Why 2017 has been a bad year for customer experience management
The discipline of customer experience management arguably has a higher profile than ever before, but as we reach the end of another year has this translated into genuine improvements in experience standards being delivered?
Research by Dimension Data in its 2017 Global Customer Experience Benchmarking Report, found that 81% of organisations consider customer experience to be a key competitive differentiator, seeing clear benefits from improving their customer experience in terms of increased customer loyalty, increases in revenue and cost savings.
Furthermore, 71% of organisations cite customer experience as their top, strategic performance measure. But despite this, only 13% of them rate themselves a 9 or a 10 (out of 10) when it comes to delivery.
Is this just modesty? Are today’s brands being too hard on themselves?
Sadly, KPMG Nunwood’s annual Customer Experience Excellence study suggests this is not the case. It notes that while UK brands are spending billions of pounds trying to improve customer relationships, they continue to fall behind customer expectations. The study revealed that the overall performance score for British brands sank to the lowest level in the history of the report, dropping from 7.33 in 2016 to 7.08 this year.
As CX expert Adrian Swinscoe notes: “So, when we consider all of this, surely we have to ask……has much changed? Have we moved forward? Are things better? Arguably not.”
So against this challenging backdrop, what was notable in 2017?
The digital customer experience
Stephen Walden, director of CX strategy at TeleTech Consulting, believes that the year will be remembered for the relentless progress of digital experience, encompassing areas such as omnichannel deployment, digital contact centre, app-driven economy, AI and virtual agents.
He explains: “Although currently more about augmenting the experience, we are in a mode of experimentation. Success is driven not just by opex reduction and speed to market but the criticality of managing the immense data overload coming from multiple channels. And we can expect increasing integration of digital into customer and journey management strategies.”
Shaun Smith, author and founder of Smith+Co Consultancy, echoes this assessment.
“The personalisation of the digital experience is now being fine-tuned across many levels of business markets,” says Smith. “From shoe shops rolling out 'pay as you sit' services to avoid queuing up, to local taxi firms storing your buying patterns to allow you to simply press '1' to get picked up - it's not just been the bigger brands who are further personalising their digital experience. However, the investment into apps has taken another leap in 2017, arguably positioning the platforms as important to brands as website usability or effective email marketing.
“There's definitely been less clunk and more cuteness within the apps market. Serious cash has crossed hands and developers are the new rock stars - often invisible, largely unknown rock stars. Digital solutions have also seen huge investment again this year, particularly across the finance and payments markets. Thankfully, we've seen a growing trend in businesses taking notice of their customer experience, and investing to make the whole thing better, and not just second guessing their audiences.”
I see little transformation. I see the same bad customer experience being delivered digitally.
But the flurry of CX activity in the digital space is often unfocused, according to some of the findings from the Dimension Data report.
Swinscoe notes: “With digital dominating much of the conversation around customer experience, it’s shocking to see that more than half of organisations (51%) report that they don’t have a digital strategy or they are, at best, only in the process of developing one.
“Further, only 9.5% of respondents think that their digital business strategy is optimised and this leads to a disjointed experience for many of their customers. The result is that digital channels are failing to meet customers’ needs, and this is having an impact on organisations’ abilities to reduce costs and call volumes at the speed that they would like.”
Colin Shaw, author and founder of Beyond Philosophy, is unsurprised by the findings. “A big arena of activity this year is digital transformation. However, please take note that firstly I talk about ‘activity’. Activity is not success. Activity is just activity. Running around in circles is activity and from what I have seen, there is a lot of that!
“Also, I take issue with the word ‘transformation’. I see little transformation. I see the same bad customer experience being delivered digitally. There are too many organisations who are looking at digital transformation as just a way of saving money rather than trying to enhance the customer experience. Not enough attention is paid to the user experience and how it integrates into the wider omni-experience. Most digital transformations have not considered the emotional, subconscious or psychological experience.”
