“You have got to start with the customer experience and then work your way back towards the technology, not the other way around”
Customer experience, also known as CX, is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction includes a customer’s attraction, awareness, discovery. Cultivation, advocacy and purchase and use of a service. Companies have long emphasized touchpoints- the many critical moments when customers interact with the organization and its offerings on their way to purchase and after.
However the narrow focus on maximizing satisfaction at those moments can create a distorted picture, suggesting that customers are happier with the company than they really are. It also diverts attention from bigger- and more important picture: the customer’s end-to-end journey. In order to get the entire picture, we must look at the involvement at different levels, such as rational, emotional, sensorial and physical. Customers respond diversely to direct and indirect contact with a company. Direct contact usually occurs when the purchase or use initiated by the customer. Indirect contact often involves advertising, news reports, unplanned encounters with sales representatives, word-of- mouth recommendations or criticisms.
Think about a routine service event- a product query, from the point of view of both the company and the customer. The company may receive millions of phone calls about the product and must handle each one well. However, if asked about the experience months after the fact, a customer would never describe such a call as simply a “product question”. Understanding the context of the call is key. A customer might have been trying to ensure uninterrupted service after moving, make sense of the renewal options at the end of a contract, or fix a nagging technical problem. A company that manages complete journeys would not only do its best with the individual transaction but also seek to understand the broader reasons for the call, address the root causes, and create feedback loops to continuously improve interactions upstream and downstream from the call.
The advent of social media and real-time interactive feedback via the internet allows every customer to build and expect a relationship with your business, rather than just touchpoints. Yet business executives are still learning what that means, in terms of hard business practices. Brands like Facebook, Uber and Nike have been able to incorporate the CX aspect of business into their daily operations. This is shown by the sheer number of returning customers they get. At the end of the day, they product you are offering tends to remain the same. It’s the customer experience that can be tweaked and changed to make the product look more attractive.
Analytics are enhancing the understanding of buyer needs. Disrupters and incumbents alike can now count on more detailed data on shoppers’ behavior, which they can use to tailor their offerings. According to a survey on customer analytics, 51% of companies rank “improved customer satisfaction” as the primary reason for adopting analytics. With the help of these analytics, companies can create a shopping experience that the customers will love. The analytics help gain intelligence on the shoppers and help the companies understand their needs and expectations better. This data allows for informed decision making, where management can take calculated risks with changes necessary.
Large retail stores like Macy’s is using big data to offer more localized, personalized and smarter retail customer experience across all channels. “They analyze a large amount of different data points, such as out-of-stock rates, price promotions, sell-through rates etc. and combine this with SKU data from a product at a certain location and time as well as customer data in order to optimize their local assortments to the individual customer segments in those locations.” – Dataflop.
According to Julie Bernard, Senior Vice President of Customer strategy at Macy’s, the customer needs to be at the center of all decisions that are made whenever the customer connects through any of the channels Macy’s offers. They aim to make the buying process as easy as possible for every individual customer. Macy’s objective is to to recognize sale where the customer is standing. Any complicating factor is lost opportunity. With big data they are on the right track.
A handful of retailers have tried and succeeded in achieving the smooth transition from outline to in-store shopping by offering customers a seamless, omni-channel experience. Companies such as Apple have managed to blend the ease and convenience of online electronic payment with the reassuring comfort of in-store shopping by eliminating the cash register in their stores and having salespeople handle the sales transaction on smartphones before sending customer receipts via email. By understanding the changing needs and expectations of shoppers, Apple stores have adopted a differentiated checkout experience that blends the best of in-store with best of online.
While the goal is to offer customers a seamless shopping experience across multiple channels, the trick has been finding the best way to combine e-commerce with in store shopping to create a connected retail experience.Now online platforms are lowering the barriers to entry and change in the shopping industry. E-commerce platforms are reducing barriers to entry by providing cheap infrastructure to new entrants. “Bigcommerce now allows anyone to set up an online store in less than 30 minutes. Since its establishment in 2009, it has already processed 17 million orders for as many as 35000 clients”. – Accenture.
