7. Me + free + ease
After two decades of shopping, reading, watching, seeking information, and interacting on the Internet, our expectations have changed. Whether dealing with customer service representatives, researching vendor websites, or shopping
in a bricks-and-mortar store, customers expect more services to be free, personalized, and easy to use without instructions. When they don’t find these things, they are likely to voice their disappointment on Facebook or Twitter.
This presents major challenges for business (Exhibit 7). Even among online- only businesses, the bar continues to rise. Customers want easier interactions,
seamless transactions, and more features—all for free. Competitors are a mouse- click away, and any leader that falters is soon in danger. On the Internet—and increasingly in the offline world—the customer has more power than ever.
Exhibit 7
Me + free + ease
Big data
Sensors and actuators
Cloud computing
Mobile technology
Natural user interfaces
Computation, storage, and networks
Definition Rising consumer expectations for instant access to information, transparency, customization, low prices, and ease of use, based on the model of Internet services, now being applied offline as well
Applications of the trend
▪ Responding to increased pressure from consumers to provide services for free and creating the need for companies to search for alternate revenue pools
▪ Personalizing customer service, often through customization at scale
▪ Growing expectation of extreme ease of use and instantaneous results
Key sectors impacted
▪ Media and communications
▪ Retail
▪ Education
▪ Manufacturing
▪ Finance
▪ Health care
SOURCE: McKinsey Global Institute analysis
Applications of the trend
▪ Free. As the Internet has become the primary medium of information and media consumption over the past decade, customers have grown accustomed to consuming for free. Many of the Internet’s most popular services replaced paid offline services and ushered in an era of “free”—obtaining information through Google and Wikipedia instead of encyclopedias and consulting Craigslist instead of classified ads. Customers read free online editions instead
of physical newspapers, and access music and movies through peer-to-peer sharing websites. The extension of “free” into new areas continues to this day.
Once the concept of free takes hold, it becomes risky to then expect consumers to pay. Video game maker Electronic Arts lost 400,000 of the
1.7 million online players of its Star Wars multiplayer game in 2012 because customers expected the game to be free. It found out that 40 percent of players were willing to come back if they didn’t have to pay. Now, the game is available on a “freemium” basis: free for the first 50 levels and paid for the rest.
Across customer-facing industries, companies are experiencing resistance to paying, acutely so for things that have been free. When US banks proposed monthly maintenance fees for debit cards, instant outrage spread on social media sites and the plans were quickly withdrawn. However, as business models have evolved, some granular consumer-pay models have worked. Music-sharing pioneer Napster, for example, sparked intense debate on intellectual property rights and was strongly resisted by incumbents. But it ultimately laid the path for iTunes and “freemium” content provision such as the New York Times paywall, which allows ten articles per month for free
but requires a paid subscription to read more (see Trend 8: “The e-volution of commerce”).
Now, when consumers venture into bricks-and-mortar stores, they continue to use the Internet to compare prices, read reviews, and even order online. Best Buy is countering “showrooming”—the practice of shoppers testing products in stores but purchasing online—by launching a program aimed at combining in-store service with Internet-like pricing. Knowledgeable sales
representatives greet shoppers and answer questions on product features. If a question requires more information, the representatives have tablets to access additional data—including pricing from 19 online retailers.
▪ Me: Personalized. Consumers expect to be treated as individuals who are valuable to the companies they give their business to. While this is challenging in complex, multi-channel environments, companies that are able to offer personalized service are rewarded with greater loyalty and sales.
Personalization of services is most easily visible in online experiences such as customized Web search results based on the user’s preferences and networks on social media. Use history is used by Spotify for music and Apple for app recommendations. Similarly, Facebook and Amazon present completely customized landing pages, recommendations, and even deals.
Companies with physical products as well as offline services are also recognizing the need for personalization. Nike allows customers to design their own shoes from templates and even offers “inspirations.” Retailers Tesco and Safeway use data from loyalty programs to customize marketing offers, essentially adjusting prices for specific customers, increasing sales as well as customer engagement. A major credit card processor found that investing in higher-caliber call-center representatives who can offer single-point, personal service pays handsomely. Each representative is trained on common issues and is encouraged to take care of the customer’s request without passing on the call to a specialist. Representatives are incentivized on service provided instead of time saved on the call. The result is a 10 percent improvement in customer service margins and higher customer service ratings.
