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Tutorial on the McKinsey/Harvard "Customer Decision Journey" by John Sing

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Today, our customers engage whether to do business with us in fundamentally different ways, relying heavily on digital interactions, evaluating a constantly shifting array of options, and affecting our future business by their post-purchase continual engagement through social media, recommendations, and reviews. A new customer buying model is the new normal. First described in 2009, continually refined since, this is my tutorial on this proven McKinsey / Harvard paradigm. Essential info. I also have an IT-specific version of this presentation on Slideshare.net ( "Will your 2015 IT Roadmap Drive Business Success?" ) which supplements this presentation by describing the deep implications to the IT technology organization, and best practices for IT and the business to address these implications successfully. The URL for that presentation (you may cut/paste) is: http://www.slideshare.net/johnsing1/2015-it-roadmapdrivingbusinesssuccessv31

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Tutorial on the McKinsey/Harvard "Customer Decision Journey" by John Sing

  1. 1. The 2015+ “Digital Customer Journey” For your Business and Career © 2014 John Sing – All Rights Reserved John Sing, Director of Technology John Sing, john@johnsing.us
  2. 2. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 2 What’s Inside:  New business reality: “Digital Customer Journey”  Mapping the 2014+ customer journey  Applying it to our business models  Understanding what’s changed 2014+ customer buying behavior
  3. 3. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 3 A long time ago, there were fewer choices…..
  4. 4. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 4 The 2014 customer’s problem: (too) many choices! http://digitalvideospace.blogspot.com/2012/11/the-coming-battle-for-second-screen.html
  5. 5. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 5 Meanwhile, regarding our business models….. McKinsey Marketing and Sales http://media-cache-ec0.pinimg.com/originals/ab/57/f0/ab57f0388e175b0b0f3150a5538f3cbb.jpg
  6. 6. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 6 Today’s evaluation phase research shows: > 60% consulted others < 9% from advertising http://www.pinterest.com/pin/94083079686991394/
  7. 7. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 7 > 50% of all internet access via mobile
  8. 8. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 8 The “Showrooming” effect (auto dealer example): http://marketingland.com/report-6-71748
  9. 9. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 9 “Showrooming:” Amazon impact physical store retailers: https://www.placed.com/resources/case-studies-and-white-papers Top retailers where customer purchased online on Amazon… After or while seeing item in their retail store
  10. 10. 2014 – The New Customer Journey Learning points for today’s customer © 2014 John Sing – All Rights Reserved 10  Today’s customer views your brand in fundamentally different way  Promiscuous in brand relationships – 10s/100s  Magnified by mobile-enabled instant internet-scale searching  Creates constantly shifting, expanding array of options  After purchase, customers aggressively engaged with social media, public reviews, complaints  In real-time, customers collaborate / condemn, depending on their experience, at internet scale and speed
  11. 11. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 11 Thus, we have 2014+ Business Model challenge…..
  12. 12. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 12 But all is not lost! Even if this is your current state: Percentage of companies that admit they have limited to no understanding on how their customers interact with them digitally http://www.mckinseyonmarketingandsales.com/the-funnel-is-dead-long-live-consumer-decision-journey
  13. 13. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 13 How we used to attract customers = “The Funnel”: Initial choices Whittle down to final buy Prior to 2009:
  14. 14. 2014 – The New Customer Journey Before vs. Today: © 2014 John Sing – All Rights Reserved http://industriamusical.es/8-casos-de-exito-de-artistas-a-traves-del-social-media/ 14 VS.
  15. 15. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 15 Could it be… there might be a new buying model? Prior to 2009: “The Funnel” Since 2009: “Customer Decision Journey”
  16. 16. 2014 – The New Customer Journey In 2009, a “new journey” was first identified: © 2014 John Sing – All Rights Reserved 16  “The Customer Decision Journey”  Goal: Cut through the noise. Create “The Loyalty Loop”
  17. 17. 2014 – The New Customer Journey 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 17 “Customer Decision Journey”: 22.. EEvvaalluuaattee 33.. BBuuyy 4. Enjoy, Advocate, Bond 11.. CCoonnssiiddeerr Loyalty Loop Let’s summarize this model: And it’s 6-year journey Four “battlegrounds”
  18. 18. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 18 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
  19. 19. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 19 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points 1. Consider
