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BUSINESSES MUST RUTHLESSLY FOCUS ON CX TO BOOST COMPETITIVENESS AND REVENUE

Talking to your customers through the product experience

Article by Simon Erdmann,
Digital Business Leader

CX is overtaking product, brand and price as a key competitive differentiator


Happy customers are returning customers. Focus on customer experience (CX) is sometimes overlooked but it is becoming an increasingly critical success factor for companies – and not only in consumer facing industries.

Across almost all industry sectors good customer experience (CX) has never been more important to attracting and retaining customers. In today’s digital world customers want seamless, hassle-free and contextual experiences across the many virtual and physical channels and devices they use to interact with businesses.

Nearly 90 per cent of companies now expect to compete on the basis of customer experience, versus just over a third in 2012, according to Gartner. That means customer experience increasingly trumps brand, price and product as a key competitive differentiator.

There is also strong evidence linking positive revenue potential from improving CX. Forrester’s most recent CX Index modelled the revenue impact of improving CX for 13 industries and found that revenue potential and CX quality move in lockstep – across every industry.

The Forrester study calculated the revenue impact of a company increasing its CX Index score by just one point. Mass market car manufacturers showed the highest potential increase at $873m because the high per-unit revenue from the sale of each car obviously makes winning additional customers very attractive.

In some industries, such as airlines, it is more important to improve poor CX to avoid driving unhappy customers to rival airlines. In other industries, such as retail banks and up-market hotels, the biggest benefits are from creating exceptional experiences that move already high CX Index scores to even higher levels.

In consumer facing industries such as financial services and insurance, CX is obviously important. A recent Cognizant study, The Future of Money, consistently found that financial providers either overwhelmed their customers with information, product options and features, or they outsourced financial decisions for their customers, leaving them feeling like they were in the dark. In both scenarios, customers felt out of control and unsupported.

Take the example of a branch-heavy client in the financial services sector where the issue was about customers queuing and how to improve that experience and make it more convenient. To do that means thinking about the customer experience even before they have entered the branch so that when the customer arrives the staff already know what they have come in for and can deal with them more quickly and efficiently.

But it wasn’t just about improving the CX in the physical branch for that client. They also looked at how they could improve the back-end process from purchase to paying. This project involved looking at newer digital technologies, specifically blockchain-based technologies. The client was able to reduce the processing time from purchase to pay from 12 minutes to just four seconds. That’s not only much more efficient but makes it a much better and faster experience for the customer. It’s also a virtuous circle, where the cost savings from the more efficient purchase to pay process can be put back into the front end physical experience by increasing the number of customer service employees in the branch.

However, CX isn’t just about traditional consumer sectors. It’s also becoming a critical factor in business-to-business sectors such as manufacturing, where the focus has traditionally been on the product. According to an IDC Manufacturing Insights report, one of the main catalysts for this is the expectation of business customers is now for the same rich level of interaction and personalization that they get in their personal consumer transactions. And that means a strong product and competitive pricing are no longer enough alone. Focusing on CX will also be essential for manufacturers as they transform their traditional business models from making products to also selling new value-add services.

Multi-disciplinary teams are essential to tackling CX and user interface (UI) design. That means a technical team doing analysis of the data, prototyping and user testing. Then the customer experience team focuses on the content, tools and visual design. Newer digital technologies, such as automation and artificial intelligence (AI) are also becoming increasingly important to delivering a great CX today.

CX and user interfaces might not seem like the most important aspect of attracting and retaining customers and increasing revenue compared to advertising or acquiring other companies. But as many recent studies show, good CX is directly correlated to higher revenue and it will increasingly become the most important competitive factor. And let’s not forget that hugely successful companies such as Apple, Amazon and Google all focused ruthlessly on CX. 

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