EMEA chief marketing officer for Merkle and dentsu’s customer experience management service line.
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How do you achieve consistent growth and profitability when consumers’ expectations are constantly changing and more demand is placed on businesses? It’s not just a case of outspending your rivals on digitization of your operations; you should look to transform your business as a whole.
The business growth mantra of recent years has been focused on the necessity for all companies to become digital businesses. Whatever their sector, service or product specialty is, digitizing operations and interactions with customers has become the center of gravity for most companies new and old. By now, every business should be digital in some way—it’s no longer a new innovation, and those that have only just begun their digital transformation are playing catch-up.
Over the last decade, businesses have spent billions of dollars on technology of one type or another. Amid all of that expenditure driven by the pressure to get future fit, it must be easy to lose sight of “why.” Are businesses just investing in tech for tech’s sake?
The reality is that growth and profitability are still the result of human interactions, and it’s becoming increasingly important to factor in emotions, as well as needs and desires.
It’s worth reminding ourselves of this fact because the north star guiding organizations should not be technology capability, but what that technology can be geared to achieve. The goal should be the ability to match or surpass customer expectations and adapt fluidly and effectively as those expectations change.
In other words, invest in capabilities such as technology and strategy that enable you to be an adaptive organization.
The connection between people’s expectations, the customer experience (CX) that a brand delivers and commercial performance is now undeniable.
It has long been argued that developed markets are becoming or already are expectation-based economies in which customer expectations and experience of a product, a service and brand interactions help define the performance of companies over time.
Our habitual use of technology and its tendency to train our expectations ever upward are key drivers of this new socioeconomic reality, and much has been said about how Covid-19 accelerated consumers’ immersion in digital experiences of everything.
The body of evidence supporting the rationale for a focus on CX, examples of which Blake Morgan neatly summed up here, keeps building.
The Case For A CX Management Culture
Becoming an “expectation business” requires a shift in strategic management thinking and organization. It means that people leading businesses need to reset how they think profit is achieved.
That’s no easy challenge. The idea of becoming an expectation business may to some feel like a constantly moving goal post that it’s impossible to set expectations against.
Years of corporate culture may need to be overturned or new firms created by visionaries who get it, and they may have a battle ahead of them to convince investors and business partners of this idea.
Clear guide rails and logical strategies are needed to land the idea of an expectation business in profitable reality.
There are three ways in which businesses can design, organize and optimize technology investments to achieve consistent delivery of great customer experiences.
1. Greater Expectations Of Data
As our understanding of people’s relationships with brands in a digitized world becomes deeper, it has become abundantly clear to me that the first fundamental of any expectation business is data and technology designed around improving the customer experience.
It wasn’t so long ago that customer data usage was dominated by push marketing and divided between the domains of CRM, loyalty and advertising or below-the-line activity.
Our idea of data has transformed from static records deployed when needed to a fluid, ever-changing pool of information that enables us to go beyond personalization to become personal in the moment. It allows us to predict the best experiences for a person in the context they find themselves in. Data isn’t just about identity; it is also about understanding and using all the information that will give a person the right experience in the moment.
A management team with a clear strategic objective to achieve the total customer experience can work backward with internal teams and external partners to design, build and curate data infrastructure that cannot just do what’s needed now but can also adapt to what is around the corner.
2. Measuring The Right Stuff
Measuring success can be tricky. Sometimes it’s possible to choose indicators that seem like a logical guide to success, but that in fact distort the truth or—even worse—could drive your business into the ground.
It is essential to choose customer measures based on what will make a difference and what will encourage the right behaviors in your organization, not just what you can measure.
Everything you do measure—for example, sales, satisfaction, word-of-mouth and churn—should ladder up to CX delivery and be interlinked to provide a cohesive picture of what’s going right or wrong and why.
3. Next-Generation Customer Loyalty
Brand loyalty is one of the most powerful drivers of performance, and yet it is driven by emotion as much as logic.
Value, convenience and exclusivity are basics. If you’re not delivering that today, you’re already a generation behind.
Today, you should be constantly finessing your understanding of what individuals want and the delivery of immersive and entertaining experiences that will build emotional connections.
And there’s a level above that. In the next-generation loyalty game, you should also leverage your corporate values.
There are two approaches a business can take when it comes to values. The first is to align your business’s values around the values your customers seek out. The second is to rigidly define your brand’s values and then target customers who align with those values.
There are risks to both approaches. Taking the first approach can lead to brands appearing ingenuine, but in the second, brands risk isolating a large potential customer base. Getting the balance right involves ethics, transparency and humanity, and brands should communicate to their customers about what they are doing to demonstrate these values. Great experiences are fueled by creativity, meaning and relevance. But in my experience, the investments businesses make in technology to achieve data transformation plus digital transformation can only equal experience transformation if customer expectations become their management north star.
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