Consumers demand attention
The Age of the Customer. This is how we can define the socio-economic context that we are experiencing, characterized by consumers who take control of the purchasing process: indeed, the latter do not settle simply for the purchase of a product, but require increased engagement and personalization, and, therefore, to experience interaction with brands on a deeper level.
When we speak about customer experience (CX), we are referring to the sum of experiences, emotions and memories that a customer has matured in their interaction with the brand at all phases of their customer journey. This concept has been clearly represented by Google and the film “Micro Moments”: the well-known search engine puts itself forward as an “integrator” of those small decision-making moments that, as a whole, make the user experience memorable.
Given that we are in an age in which the customer has placed themselves at the center of production and expects their requirements for memorable experiences to be met, the ability to stand out from competitors no longer depends only on the quality of the product and service, but on the ability to provide the best customer experience.
Although, up until the 1960s, companies that had mass production (Ford, Boeing, GE, RCA) possessed the keys to success, in the years that followed, with the opportunities offered by globalization, differentiation between brands was played out first in terms of distribution, given the improvement of global connections and transport systems, and then in terms of sharing information, with the birth of the web and “connected” supply chains (indeed, the market owners were those companies that controlled the flow of information, such as Yahoo, Google, Comcast, etc.). Now that we have reached the Age of the Customer, those that are winning are not those that are simply oriented toward the consumer, but those that manage to bring the customer vision into their own company ecosystem in a concrete and radical manner, making it an “engine” of decision-making processes and, therefore, becoming a customer centric company.
How do you become customer centric?
To evolve toward this objective, that is, becoming customer centric, companies have begun to “go through” certain phases: in companies’ strategic plans, the first thing to be seen is the addition of significant investments in technology to bring about the so-called digital transformation; the next step is monitoring the customer journey and activating processes involving listening to the customer (VOC); this arrives at measuring the CX with Net Promoter Score (NPS) indicators that determine customer satisfaction on the basis of how much they promote or criticize the brand.
This evolution process must, however, be supported by an aligned and consistent customer strategy: the entire company must be connected on a cultural and operational level so that its processes are completely aimed at achieving the best CX possible. To give you an example, I arrived late at the station and my train, which was also late, was stopped at the platform. Going to the kiosk to change my ticket, I was told that it was not possible because the system had already registered the train as having departed. But how? This is why front, middle and back offices must be aligned, because otherwise, it is the CX that faces the repercussions.
And we know that an excellent customer experience leads to the creation of value. It has a significant impact in terms of improving the Net Promoter Score and increasing loyalty. This translates into an economic advantage for companies: KPMG Nunwood’s research in Italy “L’era della customer experience” (The Age of Customer Experience), based on the evaluation of 2500 consumers that expressed their opinions about more than 140 brands belonging to 9 different industries, revealed that the companies in the top 10 for offering an excellent CX have experienced an increase in turnover over the last three years which is double that of the companies in subsequent positions. They have seen an annual increase of 9.5% (compared with an average value of 3.4%).
And not only. Among the benefits of a business connected with customer expectations, we also observe a lower Cost to Serve (we are talking about an annual decrease of 7.5% compared with the 0.2% previously registered), an increase in customer loyalty and a higher Customer Lifetime Value.
In fact, as the data supplied by Aberdeen Group and Google reveal, omnichannel companies (and, therefore, connected companies) boast of 89% customer loyalty compared with 33% for companies that have strategic limitations to this regard. They also reflect a Customer Lifetime Value, or rather, the estimated revenue that the consumer will generate in their lifetime, that is 30% higher among consumers that purchase both online and offline compared with single-channel customers.
How can the relationship with the customer be improved?
KPMG suggests going beyond traditional metrics and integrating the Six Pillars into the CEE Score (Customer Experience Excellence Score). These are six drivers for the improvement of the relationship with the customer (Personalization, Time & Effort, Empathy, Expectations, Resolution, and Integrity). Indeed, we believe that purchasing behavior is not just linked to the quality of the product or service, but also to some emotional aspects (such as empathy). If we compare the CEE Score of Italian companies with English ones, we can see that the latter are “ahead” in terms of CX excellence. But, there are aspects in which Italians are stronger, such as empathy, given that they have a natural tendency to favor a “human” relationship with the customer.
To be able to offer a successful CX, we must, in any case, ensure certain aspects:
- clarity of vision: at the base of decision-making processes, there must be a clear idea of the value that we want to convey in the customer’s experience with our brand
- consequentiality of approach, or rather, the ability to implement the Six Pillars correctly and within the correct time frame
- organizational skills so as to adequately allocate investments in the CX to initiate and guide the change (being omnichannel, high and homogeneous levels of service on a global scale, customer awareness, etc.)
When we dedicate ourselves to planning, however, we must be careful in finding the right balance between expectations and customer experience, avoiding overinvesting (exceeding expectations but with higher operational costs than necessary) or investing too little in the CX (the experience is not able to fulfill expectations with the subsequent loss of turnover or market shares).
Indeed, economic value is maximized when customer expectations and experiences are aligned. And this is possible only if the customer is placed at the center of business.