2016 was a year when countless organisations started transformation projects in the name of customer experience.
Yet many were initiated under the cloud of a pivotal McKinsey report, which had announced that a mere 26% of transformation projects they’d studied were deemed “very or completely successful at both improving performance and equipping the organisation to sustain improvements over time”.
Such a failure rate led to some experts questioning the logic of widespread transformation at the hands of customer experience. However, McKinsey’s research also found that, at organisations that took a rigorous, action-oriented approach and completed their transformations (i.e. all of their initiatives have been fully implemented), the success rate increased to 79% - three times the average for all transformations.
It’s this latter statistic that is likely to motivate customer experience leaders in 2017. Instead of transformation projects being deemed a failure and abandoned, 2017 looks set to be the year that major organisations hone in on this more ‘rigorous’ approach to CX. Organisations such as DHL are already leading the charge, using customer experience as the mandate for all-encompassing transformation programmes incorporating every aspect of the business.
“I think 2017 will be a watershed year for the customer experience profession,” says Ian Golding, a board member for the Customer Experience Professionals Association (CXPA).
“Many organisations have been doing or dabbling with CX for a few years now, but not many have revaluated what has worked and what hasn’t. The need to ensure that organisations are still relevant to their customers is becoming ever more important – especially with more high profile business failures this year, with the likes of BHS.
“I expect more companies to look at all elements of the customer experience – from their segmentation to their value propositions, the customer journey and the way they measure it – and make them fit for purpose for the next phase of their evolution.”
Data, data, data
As a result, Nigel Shanahan, the founder of customer feedback platform, Rant & Rave says customer experience leaders will be under increasing pressure to deliver return on investment as CX programmes mature through the year.
“Programmes will need to define clear goals; both quarterly and annually. Using a metric is important here, for example: retaining customers for 10% longer; this measurable data will become vital in securing support and the all-important budget from senior executives for further CX programmes.
“Pulling together relevant data sets is crucial when demonstrating ROI. Before even considering new technologies or approaches, companies need to know what data they need to collect and how they’re going to collect it. Businesses have access to a constant supply of new customer communication channels, so if organisations consider what data they have access to early on, their lives will be much easier when the programme gets going. Pulling data together and analysing it will also be much more efficient.
“Typically, organisations use information such as the average call handling times or call waiting times alongside their CX metrics so that they can draw a comparison over time, but to get the most out of data, they need to have the resources available to analyse it more in depth.”
Despite this, market forecasters, IDC expect a 50% increase in revenues from the sale of big data and business analytics software, hardware, and services between now and 2019, as the thirst for deeper data analysis continues to be played out in terms of the technology businesses invest in. Consultant and CXPA board member, Annette Franz Gleneicki expects CX professionals to be a key stakeholder.
“Predictive and prescriptive analytics technology will be key to customer experience improvement efforts in 2017. Not only does this technology identify what drives both business and customer outcomes but it also helps to drive the right actions for change at strategic, tactical, and personal levels to ensure those outcomes occur.
“Ensuring you know what to do with your data, how to easily glean insights and answers, and where to go when you’ve got the answers is necessary and powerful to effect change within the organisation.”
Susan Ganeshan, the CMO for Clarabridge, says many businesses will need to prioritise how they segment their data better in 2017, which is likely to lead to some fundamental questions about what constitutes successful customer experiences.
“Brands now have the opportunity to pool loyalty, demographic and behavioural data with customer feedback. Companies already focused on customer feedback collect data from surveys, social media, emails, call centre recordings and beyond. When combined with a deep understanding of whom the customer is and how he or she behaves, organisations are empowered to segment customers not only on their propensity to buy, but also on their sentiment and emotional connection to the brand.
“In 2017, we’ll see companies prioritise segmentation of customers based on their wants, desires and history with the brand. In fact, advanced organisations like AARP already do this today. By combining age, gender, income, geography and feedback together into one view, AARP knows what their customers need in order to be happy, and as a result, personalise services and products accordingly.”
And Gagandeep Gadri, head of customer experience and analytics at Capgemini, says the likes of John Lewis, Apple and Marks and Spencer have already set the tone for how brands will tackle this type of expectation from customers, by virtue of their 2016 winter advertising campaigns.
“When looking at how Christmas marketing campaigns have changed over the years, they’ve gone from promoting products and services to creating emotional connections with people. The same rules should apply for engaging customers and delivering customer experiences all year round – they have to make us feel something before we will interact and buy something.
“In 2017, we’ll see more CX professionals asking themselves – ‘how do we make our customers feel when they engage with our brand?’. The task will be to convey this feeling through the latest innovative thinking and technology to the best effect, to create fully immersive, engaging and emotional experiences for customers however they interact, be it online, across all devices or in the store. If brands can master this well, their customers will engage more and become brand advocates, which in turn will draw other people to interact with them too.”
Customer experience is likely to become more hands-on, in this respect, as leaders continue to collaborate across the business in order to establish more understanding about what makes their customers tick.
Ensuring you know what to do with your data, how to easily glean insights and answers, and where to go when you’ve got the answers is necessary and powerful to effect change
“Companies can now identify the set of emotions – those biased to the positive and those biased to the negative – that play a dominant role in triggering decisions,” says Forrester’s CMO, Victor Milligan.
“There are existing sources: social sentiment, contact centre recordings, customer satisfaction surveys, and Voice of the Customer qualitative research to name a few. Mine them. Identify the specific emotions on which customers centre and build a “template” of the most important emotions that lead to greater affinity and spend. With this method, you can capture customers at critical touchpoints and design experiences that engender these emotions.
“Bridging the emotion gap is all about design: data-driven, human-centered design. Blending account, transactional, and interaction data from customers with emotional data creates powerful fuel for experience design. The goal is to focus on signature moments – the moments when your customer is paying close attention, emotions are triggering loyalty/economic decisions, and you can deliver an experience affirming the best of your brand.”
However, anyone expecting to reach these depths of analysis and discover a silver bullet may be disappointed. As customer experience author and thought-leader, Colin Shaw states, CX leaders will need to hold onto one key fact whilst in the midst of any large-scale transformational work in the coming year:
“Your customers are people, and people are irrational by nature. Furthermore, over 50% of the CX is emotional, whether felt consciously or subconsciously. Customers buy based on how they feel. Then, customers justify their purchase using logic and reason, creating the false impression that it was a rational decision. However, emotions are neither reasonable nor logical.”