Why Customer Experience Is the Final Differentiator and How Services Unleash It
Author: Maria Alejandra Lopez
Source: Customer Think
There was a time not long ago in sales when products could compete based on their different capabilities alone. Today, it isn’t that simple. For any product—or service for that matter—there are thousands of options from which consumers can choose. The sheer number of choices can be overwhelming, making purchasing decisions difficult to navigate when choosing between seemingly marginal differences.
This reality is why customer experience (CX) has become a huge differentiator for brands. More than just customer service (how a brand interacts with a customer at certain touchpoints), CX is the total sum of a customer’s perception of how a brand treats them. These perceptions affect behaviors and build memories and feelings that lead to customer loyalty.
Research proves it. Gartner says that 89 percent of companies compete primarily on the basis of customer experience, while Bain reports that although 80 percent of companies believe they deliver “super experiences,” a mere 8 percent of customers agree. In fact, a Walker study reveals that by 2020, CX will overtake price and product as the key brand differentiator.
CX matters to the bottom line, too. The Temkin Group found that companies earning $1 billion annually can expect to earn, on average, an additional $700 million within three years of investing in CX.
It’s plain to see: CX is the new battlefront on which brands are competing. There are three critical elements to delivering outstanding CX—and as-a-service offerings are key to making it happen. Here’s why:
1. Make it personal
Customers expect highly personalized experiences. This means that a company remembers them, makes germane suggestions that anticipate their needs, and delivers relevant content in a timely manner. This is more than just a feel-good benefit for customers: 49 percent of customers bought items they did not intend to buy due to a personalized recommendation from a brand they were doing business with, and 59 percent of customers say personalized engagement informed by past exchanges are key to securing their business.
In an already ultra-competitive market where retaining customers is a struggle for companies, getting personalization right is becoming table stakes. Brands must create a single-pane view of their customer. But too often, systems operating in silos make creating this view nearly impossible. As McKinsey claims, only one percent of data collected is ever used, underscoring the fact that there is a substantial disparity between the potential of data and companies’ ability to convert it into value.
By transition to a Everything-as-a-Service (XaaS) model, centralized services gather analytics from across the organization to enable you to know your customers very well, and then use this knowledge to deliver personalized experiences to entice their loyalty.
To achieve this unified view and deliver tailored customer experiences, analytics must transform from simple reporting to real-time behavior-tracking. XaaS enables organizations to harness and analyze unprecedented amounts of data, creating profoundly nuanced single-pane customer profiles, which facilitate better-informed product and service development and deliver compelling and differentiated CX. In fact, one survey found that among those who have embraced the XaaS model, 77 percent have increased customer retention and 80 percent say they have introduced more personalized marketing.
2. Orient to the journey not touchpoints
The customer journey is the complete sum of experiences that customers go through when interacting with a company—from awareness through post-sales support and repurchase. Each journey consists of multiple online and offline touchpoints, and while each touchpoint is important, in this case, the sum is greater than the parts. For example, McKinsey research finds that customer satisfaction with health insurance is 73 percent more likely when the total journey is positive.
The goal is a seamless, easy (and personalized) omnichannel customer experience, and the prize is worth the investment: Aberdeen Group says companies with the strongest omnichannel CX report an average customer retention rate of 89 percent, versus just 33 percent for businesses with a weaker presence. But 41 percent of respondents in an HBR survey said the biggest obstacle to consistent customer experience is systems integration.
XaaS enables companies to digitize the processes behind the most important customer journeys. By transforming paper-based workflows into automated, digital work streams, thousands of manual processes—and the cost and errors they can invite—are eliminated. For example, physicians scan prescriptions and test results straight to a patient’s medical record. This also helps to speed the delivery of the right information to the right place at the right time in the right format—improving the value of physicians’ decision-making tools at the point of care.
3. Safeguard customer information
Even the very best CX will be worthless if customers don’t trust you to keep their data safe and secure. Customers absolutely demand that their information is protected, yet an Oracle/KPMG report reveals that a staggeringly-low say they are able to collect, analyze and respond to 75 percent or more of their security event telemetry. And small- to medium-sized businesses might be at even greater risk because they are targets of hackers who want to exploit their perceived less-robust security protocols.
As-a-service models help mitigate these concerns by delivering the latest and most secure technology along with deep expertise for a single centralized and secure system. The result is proactive protection, expeditious remediation, and automatic patching and upgrading across a company’s fleet of devices as well as uninterrupted compliance with security policies.
Further, XaaS enables companies to digitize workflows to eliminate the security risk inherent in paper, transforming documents from static unsecure, and location-dependent into more dynamic, secure, process- and context-aware digital files accessible from virtually any application or device. Badge-enabled pull printing dramatically reduces the chance of sensitive information—like client financial data at a large financial services firm—falling into the wrong hands by only printing once a badge is swiped.
Today, customer experience is everything. Companies that don’t reinvent the CX bar are doomed to get passed over by customers who are increasingly discriminating. Fueled by the rise of the services-led culture, the new customer experience criteria include convenience, personalization and lower-cost way to get what consumers want. Customers expect trusted brands to involve them to know who they are, what they want and when they want it—and to deliver it consistently, seamlessly, and safely.