw data into information and knowledge that can drive business decisions.

But it’s about much more than just listening and sifting through numbers. The second theme is placing a priority on user experience. The IBM research shows that “more and more, organizations are working to synchronize processes with the desired customer experience, and shift their metrics to measure that experience.” This is a fundamental shift. Companies are asking themselves how to reorganize, re-engineer processes, and implement metrics not for internal efficiencies but to improve the understanding and delivery of a superior customer experience.

The third theme is co-creation, which may be one of the strongest examples of getting closer to the customer. “The most successful organizations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers.” This dimension of getting closer to the customer brings the vendor and customer into a partnership to mutually solve problems. That’s very different than a vendor sells and customer buys mindset.

In the Reinvent Customer Relations chapter of the report, IBM offers three recommendations:
Honor your customer above all else,
Use two-way communication to stay in sync with customers,
Profit from the information explosion.

To get you thinking about what this means, the study poses three questions:
How will you engage customers in new ways that increase interest and loyalty to generate new demand and revenue sources?
How can you involve customers more effectively and directly in product and service development?
Can you hear the voice of your customers through the vast amount of data? Can you understand and act upon the information?

In the introduction to my blog last week, I said I listen to smart people. What these smart people are telling me is that getting closer to the customer is critical to business success and it includes more two-way communication, understanding and improving the customer’s experience, and can evolve into the co-creation of products.

What kind of priority is your company putting on getting closer to your customers and in what forms is that taking?