NEW YORK and LAS VEGAS, Jan. 28, 2008 (PRIME NEWSWIRE) -- Engaging in digital conversations to better understand customers and translating those conversations into actionable knowledge will transform business and help drive competitive advantage, reveals a report released today by PricewaterhouseCoopers LLP at the NATPE 2008 Convention & Exhibition at the Mandalay Bay Resort in Las Vegas. The report, "How consumer conversation will transform business," represents multiple new analyses of global consumer conversation and its effects. These include the results of PricewaterhouseCoopers' Management Barometer quarterly survey, proprietary review of global patents and US private equity investment, and original research on approximately 75 to 100 million blogs and 10 to 20 million discussion boards and forums. Additional insights were gained through interviews with industry analysts, service providers, and executives from various sectors.
"Successful companies need to quickly respond to market changes and understand consumer needs so they can innovate in advance of demand," said Deborah Bothun, PricewaterhouseCoopers principal and Advisory entertainment, media and communications leader. The most successful businesses will be those that are able to merge traditional and digital consumer data and integrate them into their everyday operations. Those that do will be able to stay ahead of the curve and be able to identify when the competitive dynamics of a market are changing."
Digital consumer conversations define the current phenomenon occurring in billions of blogs, chats, emails, phone calls, text messaging, and social networks where consumers are talking about products, services and companies. These digital conversations contain millions of real-time, unfiltered attitudes, behaviors, and intentions.
Traditional consumer intelligence is greatly enhanced by digital conversations due to the real-time speed, granularity of individual opinions, market indicators, unfiltered sentiment and cross-channel integration. Tapping into these exchanges can enable a company to solve performance problems before they become financial problems and help them innovate well in advance of demand.
"Across most industries, from retail to entertainment to financial services, profound changes will occur as businesses organize around the deeper understanding of consumer behavior," explained Ms. Bothun. "This is already occurring in the advertising market, where consumer conversations are starting to change the foundation of pricing and performance evaluation. Knowledge of the consumer gained from digital conversations not only enables advertisers to better target their audience, but it is also driving improved digital media measurement systems."
Across nearly all industries, the paper finds that similarly profound changes will occur as businesses organize around the deeper understanding of consumer behavior achieved when digital conversation is combined with traditional data sources. Companies that prepare themselves for these changes will have the potential to establish new and expanded markets, generate faster sales growth, reduce risk, achieve greater efficiency, and end up with higher customer retention.
The report notes that the explosion of consumer conversation has changed how people communicate about products and services. Consumers now have the ability and freedom to rapidly self-organize across geographical borders in order to express constantly evolving needs. Consumers have the power to demand what they want and they now expect rapid responses to their immediate desires. This can be a source of risk for companies, as missteps can spread quickly through critics, fans and self-appointed journalists, many of whom are not customers.
Currently, the majority of executives who were surveyed in the recent PwC Management Barometer recognize the potential of consumer conversations but still have difficulty interpreting and reacting to them. Of the 118 senior executives at US multinationals who were surveyed, 65 percent said they would increase their overall investment in knowing the customer in the next two years. In addition, 81% report the systematic collection and analysis of observations from employees who interact with or observe customers. About half of these executives interviewed said their companies regularly and systematically use blogs, wikis, social networking, and chat rooms to understand key influencers of market or consumer expectations.
The following are several ways companies can integrate consumer voices into standard operations:
* Ask the big questions
The questions will be different for each company, but the theme is clear: where would a view of consumer behavior and sentiment that is closer, faster, cross-channel, and forward-looking impact your business most positively?
* Pursue the best opportunities
In order to operationalize knowledge gained from consumer voices, companies should find consumer conversations that will solve specific problems and deliver value. Areas like new product launches, competitive threats and events that negatively impact reputation are a start. The result can be better margins, a stronger brand and reduced crisis management costs.
* Create a consumer intelligence unit and break down silos
The insight from consumer conversation may be applied to many functions, including driving corporate strategy, so that a company can react to early warnings of adverse issues gained through monitoring digital conversations quickly enough to lessen their impacts.
* Improve operations according to real-time insight
The most highly evolved companies will merge consumer voices with other channels of consumer information in order to produce a granular, forward-looking, real-time and unfiltered view of their customers. The benefits of this process will be speed, agility, focus and prescience.
PricewaterhouseCoopers conducted this research as part of continuing investigations into how digital media is radically transforming relationships between companies and consumers. The following white papers, which were previously published by PricewaterhouseCoopers, discuss other aspects of this issue:
Breaking Down Walls: How an Open Business Model Is Now the Convergence Imperative (2006)
Insights into the Food, Beverage, and Consumer Products Industry: GMA Overview of Industry Financial Performance and Trends (Published in conjunction with Grocery Manufacturers Association, Inc., 2006 & 2007)
How to Capitalize on Lifestyle Advertising in a Customer-Centric World (2007)
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