Accenture Strategy’s most recent Global Consumer Pulse Research has found that customer experiences (CX) improved in several areas last year. Unfortunately, these modest gains were offset by falling or stagnant performance in other areas—from customer frustrations and trust to their propensity to switch providers.
Customer expectations continue to soar. This puts companies in a tough position. Many are simply perpetuating an endless game of catch-up, trying to satisfy a customer base that may never be satisfied.
Competitive advantage will no longer come from meeting customer demands. To thrive in the years ahead, companies must exceed those demands by a significant margin. Three areas of opportunity will help them do just that.
Accenture Strategy’s most recent Global Consumer Pulse Research found that customer satisfaction and participation in loyalty programs has increased by one or two percentage points over the past year in all industries. The effectiveness of loyalty programs is also on the rise. Unfortunately, the modest gains in these areas were offset by falling or stagnant performance in other areas. For example:
61 percent of customers globally switched companies due to poor service in 2017.
This figure is consistent with reports of switching in 2016. But it is 2 percentage points higher than what we found when we launched our Global Consumer Pulse Research 10 years ago.
Customer frustration with marketing and sales practices increased by an average of 2.8 percent across every category.
Failing to deliver on promises, being difficult to work with, and mishandling personal information are the top three sources of discontent.
Perhaps most tellingly, 23 percent of customers trust companies much less today than they did five years ago.
In the US alone, 41 percent of customers who switched providers did so because of an issue of trust.
Despite these findings, we believe investments in virtually all areas of CX are worthwhile. That’s because even if CX investments are not translating into revenue gains, they are likely helping to prevent further erosion of customer satisfaction and loyalty.
For the past five years, approximately one-third of customers have indicated that their expectations for service and support are greater than they were the prior year. The specific experiences customers expect have remained fairly consistent for years. Topping the list is speed, followed by convenience.
The fact that so many customers place higher expectations on companies year after year makes it tremendously challenging for individual companies to get ahead. Companies invest in CX initiatives to engage customers, strengthen relationships and ultimately grow their businesses. The problem is not that companies are investing in the wrong things. More likely, it is that their CX improvements are simply not keeping pace with customer expectations.
Our research suggests that three large, distinct and relatively untapped pockets of CX value exist.
In 2017, more than half (53 percent) of customers in mature markets switched away from at least one of their providers. In emerging markets, the figure is 25 percent higher. Poor experiences are one of the main reasons customers leave. After having a bad customer experience, 46 percent of customers shifted a portion of their spending to another provider. And 47 percent immediately stopped doing business with that company.
Digging deeper into the characteristics of poor experiences, we found that the top three sources of customer frustration included having to contact the company multiple times for the same reason (cited by 60 percent of respondents), dealing with unfriendly or impolite employees (56 percent), and failure to deliver on promises made at the time of purchase (55 percent). Interestingly, there is remarkably little change over the past three years in terms of the things companies do to frustrate their customers with regard to customer service. Mitigating these and other frustrations will go far to create the CX consumers now demand.
Success today calls for hyper-relevance, or the ability to meet customers’ needs and expectations in real time and in response to their changing circumstances. Hyper-relevance requires two things:
Personalized & contextual data. Nearly 30 percent of customers now expect companies with which they engage to know more about them than ever before. Further, predictive analytics, artificial intelligence (AI), machine learning and extended ecosystems of partners make it possible for companies to capture real-time snapshots of customers and achieve new levels of insight to keep them engaged.
Digital trust. Our research found that personalization that is built on trust is critically important to 43 percent of customers. Further, 88 percent of customers find a company that can personalize their experience without compromising trust to be much more appealing and relevant to their needs.
By eliminating trust barriers with new practices, controls and governance structures, companies can use data in new and exciting ways to deliver the experiences that customers demand—and even some they don't yet realize they desire.
Customers see AI technologies as valuable tools through which answers, support or more convenient transactions can be delivered. Half of customers no longer care if they are interacting with humans or AI-enabled technologies. And 44 percent of consumers use some type of virtual assistant—22 percent do so daily.
Companies can seize upon customers’ growing AI acceptance to transform CX with fast, highly relevant virtual support. This will involve combining human skills, AI capabilities and analytics to enable proactive consultation and decision-making. Where can AI add the most value? Our research revealed some of the possibilities, including the monitoring of home energy use, home security and consumers’ health.
Breaking through the CX stagnation requires more than meeting customers’ expectations. It calls for exceeding customer demands by a significant margin. We believe a focus on switching mitigation, hyper-relevance and AI can re-energize CX and set companies on a course to sustainable competitive advantage and growth.