Customer Experience

Future-proof your customer experience

Technology has fueled ever higher customer expectations. Discover the five main areas of growth that smart leaders are using to future proof their customer experience (CX).

by Adrian Clamp (contact), Tim Knight (contact)
7 minute read

Improving customer experience (CX) has become fundamental to the sustainability of any business, as digital technology tears down barriers, changes customer behaviours and pushes organisations to look outside their sector to remain competitive.

Smart leaders have recognised that the future is already here, with five main areas of exponential growth dominating the transformation of CX:

  1. Mobile: our phones have become an extension of ourselves, and among British adults, mobiles are the preferred device for online activities. With the number of UK smartphone users expected to reach 46.8 million [1] by 2018 and almost half of all retail sales [2] to be mobile-influenced by 2024, there is tremendous opportunity for investment and innovation.
  2. Social media: there are now over two billion active social media users globally [3] and this figure is growing by around 20% every year. Consumers are using a social media channel at least once a day, and not solely for peer-to-peer interactions, but also to discover more about companies, engage with them and make purchases. This brings a huge opportunity for building better relationships throughout the customer journey and in particular for service and sales. A leading European airline has set a good benchmark already with a 150-strong team of social media customer service agents that generated US$25 million in revenue in 2014.
  3. Smart devices: these have blurred the lines between the physical and the digital. Opportunities now exist to provide customers with a deeper experience by introducing emerging technologies such as artificial intelligence, virtual reality and augmented reality. These have been named among Forrester's top emerging technologies, making them good potential investments for customer experience. Even in these early days of adoption we are seeing many sectors test them  to understand the possible impacts and benefits. However, companies should start small and constantly measure initiatives, allowing them to make changes quickly and iterate successes.
  4. Cloud computing: many organisations are increasingly moving their enterprise applications to the cloud to gain the necessary speed, agility and flexibility to support growth. This proliferation is expected to continue and should be considered as an avenue to improve CX. Organisations that have done so are reaping operational benefits, as well as driving customer value. Starbucks has leveraged cloud to phone competitive edge for many years now, aligning innovation with clear business and customer outcomes. Cloud technologies have helped the coffee giant to track operational performance, but as almost 97% of business happens in-store [4] the innovations are always linked with improving or enhancing the customer experience. From the ability to order via an app to avoid queues, to its ever evolving loyalty programme, Starbucks’ IT investments are CX-led.
  5. Customer data: the amount of data that can be gathered about customers is growing dramatically, and this provides enormous opportunities to organisations that can manage and analyse data to inform their actions. This provides an unprecedented opportunity to deliver tailored interactions led by behaviour preferences that improve the overall customer experience.

Measuring for success

Identifying areas of investment is a first step, but from there it’s critical to measure the impact of CX initiatives, to ensure that they translate into enterprise value.

In doing so, organisations have to leave behind the once-a-year mind-set, instead continually assessing metrics such as Net Promoter Score, Customer Lifetime Value, Cost per Acquisition and Cost per Lead. This will allow them to understand how customers respond to offers and the sales funnel.

Employee engagement metrics should also be carefully analysed to complement customer insights. Customers will tell companies when something is not working, while employees will provide a deeper understanding of the reasons behind a problem. John Lewis, which clinched the second spot in the KPMG Nunwood 2016 UK Customer Experience Excellence rankings, uses feedback from customer-facing employees to identify any un-met retail needs.

Learning from the best

A common mistake is for organisations to benchmark themselves solely against their competitors. While there are certainly lessons that can be gained from sector-specific cases, business leaders should look outside their industry and take lessons from best-in-class brands across the board. Such an outlook will help organisations become leaders within their own industry by innovating early.

Executives who are reluctant to look outside their industry should remember that today's digital-savvy customers are operating in a barrier-free world and that their evaluation of any brand’s customer experience will be based on cross-sector comparisons. It is no longer enough to be the best in your industry, especially if you're operating in a sector that does not fare well on customer experience. Instead the leadership team, spearheaded by the CEO, needs to have the bravery to look at how the world's leading companies are making improvements, and follow suit.

Developing a future-proof strategy

Business leaders tend to struggle to predict the future landscape in their sector, which means it’s hard to make the right investments. The answer lies in horizon scanning, allowing brands to stay ahead of emerging trends in technology and customer behaviour.

Companies need to look four to eight years into the future to ensure they are not investing in innovations that the market is not ready for, and instead focus longer term investments on building solid CX foundations.

One of these foundation areas is the creation of a true multi layered, channel-agnostic customer experience. Bringing the different channels together might not appear glamorous, but it is the essential plumbing required to deliver the consistency and responsiveness that customers expect.

Another foundation area is fostering the right behaviours across the organisation – a long term investment that can lead to decades of growth. It is also important for companies to generate a culture of innovation and experimentation that starts from the top. Brands need to adopt an agile mind-set, allowing them to make changes quickly and efficiently. Starting small, and having the courage to change course when a plan of action is not working, is critical.

These foundations, like those of a house, are there for the long term, while short term investments are the final touches that make the rooms beautiful and functional.

Challenge complacency

What if your organisation is already seeing healthy returns? Complacency is a big trap. The world over, success mostly lies with the brands that have the bravery to challenge traditional conceptions while the market is still good.

Leaders need to stop viewing innovations as expenses and recognise them as a route towards increased revenue. In fact, the right customer experience strategies will drive out unnecessary costs by redesigning the company around the customer. It is time for business leaders to ask: “Where does my company stand when it comes to developing a customer experience strategy that will withstand future challenges?”






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