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The five stories that shook customer experience in 2021

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What trends and developments have had the biggest influence on customer experience strategies over the past year?

29th Nov 2021
Managing editor MyCustomer.com
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Now in its third year, MyCustomer’s CX Leader of the Year award has seen applications not only rise in number, but also in quality. Despite the disruption of the pandemic - or perhaps even because of it - customer experience management has become a greater priority over the past year. A growing number of multinational organisations are appointing senior customer experience professionals and businesses are restructuring to put customer teams in prominent and influential positions.

But that only tells part of the story of customer experience management in 2021. In this article, we reflect back on a handful of the trends that have characterised CX over the past year and are influencing strategies as we move into 2022. 

1. The growing corporate influence of customer experience

The influence of customer experience management is growing within many organisations, with senior CX professionals being appointed and customer strategies becoming more advanced. This year has seen major players appointing dedicated CX teams and senior customer experience leaders to oversee large parts of the organisation. 

McDonald’s made the news when it announced it was to reshuffle its operations in order to place a greater focus on building a customer experience team.

As Forbes reported at the time, the world’s leading global restaurant chain created a new customer experience team to focus on the “way consumers engage with [its] restaurants”. The team would bring its current global marketing, global restaurant development and restaurant solutions, data analytics and digital customer engagement departments together under the CX umbrella.

The company’s current vice president of international operated markets, Manu Steijaert would be the man to lead the new team and report directly to its CEO, as a chief customer officer.

But McDonald’s wasn’t alone. The news came less than a fortnight after another of the world’s biggest brands, Volkswagen, declared a similar reshuffle in the name of customer experience, hiring Markus Kleimann as its very first chief experience officer and tasking him with overseeing a new team of over 40 senior leaders charged with improving CX at the German car manufacturer. 

Elsewhere, General Motors also announced a renewed CX focus of its own, according to the Wall Street Journal.    

Whilst nothing new (as Forbes explains, even in the restaurant space big brands such as Wingstop, TGI Fridays and CraftWorks have been operating with CX teams, of some nature, for several years), the changes at McDonald’s – as well as at Volkswagen and GM – highlight the growing emphasis in big businesses of having customer experience together, as a centralised team. 

The Global Customer Benchmarking Report from NTT, which interviewed 1,359 professionals across 34 global markets and 14 different sectors, reiterated the shift in CX strategy and focus. 

It found that 75% of organisations now have ultimate accountability for CX held at the board level, up from 35% in 2020. The rate of organisations with ‘well advanced’ or ‘complete’ CX strategies has also more than doubled to 71%, up from 28% in 2020.

Meanwhile, the rate of organisations reporting being ‘very satisfied’ with their CX has risen to 45%, up from 10% in 2020.

More trends

2. Customer experiences are worsening - with digital the culprit

But in spite of these appointments, restructures and developments, customers do not share the same satisfaction as the organisations. 

CX over the past year has actually gotten worse according to a number of studies.The Alida 2021 Global Trends Report: Customer Experience, for instance, surveyed 5,300 consumers across five countries (Australia, Canada, India, UK and US) and found that over half (52%) said that customer experiences had either not improved or was worse than it was a year ago. 

Similarly, research from the KPMG Nunwood Excellence Centre revealed the first dip in customer experience in the UK since 2017, falling 1% vs last year, while a study from Genesys which surveyed 11,000 adults across the UK found that 31% believe customer service quality has worsened since Britain’s first lockdown.

Elsewhere, a survey of 10,000 consumers conducted by the Institute of Customer Service, suggests that many UK brands are flouting their commitment to offering satisfactory customer service. It revealed that complaints in the UK specifically targeted at poor service have risen in the last six months to be their highest since 2009.

The biggest bone of contention has been digital service quality. NTT’s research found that over half (52%) of consumers say that digital channels are failing them due to limited capabilities or services, while nearly half (44%) of experience failures reported by respondents were due to digital channels misunderstanding their queries. 

The digital shortcomings are so significant that just 35% reported that they were ‘very satisfied’ with automated CX solutions. 

The Genesys research, meanwhile, also pinpointed issues with digital, with consumers reporting that brands’ digital channels lack the expected emotional and empathetic feel of human interaction, and that interaction with service representatives via digital platforms often let them down and felt ‘fake’, leaving many feeling unsatisfied with the customer service experiences.

Elsewhere, Sinch research suggests that, despite significant  digital transformation over the past year, brands are still not delivering many of the most useful digital and mobile experiences people say they want.

The findings indicate that customer experiences are still suffering from the well-documented 'Dash to Digital' that occurred during the pandemic, with organisations rushing to accommodate the greater requirement for digital service channels, but prioritising speed of deployment over performance. 

Research from the Institute of Customer Service indicates that while customers were understanding of imperfect digital service during the early days of the pandemic, those excuses have now worn thin. 

Overall, this is a major problem for organisations, as digital interactions continue to rise - the latest UKCSI research found that 50% of customer experiences reported were online, the highest amount ever recorded within the report. And the expectation is that there will be no snap-back to old habits when the pandemic ends - McKinsey research found that more than 60% of respondents believe that shifts in consumer behaviour and demands are here for good.

But the rewards for those that are getting it right are significant. The latest KPMG Nunwood Excellence Centre polled 10,000 British consumers about the brands with the best customer experience, finding that there are 10 new entrants to the top 100 ranking who are all “digital-first” businesses.

