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Rapid globalization. Extreme market volatility. Heightened business risk. Uncertainties over consumer behavior. Facing all this, companies need to focus on existing customers to withstand short-term pressures and lay the groundwork for growth in the upturn—but the high-performing companies will also experiment with and master new routes leading to new customers because they recognize the need to foster trust-based relationships while efficiently managing customer transactions.
The recession’s long-term impact remains to be seen, but for now companies must present a strong value proposition to earn their customers’ business. Increasingly unpredictable buyer demand and behavior compounds the challenges. Consumers are now more diverse, with specialized needs and preferences, especially in emerging markets.
In today’s world, economic power is diffused across multiple countries and regions, complicating the effort to discern what will satisfy customers. Even as the global economy struggles, however, many emerging markets have enjoyed impressive growth in consumer spending, bolstered by population growth, an emerging middle class, rising per capita incomes, and greater credit availability.
This can help companies counteract sagging demand in Western economies and develop a base of new consumers for the eventual upturn. However, the traditional approaches to identifying, reaching, and satisfying buyers need to be refreshed or even retooled for these markets.
Gaining detailed buyer knowledge and a clear sense of who customers are requires an intense effort—and what works in mature markets can be very different from what works in emerging ones. Sophisticated analytics can help tailor services to be more appealing to customers, and information about customers and the local culture can help tailor marketing strategies and operating models.
Customer service and customer experience are critical. Research shows consumers worldwide are deserting companies in record numbers when experiences fail to meet expectations. In a recent study, two-thirds of participating consumers cited poor service as the reason for having left at least one provider in the prior 12 months.
Nowhere has this been more evident than in emerging markets. In the same study, 84 percent of respondents in China, India, and Brazil said their expectations were higher than they’d been five years earlier. Just 36 percent said that their expectations were always or frequently met.
Emerging markets tend to share certain traits, and companies entering them need to be prepared for the following:
First-time buyers—large, fragmented bases with low purchase power and highly localized needs.
Disparate populations—large populations spread over a vast geographic area characterized by cultural barriers and marked differences in lifestyle and language.
Explosive, uneven demand—requiring relationship-driven operating models; focus on operational efficiency; and multiple marketing, sales, and service channels.
Immature business environments—long payment cycles coupled with limited third-party capabilities and distribution infrastructure.
Those emerging-market requirements demand a customer-centric business strategy, forcing companies to:
- Create geographic options. Reach out to potential customers in emerging markets with new business models, channels, and infrastructure investment to unlock latent demand.
- Act authentically local. Operate in ways that allow response to local tastes, customs, and regulations. Proactively deploy analytics to increase understanding of new markets. Work with local people and companies.
- Network the organization. To act on information from around the world and execute in multiple locations, master the ability to transfer people, resources, capital, and know-how to the right places at the right time. An organization that is permeable, both internally and externally, enables flows of people, ideas, and best practices.
It’s clear that consumer values, expectations, and preferences are constantly in flux. The high-performing companies will be those that take this truth to heart and develop the capability to adapt to and act on shifting consumer requirements—in any market.
David Rich (email@example.com) is the managing director of the CRM practice at Accenture, a company that specializes in management consulting, outsourcing, and systems integration technology.
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