Editor’s Note: With 2014 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
In the past few years the iOS and Android device revolution has firmly and irreversibly shifted consumer online activity to a mobile-first experience. The majority of consumer traffic growth, app development and innovation is now via mobile devices. 2014 is the year the dam starts to break. We believe 2014 will be the year that businesses begin a pronounced shift from the “come to me” customer engagement model, to the “go to my customer” engagement model – driven via mobile and social engagement.
This shift in online activity behavior has already happened for consumers, but the most businesses haven’t made the adjustment yet and as a result have increasingly been left stranded.
The businesses we’re primarily referring to here, in this article, are those that have durable, ongoing service relationships with their customers – phone, electric, banking, insurance, credit card, healthcare, utilities, investments, etc. The average U.S. household has more than 20 providers across these categories of service. Across the country, more than 50,000 different businesses compete in these categories. It includes many large, national companies, but most are mid-sized, regional players.
Most of these businesses are still functioning on a 1999, Web 1.0 model. This approach was modeled after the major consumer portals of that era – Yahoo, AOL, MSN, Excite (remember them?), and the like. While in our personal lives we all recognize these portals as artifacts of a bygone era, this “portal” Internet is still the pattern most businesses use for their Web strategies. It’s a unilateral approach to customer interaction. “We’ll keep improving our company website, we’ll put lots of cool content there, and we’re confident our customers will each eventually register with us to come and use it.”
This concept was innovative in 1999. Better than any model that came before. Some still defend this model. Look, we grew online interaction 50% in the past couple years. Interesting, but for the fact that 80% of customers still don’t visit your site. The bar, and expectations are too low. For consumers, this “come to me” portal model has long since died. Twice.
The first death of the portal model: social
In about 2004 the AOL, Yahoo and MSN portal model fell prey to the social model. Facebook replaced the media-portal-centered online experience with the “you, personally, are the center” model. Linkedin did it again for our professional relationships. These “me-in-the-middle” models worked better for our egos. But they were also much more efficient for us. The relationships and the content I care about come to me, not vice-versa. Consumer interaction and usage exploded.
No problem – we’ll just get on Facebook and Twitter
Business can set up their Facebook page and Twitter account in minutes though. Voila, problem solved, right? Not so much. Facebook and Twitter are fine for general brand building and sometimes even a bit of light customer support. But these services are impossibly insecure and un-private (is that a word?) for sensitive account information, bills, statements or payments. The standard social networks don’t work for the most essential customer interactions.
The second death of the portal model: mobile
So the social model killed the portal model first, and then it died a second death with the explosion of smartphones. The consumer online experience quickly changed from “do it when I get back to my desk” to a “do it right now, right here, while I’m thinking about it.” Consumer interaction and usage exploded. Again.
And again, most businesses haven’t been able to participate in this massive consumer shift. Most consumers still aren’t visiting their providers’ sites even in a big-screen browser world (according to HubSpot Marketing Statistics and data less than 20% of customers visit the average business’ site in a given month). This sure isn’t about to change on the small screen of smartphones. The market has run away from the “come to me” business model.
No problem – we’ll just build mobile apps
For most businesses, this is an impossible solution. Not that they can’t all build apps. Sure that’s possible given enough time. But, with more than 20 providers per person, users can’t spend that much time to download, set up credentials and utilize an app for each of their accounts. It’s still a “come to me” model, and most customers won’t. Businesses with apps, unless they are in the top 100 service providers, typically see less than 5% of their customers participate. That’s a bad return on investment. And the pace of iOS, Android and device innovation is faster than most could keep their apps current anyway.
Social and mobile is finally viable for business
Does the average business just get left out of the social and mobile driven Internet? Are they just stuck? Is there really any plausible way to expect the vast majority of your customers to interact only online? Based on our own crowd-sourced data and traffic trends, there’s evidence for hope for businesses to achieve big breakthroughs in user engagement, with a much smaller investment by adopting a social/mobile model. We think 2014 is the year this shift starts to happen in a broad way.
Here’s the good news for businesses: the social and mobile phenomenon has already proven that when friction of engagement is far lower for the consumer, the amount of interaction increases massively.
The other good news is that these gains are now available for businesses, not just friends sharing funny cat pics. Social/mobile tools have now emerged for business to customer interaction. These tools bring social and mobile driven interaction, but designed for the specific security and privacy requirements of the business/customer relationship, enabling secure interaction, doc delivery, payments and mobile access.
The new model is a customer-centric personal account directory can be built and tailored around the consumer. All bills, statements, notices and account info flow to the customer. All their payments (and auto-payments) are securely managed and executed in the same place. All their records automatically organized, archived and backed up to their personal Dropbox, Google Drive or Box accounts.
Does it work to boost customer interaction? Based on our company’s direct experience, the “me-in-the-middle” model for customer interaction has become for most businesses their fastest growing channel for customer interaction. The network effect of the customer-centered model means businesses can for the first time draft off of each other to boost interaction far above what they can do through their own unilateral methods.
Is it working to boost mobile engagement? You bet. For example, more than 90% of the businesses we work with have no mobile app of their own. Even so, they’ve been able to immediately expand into mobile engagement, with none of the time, expense and risk of developing their own apps. In 2013, we saw customer engagement with businesses on our network grow from 30% to over 40% via mobile. We expect to end 2014 with the majority of customer interaction via mobile.
2014 is the year businesses start to catch up
Our predictions for 2014:
–Businesses start to shift to network-driven, “social” interaction models, with tools purpose built for secure, private customer engagement.
–Businesses start to aggressively shift to a “mobile first” interaction strategy, that matches existing consumer behavior.
–New models of low-friction customer engagement will massively expand customer interaction over unilateral, separate login for every account driven models; while disruptive, we love the social and mobile shifts that have transformed consumer behavior.
For businesses bold enough to act on these shifts, we believe they’ll bring significant efficiencies and savings, and tremendous boost in customer interaction. We think 2014 is the year the dam breaks to bring in this new era of business to customer engagement.
Steve Shiver’s a recovering engineer (Rice U, Mechanical… back when they made mechanical stuff). After a couple of fun years working as an engineer in Alaska, Shivers went to business school (UVA) because he thought it would help him behave more professionally. It didn’t. After b-school, Shivers worked in consulting (at Kaiser Associates) and then got a front row seat for the dot-com boom and bust (at Infospace) before he landed at Qpass in 2002. At Qpass, he ran sales and marketing then helped develop and launch a new mobile payment network, OpenMarket, which grew to take the No. 1 position in the U.S. market and continues to expand successfully. Shivers was SVP and GM of OpenMarket, by then a division of Amdocs, before exiting in 2008 and starting Doxo.
