Achieving Customer Experience Excellence at Seven Critical Life Cycle Points

A recent study by Retail Info Systems asked execs, 'Who does personalisation best?'. The highest-ranking answer? 'No one'!

By using customer insights and authentic self-defined preferences, however, it is possible to achieve a fivefold increase in response and engagement rates, as demonstrated in the case study in this paper. To achieve such engagement excellence, marketers must fundamentally change their thinking. Traditionally, marketers put customers into one of two buckets: business-to-business (B2B) or business-to-consumer (B2C). But these artificial labels do not work because no matter what you are selling, you are selling to a person.

For marketers, the critical question is how to achieve high-value engagement. The answer: understand the individual and what they want at every stage of their relationship with your business.

Regardless of where the buying decision is made — be it at home or in the office — it is a person making that buying decision. In short, now is the time to shift to person-to-person (P2P) marketing.

The Four Universal Truths of Customer Experience

ERDM Corp conducted over 20,000 hours of in-depth, hour-long research interviews with the customers and prospects of clients such as IBM, Microsoft, QVC and 10X Genomics. These interviews uncovered four universal truths of customer experience (CX):

• There is a dangerous chasm between the CX fantasy of brands versus the reality that people actually experience.
• Millennial and Generation Z consumers have unprecedented high expectation levels when it comes to CX. When the reality fails to meet expectations, they move on to find it with another company.
• In spite of privacy concerns, customers are willing to provide deep explicit data to get improved CX.
• There are seven key points in the customer life cycle where people expect this high-value engagement.

To ensure that marketers can scale and operationalise high-quality CX and personalisation, there must be an exchange of deep customer preference data in return for authentic and effective personalisation based on the P2P data. This is known as reciprocity of value.

This new level of personalisation must be based on more than transactional, overlay and inferential data. To overcome privacy concerns and fears of being 'creepy' it must be based on a solid foundation of trust and perceived value. Through voice of customer (VoC) research, a six-step circle of value was identified.

The six-step circle of value

1. Trust is the foundation; it opens the customer to reciprocity as a fair exchange of value.
2. The improved customer experience strengthens trust.
3. Reciprocity motivates the sharing of deeper information.
4. The unique opt-in customer preference data can enable improved personalisation of offers, communications and experiences.
5. This reinforces trust in the marketer and their commitment to engage in true reciprocity.
6. This drives progressive, ongoing, customer self-profiling that provides the marketer with uniquely deep and accurate human data.

Case study

A Fortune 100 financial institution found that its traditional persona and cohort segmentation was no longer effective in driving response rates and engagement from Millennials. It was receiving feedback such as, 'I'm not looking to be marketed to. I'm looking for help in making my specific life decisions' and 'I am not a simplistic cohort. I have complex individual needs you should solve'. This indicated a severe disconnect with the target audience.

Based on insights from the deep VoC research, the company learned that Millennials are evolving at such a rapid pace that traditional persona-based approaches to personalisation were no longer effective. In fact, they were often viewed as 'insultingly simplistic in their cartoonish attempts' to address their needs and changing preferences.

The research identified new consumer segments based on how customers articulated their real-world human situations and potential needs for financial products:

• Not me — Too young, healthy, no beneficiary.
• I'll gamble — Won't pay for what I do not need.
• Should but... — Overwhelmed with choices, inertia is getting the best of me.
• Planner — Pays attention to finances, well informed, does research.
• Taker — Has work insurance and basic pension plan but pays little attention to retirement plans and insurance policies.

Based on these insights, new messaging, language, imagery and videos were developed to align with these human data segments, thus making each communication much more credible. In addition, because the messaging was now authentic and relevant, the company experienced significant increases: 94 per cent higher open rates, 1,062 per cent higher video views, zero opt-outs and 100 per cent deliverability.

Overall, this human data driven segmentation drove an increase in response rates from a baseline of 2 per cent to over 10 per cent — a five-fold increase — because communications now conveyed relevance and authenticity.

Seven critical points for engagement

Consumers often experience frustration when interacting with brands. Here are some of the quotes from VoC research ERDM has conducted for brands such as IBM, Microsoft, QVC, Gilt and Shinola:

• 'Simplistic purchase history-based e-mails do not work. With today's technology, I expect e-mails to reflect my individual interests and preferences.'
• 'We are complex human beings with individual needs. It is insulting when we get "personalisation" which reduces us to cartoon characters. We are not simple cohorts!'
• 'True engagement forges strong ties with your company that serve as a "grace account" upon which to draw when there is the inevitable problem or outreach from competition'.

The research findings indicate that a brand's ability to earn customer's business and loyalty over the long term depends on how it treats customers at seven critical points in their life cycle. B2B and B2C customers reported wanting the following during their journey:

• High-value customer experiences across every point of contact with the organisation.
• Value in all elements of the media mix and all departments in the organisation.
• Value throughout the relationship, 'not just when you are selling to me'.
• Customer experiences driven by individual preferences regarding needs, message, timing, frequency and media preferences and aversions.
• Preference data must result in obvious improvements in personalisation of communications and experiences.
• Privacy of preference information is essential.

