Peter Whibley, product marketing manager for KANA, A Verint® Company
Across industries, the brand emerged as a surrogate for knowledge, representing a dependable level of quality. In the absence of other information on which to make a purchase decision, we automatically reached for trusted brands. In an uncertain world, the brand was a stamp of quality. However, the power of the brand is being eroded. Web technology and, in particular, social media now mean that we have no shortage of knowledge sources, and customers no longer have to rely on official sources of product information when it comes to researching their buying decisions. Increasingly, we are relying on customer advocacy or the opinions of fellow customers using sites, such as Consumer Reports and Trip Advisor, before making a buying decision.
Technology and the ability of consumers to share their customer experience are eroding the importance of the brand. Not so many years ago, brands could rely on the protection afforded by predictable “one to one” communication. If a business found itself on the receiving end of criticism from a customer, the chances were that it would have no significant impact on the company’s reputation unless the issue that customer raised was newsworthy. Today, a poorly handled interaction with a customer has the potential to grow from an anecdote to the reputational equivalent of the Big Bang in seconds. Indeed, brands today run the risk not of erosion, but of brand inversion – from “hero to zero” in seconds.
While it has never been easier to obtain information about an organization, it’s also never been easier for customers to switch providers. New, more agile industry startups or digital disrupters are taking market share from established brands. These digital disruptors are often Internet-only businesses focused on customer experience as a key differentiator.
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These digital disrupters are supported by government regulation that is forcing established organizations to make it easier to switch and compare. In the UK, September 2013 saw the introduction of the “Current Account Switch Service” as a core part of the government’s plan to reform Britain’s banking system. For the first time, consumers must be able to safely and reliably switch their accounts between banks in seven days, with a guarantee that they will be fully protected against any financial loss in the event a problem occurs during the switch. In addition, the recession, combined with cheap, ubiquitous digital technology and the growth of price comparison and financial advice organizations, have turned chasing a deal and switching service providers into almost a hobby.
No industry is immune to this explosion in disloyalty. Within the financial services industry, it is estimated that up to 35 percent of banks’ market share could be in play by 2020 as traditional branch banking gives way to new digital players in payments, lending and Internet banking. Acquiring new financial service customer costs five to 10 times more than retaining an existing one, and it can take two to five years to recoup resources spent on getting a new customer. On top of this, the recent financial crisis has broken trust with established financial services providers and has made consumers more willing to explore alternate financial services providers. In today’s highly regulated financial services market, where very little differentiates one organization from another; organizations can no longer rely on their brand to attract and retain customers. Increasing customer advocacy through enhanced customer service and customer experience is of critical importance.
Customer advocacy, therefore, has the brand on the run. If organizations want to increase customer advocacy, they need to behave like digital disruptors and focus on customer experience. To do, this they need to begin to emulate digital disruptors and match their differentiators of simplicity, convenience, speed and consistency.
Customer experience is often defined as how customers perceive their interactions with an organization. Each one of these interactions is a business process. Many customer experience leaders just execute their business processes better than their competitors. Take for example three customer experience leaders — Amazon, Apple and First Direct. All three organizations execute their key business processes with precision. Amazon excels in logistics processes, Apple in supply chain and research and development, and First Direct delivers leading customer service within the financial services industry.
The proliferation in customer channels is the response by companies to continuously search for new ways to fit the needs of their customers. Rather than force customers into fixed, inflexible, cookie-cutter business processes, successful organizations adapt their processes to customer needs. The Amazon Mayday service or the growth of click-and-collect is perfect examples of how organizations can be more successful by adapting business processes to make life convenient for their customers.
Customers now expect customer service on their terms, via their preferred channel and at “social speed.” Social media has changed customer expectations when it comes to speed of response. To deliver speed within a customer service context, service agents need business tools that eliminate delays in obtaining customer data, provide key knowledge within the context of their work and eliminate the headache of application switching.
Customers now engage with organizations via a variety of channels, using multiple devices. Customer service no longer starts and ends in the contact center. Whether it’s Web, social, chat or voice, customers choose their preferred channel when engaging with organizations and sometimes use multiple channels during a single transaction. Understanding this customer journey is critical, and ensuring consistency for customers on whatever channel they wish to engage is the challenge for organizations.
Established organizations can no longer rely on the power of their brand to help them win and retain customers. Customer advocacy and the opinions of others are of critical importance across all industries. To increase customer loyalty and drive customer advocacy, established organizations need to adopt the simplicity, speed, convenience and consistency attributes of the digital disruptor. Knowledge availability, government regulation and new digital alternatives have made switching so easy that customers won’t wait for you to get service right.
About the Author
Specializing in helping organizations architect next-generation customer experiences, Peter Whibley is product marketing manager for KANA, a Verint® Company.