As brick and mortar retailers are trying to enhance their in-store experiences, new options are emerging to help close the gap between online and in-store experiences. By making the shopping process as simple as walking into a store, scanning an item, and paying for it with a series of taps on your smartphone- or better yet buying products online, picking them up in-store and checking yourself out- more stores are successfully blending the best of in-store with the best of online shopping.
New entrants to this kind of business are exploiting the niche expertise. They are powered by granular data on buyer behavior, analytics startups are taking over retail and online competition to the next frontier. Qubit, a UK startup, uses visitor analytics to help companies convert browsers into buyers. For instance, it helped fartech.com- an online fashion store- to understand the relationship between visitors’ buying behavior and the content that they browsed. This way, fartech.com changed the order in which content was displayed and improved conversion rates for parts of its website as much as 17%.
As we move into the future, the shopping experience will change vastly. New and improved technology will keep the customer one step ahead of trends and needs all the time. It is upto the companies to keep up with the these trends. They can do this by harnessing big data, wherever available, whether it be through social media, surveys or just plain old feedback.
A product development strategy must be designed to deliver a compelling set of customer/user experiences rather than a collection of product features and attributes. Customer experience must therefore be factored in at the very outset of product design. Many manufacturers are “product driven” organizations, focussing on profitably producing the best products possible. However the smart money is on “experience driven” firms that offer both OE and aftermarket products and services. They are selling a solution, not just a component. One example is HP: “their margins are razor-thin on printers but they enjoy a recurring revenue stream from their highly profitable inks. In fact, Deloitte has shown that aftermarket operations deliver 75% greater profitability than manufacturing operations. These are numbers we all can love.” – Mapi.
From manufacturing to fabrication, oil & gas to industrial engineering, B2B leaders are increasingly focussing on customer experience management. CX helps B2B firms retain customers and increase customer advocacy and share of wallet. For years, manufacturing and industrial companies have been impacted by increasing commoditization. Although globalization and new technology has opened new markets, it has also presented new challenges from low cost rivals. “In order to compete in such an environment, a company must harness customer intelligence and differentiate on value and great experiences, not price.” – Syngro.
Already key players in the industry, are integrating their customers in the production process. The are concentrating on how they can enhance customer experiences at every stage of product or service development. “In 2010, Fiat used crowdsourcing in Brazil to invite visitors to submit their ideas and suggestions for the perfect town car. More than 17000 people from more than 40 countries took up the invitation and submitted upwards of 10000 suggestion. The result was the Fiat Mio, a car that has won several design awards.” – Accenture.
Integrating CX into the production process sounds well and good in theory, however the application of such a process is difficult. For instance, incorporating new technologies takes many manufacturers out of their comfort zone. Further, customer service networks are are notoriously difficult to build, and customers can be unforgiving. With the advent of digital implications in our day to day lives, bad reviews and suggestions travel fast through the network, so companies have to keep mind the consequences of decision making in mind.
Within this pressurized situation, there are ways companies can help ease themselves into the CX environment. Many technologies are currently available to help manufacturers enhance the customer experience, including community management tools, social channel response systems, social analytics tools, content marketing tools and process automation and guided selling applications. Each plays a role in supporting an enriched interaction between manufacturers and their channel partners and end consumers.
Understanding where customer experience can have the greatest impact on business drivers provides a good entry point for manufacturers that are interested in starting a CX project. Once the entry point has been established and secured, companies can start using more sophisticated tools like customer experience roadmaps and touchpoint models, loyalty models, maturity assessments and data analytics. In order to foster a customer centric culture, companies must focus on effective communication, goal and compensation alignment, and embedding the customer in their values and strategies.
“There has been a meteoric rise in student enrollment at for-profit institutions is a wake up call to traditional colleges and universities and an indicator that students are seeking education opportunities in outlets that meet their customer experience needs.” – PennState. Educational institutes around the world have provided an excellent customer experience through dedicated departments. However, real customer experience must involve more than a department or a handful of individuals. Providing a true experience-centered environment is everyone’s job.
