Data: An Optimal Catalyst to drive Customer Experience (CX) - Part I

The battle for the customer has truly begun and it is not the best product/service or tech that will win the mindshare of the customer but the one with the best Customer Experience (CX).

I.?Introduction:

The evolution of Customer and hence Customer Experience (CX) has been a revolution of kinds. In the good old days, the norm was to just provide the product/service to the customer and then moving on to the next customer, whereas today, organizations are having to focus on the entire customer journey as a source of competitive advantage. Though a welcome change, this has been giving a lot of organizations a nightmare in managing this effectively.

Figure 1: The evolution of Customer Experience over the years

Earlier the focus of executives was only on “What does the customer want in terms of product/service?”. This worked well in a scenario with limited options and before the advent of social media which has shrunk the world and given customers a Global experience, increasing the exposure for customers and increasing expectations. Add to this the fact that technology has enabled delivery of products/services through multiple channels, lots of information is freely available and customers are now interacting with others to hear their experience and feedback, thus impacting the entire decision-making process.

This raises some important questions:

1.???What truly is Customer Experience?

2.???Why is it so important?

3.???What all does this entail?

4.????What is the impact one can expect out of delivering a good CX?? and

5.????How can organizations drive value through?

II.??What is Customer Experience (CX)?

CX refers to everything an organization does to deliver superior product/services to its customers across the entire customer journey encompassing pre, during and post service across all customer touchpoints in a seamless and consistent manner.

This also involves the communication of the brand as well as the behaviour of employees (not restricted to senior executives) in public forums since any of these can go viral and hamper the customer perception of the brand and thus the experience.

III.??The Potential Impact of CX in Business

There has been a lot of research that has been carried out to understand the impact of CX on the business and the results are not surprising. Some snippets from research carried out by McKinsey, Forbes and likes puts forth the following key insights.

1.?76% will go out of their way to do business with a company that provides better customer service.

2.?86% are willing to switch brands because another company will provide a better customer service experience.

3.?48% say customer service is more important than price.

a.?Consider this: The price becomes more important when the value of the experience is missing.

b.?This is specifically critical in the travel and hospitality business wherein if the perceived value starts to drop (as in the case of airlines), the price drop is significant.

4.?72% of customers will share a positive experience with 6 or more people.

5.?On the other hand, if a customer?is not happy,?13% of them will?share their experience with 15 or even more.

a.? The challenge here lies in the fact that, in most cases, customers don’t tell you they’re unhappy.

b.? In fact,?only 1 in 26 unhappy customers actually complain.

c. The rest? They just stop doing business with you.

6.?In 2020, 25% of all customer interactions were automated through AI and machine learning. Today, this number?has reached 40%?(and continues to grow).

7.?When it comes to the customer experience, your customers don’t care about how great your product or service is. All they care about is that if they have a problem, you are there to help them.?And quickly.

8.?More than?85% of customers?want to experience proactive communication and contact from a business.

IV.?Broad Guidelines to drive CX across organizations.

The question remains: How do you achieve this? The answers can be found by answering the following simple questions:

1.?Does our organization culture promote CX across all levels of the organization?

a.?Is our vision and approach pertaining to CX deeply embedded in the way the employees approach their work?

????????i.?How do we design our product/service?

???????ii.?Does the product/service solve for key customer needs across the customer segments?

???????iii.?Will our customers see value in what we have to offer at the price we envisage to offer? Does it increase the consumer surplus?

??????iv.?How do we distribute (make available) our products/services to ensure ease of access?

?????v.?How are we communicating to existing and prospective customers in a manner which is consistent with the values that the customers can relate (Eg. Brands would want to communicate environmentally friendly practises and sustainability in addition to the core value proposition to ensure relatability)

???vi.?Are we able to address the queries of the customers (pre, during and post customer cycle) in a manner which is:

a.?Relevant

b.?Quick

c.?Proactive

d.?Consistent (across all channels) and

e.?Leveraged upon for improvement.

?vii.?Does our product/service deliver on the promises and how do we deal with feedback?

b.? Does our organization have shared values which are of utmost importance to the customer?

????i.?Environmental Sustainability Governance (ESG)

????ii. Corporate Social Responsibilities (CSR)

iii.?Empathy and Care towards own employees (which tends to reflect in their approach towards customers)

2.????? Does the organization embrace new technologies to enhance the customer experience?

a.??IT Infrastructure

?????????????? i.??Cloud, Data lakes, etc.

????????????? ii.??Data privacy and security

??????????????iii.??Customer Data Platform/ CRM

b.??Website and Apps- Content and performance optimization

c.?? Virtual Tours or product/service insights, etc.

d.???Optimization of other channels – Chatbots, Contact Centres (Phone Calls, IVRs, etc.)

e.???Customer Complaints Management – A very critical aspect. Time to resolution and communication around it is of utmost importance.

3.??How does the organization personalise and innovate keeping in mind the changing customer preferences, feedback and breakpoints observed/communicated.

a.? How effectively does the organization use the customer data collected to improve the CX by personalising and knowing the customer better?

b.??Does the organization use the past communication/ complaints (across all channels) to proactively communicate and provide solutions to the customer?

c.??Does the organization treat the customer as just another “Cust ID” or leverages this to build a relationship which feels personal in all communications and offers?

d.??Is the organization just interested in making a “Sale” to the customer or identifying the “Customer Needs” through data (Internal and External) and offering the most relevant solution to the customer?

?Up Next: Challenges & Opportunities towards Driving an Effective CX & Role of Data