How can NZ business survive?
Disruptive technology means companies need to get closer to their customers.
New Zealand businesses have been issued a stark warning: Get better at listening to customers or risk irrelevance.
In comments following the release of Suncorp New Zealand’s 2018 Business Success Index, executive general manager for customer marketplace Campbell Mitchell says it is vital companies have a better understanding of customer ‘demand’ if they want to survive potential disruption.
“The ever increasing pace of change can be overwhelming, but technological change isn’t happening in isolation, it’s being propelled by demand – and vice versa,” he says.
“Taking the time to listen to your customers can be a great way to unpick the impact of technology and help businesses invest in things that will ultimately benefit their customers.”
Mitchell says the Index shows Kiwi companies virtually never link customer demand to disruption, with a mere one per cent mentioning customers when asked about disruption, while just 12 percent, unprompted, mentioned technology. But he says that what customers want and need is at the heart of what’s driving change.
“By providing greater choice and experience, technology is putting customers in control of the business relationship,” he says. “Uber didn’t become successful because people are happy to jump into an unmarked car with an unknown person as driver.
“They did because they answered a need, gave people confidence they would arrive on time, provided seamless payment options and removed high fees. This kind of disruption is only going to occur more rapidly in the future; a lot of companies are going to be surprised because they won’t see it coming.”
He says that if Kiwi firms are overwhelmed by technology and an ever increasing pace of change, listening to customers – and not just selling – is vital.
He believes one of the first steps for every business should be to find out what the customer ‘pain point’ is.
“Technology has made it possible for people to change their energy company in a minute and a half – this is the power it gives to a customer; it easily exposes the offers of competitors so it is really important to understand what your customers want.” Mitchell says he thinks the reason so few companies have technology top of mind as a disruptive force is because many, particularly smaller operations, get caught up in the “moment of day-today challenges.
“It is hard for them. They are trying to build their business and do a lot of things at once,” he says. “They are faced with so much that steals their time – red tape, compliance issues or staff matters – so talking with customers and looking at ways you can use new technology to meet their needs better probably doesn’t get as much air time as it should.”
But he says getting closer to customers is a simple thing companies can do without spending lots of money.
Suncorp operates programmes specifically designed for people at all levels of a business to have real contact with customers. If firms don’t have access to these he recommends they set up a system to check how much time is spent each week listening and questioning customers.
“Suncorp’s research shows that a lot of businesses see their staff as the key to success, finding and keeping good people. Absolutely this is crucial, but customers are the most important component in a business; I’ve never seen one yet where the money comes from anywhere other than a customer,” says Mitchell.
“Yes, businesses need good people, but having a deep insight into customer behaviour and needs is also necessary.” The 2018 index, based on research conducted by UMR Research, represents a broader conversation Suncorp wants to have about what success looks like for business, how they feel about risk and how they see their business evolving in the future.
Although overall the index showed most businesses remain positive about their own situation and the general business environment in New Zealand, it also revealed they may be overly complacent about technological disruption.
Other key results in this regard included:
• Only 25 per cent of respondents predict disruption will hit their business in the next two to five years.
• Around a third of businesses (32 per cent) don’t think digital platforms will disrupt their business in the next five years while 34 per cent don’t believe technology or machinery will be disruptive factors.
• Just over 40 per cent don’t think customer behaviour will disrupt their business in the next five years.
To download the report and discover insights and learnings from Kiwi businesses finding ways to be more confident risk-takers and achieve success on their own terms, in a climate of technological disruption, visit suncorp.co.nz/business-success-index.