Are brands truly prepared for the digitalisation of customer engagement?
The borders between physical and digital channels are becoming blurry. Services that had been exclusively physical are now increasingly digital. Video-conferenced doctor’s appointments, virtual make-up counters where customers sample and purchase products over smartphones, and taxes filed via text message are just three examples of how brands and institutions are finding new ways to interact with customers beyond the four walls of an office or retail space.
But as customers become more dependent on smartphones and digital channels for planning, purchasing and working, are businesses prepare for the customer meeting of the future?
According to a global study from Arthur D. Little, 3 in 5 (64%) of businesses have low or no integration between their physical and digital channels, and less than 1 in 3 (28%) have invested in personalisation technologies.
Key technology trends and changing customer behaviours offers businesses and institutions new signposts for how to create fully integrated customer engagement solutions characterised by individualised communication at all points of contact, from stores to customer service channels, and online.
Staying ahead of technology
Digitally-mature industries like media and hospitality are already harnessing new technologies to enhance the customer experience. The New York Times has launched a virtual reality app that lets users experience news in the same environment where it took place, and Amazon is complementing its ecommerce business with a flagship brick and mortar bookstore in Seattle. These examples of omnichannel experiences are only going to increase as competition amongst brands grows and more customers have uninterrupted mobile internet connections powered by 4G, and then 5G.
Today the conversion rate for mobile purchases is one-tenth the rate for PC users, a statistic that digitally savvy businesses are using to their advantage, employing mobile-friendly websites and beacon targeting to reach customers with the right messages at the moment of purchase. Digital ID and biometrics will further revolutionise mobile advertising and the shopping experience. These technologies will identify customers in real-time, through a multitude of new channels, allowing brands to target individuals with relevant messages in store, at the point of purchase.
Customer service is transforming as technology develops. Artificial intelligence, led by companies like IBM and Google, promise to re-invent how businesses trouble-shoot customer problems. Chatbots, for instance, are being developed to help companies and institutions improve the quality of their internal and customer support – using linguistic programming and keywords to answer common questions and respond with “human-like intelligence.”
Virtual and augmented reality technologies, like those used in Pokemon Go, are developing rapidly, and companies are hard at work to make commercial advantage of the opportunities they create to converge customer’s digital and physical engagement with the brand. Unlike virtual reality, augmented reality does not need dedicated hardware – and smartphone users can be part of the experience.
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As rapidly as technology evolves, the regulators responsible for protecting customer privacy are never far behind. Embracing new channels of customer engagement without ensuring data security, opt-in approvals, and privacy standards can mean major reputational damages for brands caught in a data breach.
Defining the future of customer meetings
Even with the best technology in the world, brands need the vision and strategy to make good on their customer promises in a digitally converging environment. The basics of excellent customer service won’t change - continuity, reliability, and trust – but businesses must adjust if the brand is to deliver the service customers expect at every touchpoint, across an ever-growing number of channels. Brands that excel at the customer meeting of the future will deliver a seamless, personal and on-time customer experience.
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First and foremost, users will expect to seamlessly switch between channels at any stage in the customer journey – before, during, and after purchase. This means all information about a customer must be constantly available, regardless of channel. As social media, chatbots, and mobile messaging services make customer engagement more interactive, brands who have yet to achieved a single customer view – accessible in-store, online, or over the phone – will suffer.
The seamless experience is also characterised by blurring the borders between physical and digital customer engagement. A shopper walking the showroom in a furniture store will be able to see how a new sofa would look in their sitting room with a simple wave of their smartphone.
Personalised customer meetings will be possible using digital ID technologies, AI and chatbots to deliver unique content based on a customer’s situation, preferences, and history of engagement with the brand. Physical meetings will always be a way to deliver premium services, but truly personalised digital engagement will offer customers faster, more convenient ways to seek services and purchase products.
Like personalised customer engagement, an on-time customer experience occurs whenever it is most relevant for the customer, independent of time or location. But for brands, on-time also means delivering relevant marketing content at the moment the customer is most likely to buy.
Today, 1 in 3 smartphone users has purchased from a different company or brand than they initially planned because of information given to them when they needed it. Ever more sophisticated behavioural targeting algorithms and location-based beacon technology will enable brands to reach customers with individualised messages at the moment they are making a purchasing decision.
As the image below demonstrates, however, few organisations have yet to evolve to fully realise this vision of the meeting of the future.
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Following the customer
Today’s leading brands are continuously reinvesting in new and better ways to meet their customers. As consumers’ needs and behaviours change even more rapidly and the competitive landscape evolves more quickly, traditional approaches to managing customer relationships are being challenged. The customer meeting of the future is being defined today by businesses that shape their operations around their customers. Staying “customer obsessed” is critical for traditional businesses digitalising their operations, and will ultimately be the factor that ensures they stay relevant to millennial audiences.
Shifting focus from products and channels to the customer journey puts pressure on the entire organisation, and will force organisations to embrace new cross-functional ways of working.
Companies successfully rethinking the customer meeting are proactively breaking down siloes to rethink their approach to sales, service and customer marketing. Creating new divisions responsible for managing the customer journey, or engaging customers in the design and implementation of new services are just two ways brands can rethink how they manage their customers to create a more comprehensive and inclusive customer meeting experience.
Technology is moving fast, and consumers are embracing the multitude of new choices and channels available to them in the digitalised world. Customer-centric organisations will be those prepared to re-engineer their businesses to reflect their customers’ changing preferences and modes of engagement.
Below are the five steps that organisations need to take on their transformational journey to realising the customer meeting of the future.
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Martin Glaumann is a partner at Arthur D Little.
The report which this article is referring to, has been co-authored by Arthur D. Little and Telia as part of a series highlighting various aspects of digitalisation and the impact on companies and organisations.