Initial purchase

Begin the relationship by being proactive in asking for appropriate data to improve each person's unique experience with the brand so it is possible to reciprocate and offer much smarter personalisation and recommendations.

It is critical to rethink this point in the life cycle and move from a focus on 'closing' a sale to using this phase to open a relationship. The following quote from the VoC research says it all: 'Don't worry about improving your renewal process at the end of the year. Focus on how you treat me from the very first moment of the sale and you will increase the likelihood that I will renew!'

Onboarding

Formal onboarding strategies and programmes yield a very good return on investment (ROI).

At the purchase phase in the customer relationship, most marketers are trying to recoup the costs of customer acquisition. It is therefore critical to get onboarding right to deepen and strengthen the relationship, so new customers will spend and stay.

Set the tone for a superior experience with a sincere welcome and easily available help to be sure that the new customer fully understands the product they just purchased, the company and the available customer service. A second purchase is often dependent upon the initial onboarding experience: 'Welcome me, make me feel appreciated. Then, make sure I understand what I need to know to get the greatest value from what I just purchased from you. Don't just take my money and run!'

Deepening relationships with anticipatory responses to decreasing engagement

Millennials have an especially good understanding of how much data marketers now collect regarding customer behaviour on their websites and mobile devices. However, these consumers are often frustrated by marketers who do not use such data to proactively drive value and engagement.

The key signals of decreasing engagement to monitor and act on are:

• falling e-mail open and click-through rates;
• reduced visits to the website;
• reduced purchases and favourites and increased cart abandonment.

In spite of privacy concerns, customers want marketers to use their data responsibly and proactively to improve their customer experience. When engagement lags, it is imperative to discover why: 'If we're not buying, check in with us. Find out what's happening, are we having problems? Don't just view us as a cash register!'

Immediate responses to negative experiences

In this digital age, people expect everything to be immediate. So, when it takes hours, days or weeks to resolve problems, it destroys the customer's trust that they will be treated right. That is a hard one to recover from. Consider these quotes from the VoC:

• 'Problems are inevitable. That's when we see whether it was all talk or whether you are committed to doing right by me'.
• 'How come the cool technology you use to get me to buy instantly, doesn't work to fix my problems... instantly!'

Surprise and delight thank-you programmes

Surprise and delight and thank-you programmes are one of the highest ROI programmes a firm can have. Consider the following quote from the VoC research: 'Make me feel appreciated. Be as loyal to me as I am to you'.

Showing appreciation costs little. Little thank-you surprises significantly improve experiences and demonstrate that the person behind the sale is valued. Keep in mind that, per the VoC research, people are not expecting much more than recognition. Appreciation is a key factor in nurturing loyalty: 'It doesn't take much, a thank you card, a token gift'.

Cross-selling and upselling

Think about these VoC quotes:

• 'Truly personalised offers are not sales, they are helpful service.'
• 'Don't expect me to know your entire product line. Proactively reach out and offer additional products or services based on understanding our needs and preferences.'
• 'Knowledgeable and personalised add-on offers are valued and not perceived as "sales ploys".'

Personalised repeat sales and renewals

To achieve a repeat sale, it is important to develop a comprehensive understanding of what each person wants post sale. Do not let them buy and be forgotten. As a brand, it is important to be visible and caring. It is up to you — not them — to make them want to be loyal. The key to this is to remember that loyalty is earned, not assumed. Some VoC quotes to consider:

• 'If you've treated us right from the beginning, why should we buy from your competitor?'
• 'Be a visible and caring brand and then... why would we go with someone else when it's time to repurchase?'
• 'Companies do not get it. If they've taken care of us from the initial sale and been there throughout the relationship, then in our book, they have earned the renewal.'

Final takeaways

In summary, the insights we shared for engagement across the life cycle are actionable and go straight to the bottom line. The following key points are essential to success:

• Recognise how much you do not know about customer's individual preferences and needs.
• Do not reduce complex humans to generic cohorts and personas.
• Customers want human engagement, not mass-produced spray-and-pray blasts.
• It is insulting to consumers when they receive empty attempts at 'personalisation' which reduce them to a transaction rather than a person with unique characteristics.
• Customer decision-making journeys are not linear. Customers are complex humans and one must engage with them accordingly.
• P2P marketing is the key that makes CX come to life — truly personalised communication based on opt-in preference information is the optimal combination to win first-time business and drive repeat engagement.
• True, relevant engagement with demonstrations of authentic caring is what forges the type of strong ties that can overcome lapses and problems.
• Customers' needs change over time; be one step ahead and know when to change CX and offers, to keep them engaged and loyal at every stage.

Reference

Retail Info Systems (2017) 'Closing Big Gaps in Personalization', 30th October.

About the author

Ernan Roman Direct Marketing's Customer Experience strategies achieve consistent double-digit increases in response and revenue for their clients, which include IBM, MassMutual, QVC, Microsoft, and Symantec Corp.

As a leader in providing Voice of Customer research-based guidance, ERDM has conducted over 10,000 hours of interviews with their clients' customers and prospects, to gain an in-depth understanding of their expectations for high-value relationships.

The results achieved by ERDM's VoC-based strategies earned Ernan Roman induction into the Marketing Hall of Fame.