Manufacturers have invested heavily in updating back-end systems to make processes more efficient and enable them to adopt competitive prices in a digitally evolving world. However, the current economy places a premium on experience, which, in turn, creates a need for manufacturers to reorient their business model toward the customer. Some companies such as Dyson have long operated with this type of model, but the new landscape is giving rise to agile challengers founded on direct to consumer models such as Dollar Shave Club or Tesla.
To stave off these challengers, incumbent manufacturers will have to adopt a renewed focus on their customers by moving to cloud-based systems and making the most of their data.
The analyst firm, IDC, has estimated that global data volumes will grow from 33 zettabytes in 2018 to 175 zettabytes in 2025. Manufacturers are awash with customer data that is unstructured and dispersed across the company. This is a potential gold mine of sales and marketing information not being put to good use building personal profiles of potential customers because it cannot be extracted. Data siloes across departments, caused by unwieldy IT systems, are one of the biggest obstacles to creating truly customer-focused companies, and are a pit of lost value.
Leaving the legacy behind
Legacy IT systems lock in data stored offsite and out of mind, and create an obstacle to connecting the front and back end of offices, resulting in siloes. This divergence means disconnected data and slower response times to customers, whether this is with marketing material or a car contract. These data latency issues create friction in the customer journey, which sits at odds with consumer expectations. Constant communication is expected from the sales, service, and sometimes production teams. Take the example of Harley Davidson, which encourages its motorbike owners to join the Harley Owners Group (HOG). Harley Davidson riders can socialise with like-minded individuals, and it enables the brand to continuously communicate with customers about maintenance issues. Legacy technology slows down the customer learning process and makes it less likely for initiatives such as HOG to be effective.
Cumbersome, antiquated IT systems will not help manufacturers adapt to the expectations of customers, which demands agility and the easy flow of data to easily connect with these customers. In the automotive industry, a seamless consumer journey from first contact, to a test drive, to purchase requires better communication and data sharing between employees, partners, dealerships, and the customers themselves.
By updating to cloud-based IT systems, manufacturers can overcome siloes and be smarter about how they use sales and marketing data, including providing personalised offers and speedy quotes to customers. A modernised system also aids the creation of a 360- degree profile of customers, which can inform up-selling and cross-selling efforts in a truly personalised way. This is an approach preferred by consumers; Salesforce research has found 59% of people say tailored engagement based on past interactions with a business is important to winning them over.
Data-driven customer service
Customer interactions need to be more informed by data from the outset of a conversation. Manufacturers have begun emulating successful customer-oriented companies in other sectors such as e-commerce to address these expectations. For example, Hyundai recently implemented a Shopper Assurance programme, which adopts some of the most popular aspects of Amazon’s service. Part of the programme involves Hyundai salespeople bringing cars to the consumers for test drives as well as a returns guarantee for customers.
Yet, high quality customer service does not end after a purchase has been made. The information gathered on consumers during the initial purchase journey can be used to personalise updates and create relevant offers. IoT devices enable technical information on a product’s performance to be delivered back to a manufacturer in a constant feedback loop. As a result, engineers can be automatically dispatched to solve problems a customer may not even know about.
In some cases, IoT-enabled devices remove the need for human intervention at all. Take the example of Tesla; most issues and updates are identified and performed while these connected cars are in the customer’s garage. This cuts costs for the manufacturer, which can react to potential issues without involving maintenance staff but, crucially, it means the company can remain in constant communication with its customers.
Creating customer-obsessed companies
Digital transformation will change the manufacturing industry regardless of the actions of individual manufacturers, but how they respond to it will define whether they thrive or not. Technological advancements without direction risk doing nothing to enhance a manufacturer’s offering to its customers, but costing a great deal. To mitigate this risk, and get the most from digital transformation, manufacturers need to keep the customer’s expectations in mind at every stage of the process.