How the New Corporate Mindset Just May Change the World
What’s good for the goose is good for the gander. One hand washes another. You scratch my back and I’ll scratch yours. The notion of mutual benefits is part of our lexicon for a very good reason: There’s a lot of truth in it.
However, according to Tim Burke, CEO at Affinio, the business world has maintained for too long a skewed view – force or manipulate consumers into purchasing products in order to please the exalted shareholder; providing a facade of consumer benefits, while really just providing the bare minimum that increases the bottom line.
Thankfully, over the last few years, it has become apparent to corporations that putting the needs of their customers, employees, suppliers and the environment on the same footing as their investors is actually the best way to drive shareholder value. And let’s be clear: the value will be the direct result of increased sales and brand loyalty because the customer came first.
I’ll give you an example: A global CPG company, went through considerable effort to listen to its customers in order to understand what they value most. The brand then used that insight to transform its entire product line, packaging, distribution and supply chains to to focus on sustainability. This was an incredibly massive and costly undertaking. And to prove the brand isn’t woke-washing, the company became a certified B Corporation, which requires third-party assessment and verification of the applicant’s processes. This commitment to healthy and eco-friendly products — of creating products that meet its consumer’s expectations — has led to increases both in sales and shareholder value.
This Business Roundtable’s revised statement on the purpose of a corporation encourages all businesses to meet or exceed their customer’s expectations. Never before have brands been in a position to do just that. Big data, social signals, looking at conversations at scale, along with the availability of data analytic and visualization tools make this goal possible.
This is a radically different scenario than even just a few years ago. Up until fairly recently, marketers who wanted to understand their customers leveraged demographic data, surveys, and focus groups — all of which are essentially estimations and highly biased.
Big data lets marketers understand consumer behavior in unbiased and highly granular ways. It’s fair to say that the existence of big data has given rise to a new age of customer-centricity, one that is wholly focused on understanding what those customer needs are — to the Business Roundtable’s point. It allows marketers to identify patterns in behavior, sentiment, purchase preferences, and to understand what those patterns mean. More than that, it gives marketers the ability to use them as predictors of future behaviors.
This is more astounding than may appear on first read. Opting to go the same route as the environmentally conscious CPG company — embracing sustainability at every point in the manufacturing and distribution process — requires investments in the hundreds of millions of dollars. No CEO, COO, Board member or shareholder wants to see a company embark on such initiatives unless they’re assured that the consumer trend they’re responding to is more than just a flash in the pan. If they implement such changes, will it last over the long run?
This is why big data is so relevant to the enterprise’s product roadmap. The sheer volume of the data and the ability to analyze and collect nuanced signals means that those signals are inherently statistically relevant. Additionally, marketers can monitor those trends over time and measure the degree to which those changes affect consumer behavior.
Ever Expanding Source of Data
Brands have access to a plethora of data sources they can leverage to better understand their customers’ needs, including social signals, conversations, content consumption, articles shared, influencers followed, public reviews on Amazon, etc. Even context — where, when, how brands are mentioned, and the affinity terms used — can be leveraged at scale. These insights can then inform the entire product lifecycle, from design and manufacturing to positioning and campaign messaging.
By reallocating traditional investment in market research to data science, brands can discover things such as which non-profit organizations its consumers support and topics they care most about. In aggregate, these become very powerful tools for brands to make strategic decisions, such as the above mentioned CPG brand, to optimize the supply chain and tick off all the priorities put forth by the Business Roundtable.
It remains to be seen how many brands put into practice the priorities laid out by the Business Roundtable. My hope is that they all do, because it is a path that will lead towards sustainable growth along with respectful treatment of customers, employees, and the environment. Today’s technology gives us an unprecedented ability to understand our customers, and that, in turn, means we have an unprecedented ability to do good in the world.