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Understanding Customer 4.0 – the Customer led revolution....

A fourth generation of commerce, led by our younger and highly influential generations, where the customer is truly in control....

A massive impact of the digital economy is that we are constantly connected;  anytime, anywhere, anyhow.  We have a continual ability to interact with friends, family, peers, teams, suppliers or customers;  whenever we choose to engage, and sometimes when we don’t.

Our world today is dominated by pretty radical change. It’s a fascinating and sometimes slightly dangerous time; on one hand Trump, Brexit, Le Pen / Macron, Popularism, Fake News creating more ‘unbelievable’ headlines every day. On the other hand the emergence of new, often ‘disruptive’ businesses and technologies that are transforming the way we live and work.

Close observation of the behaviour of Millennials and Generation Z gives us insight into an age of fast moving, mobile, digitally informed, emotionally engaged 24/7 online experiences. A world where customer-to-customer communications and influence, far outstrip business-to-customer communications and influence. A world where advocates (both positive and negative) of your business will define the public perception of your brand. A world where a ‘new entrant’ competitor can transform a market almost overnight, displacing long term business models.

This is the foundation of Customer 4.0, a fourth generation of commerce, led by our younger and highly influential generations, where the customer is truly in control. To understand 4.0 we need to quickly skip through early generations of commerce -

  • Customer 1.0 (Pre 1950’s) – Customers benefited from the production or delivery capability of the business. They had little choice, and bought products that were available and the best that could be achieved at that time.
  • Customer 2.0 (1950 – 2000) – The principles of Customer 1.0 were still alive, supported by the development of consumerism and marketing. The concepts of brand first emerge, and customer demand for products and services were heavily driven by marketing.
  • Customer 3.0 (2000 – 2015) – The principles of Customer 1.0 and 2.0 continue, but expanded by the explosion of globalisation and the internet. Customer retention and loyalty are key features, and the focus of competitive action is on delivering the best possible customer experience.
  • Customer 4.0 (2015 +) – The principles of Customer 1.0, 2.0 and 3.0 continue to evolve, but are now complicated by vast choices, online platforms and the emergence of a new type of customer. One whose personal goals outweigh persuasive marketing. One who seeks to influence and be influenced by other customers. One who employs very new ways of working and thinking, who has high expectation that a provider will change the way they deliver to fit with their needs. Where the customer’s journey is their unique journey, where businesses play a part in enabling them to achieve their goals.

While led by Milennials, Customer 4.0 will resonate for many of us in our role as customers;  but much less so in our role within a business providing services to customers.  This in itself is a Customer 4.0 trait. We readily recognise the need to be served differently as customers. But we find it harder to consider changing our behaviour to serve our customers differently.

Diverse sectors such as travel and tourism, music and entertainment, insurance and supermarkets are highly engaged in developing competitive and innovative approaches to the challenges of 4.0. Other sectors such as banking, professional services, automotive and IT Services are dipping their toes in 4.0 thinking. Many sectors such as healthcare, education, utilities, (most aspects of) manufacturing and construction are in the main yet to tackle Customer 4.0.

A mature 4.0 sector can be described as:

  • A market with wide choice of providers
  • Where there are already clear examples of market disruption
  • Where long term traditional businesses have radically changed or are being replaced by new brands
  • Where the range and volume of C2C (Customer to Customer) communication dominates

Leading 4.0 businesses are successful because they understand the underlying rules of customer 4.0 that pervade every aspect of the business in strategy, marketing, sales, customer services, logistics, operations, supply chain and most importantly in team selection and deployment.

The Customer 4.0 principles are:

  • Be purposeful – What is your purpose in the mind of your customers?  Why do you exist, and what is it that you propose to do for them (customers)? How do you want to make your customers feel?
  • Be authentic – Can you deliver on your purpose time after time?  Are your staff aligned to the purpose of the business and easily able to translate that into actions?  Is the customer’s experience true to your purpose?
  • Be agile & responsive – You cannot cater for every type of customer, so do your systems allow flexibility to do the ‘right thing’ for customers? Do you continually learn, review and improve the way you deliver your customer’s experience?
  • Be valued – Continually value and evaluate the power of your value proposition. What do customers genuinely believe about your capability? Could you rely on customers to ‘sell’ your business for you based on the value they receive?

Like all business principles these ideas may seem like a huge dollop of common sense, laced with a dose of ‘so what’. But just reflect on the success of the organisations that relentlessly pursue the Customer 4.0 agenda. And perhaps consider that we are in the very early stages of the first age of commerce -where the customer’s truly call the shots.




Roger Williams, Freeman