Proactive planning, which leverages data and technological tools, is needed to help businesses build customer experiences that retain and encourage referrals.
Customer experience is one metric that allows companies to retain customers, increase word-of-mouth referrals, and gain a competitive edge in their particular market. The pandemic threw many businesses into a marketing tailspin, where a conscious effort to craft impactful customer experiences that could reach across disruption met with unprecedented times.
Have companies been able to rise to the challenge? Unfortunately, not, according to an IFS survey released this summer. Companies are convinced that customer experience is a business differentiator, but they’re falling short on delivery. The survey results could shed light on this discrepancy.
See also: Inside McDonald’s Digital Transformation
Companies are pursuing digital transformation
Instead of pulling back technology spending in the wake of disruption, the survey finds that companies are allocating more resources than ever to its adoption. Business owners who are worried about economic disruption are more likely to increase spending on technology to pursue digital transformation. The past two years haven’t dampened the enthusiasm for it at all.
Digital execution is challenging and inconsistent across industries. The underlying purpose for making the move is to deliver consistent client and customer experiences by ensuring that business operations have fewer weak points and fewer risks. However, the connection between digital transformation and customer experience doesn’t always match.
The number one concern for decision-makers, 64% of respondents to the survey, is delivering a measurable return on technology investment quickly. They also worry that investment returns won’t satisfy relevant internal stakeholders.
Missing the customer experience mark
Technology should help companies develop impactful and personalized customer experiences, but the survey tells a different story. In many cases, survey respondents are aware of the disconnect and note important inflection points in the customer and business lifecycle. 79% of businesses have invested time and resources into finding out where these inflection points are, but a third fail to act on them.
Only about 15% of respondents take any kind of proactive approach to managing these inflection points, while the rest seem to take only defensive and reactive steps. Technology investments will bode well for recovery efforts, but only if companies take an active and thoughtful approach to the customer experience.
Companies that don’t could see far-reaching ramifications. One-quarter of consumer respondents would drop a company after one single bad experience. The survey doesn’t specify the severity of the type of negative experience, but consumers expect meaningful experiences pioneered by some of the most successful business models. What’s more, companies don’t have much of a chance to make it right, with over half of consumer respondents ready to leave after just two to three bad experiences.
Bad interactions can be amplified beyond the single customer as well. Over half of respondents are willing to share a bad experience publicly, reaching far beyond their innermost circle and leaving companies to monitor feedback across multiple channels.
Rethinking customer experience during digital transformation
Customers are just as willing to share about positive experiences as they are negative. With some thoughtful restructuring, companies can deliver the type of experience that keeps customers loyal and improves customer retention.
Technology investments should focus on coordinating people, assets, and customers of a business. Businesses must consider all customer touchpoints and leverage technology to reduce the friction.
90% of business respondents noted that they’ve restructured or have begun the process of restructuring to get a better handle on customer touchpoints. The magic lies in using technology to optimize each stage so that, in the end, the magic comes together for a customer experience that makes people want to shout the business name from the mountaintops.
In addition, better analytics can provide feedback for optimizing that cycle based on customer activity, preferences, segmentation, and other tags. Companies need to take the first steps to integrate data into their operations, so that customer experience moves from guesswork to something measurable and attainable.
The survey takeaways
IFS interviewed more than 1,700 business executives and 12,500 consumers worldwide to discover their thoughts and motivations surrounding critical inflection points, including moments of service frequently overlooked. 90% of respondents were changing their customer experience initiatives to focus on customer retention in the wake of disruption, and there lies enormous potential for future proof operations.
On the other hand, only about 18% of respondents have worked recently on creating the type of frictionless experience customers in the post-Amazon world expect. That’s not a good sign. IFS notes that the traditional business model focusing on products may not be enough anymore; businesses must shift to services and outcomes.
It seems that business leaders need to take proactive steps to tighten up customer touchpoints and ensure that every piece of the customer journey can converge to create the experiences customers crave. Businesses that ignore this process could lose customers to their competition.
Fostering customer experience with digital tools
Business owners seem to be putting their money where their worries are but stop short of managing an impactful customer experience. It’s only with proactive planning that leverages data and technological tools that businesses can build customer experiences that retain and encourage referrals.
Customers are ready to provide positive reviews and to stay loyal to companies that craft a compelling customer experience. Because that experience differs from company to company based on the services and outcomes as well as the ideal customer, leveraging data tools is the only way to optimize each touchpoint. Luckily, business leaders have invested in those tools and plan to increase spending there for a competitive edge. With a slight shift in focus — from gathering tools to focusing on customer outcomes — the return on investment could finally appear.