Episode #40: A Brief History of the Modern Customer

As we’ve moved from the static web to the conversation web, customer expectations have changed. Dramatically. The best way to understand modern customers is to understand the digital and analog evolution that created them. In today’s episode we’ll look at how the modern customer became a modern customer. And what you can do to keep them happy, and coming back for more.

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PODCAST TRANSCRIPT

Oh yeah, I just love groovin’ out to that music every single time. And welcome to the CXM Experience. I am, as usual Grad Conn, CXO at Sprinklr. And here today to talk to you about CXM and to talk to you about experience. And we’re going to have kind of a fun episode today. I’m just going to spend a little bit of time talking about the modern customer, and all the changes that have occurred. So this will be a little bit of a history lesson, but in a fun way, and it’ll land on something that will help you sell the modern customer priority within your own organization.

Now, I’m just gonna spend a moment talking about CXM. We’ve had some really, really interesting shows lately, but I haven’t had a chance to soapbox on CXM in a while. So I’m going to just jump on that for a second and shout in the county square here. So CXM, customer experience management, it has been a not particularly well defined category over the years. It’s getting clearer, but I think there are a lot of companies maybe — think is even not even the right word. I would say that I have observed that a lot of companies are claiming to be CXM, when they’re really CFM, or customer feedback management, which is a way that Forrester would classify them. And what these companies do is they do surveys, and they do customer feedback scenarios. But that’s it. That gives you a readout of how customers are feeling. But you can’t really do anything about it, you know, directly.

CXM in the opinion of Sprinklr and a growing number of people, has an emphasis on the M, which is management. So I want to understand the customer experience by listening to what the customer is saying. But I also need to act on it. I need to love my customers. And if someone’s in pain, or someone’s happy, or whatever the emotional state is, I need to act on it and get back to it. I need to be able to take care of the customer in whatever way is appropriate at the moment that that’s occurring. That’s a big challenge for most organizations. And there are some incredible efforts going on around the world and a lot of different companies to make that happen. But it’s a big, exciting challenge. And that’s the future of CXM. I’m really excited to be part of that.

So today I want to talk a little bit about the modern customer. I kind of assume the modern customer a bit. And I’m going to actually walk through a little bit of a story on how things have evolved. You hear me talk about 20th century versus 21st century, you hear me talk about broadcast versus conversation, you’ve probably heard me say static web and conversation web. And so there’s a bunch of these terms, and I just want to frame it all within a single flow, and put it down and I think you’ll enjoy. This should be kind of fun.

So we’re going to start in the beginning. And in the beginning, there was the birth of broadcast. This is really where everything changed. And this is really not that long ago, you know, it’s a few generations. But in terms of human history, most of our human history has been about talking to each other. And so humans have evolved, and our systems have evolved, and our communication has evolved in a face to face way. Which is why what was so weird about the late 19th and 20th century is that we actually moved into a very different way of communicating with each other. And some may look back at it as being somewhat short lived. Because as we move into the new media of the 21st century, we’re actually returning to the way we used to communicate, which is more face to face, more interactive, more what people call social.

It’s a little bit like… it doesn’t happen very often that’s something entirely disappears. But silent movies did. There’s an entirely unique form of communication… some of the histrionics that you see in a silent movie and some of that over the top acting was actually a very subtle code way of the actors to communicate to the audience because they didn’t have sound. I guess eight tracks went away. Not many, eight track players out there. Cassettes are still hanging in there, but they’re probably close to on their way out. But, you know, not many things disappear. But there’s a possibility that one day, several hundred years from now, we’ll look back on the age of broadcast as a blip in time and something that led to where we are today.

So let’s talk about the birth of broadcast. So the New York Sun which is the first penny press launched in 1833. Illustrated magazines first came out in the 1840s in London. First films were late 1890s. Radio, there was a Christmas concert broadcast in 1906. And then TV, which had its first debut in Schenectady, New York, in 1928. So, TVs really… like there are many people alive today who were alive before TV was born, which is pretty amazing when you think about it.

So the broadcast model when all this stuff that came out primarily in the 20th century, is really about a sender, medium and receivers. And there’s a message. And you can always tell when someone’s in a broadcast mindset because they talk about audience. They talk about people listening to what they’re saying, What’s very reassuring about broadcast is you have complete control of the message. And you can define it any way that you want to define it. So it’s very reassuring that way. Gives you a high level of mastery. In the early days broadcast was ridiculously effective, because it had not appeared before. So it was… things like a lot of the early propaganda campaigns in the 1930s which looks kind of ridiculous through today’s lens, back then were exceedingly effective, because they were so new and people weren’t used to it.