That emphasis must start at the top and the inspiration for delivering has to be more than lip service. Some would argue that higher education has focussed less on the process of good customer service and more on the final product of producing educated graduates. If students fulfill all the course requirements set before them, the institution awards them a diploma in recognition of their accomplishment. Colleges and universities have not been as concerned about whether students felt-satisfied while completing their degree requirements. According to Emery, Kramer and Tain, “Students may not be excited about the hard work in the short run, but in the long run, the students will be very appreciative of the quality education that prepared them for the real world.”
Universities and colleges now recognize that the costs of education, coupled with busy lifestyles, means that it’s necessary to become far more customer centric in terms of their learning delivery methods. In part, because of the economic crunch and reduced funding, higher education institutions understand they are competing for students and more specifically student time. That has resulted in more customization available for educational programs, and many more options than there were available one or two decades ago. That’s probably a good thing, although the question remains whether these different ways of delivering learning are as effective in the long run.
The demand for education is outpacing supply. As the world’s population grows, so too does the number of prospective student who enter tertiary education each year. The number of university students will increase to 263 million by 2025, up from 165 million in 2011. Providing education to such a large number of learners using traditional delivery mechanisms would require building as many as four new 30000- place universities per week over the next 15 years.
In order to educate the future masses, CX analytics needs to be harnessed to understand the mentality of the student, ranging from their preferences to their needs. Thanks to the data on course enrolments, graduation rates, grades and feedback, education providers can now develop a much more in-depth understanding of each student. This will allow institutions to make changes to their learning techniques accordingly to provide an amazing customer experience. For instance, publishing giant Pearson has recently acquired a learning analytics startup to strengthen its personalized learning offerings.
Leading companies are already making the most of the latest digital tools to propagate, share or acquire knowledge. For instance, Bank of America recently partnered up with Khan Academy, a not-for-profit provider of online education videos, to provide online learning for personal finance. The United States Navy has partnered with the Institute of the Future- a think tank- to launch a massive online gaming tool that will help them craft strategies to fight piracy.
Students not only consider themselves as active learners and participants in the attainment of their education, but also as customers of the educational goods learning institutions provide. In viewing themselves as both student and customer, students are much more sensitive to the wide array of choices available in the educational arena and more likely to compare and contrast not only academic program offerings, but also the services a given institution provides throughout the education experience. They have come to expect, and demand, the same high standards of service they have grown accustomed to in other organizations in society, making administrative service delivery an integral part of an education institution’s ability to compete in the higher educational market.
All of the above are working together to make the CX in the healthcare better. The data collected from all the analysis is helping medical institutions to make better decisions about the facilities they offer to patients and their families. Hospitals around the world are competing with each other to become the best provider of care, and CX is helping these hospital distinguish themselves.
According to the Centers for Medicare and Medicaid Services, USA, “healthcare spending in the United States will reach $4.3 trillion by 2017, nearly double the spending in 2007. This would represent nearly 20% of the GDP. Factors driving the increase include the aging baby boom generation and rising costs of new drugs and medical technology.” – Genesys. This can also be said for countries around the world. Clearly, the health care spending trend is not sustainable, with many calling for a new consumerism model where consumers have greater accountability for the costs of their health care decisions.
Transparency in quality and pricing was identified as a contributor to sustainability by more than 80% of the more than 580 executives of hospitals, hospital systems, physician groups, payers, governments, medical supply companies, and employers participating in PriceWaterhouseCooper’s Healthcast 2020 survey. But only 35% of respondents in the survey said hospital systems were prepared to meet the demands of empowered consumers.
PWC analyzed data from its unique Customer Experience Radar, a national survey of 6000 consumers across nearly a dozen industries, to gain a better understanding of consumer expectations. The findings were compared across banking, hospitality, airline and retail sectors to experiences and attitudes in the healthcare industry. However they also differ in several key areas. For example, healthcare consumers are less likely to report a positive experience, which is not a good thing when you think about the best marketing is free marketing- word of mouth.
