Matias Adam, Lecturer at MIT Sloan School of Management
From The Hill
As companies collect increasing amounts of data about customers, a key challenge is connecting that information to customize the customer experience and boost sales. The customer journey begins long before the actual sale.
It starts with online searches, store visits, conversations and emails. Companies need to connect all of these touch points to identify potential customers and turn research and exploration into sales.
While business-to-consumer (B2C) markets have been deploying customer data platforms to consolidate the customer experience and improve marketing personalization, this has been a bigger challenge in the business-to-business (B2B) markets.
This is due to the complexity of B2B, where each customer has multiple decision-makers and users that are not always identified in the early stages, and the entire sales cycle is longer and relies on fewer leads, prospects, opportunities and sales than in B2C space.
Dominating business-to-consumer sales, Amazon seems ready to take over the world of business-to-business too. In its first year, Amazon Business generated $1 billion in sales. However, there is still room for competition. It’s not yet an ecosystem driver in B2B, although the longer it takes for other business supply companies to catch up, the harder it will be to beat Amazon.
This is a good example of the importance of learning how to thrive in a digital ecosystem. Companies must learn to become ecosystem drivers – even if only for a subset of their customers – in order to survive. These drivers have become the destination for their spaces like Amazon with consumer products, Aetna with healthcare needs, and USAA for life events. So what does it take to be a successful ecosystem driver?
The first step is to assess your current business model. Are you an omnichannel business with an integrated value chain? Are you a supplier that sells through another company? Or are you a modular producer that adapts to other companies’ ecosystems? Most businesses today generate revenue with one or more of these models.
The days of the passive patient and omnipotent Marcus Welby-like physician are long gone. Since the 1990s, consumer empowerment in health care has been increasing, most notably with the advent of direct-to-consumer advertising for prescription medicines. Then, the rise of digital media allowed consumers to search symptoms and create communities around common disease experiences. More recently, the ability to shop for health insurance through health care exchanges and obtain treatment at drug store clinics has led to a new age of consumer empowerment.
We’ve gone from a B-to-B model to a B-to-C model in health care. This shift in power to consumers has many implications when it comes to how we make decisions about our health care. Here are six ways that a behavioral lens can help us understand the implications of empowering consumers in health care:
Heuristics are very important. These mental shortcuts or “rules of thumb” allow us to make decisions efficiently. However, these judgments are subject to non-rational (or biased) influences in the marketplace. For example, a retail promotion like a drug store coupon can affect the price on which patients “anchor” their judgments about the appropriate cost of health care. And a retail clinic can affect the appeal of non-healthy alternatives with their location, like in the candy aisle. While this may not have been a big deal before, it is an important consideration in a B2C retail environment.
In 1895, John Deere, the agricultural machinery company, debuted a slight publication called The Furrow targeted at farmers and ranchers. Back then, The Furrow was a simple newsletter containing pen-and ink-drawings, articles about farming techniques, ads for new plows, and a section tailored for women readers that featured products like cream separators. Fast-forward 118 years to today: The Furrow is still published – albeit in glossy form, complete with its own website, Facebook page, and Twitter feed. It has circulation of 1.5 million.
The Furrow is one of the earliest examples of content marketing, an approach that involves creating, distributing, and exchanging information to attract, engage, and retain a clearly defined audience, with the ultimate goal of driving sales. According to a recent survey by the Content Marketing Institute (CMI), 91% of North American B2B marketers use content marketing as part of their current marketing strategy.