FUTURE FOCUS - Customer experience
It’s a question that businesses throughout history have been trying to answer. The difference today, compared to say, 20 years ago, is that...
Why transparency and trust are your currencies for competitive advantage
What do customers really want?
It’s a question that businesses throughout history have been trying to answer. The difference today, compared to say, 20 years ago, is that organisations have access to a wealth of information about their customers.
The amount of data generated is almost impossible to comprehend: estimates say more than 2.5 quintillion bytes of data a day.
By 2020, it’s thought that 1.7 megabytes of data will be created every second for every person on earth 1. In practical terms, it’s never been easier for organisations to develop a deep understanding of individual customers.
They have access to personal data that allows them to deliver hyper-personalised products and services on an unprecedented scale.
However, while digital technology may offer a wide range of direct routes to the customer, it can also be seen by customers as a barrier to communication or even a way of shielding malpractice, particularly where data usage is concerned.
Without careful management, whether the barrier is real or perceived, there is a danger that customer trust will be eroded.
Accruing, managing and using data comes with an ever more complex raft of regulatory, legal and ‒ as the UK government laid out in its National Data Strategy 2‒ ethical considerations.
Customers are willing to share their personal data, but the mistake many organisations make is failing to equate data ‒ that is, personal information ‒ with the ultimate owner, the customer.
As Capita highlighted in Beyond 2020: Helping you embrace transformation, the way organisations adapt to a data-driven world in which customers wield growing power will define their future success.
In this, the latest part of our series looking at the priorities for businesses in the digital age, we discuss the challenges organisations face in forging a mutually beneficial relationship with customers. It is one that must be built on respect and trust, and a focus on improving the customer experience.
By 2020, it’s thought that 1.7 megabytes of data will be created every second for every person on earth 1
1 www.digitalinformationworld.com, 2 www.gov.uk
Big promises fuel higher expectations
The more that customers are promised market-of-one, life-enriching experiences, the higher the customer experience bar is set.
If they don’t get what they want, they’ll go elsewhere.
According to a survey undertaken by Gladly’s in 2018, 92 percent of respondents say they would stop purchasing from a company after three or fewer poor customer service experiences.
Twenty-six percent of those would stop after just one bad experience 3.
Customers no longer compare the experiences they receive from organisations within specific industries or markets ‒ every experience is measured against the best they’ve ever had from any business.
Data is the differentiator
Steve Molesworth, an expert in customer experience, says; “Data is where it’s at. It’s where every business should begin. It gives us the insight and evidence that allows us to design experiences that are next level.
It’s the single thread that runs through all front-end experiences and interactions you have with customers.”
When used effectively ‒ and ethically ‒ data will underpin delivery of exceptional, personalised customer experiences. The kind that encourages customers to buy and stay loyal.
This is backed up by the data. Research by McKinsey Global Institute shows data-driven organisations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable 4.
To become data-driven, organisations have to make use of the data they collect, yet there is still a significant disconnect between the time, money and effort invested in amassing data and the degree to which companies make active use of it.
What’s more, many companies are also holding customer data across multiple, unintegrated systems, leading to a fractured view of the customer.
Around 80 percent of data collected by organisations is never factored into improving the product, service or experience 5
It remains untouched. Data should be integrated and then mined for insight, which can then be used to define strategies and shape enriched experiences.
3 Gladly: 2018 Customer Service Expectations Survey / 4 www.mckinsey.com / 5 www.cio.com
Trust through transparency
Customers are increasingly aware of the value of their personal data, but for now they’re willing to share it as long as companies offer something of equal value in return.
Customers are looking for a fair exchange – and defining exactly what constitutes fair exchange is the customer’s prerogative.
While scandals like Cambridge Analytica haven’t, as yet, dissuaded consumers from acceding to data requests from organisations, there is evidence to suggest that change is on the horizon.
We can expect a growing maturity in people’s perception of the importance and value of their data to businesses, and it may not be long before customers start to expect genuine financial recompense as part of the value exchange.
For the moment, trust is key, and there is a proven correlation between high-quality customer experience and trust. According to Molesworth, it’s time we broadened the debate about the factors that constitute an exemplary customer experience.
It is no longer about simplicity, ease and speed, it now has to include honesty and – most importantly – transparency.
In reality, this means clearly asking for consent to use data, ensuring customers understand how and when you are going to use their data, and giving them clear control over that use, with the ability to retract their consent at any given time.
