A new study has revealed a massive perception gap between how well businesses think they are marketing and their customers’ actual experience.
The US study by IBM and Econsultancy found that almost 90% of marketers agree that personalising the customer experience is critical to their success. Despite this widespread agreement, however, nearly 80% of consumers stated that the average brand doesn’t understand them as an individual.
The consumer/brand relationship has evolved into a two-way partnership where consumers are willing to share their most personal details with trusted businesses in exchange for experiences that are unique to them. The onus is on brands to deliver. To gain greater insight into both sides, Econsultancy conducted two US studies, the first with marketing professionals from 276 consumer companies, most with revenues in excess of $1-billion. The second study features direct responses from 1 135 consumers, the same people who are transforming the decade of digital into the decade of experiences.
The studies found that 80% of marketers strongly believe they have a holistic view of individual customers and segments across interactions and channels. In addition, this group also believes strongly in their ability to deliver superior experiences offline (75%), online (69%) and on mobile devices (57%).
Despite this agreement, only 47% of marketers stated that they are able to deliver relevant communications. In fact, even that figure may be too high. When consumers were asked if companies are personalising the shopping experience (products, deals and other information) for them as an individual, the response was a resounding no, even when it comes to their most trusted brands. Specific findings include:
* Only 37% of respondents believe their preferred retailer understands them as an individual
* Only 22% of respondents say the average retailer understands them as an individual
* Only 21% of consumers said the communications from their average are “usually relevant”
* Only 35% of consumers said the communications from their preferred retailers are “usually relevant”
This lack of understanding and relevancy may explain why many shoppers leave a brand’s website without completing their purchase. According to IBM’s Digital Analytics Benchmark, shopping cart abandonment rate continues to rise, reaching 73,7% in March 2015.
One explanation for relevancy void may be a lack of innovation for the multi-channel lives we all lead. According to the study, only 34% of marketers said they do a good job of linking their online and offline customer experiences. With the vast majority of dollars spent offline and the majority of product research happening on the Internet, the two are already linked for consumers but this gulf must close for marketers if they are to advance. One issue is the technology of integration, with only 37% of marketers saying they have the tools to deliver exceptional customer experiences.
A failure to deliver these experiences can be costly. Researchers asked consumers if they had changed providers in the last 12 months. The question focused on several service areas known to be inherently sticky, including banking, mobile, Internet and satellite/cable. Forty nine percent of consumers said they changed service providers in the last 12 months with experience-related factors playing a prominent role.
* Thirty percent switched due to provider failure, with 51% citing customer experience as the number one factor.
* Fifty nine percent switched because the new company offered something better, with 42% stating products as the top factor followed by experience at 29%.
“The customer is in control, but this is not the threat many marketers perceive it to be,” says Deepak Advani, GM of IBM Commerce. “It’s an opportunity to engage and serve the customer’s needs like never before. By increasing investments in marketing innovations, teams can examine consumers at unimaginable depths including specific behaviour patterns from one channel to the next. With this level of insight brands can become of customer’s trusted partner rather than an unwanted intrusion.”
Businesses that successfully deliver experiences pave the way for a surge in brand advocacy and customer trust. Researchers asked consumers about their willingness to share their most precious data with a brand. The results show that with an average company, 38% are willing to share their geographic data while 37% said they would do so with their personally identifiable information. When it came to trusted brands, these numbers spiked dramatically.
Details include:
* 72% said they would share their geographic data with a brand they trust, an increase of 89%.
* 61% would be willing to share their personally identifiable information with a brand they trust, an increase of 65%.
“The fundamental thinking behind digital marketing has shifted,” says Stefan Tomquist, vice-president research for the Americas at Econsultancy. “The goal of providing the right message to the right person at the right time is now just a part of the larger puzzle. The real challenge is providing the right experience for the right person at a time that’s right for them.
“At the centre of it all is the marriage of marketing and technology and a commitment to innovation that’s driven by individual customer needs.”