And then there was the birth of the internet, which actually was quite a long time ago, like 51 years ago. So ARPANET was invented in 1969, by the Advanced Research Projects Agency of the US Department of Defense. By 1983, they’d invented the TCP/IP protocols. And that was really where it started to become a true packet driven network. And things like Gopher net began to evolve with browsers like Archie and Jughead and Veronica. And other things like email began to evolve on top of that. But that’s still the early 80s. And it really wasn’t until 1989, when Tim Berners-Lee invented the World Wide Web, and the first browser was released in 91, that things really started to get interesting. NCSA Mosaic browser, which was my first browser was released to the public in 1993. And then Netscape was founded in 94. And then everything changed overnight.

If you want to really great walk back in time, watch the series Halt and Catch Fire. It’s on Netflix now. It was an AMC series. But it’s probably the best thing I’ve ever seen on the evolution of the PC and early dotcom years. Exceptional cast and exceptional show.

And so you’ve got this time period where suddenly there’s this whole new technology out there. But humans typically will tend to define new technologies by the last one. So if you think about say, the car. The first cars were not called cars, they weren’t even called automobiles. They were called horseless carriages. First computers were called electronic typewriters. We’ll always tend to take the thing we know and then add some sort of qualifier or modifier to it. And you’ll see this all the time. There’s another favorite thing people like to do is… so and so on crack, or so and so on steroids. Like that kind of idea of just constantly trying to redefine it. Or movies, you know, it’s um, Terminator meets Love Story, or whatever. So that’s the kind of thing that people have to do to contextualize stuff.

And so a lot of the early websites, and a lot of the early work in the web, very much reflected the broadcast model. In fact, this is easy to forget, the first ads online, the first web ads — and there were a lot of them — weren’t clickable. They were just like a magazine ad. You know, people thought there’s magazines on a computer, or it’s newspapers on a computer. It’s the information superhighway so they’re like billboards on the superhighway. So we took that mindset of a flat static image you couldn’t do anything with and just put that in there. Then people said, well, geez, I guess you could click on these, you could do something with it. And then off we go with internet advertising.

But a lot of great companies were founded in that period of innovation. A lot of people don’t realize Amazon’s pretty old, was founded in July 1994. You know, right around the time that everything was just exploding. eBay is in 95, Netflix is in 97, Google came out in 98. And Salesforce came out 99. Some of the great companies all sort of came out of that. But they were living in this era of the static web.

Nonetheless, some amazing things happen in the static web. And now we start our story of what’s happened to the modern customer. Because there are a lot of companies are like what has happened? Why are people so different? And if you think about it, all these static sites have created these really different expectations. like Uber. I want to know where my car is at any point in time. I was actually talking with my fiancé the other night, we were talking about a delivery. And she was really frustrated. The delivery hadn’t arrived yet. We didn’t know where it was. And she said I wish I could see where the truck was. Because I’m used to seeing that with Uber, I’m now used to seeing that with Domino’s. Why can’t I see that with FedEx? Why not FedEx, right? Google — all the information in the world available instantly for free. Like that’s created a very high bar. eBay, the world’s largest garage sale. I can find any childhood toy I want, anytime I want to. Netflix, unlimited entertainment, I’ll never be able to stop watching.

And so these new expectations are not category based. When people have a new expectation, it’s something that transfers across multiple categories. It’s something that people start to begin to think is the way everything should be, not just things in the ride sharing business. It’s all things should have service transparency. But to a large extent, a lot of these sites and a lot of the activity around getting people to them is still based on this sort of broadcast model. There’s still people being driven through a message to click on the medium. Now it’s the computer, but still very much a static model.

And then things started to change from a technical innovation standpoint. There’s two big things that happened right at the turn of the 21st century, and it did not take long for people to capitalize on them. The first thing that happened was the mobile phone form factor started to get very exciting. The really sophisticated, best version of the Razr came out in 2000. Blackberry was really humming by 2000 and they had a very sophisticated smartphone in the early 2000s. And then the iPhone was invented in 2007. So suddenly, we had in our pockets, all the functionality that we would normally have had on a desktop. And at the same time at home, we were moving to a model where we were going to broadband. And you know, broadband often is positioned as faster. Faster is good. But it’s not the faster that’s really the innovation. The innovation is always on. And it’s easy to forget what was like to dial up and dial down. There’s a great study showing how people would usually go on their computers during commercial breaks when they had modems and they had broadband, because they could just zip on. It was always on. Whereas when people had dial up, they would take a break and spend a half an hour. Dial up, do their work, then dial down, come back in. And so very interesting behavior change that people got programmed being always on.

This concept of always on and always connected started to really evolve. And so very soon, companies started to capitalize on that. And one of the very first ones, and you may have forgotten this company… I was an early user of it. March 22 2002, Friendster launched. Oh, they were so close. Friendster launched. Man, that must hurt. It must still hurt. But they couldn’t keep the service up. That was a huge issue with it. In 2002 also LinkedIn launched. People forget how old LinkedIn is. Myspace came out in 2003. And in 2004, Facebook was created. And took a while to completely roll out. but Facebook, obviously, it was a game changer. X, formerly Twitter is in 2006, Instagram, 2010, and so on… Snapchat, 2011, so on and so on.

