CEOs pointed to the emergence of two new and more demanding classes of customers in a recent survey focusing on the challenges that companies must face in a changing global economy.
The IBM Global CEO Study draws attention to the ‘information omnivore’, and the ‘socially-minded’ customer.
Of all the trends identified in the study, surveyed CEOs plan their most substantial increases in investment in response to these customer sets.
The Rise of the Information Omnivore
The "information omnivore" craves all types of information and often broadcasts his or her views and expectations worldwide via the Internet. These customers are swapping passive roles for much deeper involvement. "Consumers" are becoming "producers," often creating entertainment and advertising content for their peers, while demanding flexibility and responsiveness from companies with whom they choose to do business.
Although these customers are more demanding, the majority of CEOs do not see them as a threat, but as an opportunity for differentiation based on meeting the heightened expectations of this group, and capitalizing on new market opportunities that will emerge.
Overall CEOs are planning a 22% increase in investments in the next three years to serve these more sophisticated and demanding customers.
The investment is even more pronounced among financial out-performers. CEOs of firms with higher net profit margin growth indicate that investments targeted at information omnivores will increase 36% over the next three years. The majority of these new investments will be dedicated to new operational capabilities that improve collaboration and product innovation, and that are more oriented to transparency and tailored to specific market segments.
The study shows the impact of the information omnivore is driving investment in every major geography. In Europe, CEOs indicated they plan a 23% investment targeted at these customers over the next three years, a 20% jump from the previous three years. In North America, CEOs plan a 19% investment – jumping 27% over the same time period. Asia Pacific CEOs plan a 16% investment – a 20% jump — and Latin America CEOs indicated a 16% investment — jumping 18% over the last three years.
The Rise of the Socially-Minded Customer
CEOs agreed that customer expectations around corporate social responsibility (CSR) are increasing, and that CSR will play an important role in differentiating an enterprise in the future. Customers are coalescing around organizations’ CSR profile – including, but not limited to "green" initiatives–and are increasingly demanding socially-minded products, services, and even supply chains.
CEOs indicated that while customers have always cared about societal issues, those concerns are now more frequently turning into action as the more socially aware customer evaluates an enterprise’s CSR profile before making purchasing decisions.
To better understand and reach the new socially-minded customer, CEOs plan to increase their investments by 25% over the next three years, the largest percentage increase of any trend identified in the study.
The study shows that while increasing CEO concern about environmental issues has doubled over the past four years globally, this concern is not evenly distributed worldwide. Asia Pacific and European CEOs lead the world in focusing on environmental issues, followed by the Americas.
CEOs also revealed that CSR reputations are also an important tool to attract and retain employees. They are also recognizing that their organizations are being held mutually accountable, along with the public sector, for the socioeconomic well-being of the regions in which they operate.
Overall, the CEOs see opportunities in CSR and are using it for their competitive advantage. They indicated that CSR is critical to maintaining current market share.
The IBM Global CEO Study, based on face-to-face interviews with 1,130 CEOs from 40 countries across 32 industries, is designed to capture insights on how the challenges CEOs face today will impact the future of business. The study, titled "The Enterprise of the Future," was conducted by IBM Global Business Services in conjunction with the Economist Intelligence Unit.
Loading...