Businesses in every major industry today find themselves in the beginning of a prolonged two-front war to attract new customers and retain existing ones. On one front they’re competing with nimble, risk-taking startups out to disrupt existing market share by forcing them to rethink how they interact with customers. On another front they’re competing with the Amazons of the world who leverage unrivaled scale and distribution to upend traditional brands in any industry. The foodie upstarts eating into Campbell’s market share and the growing alliance between Walmart and Microsoft are just a few recent examples of businesses facing pressure from both a giant on one front and small, agile competitors on the other.
This war is producing casualties. Research found that an S&P 500 company is being replaced roughly once every two weeks — which means around 75 percent of the S&P 500 would be replaced during the next 15 years. And overall turnover in this group of the largest companies in the world is actually accelerating. So what’s the secret to survival? Cultivating lasting customer relationships. A study from ACSI found that customer satisfaction is directly linked to stock market performance and business growth. Companies must double down on operationalizing their customer experience strategy across systems and teams.
Arm Yourself with CX R&D
Above product and price, customer experience is the primary driver of today’s purchasing decisions. Yet, many companies maintain a relatively shortsighted view of CX-specific investments. In the past, companies dedicated R&D resources to improve products and services. However, today, CX is king and businesses must invest in testing what works and what doesn’t work when building customer relationships. Bottom line: companies need to invest more of their R&D into CX.
For example, Walmart’s incubator, Store No. 8, launched companies like Jetblack, to prioritize mobile ordering and expedited delivery, and Spatialand, an immersive VR retail experience. Both developments address a demand from today’s consumers for an elevated brand experience. The results? Walmart’s online sales increased by more than 30 percent last quarter and the Walmart executives expect them to increase more than 40 percent in 2018. Companies who invest in CX-focused R&D and new technology to improve customer relationships will win in the long run.
Appoint a Commanding CX Officer
While customer experience is not a new business priority, its growing importance demands a renewed focus and ownership within a company. Many companies delegate customer experience to a marketing subgroup or customer support. However, to be successful customer experience management needs to be embedded within a company’s customer-centric culture whereby every individual within the organization has a focus on that intention. Today, a customer journey may start with marketing or the call center, but it almost never stops there. In fact, more than 50 percent of customer interactions happen during a multi-event, multi-channel journey in which they are interacting with multiple individuals across the organization.
Today’s leading companies recognize the nature of the omnichannel customer journey, and are
creating new business roles and customer-centric teams and cultures to reflect the demand for superior customer engagement. For example, companies like Walmart and Qantas have appointed a single CX Lead or Chief Customer Officer with the responsibility of overseeing the full customer lifecycle from onboarding to upsell to retention campaigns. Others have created cross-functional CX teams to manage the end-to-end customer experience and build lasting customer relationships.
Wield Customer Experience Data
In the two-front war, your proprietary customer data is sometimes the only thing differentiating you from your competition. Customer data is a business’ strongest asset because it helps personalize every touchpoint along the customer journey resulting in higher customer engagement, satisfaction and retention.
Netflix is an example of a company that sets a gold standard for customer experience because it’s a direct-to-consumer platform that protects and operationalizes its customer data to curate personalized experiences based on past touchpoints along the customer journey. Beyond Netflix’s “recommended-for-you programming” and “choose-your-ad experience”, the company is also leveraging customer data to influence its content creation.
While most other companies have a relative wealth of proprietary customer data, they have not yet mastered how to wield it. Why? These organizations use an average of 35 different data gathering systems with little to no integration.
Companies must have a unified customer record so every department can see a real-time, 360-degree view of all customer interactions and in turn can act on crucial customer data signals. Businesses must also invest in hiring and retaining people who deeply understand that a customer’s experience encompasses all touchpoints with an organization.
The two-front war is only in its infancy and customer experience is the new battleground. To survive, businesses must adapt to the new standard of personalized, customer engagement by making the right investments in leadership, R&D and data integration.