▪ Ease: Easy to use. The ease of using online services such as e-commerce websites, social networks, and lately even enterprise applications, has raised expectations among users. Thick instruction manuals to train employees
and customers when a new service or feature is introduced no longer exist. Increasingly, this is a requirement for real-world services as well. If a consumer can get a list of all the colors a sweater comes in with the click of a mouse,
a store employee must have the same knowledge and response time. Online consumer services increasingly need no instructions and go a step further to “delight” consumers, with user experience front and center in the design
process. New devices are now easy enough for children to master, and many products ship with no instruction manuals, especially as the new generation of users (including parents to young children) have already experienced previous IT devices.
To provide the ease of online banking for physical checks, JP Morgan Chase and dozens of other banks now allow customers to photograph checks and deposit them through smartphone apps. ZocDoc enables patients to easily locate, rate, and book appointments with doctors in their area instead of the traditional system of word-of-mouth recommendations and appointments through individual care providers.
Customers are accustomed to instant fulfillment, and companies are redesigning services, especially those delivered online, to reflect that. Many companies now provide customers with online, searchable access to their transaction history (e.g., on iTunes or Amazon), giving consumers quick access to repeat orders or similar merchandise. Content services such as Netflix now make entire seasons of online-only shows available at once, while broadcast networks increasingly offer streaming content.
Implications for leaders
Evolving consumer expectations could force many businesses to innovate on their business models to provide more products and services for free, or at lower costs. This could require identifying alternate sources of revenue and new
business models such as freemium (see Trend 4: “Realizing anything as a service” and Trend 8: “The e-volution of commerce”). Online service providers will also have to be aware of the low switching costs in Internet services. A leader like Google can retain its dominance not by locking customers in, but by providing superior technology and experience day after day.
At the same time, businesses will have to think about offering more personalization in their products and services—customization at a mass level. This could require changes to back-end systems, which are often designed for mass production. Businesses will have to think of new ways to collect the information that enables personalization, often involving solving the problem of persuading consumers to provide relevant data.
Consumers today expect all products to be easy and fun to use, requiring companies to make user experience the centerpiece of design. Apple’s products are testimony to the enormous appetite for products designed with the user as focus. This philosophy of product development will need companies to embed new processes, such as A/B testing (randomized experiments that compare
variants, as in comparing the effectiveness of landing pages) into their product life cycle. They could tap the opportunity provided by social media to see how consumers are really using their products, instead of relying on focus groups or surveys, or they could catalyze viral adoption and marketing.
Key questions
▪ Do you need to change your business model to more effectively monetize your products and services, especially as core pricing comes under pressure from consumer expectations?
▪ How do you distinguish your service or product so customers remain willing to pay for it instead of unfavorably comparing it with what is available online or from others a click away?
▪ How should you tailor your product offering to varied customer tastes and expectations?
▪ Can your products and services be made easier to use and learn?
▪ How can you leverage increased customer scrutiny and feedback to your advantage?
