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Since the pandemic has placed industry into such hot water, however, the mantra has taken on a completely new level of importance. Customer experience is fundamentally the sum of each and every touchpoint a customer has with your company.
By: Adi Gaskell, Katerva’s Futurist
Prior to the coronavirus pandemic, the retail sector was realigning itself towards the delivery of exceptional customer experience. A recent study by Forrester Research for Adobe found that businesses that are driven by exceptional customer experience had 1.4 times stronger revenue growth, 1.7 times better customer retention rates, and 1.6 times better customer lifetime value.
This was not especially new or revolutionary thinking. Sam Walton famously said that the “goal of a company is to have customer service that is not just the best, but legendary.” The mantra of being a customer focused organization has been one that many companies have claimed to adopt over the past 40 years or so, but for many, this remained largely lip service.
Since the pandemic has placed industry into such hot water, however, the mantra has taken on a completely new level of importance. Customer experience is fundamentally the sum of each and every touchpoint a customer has with your company. For an experience led business, the ultimate goal has to be to make each of these customer interactions exceptional. Achieving this is anything but easy, not least because touchpoints can occur across the entire customer journey, whether it’s as the customer is planning their purchase, doing their purchase, using their purchase or receiving support for their purchase.
The challenge is that modern customer journeys are often a complex web of interactions that take place across a multitude of different channels and platforms. Any one of these touch points can be enough to delight or frustrate the customer, encourage or derail the sale. Achieving the coordination required to ensure that everything seems utterly seamless to the customer is an incredible challenge. As the Forrester data highlights however, when you can get it right, the dividends are handsome indeed.
So what are likely to be the fundamentals of great customer experiences in the post-covid world? A probable first step is to go big on caring for your customers, and indeed your employees, suppliers and other stakeholders. People want to know that you’re a company that does the right thing, not just in the good times, but in these most challenging of times. It’s estimated that around ⅔ of customers choose to buy from socially responsible companies. This is a figure that was already rapidly on the move before the pandemic, and is only going to rise afterwards.
You will also need to meet your customers wherever they happen to be. We’re already seeing a significant shift in buyer behaviors in the grocery market, with customers exchanging smaller, more frequent shops for larger weekly shots as they bid to reduce the risk of infection. There has also been a huge increase in online penetration across the world, and this demand has risen for product groups, such as groceries, that had traditionally struggled.
Digital has become an essential element of any retailers offering, and nowhere was this more starkly displayed than in the complete eradication of sales at discount fashion retailer Primark, whose lack of online presence meant their sales fell to zero after the coronavirus lockdown. Being able to provide exceptional digital operations is no easy feat, and market leaders, such as Amazon and Netflix, have been finetuning their service for years, but now is the time to up your game as quickly as possible.
Glimpses into the kind of changes to customer preferences in the post-covid world are already evident in China, where there has been a 55% rise in those pledging to conduct most of their grocery shopping online. This has correlated with a growth in market penetration for e-commerce of around 6%. This growth matters, not least because the pandemic has forced e-commerce on many consumers for the first time. For instance, data from China suggests that the number of over 45s using e-commerce grew by 27% during the pandemic.
There’s significant evidence to suggest that the duration of the pandemic will be long enough for these first timers to acclimatize to shopping online, such that returning to the bricks and mortar world may be slower than many retailers expect. After all, it was a shift that was already underway before the pandemic, the virus just sped the transition up.
The economic situation is also likely to remain challenging, for retailers and consumers alike, so cost savings will need to be found without sacrificing customer experience. Things like digital self-service can be an effective way to both boost customer experience and save money, and these kinds of win-win strategies are likely to increase. In banking, for instance, servicing customers online is considerably less expensive than in branch, but it will require a degree of assistance to help ease late adopters into online channels.
Agility was a capability that was highly sought after before covid-19, and it’s value is only going to increase in the wholly uncertain and fast-changing environment that is going to greet us when society emerges from the pandemic. The lockdown has tested the ability of companies to provide robust customer service during a crisis, and these skills will be invaluable in adapting to whatever the post-covid world throws up.
Necessity has forced many companies to adopt agile processes that allow for rapid experimentation. These are characteristics that have long been advocated to allow firms to respond to the 4th industrial revolution, and they will be characteristics in high demand at the current time.
Strive to build your ability to sense what is happening, and respond in an agile way. You will need to listen intently to what your customers and employees are telling you, and to do this on an ongoing basis so you can adapt to the changing environment. Change is the new normal, and organizations will need to adapt.
The COVID experience has, more than anything else, underlined the importance of human interactions. Being deprived of those we love has reinforced just how important it is to treat one another well, and companies that can do that will reap the rewards. Those that cannot may feel the force of consumers who will develop long memories.
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