When did customers become so darned complicated?
Over the last five years, the way that customers interact with organisations and brands began to change. At first these changes were slow, almost imperceptible. But all of a sudden, here we are in 2014 and we are dealing with an entirely different breed of consumer.
So why are customers so different?
New digital channels – in particular social media and mobile – have certainly been hugely influential. Even though customers’ basic needs remain the same, the new channels have impacted the traditional path to purchase and have led to raised expectations.
Andy Green, director of The Customer Framework, explains: “Many marketing courses teach Maslow's hierarchy of needs as fundamental to understanding customers’ needs and predicting behaviour when customers face a choice of offers, i.e. a customer will choose the product or service that best satisfies the need. Social media have increased the opportunity for individuals to satisfy both 'deficiency' (D-needs) and 'being' (B-needs) needs.
“Social media present many opportunities for individuals to better satisfy their needs and feel a sense of belonging and acceptance. They provide increased opportunities to feel valued by others, to gain recognition and a sense of contribution - esteem needs. They can also help with achievement of self-actualisation, or realisation of potential (B-needs).”
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Social media has therefore emerged as a big influencer. Customers able to tap into the ‘wisdom of the crowd’ by listening to the recommendations and opinions of their friends and even people they don’t know – for instance, take the example of TripAdvisor in the travel industry – and furthermore the experience is rewarding because of a number of behavioural reinforcers.
Meanwhile, the convergence of computing and communications technologies has given customers better access to information and choice, whenever and wherever they want to make 'purchase' decisions.
Green continues: “Many studies show that smartphones are playing an already significant and increasing role in the purchase decision. In 2012, around 40% of UK adults had used a mobile to research and/or make purchase, often in combination with traditional channels. It is common for customers to check prices on line whilst in store.
“As a result, the path to purchase is no longer a linear progression from when the identification of the need through consideration, information gathering, trial/review and decision making to purchase.”
Becoming social and mobile may not have changed consumers’ needs much, but it has made the customer journey more complex, with customer expectations higher and more opportunities for businesses to delight or dismay them. And there are other implications of this change in path to purchase.
Bruce Temkin, managing partner at Temkin Group and chair of the Customer Experience Professionals Association, notes: “When customer journeys had fewer interactions with companies and they were more centred around distinct channels, businesses could have a deeper insight around those customers, with analytics and feedback that were focused on an individual channel. There were still flaws in this approach, but at least in the past if you tracked what people were doing in the contact centre, for instance, then you’d have a good idea about your customers because there were a bunch of them that did things with your call centre.
“But as the world is getting more complicated, with a lot more channels and people interacting with companies in multiple ways at multiple times, there is another level of complexity. And it means that it is more difficult to have insights from a single channel that are really reflective of what customers are thinking and doing.”
This presents a challenge, because if organisations miss a link in the customer journey they can find it difficult to understand what influences customers’ decision-making processes, and what their mental state is (for instance, their likelihood to purchase or engage with a business).
“There are many benefits that an organisation can reap from truly understanding their customers,” says Dea Kacorri, senior user experience consultant at Realise. “For example, Tesco has adopted a user-centric strategy where their customer-focused proposition has led them to quickly grow and compete with the more traditional big banks. Another benefit of utilising and investing in customer insight is that it can help you to outsmart your competitors. By offering a more compelling proposition, product and/or service, you can attract new customers that in return yield an increase in revenue.”
And the value of insight and customer understanding is becoming even more important over time, as companies look to utilise customer information in increasing diverse ways.
“In the past, we were just trying to find out if there’s a problem and fix it,” notes Temkin. “So you didn’t need to worry about journeys, you just listened in periodically wherever you could get information. But as companies decide that they want to more dramatically improve customer experience, it requires that they have a better understanding of what that experience is, which requires them to have a better understanding of the entire journey the customer is in. This raises the bar in terms of the focus on the whole customer journey. So as companies are getting more ambition to improve, it is requiring them to understand the journey even more than in the past.”
Kacorri adds: “Not having a thorough understanding of how your customers interact with your organisation can have various implications. At a very basic level, it can lead to dissociation between the business proposition and its end customers’ needs and the development of strategies, products and services that do not reflect your target customers. This puts organisations in a vulnerable position as it allows competitors to take advantage of implementing better solutions driven by customer insight.”
“Businesses must adapt and evolve in order to keep pace with a population that’s becoming increasingly digitally empowered,” warns Majid Shabir, founder and CEO at Instinct Studios. “The pressure on businesses to deliver an excellent customer experience is forcing many organisations to completely rethink their approach. The need to ‘get it right’ or face public condemnation through various communication channels is a reality that organisations must face.”
The traditional purchase ‘funnel’ is now a complex matrix of cross- and multichannel activity, making it challenging to identify when and where a customer was won or lost, and to understand all the points of influence along the journey. And this is further complicated by traditional organisational silos within businesses.
“Silos will always exist,” adds Temkin. “But we have to find some way to have a view of our customer that transcends our organisation. We’re never going to fully understand our customers if we look at them through the lens of individual departments within our company. So we have to have some transcendent view of customers across all of our organisation and really start to shift our thinking when it comes to customer insights as not about how do we find out about how customers think about us in discrete areas, to how do customers think about us in the context of what they are doing in totality.”
For this reason, businesses are increasingly turning to a discipline called customer journey mapping in an effort to fully understand their customers in a holistic way.
Andy Walker, UK MD of Innometrics, explains: “The complexity of a customer journey is increasing as more and more technologies, apps, channels and trends are emerging at faster and faster rates. In a world where mobile is becoming increasingly prevalent, and where customers can interact with companies in a myriad of ways, mapping the customer journey becomes not just increasingly complex but also increasingly necessary. A recent study showed that 88% of consumers research online before buying offline, further demonstrating the need to map the journey across all channels.”
Shabir adds: “A customer journey mapping activity provides the necessary opportunity to step back and gain a wider perspective. By gaining an appreciation of the entire customer journey across each department – from sales to marketing to customer support and beyond - the organisation can identify strengths, weaknesses and key moments of truth in the customer journey.
“This then places organisations in a position where they will need to ask themselves some difficult questions and prepare for a shift. The benefit of taking this approach is that they are able to identify and design a consistent and efficient customer experience across different departments, ensure various business functions are aligned with this and prioritise business development plans to ultimately improve the customer experience.”
However, while customer journey mapping is gaining in popularity, it is a discipline that most organisations still remain relatively unfamiliar with.
As Matt Oakley, group account director at Bray Leino, notes: “It’s complex because they aren’t clear on distinctions around what is meant by terms such as customer experience, customer journey, customer service and touchpoint analysis. Without this understanding, capturing information that can be reliably acted upon is virtually impossible.”
With this in mind, MyCustomer will be shining a light on customer journey mapping in the coming weeks, exploring its definitions and deployment, and providing tips and advice. In the next article in the series, we’ll be examining exactly what customer journey mapping is.