October 4, 2017

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KEY CX TRENDS IN 2017

4 Oct 2017

As a new year has begun, we wanted to share our thoughts of what were the key trends in last year and what we expect to be the new areas focus in 2017 on top of established CX areas. The analysis is based on the discussions with our customers, observing the market and the work we have conducted within our team. 

 

What we saw in 2016?
There was a lot more talk and even hype on the CX last year, but with large differences between the regions and the industries on the level achieved and focus areas. As our clients operate mainly in Europe and in the MEA, our analysis is also focused in those regions. The UK was most again advanced marked while in the Middle East there was great progress, especially in the telecom and travel industries. Out of the industries, we saw the utilities such as electricity and public services companies like postal services and public transport together with the health sector starting to invest heavily in improving their customer experience as the competition has intensified and the Customer Experience has become a major differentiator. The attention was in the most cases on getting the basics right; understanding the customer touch points and listening to the Voice of the Customer. But in the retail sector, who has longer experience in the field advanced in the use of the analytics, the main question was not so much any more technical, but how much use of personal data and how sharp personalisation the customers are prepared to accept.

 

Customer Experience Predictions

The fundamental components of the CX will remain always there, but these the key themes we see that the most advanced organisations will be working on are:
1.    Customer centred digitalisation
2.    Dynamic preference based customer journeys
3.    More advanced use of analytics
4.    Fixing service shortcomings with CX
5.    Bridging the silos (constant focus area)

 

And two topics, which will not yet be mainstream in 2017, but a worth keeping an eye on:
6.    Hyper-customisation
7.    Neuromarketing

 

Customer Centric Digitalisation

Talking with many recently appointed Chief Digital Officers, it was clear the roles of the CDOs are very diverse. The retail CDO are working typically on the challenges of the omnichannel retail and linking the customers across the touchpoints. But the focus is in the other industries mostly on efficiency gains brought by automating internal and external processes. As this transformation affects greatly how the customers interact with the company and if the CX aspects are not at the considered, the experience can easily deteriorate. We expect many companies to bring the digitalisation and CX initiatives closer together, so that the digitalisation is customer centric and is seen also as a tool to improve the CX.


More advanced use of analytics
Most companies use some customer analytics, but there is a fundamental difference on its application between the traditional and internet-only companies. The latter ones are built around the data and automated algorithms, which manage autonomously the customer interactions. But in the traditional companies the analytics have been used still more as a supplementary tool at least to some extend controlled by employees. The marketing automation tools preparing target lists that are modified and verified by the marketing department for instance. We see more and more companies migrating towards autonomous algorithms to, partly save resources, but more importantly to react in real time to customer needs and also not be limited by traditional human thinking. For many this partial loss of control is huge step, but the competitive pressure is pushing that way.


Adaptive preference based customer journeys
Before the Customer Journeys companies defined their processes largely from the point of view of internal needs – what information is needed from a potential customer and what checks need to be done by which department for a health insurance as an example. The Customer Journeys changed the focus from the inside to the customer, and has improved the experience greatly. But the journeys are defined either for an average customer or separate journeys are defined for each market segment.  This ignores largely the individual expectations for the interactions. Some customers for instance want simplified journey as they are confident on what they want, as some want more support. Some want to communicated frequently by letter in a formal tone, while another may want minimal communication by email but in a more informal tone. We see advanced companies moving from static Customer Journeys to dynamically adaptive ones, which change easily according the customer preferences.


Fixing service shortcomings with CX and analytics
While the internet-only companies have a clear lead on the use of data and on efficiency, where they fall short is when something goes wrong. The more traditional companies are still more human-to-human oriented with stores and with better call centres and can better deal with problems. For the internet-based companies, the customer satisfaction scores are often highly polarised – for most customers the process works and they are satisfied. But when things go wrong for whatever reason, the system fails the customer as it did not foresee this and cannot adapt. And with very limited human workforce, which not often sufficiently empowered, the customer feels frustrated. We see this starting be better addressed with more focus on the potential problem areas in the customer journeys. And secondly using machine learning to identify problems before they occur and guiding the customer in order to avoid them.


Bridging the silos
This is actually not a new topic at all for 2017, but as the organisational silos are often the main reason why the CX initiatives do not deliver their full potential, the issue is still very relevant. To make CX actionable, it has to be broken down tasks and responsibilities for individuals and teams with KPI and targets. Sometimes the result is less than the sum of the parts due poorly aligned activities and sometimes counterproductive incentive structures. But the customer does not care about the internal structures and is expecting the whole experience to be good. We expect more companies to address the end-to-end CX issues with better company level coordination or management of the CX often with a C-level owner.


Hyper-customisation
While a typical organisation is implementing CX-programmes to manage standardised experiences with manageable levels of customisation, the most advanced ones are looking into hyper-customisation – not well defined term yet. The leaders come the luxury and high-end hospitability companies, who have always differentiated themselves from the mass with a high sensitivity to their customers’ needs. Now they are starting to use data collection and analytical tools in addition to the human touch to anticipate the individual needs. They will prepare for a guest’s stay by collecting data from not only their own records from previous stays, but also from the internet on what the guest has liked and disliked. We forecast some aspects of this trend will find its way to wider market in the next few years. The challenge will be not so much of the technology but the customer acceptance. Some will love it and some will freak out, when offering is automatically highly customised to their unexpressed needs.

 

Neuromarketing
Traditionally the marketers have studied the customer preferences by observing behaviour and interviews. This is limited to what the consumer expresses and does not tell what he or she pays attention or feels. Neuromarketing is a field that studies what happens inside our brains, when we are shown a certain stimulus such a brand, and which parts of our brains activate. At the moment, it is used to study reactions to packaging, slogans and store layouts and web sites. But when a data from a sample group is combined with predictive analytics, it will be possible classify everyone into segments accordingly and predict out preferences at much deeper level. This will allow for instance web design to be taken to much deeper level.

 

If you have any questions or want to discuss how take your Customer Experience to the next level, please feel free to contact us at any time.

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