“The voice of the customer may be the best kept secret in healthcare, but that’s changing as consumers exert greater control over how their healthcare dollars are spent and exercise power to vote with their feet and wallets” – Kelly Barnes, US Health Industries. Only 44% of health insurance customers and 54% of provider consumers actually tell anyone within a month of having a positive experience compared to 70% retail and 66% of banking customers.
“I think what the next ten years will look like for the industry will be lots of electronic tools, apps, portals that help us engage with the patient and help the patient engage more in their own health, their own health outcomes and how they decide to get there.” – Marjorie Bessel, VP, Clinical integration at Banner health. The effect of all this will be to put patients and consumers in the driver’s seat. Perhaps this will help spread the good word among consumers, as the consumers themselves will be able to make more informed decisions about their own health and judge for themselves whether they are happy with the experience or not.
“Patients don’t stop being consumers-customers- when they put on a hospital gown.” -Forbes. The biggest obstacle to improving the customer experience in healthcare is the industry’s insular nature and the way this makes its problems self-reinforcing. In other words, health care providers and institutions compare themselves to each other- to the hospital in the next town, the surgeon in the next O.R,- and the benchmark their customer service accordingly. It is not as if patients and their loved ones stop being customers, businesspeople, twitterers, Facebook users. So, the benchmark of healthcare customer experience should be compared to the best in service-intensive industries, because that is what patients and their loved ones will do.
The key to great health care customer experience is to get over the difference between each employee’s purpose in the organization as opposed to one’s mere job function. “To create successful medical outcomes and hospitable human experiences for a hospital’s patients is a purpose. To change linens is a function. A properly trained and managed employee will know to stop changing linens of creating successful medical outcomes or being hospitable require a different action at the moment.” – Forbes.
“Companies need to engage their customers more and look at what they need. They have to take care of the ‘three Cs’, which are consumer, content and commerce.” – Oracle. Direct engagement is key to competing with digital natives and to grow digital natives and to grow digital ad revenues through data. Delivering a compelling, engaging customer experience is critical. Content alone is no longer enough and is becoming increasingly commoditised, but owning and managing great content is still key. Renewed focus is needed on creating/managing truly multi-platform content and removing traditional platform silos. There needs to be an increased focus on on cost efficiency of creating, managing and distributing content across platforms. Once the right content is created, the commerce follows. There are two key revenue streams and media companies need to balance both. Advertising is still depressed, but owning and managing data and direct consumer relationships is key to increasing rates. Payment/ subscription revenues are not yet working in digital for many traditional players. They need to focus on the customer and building models where the payment is for the value and experience the customer receives, not just “paying for content”.
The fact is, media and entertainment has always been a “content centric” industry. They created content and controlled the distribution windows and venues where that content was consumed by customers. However, in today’s age of digital mobility, consumers want what they want and where they want it. This could literally be anywhere at any time on any device. This dynamic shift in consumer viewing behavior has forced a change across the industry to embrace a “consumer centric” model where the focus is on CX.
“Where we used to say that ‘content is king’, we can now argue that the consumer audience is king and the content is the castle we must build around them.” – Graeme Noseworthy, Communications Sector, IBM analytics. With access to vast and various data sources, media companies are striving to build closer relationships with their customers at a level where they can finally understand them as individuals. New big data and predictive analytics capabilities allow them to analyze customer and behavioral data- simultaneously- to create detailed, highly personalized customer profiles. This new type of integrated insight allows media companies to identify and deliver targeted offers, dramatically improve campaign performance, recommend content in real-time, and develop content to satisfy and delight audiences.
