The internet offers everyone an equal platform. In this competitive environment, it’s challenging for retailers to differentiate. But there is also opportunity – new innovative players and disruptive business models are emerging and reshaping the market, pressuring traditional retailers.
By James Bayhack, director of sub-Saharan at CM.com Africa
In this shifting customer landscape where every digital interaction has the potential to establish a long term-relationship with a customer, businesses can no longer only take a transactional approach. Focusing on closing short-term sales or differentiating your products and services on price alone is difficult, and it means that opportunities are missed, such as the lifetime value of a customer who keeps coming back, and opportunities for cross-selling and upselling.
Instead, businesses should embrace a more relational business model: one that focuses on the customer’s unique needs, their experience during their journey, and nurtures a long-term relationship through seamless, personalised interactions. A relational business approach leads to repeat sales and increased loyalty. Once the initial sale or conversion has happened, the brand keeps in regular contact with the customer, building rapport, and encouraging advocacy. Differentiating on service and customer experience does cost more, but if companies do this well, consumers are willing to pay higher prices.
Considering this shift, many business leaders are now asking themselves: what exactly do today’s customers expect from our interactions with them? And how can they meet those expectations?
This time it’s personal
Personalisation has become central to customer experience. A report by McKinsey highlighted that as many as 71% of today’s consumers expect companies to deliver personalised interactions, and 76% get frustrated when this doesn’t happen. The report also found that companies that excel at personalisation generate 40% more revenue from those activities than companies with average personalisation.
Businesses leveraging analytics-generated recommendations of products and services, for example, are at an advantage: they can shape the customer experience across different channels, allowing them to provide tailored experiences at the right moments to the right customers.
Personalisation doesn’t only apply to marketing. Service channels and contact centres provide an opportunity for personalised interactions. Historically, however, many companies have emphasised efficient service rather than rich, meaningful conversations with their customers.
A ‘one-size-fits-all’ approach often results in a poor customer experience, and more effective customer care now requires a comprehensive view of the customer journey across multiple touchpoints.
This is where customer data platforms have become crucial: they allow companies to stitch together customer data generated across multiple systems and create a single, unified view of each of their customers. These platforms lead to much richer customer experiences and better customer engagement, while also enabling more advanced analytics capabilities.
The new rules of engagement
An omnichannel approach to customer engagement is now expected. Modern customers look for seamless experiences – regardless of the device or communication channels they choose – and businesses need to provide them. But with customers using a growing variety of communication channels, businesses need unified platforms to manage their complex, multichannel communications.
These platforms not only provide simplicity, but they also help deliver more consistent and personalised experiences to customers – on whatever channels they prefer – from initial contact with a brand to after-sales service.
Customer interactions on digital platforms are increasing in volume, which makes it even more difficult for companies trying to cut costs while maintaining the meaningful customer interactions essential to relational business. From sales to customer service, efficient engagement now requires a blend of human and machine intelligence.
Chatbots have become one of the most cost-effective tools to provide personalised interactions at scale as they are able to identify specific customer requirements and resolve simple tasks in real time before human agents need to take over. Marketing and customer service can become more automated and integrated into other back-end systems, such as customer relationship management platforms.
Technology is the enabler
Technological innovation has doubtlessly revolutionised the way we engage and interact with the modern-day customer. Technology makes it possible to take the next steps in customer experience, but at the same time causes high consumer expectations. When companies like Amazon can offer an effortless shopping experience, instant service, and personalisation, then every other retailer is also expected to. But it’s very difficult to accomplish this.
Organisations therefore need to reimagine the value they create for their customers through enhanced technological capabilities. Doing so will enable them to deliver truly personalised experiences effectively and at scale across different channels and all stages of the customer journey.
And by nurturing relationships with customers, rather than simply taking a transactional approach, businesses can drive revenue and keep customers coming back for more. Short-term wins are no longer enough, and even small improvements in customer relationships can provide a competitive advantage – especially as these relationships grow over the long term.
Relational business models create opportunities to turn customers into word-of-mouth advocates, and generate valuable customer insights that can drive better product development. Ultimately, businesses need to invest in technologies that will empower them to meet – or exceed – the expectations of modern customers. Those who do, will be the ones setting themselves up for future success.