In this edition of TheCustomer Quick-Take – 4 big reasons enterprises are focusing on CX, 2 big data challenges, 2 loyalty challenges, 2 data privacy challenges, TikTok reigns, and the fate of the universe is now on your shoulders.
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Was it the Pandemic??
Quick-Take: According to the Restaurant Readiness Index, restaurants now generate around 40% of their total sales by selling to customers online, via a mobile app, using third-party aggregators, or via other digital ordering options.
Better to Compete on Experience than Price
Quick-Take: Research backs these claims: two-thirds of companies say they primarily compete through CX (Gartner), and Dimension Data’s 2017 Global Customer Experience Benchmarking Report revealed that 84% of companies that worked to improve their CX had a correlated rise in revenue.
Better to Compete on Experience than Quality
Quick-Take: Some research has argued that a pleasurable decision-making process, combined with achieving a goal (purchase), is independent of the consequences of a decision (the experience process). So, even if a product ends up not being that great, it was still a positive experience. The user is more likely to return for other purchases.
Better to Compete on Experience than … not
Quick-Take: More than two thirds of consumers (70%) report making purchase decisions based on the quality of customer service they receive. The global Zendesk (NYSE: ZEN) Customer Experience (CX) Trends Report 2022 shows that a majority of businesses surveyed agree there is a direct link between customer service and business performance. Despite this, many consumers (54%) feel customer service is an afterthought for businesses, indicating a gap between consumer expectation and company actions.
Data Challenge Part 1
Quick-Take: Most companies struggle to take the data that they capture and synthesise it into a 360-degree view of their customers. In fact, ensuring data quality and access from a variety of sources are the top two concerns for analytics and measurement professionals (source: Forrester / Burtch Works Q3 2019 Global State of Customer Analytics Survey). On average, poor data quality costs businesses approximately $10 million to $14 million each year, according to research firm Gartner – in part because the vast majority of the data that companies generate is siloed and/or unstructured. Even once you do have the data, proper data stitching requires significant resources and expertise.
Data Challenge Part 2
Quick-Take: According to a recent study from Capgemini, only 45% of marketers say they have a customer data platform that provides a unified and single view of customers. The other challenge that many brands face is the lack of relevant skills and internal experts to properly manage personalization efforts. In the same study, only 44% of marketers say they have an adequate supply of skills in areas such as artificial intelligence (AI) and machine learning, or data analytics and data science.
Loyalty Challenge Part 1
Quick-Take: Brand loyalty is born out of some of what Joanna said, in terms of enjoying the product and availability. But some of it is really about wanting to create an image for yourself. And I think that’s why there are some people who say younger generations are not brand loyal. And it may just be because there hasn’t been something in the category yet that captures their imagination or describes themselves the way they want to be defined.
Loyalty Challenge Part 2
Quick-Take: According to a recent Deloitte Digital survey, while rational factors play a key role at the beginning and end of relationships, it is the emotional factors that inspire brand loyalty. 60 percent of long-term customers use emotional language to describe their connection to their favored brands. And, among the emotional factors that consumers feel most aligned with their favorite brands, trustworthiness (83%), integrity (79%), and honesty (77%) form the top three.
Data Privacy Complexity Part 1
Quick-Take: Data privacy laws have been witnessing a rapid escalation for the past few years all across the globe. Privacy laws 2021 and privacy trends 2022 are proofs of that. We can expect to see the rate with which privacy laws burgeon rise in the coming years. Analysts indicate that about 65% of the total population of the world will see itself being under the influence of modern privacy laws and regulations by the year 2023.
Data Privacy Complexity Part 2
Quick-Take: Beyond the increases in fine totals, the law firm believes the greatest data protection compliance challenge for companies is ensuring data transfers between the European Union and third countries are compliant with the July 2020 “Schrems II” judgment, which held data can only be transferred out of the European Union if the origin country can guarantee the same level of data protection as the GDPR.
Funnel Issues
Quick-Take: The Funnel is essentially an assembly-line process born from an assembly-line mindset. It’s unidirectional and transactional. You plug in raw material at the top of the line, and you get output at the bottom. And you’re done. You pack it, you ship it, you never see the raw material or the item again. Your relationship with the customer— such as it was—is over. If you want better results, well, you can try to improve the factory process. Maybe put in some better-quality controls, train your delivery drivers better, use cheaper materials, improve your tracking technology. But still your orientation toward the customer hasn’t changed. You’re still not seeing the customer in terms of a relationship. You’re seeing them in terms of a transaction. The Funnel is transactional. It serves and reflects our needs but has little to do with what the customer is experiencing and desiring. Furthermore, it is based on the illusion that the seller still controls the marketing, selling, and sales processes. And that is no longer true.
Sustainable Opportunities
Quick-Take: Retailers were surprised to learn that consumers are willing to spend more for sustainable brands. While two-thirds of consumers say that they would pay more for sustainable products, two-thirds of retailers believe that consumers would not be willing to spend more for sustainable brands. Equally revealing was the discovery that nearly three-quarters of the consumer respondents value product sustainability over brand name; nearly all—94 percent – of the retailers believe the opposite, saying that brand name would be more important to consumers than sustainability.
TikTok Investment
Quick-Take: Over the past few years, the adoption of TikTok has skyrocketed among US adults, with weekly usage and the popularity of the video app being particularly high among Gen Z. Data from WARC’s Marketer’s Toolkit 2022 indicates that marketers are getting on board and increasing their investment in TikTok this year. Some 84% of the marketers surveyed for the report expect to increase their spending on TikTok in 2022. That’s close to twice the share of marketers who said they planned to increase their investment in the platform in 2021, while in 2020, only one-third of marketers intended to increase their investment.
It’s Up to Us Now
Quick-Take: We find a world ensnared in a vicious cycle of distrust, fueled by a growing lack of faith in media and government. Through disinformation and division, these two institutions are feeding the cycle and exploiting it for commercial and political gain. We see an even greater expectation of business to lead as trust in government continues to spiral. But this is not a job business can do on its own. Business must work with all institutions to foster innovation and drive impact.
Photo by Camilo Fierro on Unsplash.
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