10427 The Retailer Autumn 2018_Final Draft Pages

WHY CUSTOMER EXPERIENCE IS MORE IMPORTANT THAN BRAND

Kareena Uttamchandani Senior Manager Solutions Consulting Medallia

IN THE ‘AGE OF THE CUSTOMER’ BRANDS ARE EITHER BUILT - OR BROKEN - ON CUSTOMER EXPERIENCE

Meanwhile, the rise of social media and online review sites has increased the importance of customer experience to a brand’s reputation, and diminished companies’ ability to shape their public images through traditional advertising and communication efforts. What all of this means is that companies can no longer rely entirely on the strength of their products and advertising to sustain a positive brand reputation. Instead, they must ensure that each customer interaction is a positive one, and correcting any problems as they arise. Otherwise, they risk finding that their products and advertising no longer have the impact they once did. Make or break In “The Age Of The Customer”, brands are built — or broken — on CX. These trends are especially strong among the younger generations, Millennials and Gen Z, who have grown up in a world of responsive brands and personalised CX and are accustomed to being in regular dialogue with companies. These consumers hold brands to high standards and are quick both to penalise companies for negative experiences and to reward them for positive ones. Sixty-four percent of global consumers claim to have avoided a brand because of a bad experience they had within the last year. Almost half (47 percent) say they have avoided a company because of its online reputation or negative social reviews. In contrast, 77 percent claim to have chosen a product or service from a company because of good

For years retailers have relied on the power of brand to appeal to customers and draw them to their stores. Famous faces, promotional discounts, catchy slogans and advertising campaigns are some of the tried and tested tactics used to heighten a brand’s appeal and highlight its wares. However, in this ‘age of the customer’ does brand power still have enough of a pull on today’s customers? Think brand and most retailers will still think product – and herein arises the problem. As although a product holds purpose, it evokes few emotional Today’s customers have benefited from a wave of technological innovations that have provided a multitude of choices and ever increasing expectations. Irrespective of age or gender, customers expect a seamless customer journey, exemplary customer service, and an experience with brands. And if they don’t get it, they are not afraid to vocalise it - to the brand, to their friends and online to the public. As such, the balance of power has shifted, and the customer, not the brand, is king. Recent research conducted by Ipsos and Medallia of more than 8000 consumers across the US, UK, France and Germany has found as high as today’s customer expectations are, they are also continuing to rise. In fact, one fifth of online retail consumers say their customer experience (CX) expectations are higher than they were just two years ago. Expectations may also be rising faster among younger customers than older ones with, 30 percent of Gen Z consumers claiming to have higher expectations than two years ago.These changes largely reflect a keen awareness among consumers of how their experiences with any given brand stacks up against not just its own competitors, but also against businesses in other industries. CX vs Brand As well as comparisons with other sectors, consumers place utmost importance on their own personal experiences with brands (50 percent), as well as the opinions of friends, family or known peers (20 percent). By comparison, only about 16 percent of consumers view a company’s brand reputation as a top reason to patronise it, and an even smaller percentage suggest they would be swayed by a company’s advertising communications online (7 percent) or in traditional media outlets (6 percent). connections with its buyer. Great expectations

experiences they had with it. Staying a step ahead

If these trends are any indication, the successful brands of the future will be those that stay ahead of the curve and look for ways to continually improve their CX strategies. Indeed, with 73 percent of offline retail customers claiming they’d pay more for

better CX, it is certainly worth the effort. Here are some top tips on staying ahead:

• Make sure customers have a seamless journey with your brand - develop a deep understanding of when and why customers prefer to use one device or channel over another, and what makes for a great experience in and across each of these interactions. • Improve the process for resolving customer issues - customers are continually dissatisfied with how problems with retailers are resolved. Keep the customer informed, offer a discount, and above all treat the customer with respect to improve overall experience

38 | autumn 2018 | the retailer