This article is fifth in our SAP CMO Series. To view a summary of the SAP/CMO Council Adaptive Customer Experiences research report, click here. To download the full report (registration required) click here.
Technology has caused a shift from product-centric to customer-centric business practices. The age of the customer has arrived and person-to-person engagement is both critical and profitable.
Emphasizing customer experience was essentially re-engineered out of business processes in the ’80s and ’90s as increasing organizational efficiency and cost-cutting took center stage. Today, however, is the “age of the customer” in which the customer is once again foremost.
“Organizations need to reverse-engineer current customer processes by looking at everything from the customer’s point of view,” states SAP’s Bernard Chung, Senior Director, Solution Marketing. “By identifying and mapping out the key steps of the customer journey, you can pinpoint bottlenecks, issues and barriers that prevent the delivery of great customer experiences.”
Great customer experiences – those that are personalized, tailored, interactive, engaging – are at the heart of customer engagement. Customer engagement was recently called “the latest concept to take the marketing world by storm.”
The origin of the concept, however, was traced back to 2006 by Dr. C.M. Sashi. Writing in 2012, Sashi stated, “Customer engagement has entered the lexicon of managers in private and public sector enterprises in the last few years as a concept that is critical to the success of their organizations. Its rise in the consciousness of managers has paralleled the emergence of new technologies and tools that enable greater interactivity among individuals and organizations.”
The CMO Council’s report, Mastering Adaptive Customer Engagements: A Look Into How Today’s Marketing Leaders Are Driving Business Performance Across the Customer-Centric Enterprise, along with the Customer Service Board, cite findings from various studies that indicate what technology-empowered customers want, expect, the benefits of meeting customer expectations and the consequences of not doing so:
- The revenue impact from a modest improvement in customer experience can range from $177 million to $311 million
- The impact from a 10-percentage-point improvement in customer experience score can yield more than $1 billion
- A modest increase in customer experience can result in a gain over three years of up to $382 million for US companies and up to £263 million for UK firms, depending on the industry
- 66% percent of B2B and 52% of B2C customers stopped buying after a bad customer service interaction
- 86% of buyers will pay more for a better customer experience, but only 1% of customers feel that vendors consistently meet their expectations
- 74 percent of consumers said the most important thing a brand can do to provide great service is to demonstrate it values the customer’s time
- As much as 70 percent of a customer’s buying experience is based on how the customer feels he or she is being treated
- 46 percent of consumers consider personalized, tailored offers as extremely significant to maintaining or growing their relationship with a brand
- Three quarters (75%) of consumers now expect to be able to provide feedback on their experiences in the moment
- 73 percent of customers trust recommendations from friends and family, but only 19 percent trust direct mail sent from companies they already know and do business with
Similarly, in his 2013 book Profitable Customer Engagement, Dr. V. Kumar provides a number of examples of firms that have “moved away from a product-centric to a customer engagement philosophy” and have reaped “huge gains in profits” from doing so.
And, with regard to personalized marketing experiences, a 2014 poll by Zogby found that Americans who expressed an opinion preferred seeing mobile ads that were relevant to their specific interests by a margin of nearly five-to-one.
As stated in the Mastering Adaptive Customer Engagements report, “we can all see the writing on the wall: The age of the customer is here, and marketers must respond with highly adaptive customer engagements.”
The purpose of the report was to “gauge how close organizations were to achieving these adaptive customer engagements.” The CMO Council conducted an online survey in the second quarter of 2014. With 319 senior marketing executives responding, the findings are eye-opening and the “Executive Perspectives” section provides keen insights. Fifty-two percent of the respondent represented B2B brands, 19 percent were from B2C brands, and 30 percent of the respondents were from companies that are a hybrid of B2B and B2C.
Sample of Key Findings:
Marketers define customer centricity as having a senior management team that is committed to understanding the needs of the customer, with teams that are functionally aligned and synced to a unified, holistic customer experience strategy.
Forty-five percent of respondents felt that their levels of customer centricity are good, if not high. However, 24 percent felt that department heads on the senior level are well aligned around an overall customer experience strategy but that the execution and management of the processes are left to be handled by the silos of individual teams or departments (customer service, sales, creative, merchandising, R&D, inventory, IT).
The survey found gaps in strategy and engagement including: Fifty-six (56) percent of marketers are only moderately satisfied with their company’s ability to listen and respond to the needs of the customer. Other challenges identified included having a culture that is focused on the customer and values a customer experience strategy, the alignment of teams to work synergistically, establishment of processes to track customer experience and business goals, prioritization of customer experience strategy and processes over others implemented by the company, and hiring the right talent needed to execute on these programs.
“Executive Perspective” Section
Seventeen marketing executives agreed to be interviewed and profiled as part of the research. Brands participating in the qualitative interviews included MasterCard, McCoy’s Building Supply, Sony Electronics, Green Edge Technologies, and h.h.gregg. Important themes that emerged from the interviews include listening to customers, using predictive analytics, having a deep understanding of customers, and retaining long-term relationships with customers. As Melanie Shook, VP of Client Support at NeuStar, put it, “Our organization is one that really strives to create clients for life, and that’s our fundamental principle. We demonstrate that starting at the pre-sales process and continue through the sale, and we support the customer throughout the lifecycle. Every touchpoint in the interaction is viewed as a moment of truth, defining that relationship even further so that we can work with our clients over a lifetime.”
Customer engagement is more than just a hot topic. It is a response to the technology-driven “age of the customer” that requires businesses to create and value a customer experience strategy, pay attention to customers and understand them, personalize interactions, respond to customer needs, and build long-term relationships. Businesses that master adaptive customer engagements will garner and retain customers and boost revenue. It is the ultimate win-win opportunity.
Latest posts by B2BNN Newsdesk (see all)
- Reasons Why Hiring A Trade Show Booth Design Company Is A Good Option - August 14, 2019
- Web Push Notification: Scheduling Delivery Time to Help You Reach Users - July 31, 2019
- The top 8 signs your ABM strategy might be in trouble - March 16, 2019