If all of this paints a rather depressing picture of customer experience over the last 12 months, then it’s worth empahsising that it’s not all doom and gloom. And with that in mind, let’s turn our attention to a few of the more positive trends that have characterised 2017.
New research by Capgemini’s Digital Transformation Institute has demonstrated the strong impact that emotions have on customer loyalty. In a survey of more than 9,000 consumers and 500 executives, emotions were found to have the strongest correlation to loyalty over rational factors and brand values.
Specifically, honesty and trust were noted as having the greatest influence on loyalty. 82% of consumers with high emotional engagement would always buy the brand they are loyal to when making purchasing decisions (compared to 38% of consumers with low emotional engagement).
The findings come at a time when brands are becoming more aware about the power of customer emotion.
“The acceptance that customers have emotions have caught hold,” says Colin Shaw. “As one of the pioneers of the customer experience discipline, I wrote about the importance of emotions in my first book on Customer Experience back in 2002. I’m glad to see its finally caught on!
“More organisations are realising that customers are human beings and therefore buy things emotionally. In fact, we buy things emotionally and justify with logic. Having said this, I hear too many people talking in the abstract about emotions, i.e. positive and negative emotions. It’s actually very important to talk about specific emotions, i.e. what emotions do you want your customers to feel and moreover, which emotions drive most value? A list of the emotions that drive most value, established from our research with the London Business School back in 2005, can be found here.”
Customer emotion was also examined in detail in a MyCustomer series earlier this year. You can read the series here.
According to research by Sabio and the Customer Contact Association, more than 25% of customer interactions handled by UK contact centres are either unnecessary or avoidable. The research also showed that the cost of supporting these interactions for a typical UK contact centre could amount to £6.75 million annually.
In a time when people want more personalisation and are much more willing to switch companies if they aren’t getting what they want, wouldn’t it be in a company’s best interest to give customers what they want?
Because of the push for proactive, we’re seeing companies embrace emerging technologies like predictive modeling and AI.
With this in mind, 2017 has witnessed a pivot towards proactive customer service.
“Customers desperately want this, and NICE InContact reported a few years ago that 87% of respondents want companies to be proactive in their customer service initiatives,” explains Sue Duris, director, marketing and customer experience, at M4 Communications.
“We’ve seen UK and US call centres make this move. Of course, some may be faster than others. Because of the push for proactive, we’re seeing companies embrace emerging technologies like predictive modeling and AI. Again, this is where customer journey mapping and having strong VoC programmes so we can understand emotions and behaviors helps companies become better at anticipating needs and expectations.”
“Storytelling is becoming a very serious market, even bigger than last year,” notes Smith. “Brands are now expected to explain the 'why' behind the what, particularly in the travel and hospitality sector. Market leaders like AirBnB, Booking.com and Expedia have taken what is an entirely digital booking process and relied entirely on the human aspects to sell their CX.
“We've seen this 'humanness' in other markets too. Webuyanycar have taken the 'front-up' approach to marketing, advertising that although their service isn't the cheapest, it can save customers more time. It's been refreshing to see brands explore what they can do with authentic storytelling at the heart of their comms and marketing strategy.”
The volume of research demonstrating the importance of employee engagement makes the topic unavoidable.
According to research by Gallup, organisations in the top quartile for engagement have higher profitability, productivity, customer satisfaction and staff retention; and less absenteeism, safety incidents and quality defects. Companies with highly engaged people have up to four times higher returns on share prices.
Meanwhile, disengaged people spread negativity, dissent and poor performance, with The Macleod Report estimating that employee disengagement costs the UK economy £59-£65 billion annually in lost productivity.
Clearly the employee experience is a crucial factor when tackling the customer experience. And 2017 has seen growing acknowledgement of this.
Walden explains: “There has been increasing use of the term ‘employee experience’ and a recognition that just putting in technology is not enough; that engaged employees maximise returns. Indeed, with commoditisation comes an increasing need to differentiate via personalisation which comes down to enabling human conversation. One area for instance is in video calling and specialist contact centre guides.”
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.