7. ฉัน + ฟรี + ง่ายหลังจากสองทศวรรษ อ่าน ดู หาข้อมูล และการโต้ตอบบนอินเทอร์เน็ต ความคาดหวังของเรามีการเปลี่ยนแปลง ว่าจัดการกับลูกค้าบริการพนักงาน วิจัยเว็บไซต์ผู้จัดจำหน่าย หรือช้อปปิ้งลูกค้าคาดหวังบริการฟรี ส่วนบุคคล และใช้งานง่าย โดยไม่มีคำแนะนำในการจัดเก็บอิฐ และปูน เมื่อพวกเขาไม่พบสิ่งเหล่านี้ พวกเขามักจะเสียงผิดหวังของพวกเขาใน Facebook หรือ Twitterนี้นำเสนอความท้าทายที่สำคัญสำหรับธุรกิจ (7 แสดง) แม้กระทั่งในออนไลน์ - เฉพาะธุรกิจ แถบยังเพิ่มขึ้น ลูกค้าต้องการโต้ตอบได้ง่ายขึ้นธุรกรรมที่ราบรื่น และคุณลักษณะเพิ่มเติมซึ่งทั้งหมดฟรี คู่แข่งจะต้องออกไป และผู้นำใด ๆ ที่ falters เร็ว ๆ นี้ตกอยู่ในอันตราย บนอินเทอร์เน็ต — และเพิ่มขึ้นเรื่อย ๆ ในโลกออฟไลน์ — ลูกค้ามีอำนาจมากขึ้นกว่าเดิมแสดง 7ฉัน + ฟรี + ง่าย ข้อมูลขนาดใหญ่ เซนเซอร์และหัวขับ Cloud คอมพิวเตอร์ เทคโนโลยีมือถือ อินเทอร์เฟซผู้ใช้ธรรมชาติ คำนวณ จัดเก็บ และเครือข่าย ความคาดหวังผู้บริโภคกำหนดขึ้นสำหรับการโต้ตอบแบบทันทีเข้าถึงข้อมูล โปร่งใส ปรับแต่ง ราคาต่ำ และความง่ายในการใช้ บริการ ตอนนี้ กำลังใช้แบบออฟไลน์เช่นการ โปรแกรมประยุกต์ของแนวโน้ม▪ Responding เพื่อเพิ่มแรงกดดันจากผู้บริโภคในการให้บริการฟรีและสร้างความต้องการสำหรับบริษัทเพื่อหารายได้อื่นสระ▪ Personalizing customer service, often through customization at scale▪ Growing expectation of extreme ease of use and instantaneous results Key sectors impacted▪ Media and communications▪ Retail▪ Education▪ Manufacturing▪ Finance▪ Health care SOURCE: McKinsey Global Institute analysisApplications of the trend▪ Free. As the Internet has become the primary medium of information and media consumption over the past decade, customers have grown accustomed to consuming for free. Many of the Internet’s most popular services replaced paid offline services and ushered in an era of “free”—obtaining information through Google and Wikipedia instead of encyclopedias and consulting Craigslist instead of classified ads. Customers read free online editions instead of physical newspapers, and access music and movies through peer-to-peer sharing websites. The extension of “free” into new areas continues to this day.Once the concept of free takes hold, it becomes risky to then expect consumers to pay. Video game maker Electronic Arts lost 400,000 of the1.7 million online players of its Star Wars multiplayer game in 2012 because customers expected the game to be free. It found out that 40 percent of players were willing to come back if they didn’t have to pay. Now, the game is available on a “freemium” basis: free for the first 50 levels and paid for the rest.Across customer-facing industries, companies are experiencing resistance to paying, acutely so for things that have been free. When US banks proposed monthly maintenance fees for debit cards, instant outrage spread on social media sites and the plans were quickly withdrawn. However, as business models have evolved, some granular consumer-pay models have worked. Music-sharing pioneer Napster, for example, sparked intense debate on intellectual property rights and was strongly resisted by incumbents. But it ultimately laid the path for iTunes and “freemium” content provision such as the New York Times paywall, which allows ten articles per month for freebut requires a paid subscription to read more (see Trend 8: “The e-volution of commerce”).Now, when consumers venture into bricks-and-mortar stores, they continue to use the Internet to compare prices, read reviews, and even order online. Best Buy is countering “showrooming”—the practice of shoppers testing products in stores but purchasing online—by launching a program aimed at combining in-store service with Internet-like pricing. Knowledgeable salesrepresentatives greet shoppers and answer questions on product features. If a question requires more information, the representatives have tablets to access additional data—including pricing from 19 online retailers.▪ฉัน: ส่วนบุคคล ผู้บริโภคคาดว่าจะได้รับการปฏิบัติเป็นบุคคลที่มีคุณค่ากับบริษัทจะให้ธุรกิจของพวกเขา ขณะนี้ท้าทายในสภาพแวดล้อมที่ซับซ้อน หลายสถานี บริษัทที่สามารถให้บริการแบบมีรางวัลกับสมาชิกมากขึ้นและการขายตั้งค่าส่วนบุคคลของบริการจะเห็นได้ง่ายที่สุดในประสบการณ์ออนไลน์เช่นผลการค้นหาเว็บแบบกำหนดเองตามลักษณะของผู้ใช้และเครือข่ายสังคม ประวัติใช้ถูกใช้ โดย Spotify ดนตรีและแอปเปิ้ลสำหรับแนะนำ app ในทำนองเดียวกัน Facebook และอเมซอนปัจจุบันจอดรับเองหน้า แนะนำ และแม้แต่ข้อเสนอบริษัทที่ มีผลิตภัณฑ์ทางกายภาพตลอดจนบริการแบบออฟไลน์จะยังจดจำจำเป็นส่วนบุคคล ไนกี้ทำให้ลูกค้าสามารถออกแบบรองเท้าของตัวเองจากแม่แบบ และยังมี "โลดแล่น" ร้านค้าปลีกเทสโก้และ Safeway ใช้ข้อมูลจากโปรแกรมสมาชิกเพื่อกำหนดข้อเสนอทางการตลาด หลักการปรับปรุงราคาสำหรับลูกค้าเฉพาะ การเพิ่มการขายตลอดจนความผูกพันของลูกค้า ตัวประมวลผลบัตรเครดิตพบว่า ลงทุนในศูนย์ caliber สูงแทนที่สามารถนำเสนอจุดเดียว บริการชำระเงินงาม