My in-laws purchased a piece of property and just broke ground in the process to build their house. It’s a stunning, grassy ten-acre plot of farmland, and my children have been basking in the beauty and vastness of nature. A portion of the property has been fenced off to be grazed by a neighbor’s cows.
Every time we go, the cows come visit us by the fence - which is super fun for my four boys. The kids also have fun by running and sliding down the dirt pile created by the excavation, located next to the fence.
The cows never try to cross the newly-built five-wire fence, but every time my kids run down the piles of dirt, the cows instinctively back away. The fence keeps the cows in, but they haven’t yet discovered that it keeps people out.
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In many ways, brands treat technologies in the same way that the cows treat their fence. Brands understand how technologies act as fences that affect them and their needs, but they have a harder time interpreting the actions of consumers and understanding the impact on them.
I wouldn’t let my kids get close to cows without a fence between them. The fence enables a more meaningful interaction. Likewise, the technology you adopt into your customer experience will either prevent a meaningful interaction or allow a more meaningful interaction. There is no in-between.
The cost cutting instincts of US based retailers
A significant portion of my professional life is spent on two things: advising merchants on how to achieve their goals/plans for commerce and talking with commerce tech providers about the solutions they offer. There’s a clear message I hear from both sides.
When advising, the flow of the initial conversations for merchants goes something like this:
Phase 1 of our conversation:
- “We want to double sales in the next 1-3 years.”
- “We want to make our processes, systems, and people more efficient so we can save money.”
- “We want to make our brand more like X trend (brand elevation).”
- “We want to improve our UX, CX, and conversion.”
- “We want to be more innovative.”
- “We want to do this for as little money as possible.”
Phase 2 of our conversation:
- “We really only have X budget.”
- “We want to make our processes, systems, and people more efficient so we can save money.”
- “If we have money left over we’ll invest in low-hanging fruit for growth, innovation, UX, CX, and other such things.”
My conversations with commerce tech companies:
- Tech company #1: “We’re great at improving conversion, can you help us prove that to merchants?”
- Tech company #2: “We’re great at improving conversion, but we’re repositioning to also show that we save money. Help us reposition to the market.”
- Tech company #3: “We replace existing essential technology by improving efficiency and cutting costs. Help us spread the word.”
There are exceptions to all this but the message is clear: Merchants in the United States buy tech that improves upon existing solutions by making internal resources more efficient, more affordable or adding additional features (that may replace other tech) for a similar price. Purchasing net new technology to grow the business is a long and gradual process.
And there’s nothing wrong with this. It’s very clear how the tech will impact your business. Just like it’s smart for cows not to try and push their way through a barbed-wire fence. The outcome is something you can trust because, you know, you like the back of your own hoof.
The limiting nature of platform tech helps to constrain the average merchant who may become scattered or lost. Like a herd of cattle on ten acres, rounding up the various stakeholders and keeping them concentrated on a single area of focus is quite the task. The fence enables this.
The other side of the fence
The cows at my in-law’s property have a hard time understanding that the fence is as much about keeping them away from my kids as it is about keeping my kids away from them.
In the same way, it’s often hard for different departments to recognize how their investments—especially cost-saving investments—impact their customers. CMOs and CDOs need to work more closely with COOs and CTOs to understand how to position these investments. Kris Gosser hit on this back in Insiders #52: Merchandizing the Innovations of Operations:
“Profitable acquisition is hard, so once a prospect comes to an e-commerce website, operations has a huge influence on brand impression. For instance, if a marketing campaign drives thousands of new visitors to a product page, will stock be depleted faster than anticipated? Can the fulfillment center handle the influx? What happens if the product sells out and needs to be reordered...is the campaign landing page updated, and a form implemented that invites customers to provide their email address or mobile phone number so they can be notified when the item is back in stock? Especially for e-commerce, much of the overall success of a brilliant marketing campaign rides on the operation's ability to put great processes in place.”
Those in the business that are focused on customers and growth must have an understanding of the operational toolset so they can represent the benefit to the customer. This requires both an understanding of the customer and an understanding of how the technology in place will affect them. CMOs can’t sleep on the opportunity to evolve the brand, messaging, and positioning that’s made available through operational efficiency, better data, and improved processes.
COOs, CTOs, CFOs, and budget-holding committees need to understand that squeezing operational efficiency isn’t always the fastest or best path to organizational health or growth.
Building a better fence doesn't always lead to a better relationship with your customers or attract more of them.
Sometimes you’ve gotta move the fence. To emphasize - in the US there is a clear bias toward improving efficiency, but the net new is often looked at as a luxury - or “technology for technology’s sake”. Often this is based on assumptions about your customers that are flat wrong. When the people in your org who know your customers best (growth, customer experience, eCom, marketing, whoever) come to you and ask for a budget to spend on something that feels very superfluous to you or doesn’t have a clear line back to saving money, trust the data they present and trust their instincts. Or if you don’t have data, invest in research to find out.
Leaning into the fences
So at this point, some of you might be rubbing your hands together thinking that you’ll use this article as ammo to help justify that big customer research project that will lead to a fully custom software implementation that you’ve been trying to figure out how to fund.
Every time we go to the in-laws’ property, the cows come over to the fence to see us. The fact that there’s a fence isn’t stopping them from coming. They see us, they’re interested, and they pay us a visit. The fence doesn’t prevent the visitation — in fact, the fence is the tool that allows them to get closer to you. I wouldn’t let my kids get close to cows without a fence between them.
Technology and systems enable better interaction with customers.
The problem with creating a solution that only considers the impact on customers is that instead of a fence you end up scoping a project that is a fence+playground+swimming pool because that’s going to be everything a customer could ever want. When you work backward from pre-chosen tech, you can be 10x more efficient to solve the issue at hand (i.e. cows next to kids = fence :: you selling online to customers = ecom platform). The risk of this approach is that you might not address the opportunity properly. The counter to that is that even if you conceive of a fully customer-specific solution, you end up limited by budget or technical limitations that drive your final solution to something that is platform-driven anyway.
When you encounter an opportunity or limitation with technology that requires investment, in addition to understanding how it impacts your business, make sure you don’t ignore the effect it’s going to have on your customers. Then lean on what that software does well and be smart about how you implement it. You’ll both save money and grow your business.
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