This time it's personal:
from consumer to co-creator
The CFO perspective - at a glance
The world of marketing, social media and digital may seem a long way from the CFO’s office, but the two worlds are converging.
Determining an appropriate marketing budget, and calculating returns on investment from it in conjunction with business colleagues, has become more integral to the CFO agenda.
In little more than a decade, the internet has transformed the way consumers make and execute their spending decisions.
Responding to this revolution requires a fundamental re-evaluation of the company’s business model, and critical decisions about where to allocate budget to create most value. CFOs and their teams cannot afford to leave the digital world to their sales and marketing colleagues alone.
Our survey revealed some interesting facts about changing consumer behavior. What are their implications on CFOs?
Investing to influence a changing consumer: Consumers have become “chameleons” — constantly changing and defying the confines of traditional market segmentation. They are tough to analyze and difficult to please.
These changes present CFOs with some difficult dilemmas. Determining an appropriate marketing budget, and calculating returns on investment from it in conjunction with business colleagues, has therefore become more integral to the CFO agenda.
Pricing considerations are changing: Consumers are better informed. And equipped with all possible product, price and stock information, consumers can simply bypass retailers that do not compete.
Businesses can no longer assume consumers will not find their way to rivals with a better offer — and this has serious implications for pricing.
- Organizations must learn to listen to and talk with consumers
- Smart organizations will mobilize web communities as corporate advocates
- When companies find out what consumers want from them, they must reshape their entire value chain in response
Find the platforms on which to compete: Customers want to have a greater say. They want products and services to be designed, sold, delivered, serviced and purchased in a way that suits them.
For CFOs, the changing nature of the consumer is likely to mean new priorities for the business in the years ahead. Different types of investment may be necessary and a willingness to adapt the business model is crucial.
Apply analytics to understand the customer: Analytics have become a critical tool for understanding consumer behavior. Business intelligence and analytics technology are maturing rapidly and the amount of customer data available is growing exponentially.
By gaining a deep, rich understanding of consumer needs and expectations, CFOs can be in a much better position to determine priorities and allocations of budgets. Better customer information can also help to drive sales and increase loyalty.
A new relationship creates new opportunities, but risks too: Consumers increasingly share good or bad retail experiences online, where they are seen — and passed on — by countless friends of friends.
This creates opportunities and risks. It is important for management to put in place mechanisms to identify and mitigate threats as they emerge. Above all, they need to understand the feedback customers provide via digital media — and be prepared to reshape their businesses if necessary.
Get the value chain right: It will be vital to ensure that the entire value chain is geared toward providing a personalized customer journey. Investing time and money across the business will be even more important, with every customer contact key to the personal experience.
CFOs must play a crucial role in building the rationale for these operational investments, and ensuring that there is a holistic approach to operations. A robust value chain that is capable of swift and seamless production, delivery and supply is crucial.
Invest in customer service: With brand loyalty difficult to maintain, CFOs undervalue customer service at their peril — the only remaining differentiator once brand has gone is price. That service has to be seamless, however it is delivered.
CFOs should work with their business colleagues to look for consistency on branding, pricing, quality and service across all the company’s channels.
About our survey
Our recent survey of almost 25,000 consumers, of both sexes and diverse ages and incomes across 34 countries, highlights the scale of the challenge ahead. The research, conducted in both rapid-growth and developed markets, looked at purchasing activities in 10 different product and service sectors, from food to electronics. The trends that the research revealed underline some of the key priorities for businesses today.