The subscription economy has grown rapidly over the last five years, with more than eight in ten Europeans currently relying on subscription-based services, and four in five people now having at least one subscription service1. Zendesk worked with many innovative businesses, such as Uber, Airbnb, Amazon and Dropbox, as they started to drive this notion of putting the customer at the heart of the business. The whole ethos being to see how they could, and should, be more connected. To enhance the customer experience as well as relationships, businesses began to adopt SaaS solutions, which enabled consumers to engage with them where, how and when they wanted through multiple communication channels, the omni-channel approach.
There were many factors that contributed to the growth of this movement – the rapid adoption and wider use of smart devices, consumers establishing a ‘constantly connected’ mentality as well as enhanced competition – businesses needed to find a competitive advantage. Advancements in IT infrastructure, such as AWS enabling a cloud of services, offered solutions for businesses of all sizes to use as they wanted and when they wanted contributing to the growth of the subscription economy.
For the first time, disruptive businesses were able to compete with larger established businesses by using the same or equivalent tools but in a much more agile way. The cloud, in particular, enabled these disruptors to scale rapidly like never before and build a competitive business in the blink of an eye while at the same time reaching customers around the world from anywhere. The business made in a bedroom was born.
The difference - five years later
Think back to five years ago to how you lived then compared to how you live now. Hailing a taxi was done standing on the pavement with a wave of your hand as opposed to on a phone with a swipe of your finger; a holiday was packaged not personalised, ordering takeaway food meant trawling multiple websites instead of just one; and pretty much nothing was delivered same day.
As businesses spotted the opportunity to disrupt traditional industries like transportation, retail, food and travel and had a means to do this at rapid scale, the rise of the subscription economy started to gain traction. Customers were placed at the heart of the business amid a focus on the value of long term relationships with every consumer.
Social media adoption grew and people became comfortable, familiar and efficient in communicating to the masses through the click of a button. First they started to broadcast a dialogue of their everyday lives; what they had for breakfast; where they were going to that afternoon. Soon after, they started to hold businesses to account but also celebrate when a company met their expectations.
This new power of communication coupled with the value consumers saw these new businesses placing on them gave rise to what we now term ‘the expectation economy’. Consumers who expect a business to behave in a certain way based on past experience, shared knowledge and awareness. Over the last five years, the power has shifted from the business to the customer.
The business dilemma
So, where did this leave established businesses? Essentially, it left them with a decision…push against this turning tide of consumer power or join the disruptors and embrace it.
For many, they believed this presented a new challenge, ‘be bold or succumb’. Be bold to tackle a gargantuan challenge by changing the entire culture of your customer engagement strategy or succumb to the ‘too hard basket’, ignore the issue and see your business gradually shrink. Traditional customer service solutions required many months of implementation, training and iteration; they also required six or seven figure budgets. You had to channel your inner crystal ball to consider how you might need to scale in the future. It wasn’t an agile, on demand experience.
Today there is a third option. SaaS based customer relationship solutions are designed to enable a business to try, buy and implement incredibly quickly. Business should be able to truly try the customer service solution fully, they shouldn’t need a user manual to get started. The software should be easy enough to use so that anyone within the business can pick it up quickly; and simple to introduce into the business so the IT infrastructure doesn’t need re-engineering. Importantly, it should be there and able to grow with the business as it scales or in times of peaks and troughs like the Christmas buying period for retailers.
Following the innovators
When you look at the traditional industries that have really started to adapt to this new era of consumer power, it’s really the ones with the most direct customer touch points that appear to have adapted first such as retail, travel, transportation and the public sector. Businesses such as Tesco, John Lewis, Trivago, Deliveroo, Cabify, and Gov.uk have recognised the need to change the way they appreciate their customers and instilled a mentality into their external facing employees to really focus on the lifetime value of the customer. As a result, these early adopters have been able to establish trust and loyalty among their customer base and, in return, are being repaid through advocacy or continued business.
It’s essential for businesses to take the time out to listen to their customers. A Zendesk survey of the UK retail industry showed how much demand there was from consumers for an omni-channel experience. More than 40 per cent of customers prefer to communicate with customer service teams through modern technology channels such as Chat and Message as opposed to face-to-face interactions. Another recent survey conducted by Zendesk shows that 40 per cent of customers would like vendors to remember their preferences and provide a more personalised experience.
Businesses should consider customer service as a sales opportunity rather than a cost to the business. A Zendesk survey conducted in Germany found that 46 per cent of respondents would rather visit the dentist or be stuck in a traffic jam than call customer service. That should be a powerful message for all businesses.
John Crossan, VP EMEA, Zendesk
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