BOSTON/SAN FRANCISCO: Modern technology means brands no longer have to react to consumers as they make their purchasing decisions, but can now actively shape them, two leading analysts have proposed.
David Edelman and Marc Singer, both senior executives at global consultancy McKinsey, outlined how brands can optimise results by compressing the consideration and evaluation phases of the customer decision journey.
Basing their research on 200 best-practice case studies and interviews with scores of digital business leaders worldwide, Edelman and Singer sought to update a seminal McKinsey paper from 2009 that declared the traditional "funnel" model to be over.
They said this was needed because, since then, brands have been investing in new technologies and capabilities to exert greater influence over how consumers make their purchasing decisions.
They argued that by effectively compressing the consideration and evaluation phases, successful brands could "catapult a consumer right to the loyalty phase of the relationship".
"The journey itself is becoming the defining source of competitive advantage," they stated.
However, that largely depended on how successful brands become at capturing insights about consumers and feeding them back into their marketing campaigns while also delivering consistent and personalised customer experiences.
And four distinct and interconnected capabilities underpin the approach, they argued, identifying these capabilities as automation, proactive personalisation, contextual interaction and journey innovation.
Automation streamlines journey steps, they said, citing banks that allow customers to take a photo of a cheque and deposit it through the bank's app rather than having to do it in person.
Meanwhile, proactive personalisation uses information about a customer to cater for their preferences and customise their experience.
Contextual interaction uses knowledge about where a customer is in a journey to deliver them to the next set of interactions, such as a retail site that shows the status of a customer's recent order on the home page.
Finally, they said journey innovation "extends the interaction to new sources of value".
A good example might be an airline's app that has the ability to integrate with a taxi service so that travellers can book cars to pick them up when they arrive at their destination.
"Activating customer journeys to capture value requires journeys to be treated like products that need to be actively managed, measured, and nurtured," Edelman and Singer concluded.
Data sourced from McKinsey; additional content by Warc staff