  20. 20. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 20 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
  21. 21. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 21 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
  22. 22. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 22 2. Evaluate HHiigghhllyy ccrroossss--cchhaannnneell jjoouurrnneeyy Customers add or subtract brands as they evaluate what they want 2/3 of interactions are “pulled” by customer from “earned social media”
  23. 23. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 23 3. Buy Only stage where discount coupons are effective 40% of customers change their minds at this point Thus these are important: - In-store experience ( physical or virtual ) - Salesperson knowledge / approach - Merchandising, packaging, visual - Comparison shopping - Price check, etc.
  24. 24. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 24 4. Enjoy / Advocate / Bond: “Loyalty Loop” Loyalty Loop After purchase, customers remain aggressively engaged, publically promoting / assailing, collaborating / crowdsourcing your brand’s development, challenging / shaping your brand’s meaning in marketplace.
  25. 25. 2014 – The New Customer Journey Quiz: “Customer Decision Journey”: four stages 11. . C Coonnssidideerr Initial consideration set Based on branding 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 25 Loyalty Loop 22. . E Evvaaluluaattee 33. . B Buuyy 4. Enjoy, Advocate, Bond Add / subtract choices 2/3 of interactions based on “PULL” Earned social media 40% change mind “In-store” experience Packaging, visual Comparison / price check Word of mouth Reviews Crowdsourcing Active loyalists
  26. 26. 2014 – The New Customer Journey 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 26 1st step: understand our ”Digital Customer Journey” Loyalty Loop 22.. EEvvaalluuaattee 33.. BBuuyy 4. Enjoy, Advocate, Bond 11.. CCoonnssiiddeerr
  27. 27. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 27
  28. 28. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 28 http://franksdesigns.com For designing some of the key graphics:
  29. 29. 2014 – The New Customer Journey Notes – Where did this all come from © 2014 John Sing – All Rights Reserved 29 1. June 2009: McKinsey publishes the initial “consumer decision journey” paper: http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey 2. December 2010: Harvard Business School publishes “Branding in the Digital Age – You’re Spending Your (2010 Marketing) Money In All the Wrong Places”: http://hbr.org/2010/12/branding-in-the-digital-age-youre-spending-your-money-in-all-the-wrong-places/ar/1 3. Above evoked industry-wide discussions, prompting this 2012 B2B follow-on: “Aligning with Consumer Decision Journey”: http://hbr.org/web/ideas-in-practice/aligning-with-the-consumer-decision-journey 4. By April 2013, dynamic content management becomes the norm in digital marketing: http://www.mckinsey.com/insights/marketing_sales/the_coming_era_of_on-demand_marketing 5. By May / June 2014, the best practices for Reinventing IT to support digitized customer journey had become clear: http://www.mckinsey.com/insights/business_technology/reinventing_it_to_support_digitization and http://www.mckinsey.com/insights/marketing_sales/digitizing_the_consumer_decision_journey 6. All of this has evolved into a strong body of research, here’s the McKinsey free online versions: http://www.mckinsey.com/client_service/marketing_and_sales/latest_thinking/customer_decision_journey Also do search on “David Edelman”, author of papers #2 and #3 above.
  30. 30. 2014 – The New Customer Journey Counterpoints / enhancements / clarifications to CDJ: 1. People experience a brand in many ways other than purchase and usage of a product. Be aware of that no longer only customers that advocate / denigrate a product. Advocacy therefore is all through the cycle, not just after buying the product (May 2014) : http://blogs.hbr.org/2014/05/marketing-can-no-longer-rely-on-the-funnel/ © 2014 John Sing – All Rights Reserved 30
  31. 31. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 31 John Sing  32 years of experience in enterprise servers, storage, and software – 2014: Director of Technology, 4cube – Infrastructure for Tomorrow – 2009 – 2014: IBM Executive IT Consultant: IT Strategy and Planning, Enterprise Large Scale Storage, Internet Scale Workloads and Data Center Design, Big Data Analytics, Cloud Infrastructures, High Availability, Disaster Recovery – 2002-2008: IBM IT Data Center Strategy, Large Scale Systems, Business Continuity, HA/DR/BC, IBM Storage – Previous experience 1990s: Enterprise Storage Server Marketing Manager, Planner. International experience in Europe, Asia, IBM Hong Kong, IBM China, Systems Center, Specialist  John.sing@4cube.com or john@johnsing.us  @john_sing  Follow my daily IT research blog – http://www.delicious.com/atsf_arizona  Follow me on Slideshare.net: – http://www.slideshare.net/johnsing1  LinkedIn: – http://www.linkedin.com/in/johnsing
  32. 32. 2014 – The New Customer Journey © 2014 John Sing – All Rights Reserved 32

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