Why a customer experience-led strategy is essential

"The customer is always right."

Harry Gordon Selfridge

This is one of the most famous quotes in business, and this core sentiment is as true today as it has always been.

The only difference now is how to deliver it. Today’s rapidly evolving digital environment, forced to go at an even faster pace because of Covid, continues to cause a radical shift in customer behaviour. This, in turn, is challenging the way organisations must operate to deliver the kind of experience their customers need and want now.

Customer experience rules!

Now, more than ever, customer experience (CX) runs the show. Never before has it been easier for disgruntled customers to let their feelings be known by the power of social media and review systems.

• 93% of customers read online reviews before buying a product. (Qualtrics)

There are so many points of reference to influence purchase decisions. The customer now wants instant responses, relevant and personalised, on whatever device they use, across the whole experience.

• 76% of customers expect companies to recognise their needs (Hubspot).

That’s tough for incumbents to adapt to, but businesses who want to survive in this environment better wise up, because they do need to change to remain relevant, fend off disruption, and innovate. This is why customer experience led change is imperative.

90% of B2B leaders claim that customer experience is the key to success. (Accenture)

The changing CX landscape

The pandemic has accelerated digital customer experience (CX) and customers are more demanding than ever.

Convenience

Customers expect highly convenient and relevant experiences. When Covid locked down the world, the necessity to offer this experience digitally became of paramount importance. Being able to offer services across multiple devices and platforms, and have a blended on and offline experience is now mandatory. Customers now expect to be able to research, pay, receive and return their goods all digitally.

UK internet retail sales monthly

-JAN2016-SEP2021. (Statista)

• Revenue in the UK B2C eCommerce market is projected to reach ￡100,296m in 2022 (Statista)
• UK B2C eCommerce user penetration will be 81.5% in 2022 and is expected to hit 84.2% by 2025 (Statista)
• Click and?collect?turnover in the UK is expected to be 11.9 billion euros in 2023.

Complexity

Today, there is considerable complexity when it comes to how people research and buy goods and services. There are multiple points of influence, an explosion of product choices and digital channels to choose from. Customer’s tastes are becoming more varied, making markets highly segmented.

Globally, leaders consider managing the complexity of the digital landscape as the primary obstacle to delivering a consistent customer experience across physical and digital touchpoints.

Understanding the customer journey is difficult due to the number of touchpoints, a lack of cohesive data, and system integrations. Siloed business functions and breakdowns in the process along with changing customer behaviours all contribute to the challenge for many businesses.

The complexity of customer experience is the biggest barrier. (Source: Econsultancy, March 2017)

Discerning

The traditional ‘push’ approach to marketing is being replaced by a ‘pull’ approach. Digital channels are empowering consumers, and they are becoming increasingly discerning and savvy – and less trusting of brands.

Customers can now make highly informed decisions and then share their experiences. Delivering a positive end-to-end experience, and customers creating reviews and user-generated content (UGC) about their experience is now critical to a business’s future growth.

• 80% of consumers are less likely to buy a product if it has no reviews. This number rises to 92% among Gen Z shoppers.?(PowerReviews)

Vocal

Consumers have never been so vocal – with the ability to give and receive peer reviews and share their experiences both positive and negative. Social media can make or break brands, so getting it right is essential.

• 36% of consumers overall will share their customer service experience, whether good or bad. More than a third report posting on Facebook, followed closely by Instagram. (CFI Group)

Impatient

We are more impatient than ever. We want to find things quickly and hop between multiple channels. All with a seamless, easy to navigate experience.

• Customers are willing to wait only 45 seconds for a response in a live chat. (The Contact Company)
• 33% of customers are most frustrated by having to wait on hold and having to repeat themselves to multiple support reps. . (HubSpot Research)
• Nearly 60% of customers feel that long holds and wait times are the most frustrating parts of a service experience. (Zendesk)

Multi-device

Ecommerce and in particular m-commerce continues to grow. Consumers expect to switch between channels and receive the same level of service, experience and convenience.

• In 2021 the number of smartphone users in the United Kingdom rose to?53.5 million, making it?78.9% per cent?of the population. (Statista)
• 99% of those aged 16 to 34 and 96% of individuals between 35 and 54 years of age. (Statista)

CX challenges

Why are many organisations so poor at customer experience (CX)?

Not all are – some are great – but these tend to be smaller or younger organisations. Moreover, therein lays many of the clues – size, age and complexity.

Bigger creates complexity

The customer experience in bigger organisations is managed by many different departments. Often operating in silos, targeted to drive efficiencies within their bubble and losing sight of the customer, ironically the one who ultimately pays their wages.

These organisations are often constructed into deep verticals, with the customer moving horizontally between them. No one looks at the end-to-end experience, and so the customer gets a ‘jarring’ experience as they transverse from one siloed vertical to another.

Customer interactions pretty much touch every part of a business and are managed across multiple business ‘functions’ (as the diagram below demonstrates).

So, a critical behavioural shift in the organisation is to plan primarily from the customer’s viewpoint, rather than be selectively process improvement driven. This is fundamental to success. It should include customer experience across all channels and also regarding data and information (analytics, insight, financials, KPI’s), technology and systems (ops, business, automation, HR), and product (supply, logistics and warehousing).

Digital immaturity

This core organisational issue is often exacerbated by the fact that the company has a lack of digital skills and experience to be able to affect the right addition of digital into the mix. Meaning the digitally adoptive customers gets an even worse experience.

Benefits of being customer-led

A focused customer experience-led approach will enable you to differentiate yourself from your competition, help foster brand loyalty and lead to a stronger financial performance, because customers, not only demand better experiences, they are also willing to pay for it:

• 73% of all people point to customer experience as an important factor in their purchasing decisions. (PWC)
• 43% of all consumers would pay more for greater convenience, and 42% would pay more for a friendly, welcoming experience (PWC)
• Nearly one in 3 people, 32%, say they will walk away from a brand they love after just one bad experience. (PWC)

Another major benefit of looking at your business from a customer-centric perspective is that you start to develop a customer model, one that can lead many other areas of the business such as go-to-market, commercial, operational, organisational, technical/data and corporate. Providing a guide, trigger, and purpose for a wider end-to-end business transformation.

The goal

While Harry was right with his sentiment, the reality is – shock horror – that the customer is not always right. Otherwise, we would all be driving that Ferrari that we asked for!

However, making it easier for a customer to buy, remain with you, and say nice things about their experience – within the strategic constraints of your business – has got to be THE aim. This was Harry’s sentiment.

In fact, by ensuring any necessary changes are prioritised to the customer and your business model, you guarantee the most impactful changes can be made first, aligned to both parties’ interests. So you can make more money – generating momentum – and keep doing them. This allows you to move to the next priority set, which is important for the customer, but just harder to achieve. This order makes practical, pragmatic sense.

Unfortunately, while business leaders often understand the business need, very few have begun to map out and prioritise in any detail their own customer’s journey, or develop a customer experience strategy. This is often due to the complex nature of this work, especially when digital is thrown in.

However, with a framework methodology in place, it is possible to follow a logical process to develop a better understanding of your customer needs and create a strategy that will place your customer at the centre of how you operate.

By balancing strategic clarity and execution excellence, you will achieve digital-led success, which grows and protects your business.

Next steps

Our next article will cover how to design and deliver a customer experience strategy using our tried and tested framework.

You can also visit our website and contact us for a free 30-minute consultation.

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