Rethinking the Customer Journey

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The Consumer Journey

Based on McKinsey’s “Rethinking customer journeys with the next-generation operating model” podcast

By Bryan Becker, Senior Business Analyst

The start of the journey is the trigger to shop, this occurs at a point in time when a purchase becomes a necessity. When your car stops running, or the washing machine won’t wash, we’ve all been there. At the beginning of the consumer journey, the purchasers construct a mental list of products called the “Initial Consideration Set” (ICS). The ICS usually contains a small number of candidate products, usually two and the “incumbent” product is more likely than not to be included in the ICS.

In the between stage, the development of the ICS and the eventual purchase decision, there is a period of “active evaluation.” Consumer behaviors are changing based on how they interact with technology. If we compare the consumer journey of today to the 40 years ago, some “consumer journeys” have not changed at all. For example, the journey of buying a car. But technology has enabled products and services that have changed how people think about entire product categories.

Customer expectations, around things such as speed of execution, are growing; “They have gone through the roof…” Key areas of changing expectations are:

  • Ability to self-serve

  • Availability of timely and accurate information

  • Frictionless/touchless transactions

  • Level of responsiveness

  • Post-purchase relationships

  • Opportunities for self-education

And partners, such as distribution channels, have the same expectations.

Sweeping changes in consumer behavior creates both winners and losers. The tectonic shifts brought on by new technology enabling new business models has been occurring for long enough, that we now have research that identifies why the winners win. The one ongoing study started in 2008, looked at 30 different sectors, singled out the winners, and then looked for a common model across the winners. These winners included both incumbent companies that existed before key technological change, changed their industry, as well new companies. The researchers called the winning paradigm, the “next generation operating model.” Smart companies are building the “next generation operating model.” In general, these next generation operating models heavily leverage:

  • Digitization

  • Analytics

  • Automation

  • Procurement

These work together to provide a multiplier effect. “Levers, when coupled with a fulcrum, multiply strength.” These levers enable new business models and they enable us to better understand how we can influence the customer journey. They enable effective responses to shifts in the marketplace.

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Building the “next generation operating model” is a comprehensive process. Because of the importance of leveraging technology, the transformation leaves no part of the organization untouched. It is not limited to changes in approach for marketing and sales and the back-office and procurement may require important changes in support of “speed of execution.”

Transformational efforts that are not coordinated, and at scale, can destroy value. Siloed technology will not deliver the potential value that it promised, and independently driven initiatives typically end up targeting the same value streams. Small efforts will not be transformational and don’t try it as a “side project” staffed by your third string players. Speed matters; slow modest efforts will never catch-up and never deliver the ROI that was anticipated. The “next generation operating model” aims to produce wins today and dominate tomorrow by responding to the “customer journeys” of today and engineer the dominant “customer journeys” of tomorrow.

Betach Solutions Inc.