Indeed, the new number one company in this year’s research is Starling Bank, a pure-digital business. These brands are succeeding in making digital interactions human and emotionally connective, using the most advanced technology to be efficient, joined-up and engaging. This is delivering market-leading customer experiences, often at significantly lower costs than traditional rivals.

Tm Knight, head of customer consulting at KPMG UK, notes:“For the leading brands, all customer experiences are now ‘digital first’.  Technology advancements means engaging with consumers no longer just means ‘lowest cost’, but also ‘most human’. These digital businesses are faster, more agile and more emotionally engaging, which sits at the heart of their growth.

“However, many other brands are spending significantly on technology and failing to deliver to deliver similar results. This points to structural issues in how they understand the customer, how they have adapted to the new market and their focus on real value, rather than rolling out platforms and chasing efficiencies.”

3. Supply chain disruption shifts more focus on CX

But businesses also had other challenges to contend with in 2021 that were harming customer service. 

Supply chain issues blighted many countries this year, but Britain found itself facing a full-blown crisis. Supply chain snafus have meant that McDonald's is short of milkshakes, chicken is off the menu at some Nando's and KFC restaurants, and Wetherspoon's is running low on lager. 

Meanwhile, stock levels were the lowest since 1983 as an HGV driver shortage prevents goods from getting onto supermarket shelves, and the worst shortage of raw materials and components in decades has harmed the British manufacturing sector. 

Emma Sutton, chief customer officer at EMEA Business Transformation Oracle Consulting, said that their research painted a gloomy picture. 

“It’s clear: the supply chain crisis is showing no end in sight. But this is only causing further disdain as consumers’ patience begins to thin and their brand loyalty to wane. In fact, research from Oracle found 9 in 10 UK consumers (91%) are worried this disruption is here to stay and 74% of people say that future delays could cause them to cut ties with their favourite brands permanently - a lose-lose situation.” 

Forrester Senior Analyst Judy Weader has suggested that this disruption represented “the end of instant gratification” for today’s customers, and that with these upheavals likely to last some time, it would only serve to put greater focus on the customer experience. 

“Looming shortages in everything from lumber and microchips to internationally shipped goods mean that many products will be in short supply or altogether unavailable,” she wrote. “Customers are already frustrated by empty shelves and long (sometimes unknown) wait times to receive products, a situation that will get worse before it gets better. This means that brands can no longer rely on a plethora of products as their main selling point; instead, they will have to use CX to differentiate themselves.” 

4. The growing importance of purpose and values

One factor which continues to become more influential in customer purchasing decisions is the values and purpose of the brand. 

Research from Deloitte found that price and quality were the most important criteria for purchasing from a particular brand most of the time. But because all brands need to deliver on these two dimensions, other criteria, including purpose-related factors, then become competitive differentiators.

And Deloitte also found evidence that brands that commit to purpose - guiding employee decision-making and corporate social responsibility investment - are gaining a critical competitive advantage, with high-growth brands translating purpose into action more dynamically than their lower-growth peers.

The same research found that 57% of consumers are more loyal to brands that commit to actionably addressing social inequities, with consumers increasingly keen to support brands that represent them and their values.

Echoing these findings, the DMA’s ‘Acquisition and the Consumer Mindset 2021’ revealed that nearly half of consumers (45%) would like to be able to filter products by the values that matter to them when shopping online, such as sustainability or localism. Interest also rises to almost two-thirds (62%) for consumers aged 25-34.

Elsewhere, a Trustpilot survey of UK consumers revealed that over half of Brits now consider a brand’s stance on social, political and environmental issues before buying products or services. However, woe betide those brands that try to dupe consumers with false values! When asked what factors make them less likely to buy from a brand, 49% of respondents said brands which ‘appear to be dishonest or boastful in their marketing’; for example by over-exaggerating their environmental impact by greenwashing

Alicia Skubick, Chief Marketing Officer at Trustpilot, said: “While more brands are working to reflect the big issues of the day by adopting ethical stances, this research shows that they need to not just act with purpose, but also with integrity — really understanding and representing the values of the customers they are trying to target.

“The reality is — thanks to the growing number of consumers sharing and seeking information from independent sources such as review platforms and social media — brands which aren’t acting with their customers’ values in mind now risk being left behind.”

5. Rapid developments in the customer experience tech market

The customer experience technology market is being transformed by a series of heavyweight, strategic acquisitions and mergers.

This year, investment firm Thoma Bravo announced the acquisition of Voice of the Customer and Employee specialist Medallia for around $6.5bn. Following in quick pursuit was the announcement that Qualtrics would be acquiring Clarabridge (Qualtrics itself was acquired by SAP in 2019 for a seismic £8bn). Elsewhere, Kitewheel was purchased by CSG, while Qualtrics announced the acquisition of Usermind.   

According to Heart of the Customer’s chief technology officer, Shawn Phillips, these last two in particular – Kitewheel and Usermind – are as clear a display of where CX is heading as any others, and that customer experience leaders must take note.

“Leaders in the CX space are spending money consolidating disconnected CX technologies into enterprise experience platforms. Your job as a CX leader is to lean in and take advantage of the upward momentum, and spread the reach of what CX is all about in your company.

“Qualtrics has been saying for the last several years that they are an experience platform and not a survey platform. They just invested in that in a significant way with the purchase of Usermind, a leading journey orchestration platform. This sends a message that anyone serious about CX needs to go beyond surveys and start meeting customers where they are in their journey… and help them succeed.”   

 

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By Exchange Listing Services
04th Dec 2021 08:09

Thanks for sharing such information with us very informative article.

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