The Value of Customer Experience
The expression “customer experience” (CX) is everywhere these days in retail marketing. Today’s technologies and data-driven approaches have made it possible for brands to deliver highly personalized customer experiences. And it appears shoppers value this approach. A new Arm Treasure Data and Forbes Insights study, Proving the Value of CX, found that nearly three in four consumers (74 percent) are either somewhat or very likely to buy from a company based solely on their experience, regardless of product or price. However, defining “customer experience” isn't as easy as it may seem.
In every retail organization, there are a variety of stakeholders — marketing and others — involved along the customer’s journey. Because it’s natural for CX to mean different things to different people, it’s common for gaps to arise when it comes to understanding what CX really is. In an effort to determine what customer experience means for both brands and consumers, this study took both a qualitative and quantitative approach, combining the views of more than 1,000 consumers and over 200 CX executives.
Customer experience involves a variety of instances, from awareness to post-sale, across every touchpoint. According to the survey results, beyond product and price, consumers value these CX capabilities the most:
- Service associates that are empathetic and genuinely understand the customer’s needs and/or frustrations.
- Answering service questions on the first try.
- Live platforms (such as phone and instant messaging) to resolve inquiries.
Retailers must understand that the customer is always evaluating whether their attention and money are well spent. Executives are keenly aware of the potential risks of subpar CX. In fact, 83 percent of those surveyed said they faced moderate to severe risks to their revenue and market share as a result of unimproved CX.
Despite this threat, many retail CX executives are running into internal roadblocks. The three biggest factors preventing teams from implementing a streamlined CX strategy are:
- pressure for CX investment to pay off immediately;
- prioritizing short-term goals from board members/investors; and
- no easy way to integrate data across the organization.
Bringing together the data and expertise of all parts of a retail enterprise to create a full customer view, or a single truth, is a basic requirement for becoming an experience-focused brand. Tools such as customer data platforms (CDPs), data lakes and more are useful for achieving this. The survey found that 56 percent of companies now look to data that captures customer interactions to evaluate which segments to nurture.
CDPs unify data from many different sources (such as point-of-sale systems, loyalty apps, CRM systems, social media and more) that have been traditionally siloed to build a profile of each customer. Then CDPs use artificial intelligence (AI) and machine learning (ML) to build predictive segments and to support personalized engagement with customers at scale.
Creating a cycle of data-driven improvement is what differentiates the most successful retailers from their peers. It eliminates the gaps that stem from the different stakeholders that interact with customers. And the benefits are significant. Company investments in CX lead to:
- a more valuable brand;
- improved customer lifetime value;
- the ability to collect and act on more first-party data; and
- cost savings from fixing hidden inefficiencies that upset customers.
Delivering differentiated experiences that strike each individual as “just right” is best built upon a foundation of unified customer data, both online and offline. It’s the best way to present customers with unique, delightful experiences that will keep them faithful to the brand in the years ahead.
Tom Treanor is the global head of marketing at Arm Treasure Data, an enterprise customer data platform.
Related story: Customer Data is Transforming Retail Operations
Tom Treanor is chief marketing officer at Treasure Data, an enterprise customer data platform.