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Customer experience – turn effort into impact

Customer experience – turn effort into impact

Australian consumers think most brand interactions lack differentiation, and brands face challenges setting themselves apart. But the good news is there are key ways to step up CX to get noticed.

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Partner, Design Thinking

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KPMG’s Customer Experience Excellence Report 2018 found that Australian consumers rated their experience with many Australian brands as flat. Not bad, but also not outstanding or memorable.

Participating consumers had interaction with these brands 6 months prior to the report’s survey, and were asked to evaluate their experiences across six pillars of customer experience excellence (CEE) – Personalisation, Integrity, Time and Effort, Expectations, Resolution and Empathy.

Eighty percent of Australian brands received an average CEE score between 6.5 and 7.5 (on a scale of 0 to 10). The worst and best performing brands scored 6.17 and 7.94 respectively.

In other markets, the difference between brand performance is much wider. For example, CEE scores in the UK range between 4.21 and 8.22.

This suggests that brands in Australia are struggling to find a value proposition that differentiates them. With customer experience (CX) investments continuing to increase (according to Markets & Markets, global spend on CX technology market sizing and forecasts, 2016) these results come at a surprise.

What is holding Australian companies back from CX excellence? And what can they do to maximise their impact?

Australian CX challenges

Australian brands face a number of unique challenges when it comes to developing best practice CX. These include:

1. Increasing consumer expectations, fuelled by global competition

Consumer excitement about experiences that are new and innovative diminishes quickly, and Australia faces strong competition from global companies entering the market, which are educating Australian consumers on what ‘good’ looks like. This puts pressure on local brands to improve their services to match.

2. Australia continues to focus on price

Companies are under constant pressure to lower prices, so can have little budget to invest in CX. Many Australian brands limit CX efforts to removing pain points. However, wiring consumers to focus on price makes local brands vulnerable to global market entrants. The global entrants can leverage economies of scale to offer lower prices whilst maintaining, or even improving, product quality and service.

3. A full customer-centric transformation is rare

Global leaders in CX have shown that a differentiated offer requires more than implementing technology and embedding an innovation lab or customer research department. To truly shift the dial on CX, the whole organisation is required to live a customer-first mindset, break down existing silos, and rally around customer needs and journeys. There are pockets of CX excellence in Australia, however few companies have undergone a full customer-centric transformation to ensure that the front, middle and back of house are aligned. Without this, CX departments can face significant internal barriers to transformation, and CX investments can fail to deliver the expected returns within expected timeframes.

KPMG’s report shows that most sectors in the Australian market are lacking CX champions that deliver unique experiences at scale. There is a great opportunity for Australian brands to be ‘first movers’ in their sector, and to provide truly outstanding experiences.

Achieving CX excellence in Australia

To move away from price competition and instead offer a compelling customer experience, brands need to provide a value proposition that goes beyond functional and economic value, and moves into emotional or symbolic value.

To achieve this, CX brands can take the following steps:

1. Get close to customers

Primary research will provide in-depth insights into the target market. A combination of qualitative and quantitative research is best, across demographic, geographic and behavioural perspectives. This research can be enhanced with wider market insights, trend analyses, and future predictions. The knowledge can be translated into business tools – for example personas and journey maps – to communicate what matters to target customers. This can enable the business to reorganise around customer needs, and implement a customer-centric mindset across the organisation.

2. Show customers that they are understood

Intelligence around the niche market will also allow an organisation to build a compelling value proposition and brand story. A compelling story that reflects an honest understanding of the needs and wants of the segment is key to separating a brand from price-focused competitors. It is about showing that the brand understands customer needs before they realise they have them.

3. Design memorable products and deliver meaningful experiences

Guiding principles can be distilled from the brand story that will guide all functions of the organisation, including marketing, communications, product, pricing, technology, and omni-channel service delivery. Championing these principles will ensure customers receive an experience that is aligned to the brand, and provides more than just functional and economic value. This helps to drive loyalty and advocacy beyond price.

The expectations of consumers when it comes to the retail experience are rapidly moving. Find out where the potential is in Retail consumer trends and the customer experience.

Reach out to learn more about how you performed against your competition in KPMG’s Customer Experience Excellence report.

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