So suddenly, you have all these new modern, what we’ll call conversation channels. And what was different about these conversation channels versus the earlier broadcast channels is that they use a stimulus response model. So that the sender is sending out a stimulus and the receiver is responding. But the medium is really transmitting a conversation. And advertising on these channels that was simply broadcast based…so just sending out a message, tended to not be very effective. What’s more effective is to be able to begin a conversation, have a conversation. That’s where stuff starts to get very interesting and it starts to become — what I love about it — is it’s become a lot more human.

An analogy I’ve used and I’ve talked about before, is the comedian. Comedians are masters at this. All comedians have the same communication objective. If you saw a comedian with a creative brief, the creative brief would read: “to convince the audience that I am funny.” That’s their job. If a comedian was a marketer — classic marketing broadcasts mindset — would go to the stage, stand at the front of the stage and say I am funny, I am funny, I am funny, I am funny, I am funny, I am funny. People would leave the performance and someone would say, hey, what was the performance like? And the audience member would say, Well, you know, he said he was funny. Like, they get the message. But would they believe the message? And this is the difference. A lot of companies… one of the reasons that trust is declining for companies is they’re not using true stimulus response creative or communication. So while they’re pounding their message out there, people don’t believe it.

What does the comedian actually do? A professional comedian goes on stage and tells a joke. You hear the joke, and hopefully you laugh. While you’re laughing? You think to yourself, Wow, she’s really funny. Like you come to that conclusion on your own. You make the conclusion that she’s really funny. No one had to tell you that. And afterwards, someone will say hey, how was it? She was hilarious. Couldn’t stop laughing. What were the jokes? What did she say? What did you talk about? You can never remember. You can never remember. All you remember is the conclusion that you drew. I don’t know what she talked about. There was like a mother in law thing. There was an octopus. I can’t really put it together. But I do know what I walked away with, which is, she was hilarious. I laughed a lot, and you should go see it.

So that’s what more companies need to do and think. It’s a little bit tricky, because it does involve risk. And you’ll see the companies that really do grab a hold of this getting outsized rewards, because many of their peers won’t be able to follow them.

So what happened though, is all of these new conversation web properties created a whole bunch of new other new expectations, which is public connection, personal connections. The idea that I can read a review on anything I want to buy. II can have professional connections with people from all around the world. I can text and chat with people and socially message them and have discussions. That’s a very different world we suddenly find ourselves in. And a very connected world.

So you’ve got a customer who’s had a bunch of static web expectations of service and freeness and amazingness. And a bunch of conversation web expectations around connection and being socially part of a fabric of society. And that is what has led to the modern customer. The modern customer has a set of modern expectations. The static web has helped create expectations like: my online experience should equal my in store experience. I expect attention from brands when I want it. Find me and resolve my issues. And the conversation web has created experiences like: I always read reviews before I buy a product. I trust people more than companies, and I want a personal experience that knows who I am.

And if you think about some of the data behind this, 63% of shopping journeys now start online, and 75% of customers actually expect a reply within five minutes to anything that they tweet out. The static web has driven this set of expectations of instant service. And from a conversation web standpoint, 90% of people now read a review before they buy. And 95% of people tell another person about a bad experience. And most people — 71% — expect personalized ads. And so this is why the customer feels different. And it’s a very tricky world.

The other thing that’s also happened is that the channels in which people interact, because of the conversation web, have changed as well. So you see older generations being comfortable on the phone. But look at Mary Meeker’s internet trends report where there’s been a mass movement to the social web, to conversation web to things like messaging apps and mobile applications. So you see a minority preference now for the phone. Many customer service facilities are still phone based. And that doesn’t make any sense to me, at all.

So that’s how we talk about the modern customer. And the one thing that’s interesting is to really understand this person, you’ve got to pull in all the data from the 24 different social platforms, all the blogs, and forums and review sites that are out there, all the apps that might be running in the company, all 11 messaging platforms, web chat… there’s billions of conversations that need to be pulled in and understood. But the great thing is we now have identity and interests for those customers. And half the planet’s connected. In fact, it’s more than half now, there are 4.6 billion people online of which 4.1 billion are on social. So we’ve got the next billion to go. There’s a very cool project that Google’s running on the next billion. But very exciting times because we’ve got billions of people and multiple billions of conversations, all going at the same time.

So how do you reach and persuade this connected customer? And that’s what we’re going to talk about next time. But for today, I think that’s a good review of the modern customer. A little brief history of how we got here. And when you think about why things may be different than they felt a short while ago, it’s because you’ve got people with very different expectations, framed by a bunch of new technologies that have all evolved in the 21st century or very late 20th century.

So hope you enjoyed that quick tour. For the CXM Experience, I’m Grad Conn, and I’ll see you next time.