The prospect of another year of lacklustre growth presents forward-thinking business leaders with the perfect reason to tap into the “experience economy”.
Nathalie Schooling of customer experience specialists nlighten says the country’s lackadaisical approach to customer experience is a glaring gap that could deliver tangible results if properly filled.
“It’s no secret that companies with a strong customer-centric approach see better revenue growth. Unfortunately, this is something I believe a lot of South African businesses are still not getting right,” Schooling says. “Given that consumers have tightened their belts, first quarter retail sales are in decline, and global competition is already disrupting local business sectors, this is a level of complacency that SA Inc simply cannot afford.
Local companies not awake to changing buying behaviour
“Globally, leading brands have latched onto the so-called experience economy that is informed by new buying behaviours that are no longer driven by traditional consumer values. Price, for instance, is less of a deciding factor, with a 2018 PWC report showing that consumers are willing to pay as much as a 16% more for a great customer experience.”
The experience economy refers broadly to consumers’ desire to be placed at the centre of the buying experience. They might be seeking a transformative experience such as travelling to unique locations rather than popular tourist traps, or simply for a shopping experience to be friendly, fast and efficient.
Schooling says one needs to look no further than the multitude of apps and digital services that have transformed how people perform the most mundane daily tasks. Tech giants have raked in customers by the hundreds of millions as their services easily cross borders at a pace and scale never seen before.
The speed of their advance has left countless industries – from the media world to metered taxis – lurching as they try to adapt.
Technology itself is not the answer
“In my opinion, local companies most at risk are those unwieldy dinosaurs that have been happy merely to exist, with no need to compete. The added danger for them is that competition doesn’t have to be global: look at the three new banks – with hardly any physical branches – that have launched in South Africa in the past 18 months.
“It will be interesting to see how these new entrants fare in the market. Their services are mostly digital, which instinctively feels like the right move, although technology in itself is not the answer. The success of any customer-centric approach relies on a thorough and holistic strategy, which is then translated into an action plan that should hopefully become ingrained in the company culture.”
Schooling says businesses in all sectors should be sitting up to take note of the change in customer expectations. Sectors that may feel they’re immune to technological disruption are at as much risk from smaller, nimbler competitors who see the value of placing customer’s needs first.
That threat is real and potentially damaging, with a nlighten study showing that companies could see up to 30% more in sales if they maintained consistently high levels of customer satisfaction.
“The idea of an experience economy is not a myth or fad that business leaders can afford to ignore. It is here, and consumers are aware that they hold the power. It is up to the brands that are most hungry for the business to deliver a customer experience that today’s consumers demand.”