Most of this is in line with current General Data Protection Regulation, but the key is making it easy for the customer to do.
The human touch
AI chatbots and messaging apps are redefining the way companies are interacting with customers and providing new ways to sustain a regular point of contact.
The market for conversational AI is expected to reach at least $11 billion by 2023 6, but organisations should not see it as direct replacement for human interaction.
Even as the technology becomes more “natural” with time, humans will want and need to talk to other humans, particularly when they require help making complex purchases or decisions.
And that is the key: using AI to solve the simple, easy or repeatable workloads, and thereby freeing up your people to deal with more complicated challenges and provides that personal touch.
In Molesworth’s opinion, it’s impossible to forge an honest and transparent relationship with customers without direct human contact. He says,
“To go for that extra percentage point – and that percentage point is the difference between having the customer and not having the customer – you have to differentiate your service.
And I think the human element supported by these tools [AI] has to be the point of differentiation.”
Integration is the key to great customer experience
Organisations may have invested heavily in implementing omnichannel strategies, but it is becoming increasingly apparent that this does not guarantee improved engagement or customer experience, because their back-office systems aren’t integrated.
Having multiple channels of communication does not guarantee a better experience for the customer unless it is seamless.
It is the ability to deliver a consistent experience across the channels you’re active in that customers truly value, and that builds customer satisfaction and trust.
Again, it comes back to the customer experience. If a customer goes into a service that’s delivered on one channel, drops out but then later returns via a different channel, they should be able to pick up where they left off.
They are interacting with one company ‒ the fact that it’s a different channel is irrelevant to the customer. If your systems aren’t integrated, if there is a disconnect or repetition in the journey, it’s confusing for the customer and, let’s face it, irritating. Confusion leads to distrust. And distrust leads to disloyalty.
7) Gladly: 2018 Customer Service Expectations Survey
92 percent of respondents say they would stop purchasing from a company after three or fewer poor customer service experiences.
Twenty-six percent of those would stop after just one bad experience 7
With the stage set for increased use of data across organisations in all industries, the focus on customer-related data offers the potential to be the most exciting – and profitable.
In Beyond 2020, we asked, “do our customers know their data is the new gold?” We believe the answer is a resoundingly yes.
With data already a hugely valuable commodity, we’re moving closer to it becoming the currency in an advanced value exchange.
We will see the monetisation of data at the consumer level with people paying for services with personal data rather than money. But it’s important to bear in mind that, for customers, data has a more visceral value than mere gold.
It’s all too easy for organisations to be dispassionate about data. But, to customers, data isn’t an impersonal collection of opinions and statistics, it’s an insight into their lives and personalities.
Organisations that don’t treat this data with respect or that fail to act in a fair, consistent and transparent manner, show that they’re no closer to understanding what their customers want. As a result, they will lose out to their more customer-focused and data-savvy competitors.
Around 80 percent of data collected by organisations is never factored into improving the product, service or experience 8
Key actions for business leaders
- Assess the state of play.
What kind of customer experience do your customers believe you are offering? How do your customers define excellence? How is data being used to inform and shape the customer experience? What’s working and what needs fixing? What are competitors doing that works and doesn’t work? When was the last time you benchmarked externally?
Outcome: An accurate understanding of how the customer interprets, measures and values customer experience. The starting point for substantive, customer-focused improvement.
- Understand your customers.
Every leading customer-experience company has employees who listen to customers. Talk to these people; the people who know your customers best. What are customers telling them? What makes them happy and what are their pain points?
Outcome: A deeper understanding of customers, their needs, wants and desires that can be shared across the company. The information and insights you need to instil customer-centricity across the organisation.
- Present a vision of “awesome”.
What do your customers rate as an awesome experience? What does that mean for your company’s future? Where do you want your business to be in five years’ time? How do you propose to take it there?
What and where are the changes in processes and policies that will have the most impact on customer experience?
Outcome: You will have defined a clear and shared understanding of the organisation’s customer-experience aspiration and common purpose. This purpose must be made clear to every employee through a statement of intent.
- Use technology to complement the human touch.
Don’t use technology where it’s not needed – if you do this you will erode trust.
Automate where it helps customers do things faster, introduce AI where it gives a better, more efficient service, but retain the human element to ensure you nurture your customer relationships.
Outcome: You will strike a balance between using technologies for mundane or repetitive tasks while allowing customers access to your people when they need help solving complex problems. It’s the best-of-both-worlds approach that customers want.