Today creating an effective Customer Experience (CX) is about more than just ensuring your customers receive the products and services they desire in a timely and efficient manner. It’s also about creating touchpoints with real people who can organically evangelize and grow your brand through their social media and offline interactions with friends and family. Experiences create value in the moments that matter most—and not just for the customer, but for companies, too. A superior CX enables companies to recognize the untapped potential of their customers and decides how best to unlock value for the business through dynamic personalized experiences.
There’s no doubt that 2022 will bring with it its own set of ups and downs, both anticipated and unexpected. That only means companies will have ample opportunities to enhance CX in order to consistently deliver on their customer promise, as inferred from a study in collaboration with KPMG in India and EQUiTOR. The various findings of the study are laid down below.
“Going forward, it is imperative for businesses to recognize and appreciate that customer experience is likely to shift from binary and transactional. It will need to be available across multiple channels and will have to be relational as consumers will be the biggest advocates/brand ambassadors for companies” said Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG in India.
1. CX plays a critical role in generating sustained value for a firm
- CX, if implemented successfully, could help businesses enhance valuations to the tune of 125 percent-400+ percent
- Our study reveals, across 9 specific categories, brands are leaving behind $200 billion dollars of value on the table by not being able to unlock the value potential of CX (untapped value)
- E-commerce sector – 100 percent increase in investment in CX can lead to 2X faster growth in business
- 2 and 4 wheelers - a 100 percent investment in CX can lead to 1.7X faster growth in business
2. CX is a key differentiator in customer acquisition, loyalty, and retention
3. CX plays a key role in influencing the purchase decision while choosing between brands
- 52 percent of a consumer's purchase decision is dependent on the experience the customer expects from the brand (not necessarily delivered currently by brands) as opposed to the reputation of the brand
- For all brands covered in our study across the 9 categories, the overall expectation of customers from experience is 52 percent, however, our study revealed that all leading brands fall short of meeting this expectation by a delta of 30++ percent
4. A customer is willing to pay a premium for an experience, which is superior irrespective of purchase value
- Our consumer survey highlighted; that 63 percent of respondents are willing to pay some premium for enhanced CX
- Key Parameters attracting premium - 'Providing what I want when I want it', 'Making me feel valued’, 'Understanding my needs'
5. CX is a critical lever for customer loyalty
- Our survey revealed, that approx. 45 percent of respondents were extremely satisfied with the experience while using the brand and are highly likely to continue using the same brand, thus, proving that CX can help augment loyalty, helping brands create a unique differentiator against their peers
- Sectors like personal care, ecommerce, online delivery, and grocery exceed the average satisfaction levels of CX and hence attract higher loyalty than other sectors
- By delivering on the expected CX, brands can reduce the delta by 30 percent (as indicated above) and increase the number of satisfied customers thereby enhancing loyalty
6. CX helps create brand advocates
- Delivering the right CX can lead to your customers becoming your brand ambassadors
7. CX helps increase mindshare of the brand
- Delivering the expected CX, companies can increase the probability that a buyer will notice, recognize and/or think of a brand in buying situations - Basis on the methodology, companies that score moderately high on fulfilling CX requirements and enjoy a high share of mind with greater than 65 percent respondents recalling these brands
8. CX plays a pivotal role in building the 'Best Brand'
- 66 percent of respondents believe a brand is 'Best' if they 'Provide the same type of experience every time a consumer uses them' – Consistency of experience is key
9. CX requires organizational orchestration to create superior experiences
- Almost 75 percent of organizations consider a seamless customer experience a top or high priority supporting their digital transformation”
- A 'connected enterprise' that aligns the front, middle and back offices on meeting customer expectations creates business value and drives sustainable growth in a digital world
10. CX insights hold true across all industries
- Over 90 percent of the CEOs interviewed, across focus sectors, believe that CX is a high priority agenda going forward and will require dedicated attention
- CX is applicable to both B2C and B2B environments - businesses must orchestrate the 'how' relative to purpose and industry
“Today, creating a delightful customer experience is key to shoring up long-term customer relationships and creating sustained value, and the faith that the C-suite has in this notion is only getting stronger. Companies must overcome multiple hurdles like continuously evolving customer needs, preferences, and expectations, rapidly evolving technology, and organizational fragmentation, to deliver an improved CX.To summarize, focusing on customer needs and customer experience will be a lighthouse for staying relevant in the current market” Razdan further stated.
Ramesh Jude Thomas, Managing Director, EQUiTOR Value Advisory said “The new world of customer experience has made new demands on customers. If not managed skillfully, these demands can drive away large segments of your customer base. We believe customer experience has two aspects: What do I promise? and How do I fare on the promise? Neither of these can be restricted to just the marketing or the after-sales department. There is a measure for CX and the company as a whole is responsible to deliver that CX. What it means is, that it needs to be an entire organization that is defined by a singular promise, aligned to that promise from tooth to tail, and then measured for the continued relevance and delivery of that promise. This is an orchestration game, no less. And the orchestra effect is what the customer expects to experience.”