Why Spending Wisely But Opportunistically is the Best Path

Key findings:

  • The benefits of winning over digital mobile consumers may be greater in some other sectors. In analyzing our qualitative research (case studies and literature searches), it became clear to us that many companies which sell products/services of high relative importance and urgency for consumers – and whose consumers were more likely to be “in motion” when they researched, purchased and used the product/service – had achieved major benefits from and consumer interest in their mobility initiatives.
  • Companies that win over the digital mobile consumer will not necessarily be the ones that spend the most in this area. The “leaders” from the survey are spending about the same percent of company revenue on their mobility initiatives as the laggards.

TCS Digital Mobile Consumer StudyThe data that we present in this report illustrates how companies across industries and across regions of the world have begun to change to respond to the so-called digital mobile consumer. In our interviews, we found that executives of companies that are leading the way don’t look at this consumer segment as a burden. Rather, they appear to see them as a great opportunity – a rapidly expanding market segment that will give their business to companies that can reduce the many hassles of their time-starved lives.

In viewing the digital mobile consumer segment as a substantial business opportunity, many (although certainly not all) of the organizations we studied already have instituted substantial changes in the ways they market, sell, service, develop products, and work with suppliers. For example, for drivers who use the mobile website of the global tire manufacturer that we interviewed, it’s no longer an ordeal to find someone to fix a flat tire when their car has broken down in an unfamiliar place.

Providing these types of valuable customer experiences – experiences that increase customer loyalty — has been the mantra of consumer companies for years. The enormous investments these companies have made over the last decade in websites and customer relationship management (CRM) software speaks to this need. Consider what websites have done for consumer companies since they emerged in the mid-1990s. (Amazon.com was born on the Web in 1995.) Through their websites, consumers have been given an around-the-clock channel for getting information on products and services, and for some sites the ability to purchase those offerings. These websites have empowered consumers – i.e., those who could access them from computers with Internet connections.

Also consider that the amount companies are spending on CRM alone is staggering. Gartner estimates that companies worldwide this year will collectively spend more than $12 billion on CRM software, up 33% from 2008.16 Consumer companies have used CRM so that their marketing departments can tailor direct marketing campaigns, telesales people can prospect for the best customers, and call center agents can have a better picture of the irate consumer on the other end of the phone line.

Yet CRM technology allowed consumer companies to get only so close to their customers. For most of the last decade, those customers would receive the sales call on a home phone, get the direct marketing pitch in the postal mail, and call a contact center from a phone that could do little more than dial a number. For most of the 2000s, if consumers had a mobile phone, that device probably didn’t have a web browser. And if it did, the websites that consumers viewed were almost never designed with a tiny screen and a time-starved viewer in mind.

Companies that wanted to lather personal attention on each and every consumer – or at least the minority of the customer base who represented the majority of revenue – could only go so far. They couldn’t give consumers who were on the run access to their online repository of self-help information. When the consumer was in motion – with her desktop or laptop computer long out of reach – she was essentially on her own.

In other words, consumer companies have been able to get only so close to the people who buy their products and services, whether they are airline passengers, bank checking and savings account holders, or drivers with tires and auto insurance policies to care about. This is one big reason why consumers who are “out and about” have not been able to get close to those companies in any meaningful way.

Perhaps this is one reason why the bellwether index of the US consumer satisfaction of companies they do business with has barely budged since 1994. The American Customer Satisfaction Index, which registered 74.2 at the end of 1994 (on a scale of 0 to 100), stood at only 75.9 in the second quarter of 2012 – a scant 1.7% increase over 18 years.17

This is all to say that websites and CRM technology have helped companies get a lot closer to their consumers – but only so close. They haven’t been able to stay electronically connected to consumers at all times. But with a wave of powerful and easy-to-use mobile devices that have flooded the market since 2007, this is no longer the case.18 A consumer with a smartphone or tablet device can now easily get the information she needs from just about wherever she happens to be (that is, wherever wireless service exists, especially wi-fi).

Now companies can electronically connect their businesses to consumers (even if they have millions of them) around the clock and around the world – if those consumers have powerful mobile devices. Increasingly, they do.

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16 From Gartner press releases dated Feb. 8, 2011 and Feb. 26, 2009.
17 The ASCI index has been a strongly watched number for many years. The organization, whose index was developed at the University of Michigan’s Ross School of Business, polls consumers on their satisfaction with the companies whose products and services they purchase, ranging from airlines and retailers, to computers, media and banks. See the trends since the organization began tracking consumer satisfaction in 1994.
18 Most mobile industry observers would assign the “easy to use” bragging rights to Apple and its iPhone, the first of which came to market in June 2007.


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