Jamie Thorpe: Customer Experience Pays
By Jamie Thorpe, Deputy Managing Director of CX, Insights Division at Kantar
Brands will thrive if they can deliver a great customer experience. Getting it right means being rigorous and delivering on the marketing promise.
A great customer experience is something to be treasured. After all, we have them all too fleetingly with so many of the organisations we deal with in our daily lives.
The gains for brands that get CX right are huge. Indeed, much of the success of so-called disruptive brands has been built on the fact that they are fully focused on consumers and their modern needs.
Studies by Forrester and Watermark show that CX leaders outperform the market by some 79.9%, while Bain & Co have demonstrated that a 5% increase in customer retention can increase a company’s profitability by up to 75%.
As I outlined at CX Marketing Summit last week, such headline numbers are encouraging companies of all sizes to work harder to get closer to consumers. But too many are failing to approach the challenge in the right way.
The bottom line is that the true enemy of business success is not the frequently blamed disruptor brands or digital progress, it’s mediocrity. Average brands will struggle to compete but the truly excellent will thrive.
In 2019 being excellent means delivering a fantastic experience, every time. As customer expectations rise (and true loyalty wains), the winners are those that crack the CX code. The world that people like me grew up in, limited choice and bafflingly high levels of loyalty, no longer exists.
Today, an alternative brand or service provider is just a quick swipe away and consumers are aware of their own power. They are fickle and promiscuous.
Brands invest heavily in marketing a promise and the experience that consumers get when they come to the brand needs to at least match or ideally exceed what they have been conditioned to expect.
Marketing remains critical to get people through the door but it’s the experience that matters when it comes to recommendation and repeat purchase.
Brands need to understand the difference between those who buy because of the brand and those who buy because of the quality of experience. Recent research into one big spending brand found that the CX equity was now higher than their brand equity, a remarkable achievement given that the marketing spend was so much higher than CX investment. One to watch for sure.
Evidence of value
The good news for brands is that this is an area well worth investing in: 86% of consumers said they would pay for a better service, according to recent research by Kantar (some as much as 20% more). The same research has also found that 75% of millennials said they would rather spend on experiences than ‘material things’. Our recent work for a global travel client demonstrated that a 1% improvement in NPS was worth more than £23m of incremental revenue per annum.
But if the value of CX has been widely accepted, then putting the right programme into action to deliver it is proving more complex.
The first step for any programme is identifying where you are and where you’ve come from. Our experience shows there are four stages of CX maturity. Journeying along that pathway can take time but knowing where you are – Establish, Realise, Develop or Maintain/Optimise – helps you plan your direction.
The next stage is to develop a multifaceted and holistic approach to CX across the key areas of design, platform, service, analytics and activation. Great understanding of each of these areas is essential to maximise the benefit.
With analytics, for example, you need to ensure that the process of continual improvement is driven by the right measures. Too many advertisers are hung up on NPS. While this measure tells the brand what proportion of people would recommend, it doesn’t interrogate the gap between what people say they will do and what they actually do. The natural follow up is: “have you ever actually recommended?” Business success is predicated on what people do not what they say!
This is just one example of the complexity of modern CX and how the brands that are winning are taking into account the entire ecosystem.
CX is continually evolving. That may be daunting for those who are just starting out on the CX journey, but the future winners are those who deliver excellence across customer, brand and employee experience.