Disney is an industry benchmark on the level of perfection in the entertainment industry. You can find countless examples of Disney’s daunting level of service. Whether delighting customers, creating personalized experiences, or simply by going the “extra mile”, Disney understands how important the customer experience is to its business. “In the age of smart customers personalization is the future of experience. Mass production and consumption on news, entertainment, products and services have already lost the battle, giving way to personalization and customization.” – Michael Hinshaw, MD of MCorp Consulting. Disney personalizes each and every customer’s experience at its theme parks. Where in the past, a theme park might have treated every customer the same- Disney focuses on the individual.
Disney uses digital technology to extend the customer experience beyond the theme park. Loni Stark from Adobe and Darren Smith from Intel believe that one way companies can stand out is through creating digital experiences that matter, they recommend focussing on creating customer value beyond the physical product or service you offer. Disney has created MyDisneyExperience.com where customers can make fast pace selections and dinner reservations, check entertainment times, and purchase photos that were taken at theme parks. Furthermore, this online portal is jam-packed with information about all of Disney’s attractions, accommodations, things to do etc.
At the end of the day, the company culture should be aligned with a goal to make the best customer experience possible. Disney has a clear vision and mission that embody every customer experience delivered. The culture of the company is created by the people. It embodies what they value and what they see your company’s mission and vision as. Management teams should create a mission focused on their customers, as opposed to their company. This paradigm shift puts employees and stakeholders on the same page and shines a light on the company’s corporate objectives.
Connectivity has transformed the travel experience. “Technology is now enabling people to experience the vacation before they arrive.” – Bruce Speechley, IBM. Even in the travel industry data analysis is providing new insights into CX. For instance, Delta, through exhaustive customer segmentation analysis, identified 5% of Delta’s customers who accounted for 26% of revenue. They then went about they termed as “listen/respond/listen. Listen to what it was that 5% of customers wanted, respond with products and services then listen again, in the form of how they are seeing value in Delta’s actions.
On the other hand hotel chains like the Ritz-Carlton Hotel Company, are doing things in terms of managing their customer database centrally, including using predictive modelling and purchasing third-party data, helping them to understand what the customer might do next and how they can put the right message in front of them at the right time and ensure they are receiving the personalized service of Ritz-Carlton.
Companies in the travel and hospitality industry, are partnering with other companies out of the industry to get a deeper view into customer behavior so that they can improve the customer experience. Sharing data on customers with partners from other industries can help unlock new markets as well as enhance the CX. for instance, companies from the telecommunications and insurance industries entered the travel and transport market when Telefonica partnered Italian insurer Generali to launch a “pay as I drive” offer that enables high premium drivers, such as young people save upto 40% compared with traditional insurance.
The travel industry is one of many that have been disrupted by digital innovations. More consumers are turning to online marketplaces to review their options and book travel. Mobile is also a big part of the coming shift, not just for the travel industry, but for e-commerce as a whole. Just as consumers want access to coupon and other deals on their mobile devices, 62% of travelers want the ability to book hotel accommodations. More than half of consumers are already checking in to their flights via mobile as well.
Consumers understand that travel comes with a level of uncertainty, but they are no longer accepting the industry’s status quo lack of communication. Travelers are more frustrated about being kept in the dark about problems than they are about the problems themselves. They want robust, transparent, and real time updates that empower them to take charge of their travel experiences. Customers are also looking for a seamless transition from transportation to accommodation. “Although a typical trip is a series of experiences, each provided by a different company, travelers don’t see it that way. So while an airline may wow a customer with exceptional service but if the hotel room hasn’t been cleaned, the entire travel experience goes bad.” – Astute Solutions. Travel brands are now trying to form end-to-end alliances. The coordinated experience created by a travel alliance gives an end-to-end view that allows for more agile and personalized responses to disruptions. If a traveler’s flight is canceled, their room reservation could be seamlessly transferred to the same hotel chain in another city. They could get an automated text from the hotel taking the order for free room service so it’s ready when they arrive.
With today’s widespread use of social media and online review sites, it only takes travelers a minute to tell hundreds of people exactly how their trip was. Those options carry a lot of weight with consumers booking flights or hotels. Affordable, on-time and satisfactory is no longer enough to set you apart. You need to find ways to create delightful and memorable customer experiences.