ตัวแทนแต่ละคือการฝึกอบรมในเรื่องทั่ว ๆ ไป และได้รับการสนับสนุนดูแลของคำขอของลูกค้า โดยผ่านทางโทรศัพท์ผู้เชี่ยวชาญ แทนโดยมีคิมบนบริการแทนเวลาที่บันทึกการโทร ผลคือ การปรับปรุงร้อยละ 10 ในระยะขอบการบริการลูกค้าและการจัดอันดับการบริการลูกค้าสูง ▪ Ease: Easy to use. The ease of using online services such as e-commerce websites, social networks, and lately even enterprise applications, has raised expectations among users. Thick instruction manuals to train employeesand customers when a new service or feature is introduced no longer exist. Increasingly, this is a requirement for real-world services as well. If a consumer can get a list of all the colors a sweater comes in with the click of a mouse,a store employee must have the same knowledge and response time. Online consumer services increasingly need no instructions and go a step further to “delight” consumers, with user experience front and center in the designprocess. New devices are now easy enough for children to master, and many products ship with no instruction manuals, especially as the new generation of users (including parents to young children) have already experienced previous IT devices.To provide the ease of online banking for physical checks, JP Morgan Chase and dozens of other banks now allow customers to photograph checks and deposit them through smartphone apps. ZocDoc enables patients to easily locate, rate, and book appointments with doctors in their area instead of the traditional system of word-of-mouth recommendations and appointments through individual care providers.Customers are accustomed to instant fulfillment, and companies are redesigning services, especially those delivered online, to reflect that. Many companies now provide customers with online, searchable access to their transaction history (e.g., on iTunes or Amazon), giving consumers quick access to repeat orders or similar merchandise. Content services such as Netflix now make entire seasons of online-only shows available at once, while broadcast networks increasingly offer streaming content.
Implications for leaders
Evolving consumer expectations could force many businesses to innovate on their business models to provide more products and services for free, or at lower costs. This could require identifying alternate sources of revenue and new
business models such as freemium (see Trend 4: “Realizing anything as a service” and Trend 8: “The e-volution of commerce”). Online service providers will also have to be aware of the low switching costs in Internet services. A leader like Google can retain its dominance not by locking customers in, but by providing superior technology and experience day after day.
At the same time, businesses will have to think about offering more personalization in their products and services—customization at a mass level. This could require changes to back-end systems, which are often designed for mass production. Businesses will have to think of new ways to collect the information that enables personalization, often involving solving the problem of persuading consumers to provide relevant data.
Consumers today expect all products to be easy and fun to use, requiring companies to make user experience the centerpiece of design. Apple’s products are testimony to the enormous appetite for products designed with the user as focus. This philosophy of product development will need companies to embed new processes, such as A/B testing (randomized experiments that compare
variants, as in comparing the effectiveness of landing pages) into their product life cycle. They could tap the opportunity provided by social media to see how consumers are really using their products, instead of relying on focus groups or surveys, or they could catalyze viral adoption and marketing.
Key questions
▪ Do you need to change your business model to more effectively monetize your products and services, especially as core pricing comes under pressure from consumer expectations?
▪ How do you distinguish your service or product so customers remain willing to pay for it instead of unfavorably comparing it with what is available online or from others a click away?
▪ How should you tailor your product offering to varied customer tastes and expectations?
▪ Can your products and services be made easier to use and learn?
▪ How can you leverage increased customer scrutiny and feedback to your advantage?
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