Companies like AirBnb and Uber have caused major disruptions in the travel industry. While some travel brands are fighting back through legal actions and lobbying, others are embracing the disruption and using it to their benefit. “It would be foolish and irresponsible to fight against any new concept, offer or services like this, let alone fighting against the sharing economy.” – Sebastian Bazin, Accor Hotels.
“It is an open secret that players across the travel industry are looking to emulate the leaders of online retail, as customers start to expect the same level of personalization and service sophistication from every transaction, regardless of industry.” – Tnooz. As customer adoption of digital technologies continues to accelerate, cross-pollination of ideas on how to serve these customers is also gaining momentum. Peering into the near, it is both interesting and useful to look at trends in retail and banking, and to speculate on the ways in which that can be adopted and adapted for the travel industry.
“Global payment revenues have been growing at rates in excess of expectations. Once again, Asia- and China in particular- is the primary engine propelling the global numbers, but all regions, even those where the revenues have recently in decline, are contributing to the surge. Payments growth is currently a truly global phenomenon.” – Mckinsey.com. The payments industry has recently seen the entry of diverse non-bank digital players, both technology giants and start-ups, that are presenting increased competition for banks. While startups have generally not been a major threat to the banking industry in the past, things will be different this time due to the nature of the attackers, the prominence of the smartphones as a channel, and rapidly evolving customer expectations.
Digital disruptors are finding problems with the customer experience and are able to build a solution for it. The customer centric culture will ensure that competitive advantage is sustained. Customers have more payment options than ever before. As technology advances, merchants need to be ahead of the changes by updating their systems to accept these new forms of payment. Businesses also need to innovate to ensure their customer receive frictionless, responsive and revolutionary payment experience.
Retailers reap many benefits by creating a frictionless transaction experience from start to finish. As consumers begin to adopt and get more comfortable making purchases on their mobile devices, businesses need to deploy a mobile point of sale solution to complement their existing payments infrastructure. Also an example of innovation in CX in the payments industry, is the development of pay-at-the table restaurants. Instead of customers sitting down and waiting for someone to introduce the menu and take orders, the customers can do it themselves. A tablet on the table allows access to the menu, announces specials, lists nutrition values, takes orders and can offer games and present the bill.
Organizations in the payments industry are finding ways to take customer experience with their brands to the next level. For most companies, that means delivering interactions that are at once integrated (yet seamless), personalized (but not intrusive), and engaging. Businesses are working hard to provide customer experiences that result in repeat purchases, positive recommendations and an overall reluctance to switch to another brand. The Forrester study reveals that the revenue impact of customer loyalty among credit card providers is $27 million in word-of-mouth, $290 million in churn reduction and $548 million in additional purchases.
The way that successful customer experience looks, varies from company to company. It comes down to the marriage between a company’s capabilities and their customer preferences. There is a wide range of directions a company can travel to meet their customers’ expectations. Some of the ways include things like tokenization, biometrics and virtual cards. Payments industry professionals have to think strategically about the road ahead. Flashy technology on it’s own won’t make a solution take off. What survives in the consumer payments space are the capabilities that most closely align with the consumer’s need.
The digital revolution in the payments industry will extend well beyond consumer payments and retail banking, causing significant changes in transaction banking. As customers grow accustomed to faster and more convenient payments on the retail side, they will soon demand similar conveniences and service levels in transaction banking. Having witnessed the impact of unconventional payment systems in consumer banking, transaction bankers are becoming more aware of the disruptive threat in their own backyard and of the potentially major downside of failing to invest in digital infrastructures and services.
Responding to changing payments dynamics takes preparation, but the time to act is now. Companies must think ahead, understand the retail environment and implement a strategy to prepare the company for digital payments in order to remain relevant to the customer. Now is the time to begin upgrading the current hardware and consider supporting it with software and cloud technology that seamlessly pulls together the front and back office functions. As payment technology and customer preferences evolve, companies must choose a flexible and secure solution that will handle alternative payment types of the future.