Customer centricity trumps innovation, says Gartner analysts
Innovation might be the buzzword on everyone’s lips but customer and design centricity is what will win the day with customers according to Gartner.
Part of it is getting more return on investment (ROI) from their research and development dollars claimed Brian Prentice, vice president, research, Gartner.
Customer centricity is still key for brands in this digital age
“Organisations that are more design centric appear to be more innovative than the R&D dollars they spend. Apple for example, spends a fraction of R&D compared to Samsung, but their market capitalisation is higher and they seem to have a higher degree of customer satisfaction and loyalty than Samsung does,” said Prentice.
“Samsung recognises that and in previous years its ceo said we have a problem with design,” he added.
Creating a great customer experience then does not rely on just being innovative, as Prentice cited Uber’s use of the cloud, social ranking of drivers and geo-location updates of the driver are not exactly ground breaking.
“But they put it together in a way that is a great experience, you can get great outcomes with an average implementation of technology if you really good design. If you don’t have good design, you’re relying on really really good technical implementation which may not work,” said Prentice.
Do brands care about UX?
While it might be easy for research houses to harp on user experience as essential for brands to consider, from their products to campaigns, do brands really look at customer experience?
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The answer is a resounding yes according to Olive Huang, research vice president, Gartner, citing statistics garnered from social media conversations. There were over 76,000 conversations on CX design, over 146,000 conversations on CX channels, over 163,000 on CX data and analytics and over 82,000 on CX strategy.
To ignore customer centricity then is to the detriment of brands, as Huang points out that customers today are changing, with generation Z showing little trust and looking for different level of engagement.
“This [engagement] is very much controlled by the customer and not the brand,” said Huang.
“If you look at the technology, 40% of all data analytics projects is about customer experience. If you talk about digital transformation, you have the possibilities to get more insights, they look at the data and what they can do to improve the experience.
“It is really moving from how do I generate more leads through marketing, to how do I continuously engage the customer in their lifecycle. You then have customer experience becoming the competitive edge,” she added.
Avoiding the pitfalls of CX
One of the biggest pitfalls in brands looking to improve on CX is a long-standing one, according to Huang, and it is due to how brands are setup.
“The challenge of a traditional organisation setup, they think of customer through sequential decisions. They seek for information, evaluate, and they pass customers like parcels. They see each customer lifecycle as individual compartmentalised cycles,” said Huang.
“In reality when you make buying decisions, you will obtain information evaluate and engage almost always at the same time, it’s just the different stage of evaluation and engagement. If the company passes you from one department to another department, they have already missed the mark,” she added.
While brands might have created role to look after customer experience, the problem with the role is that it is “always too big, yet too small,” according to Huang.
“Too big because almost all issues in a company has to do with customers, so it becomes like a rubbish dump, where other departments shift any work to deal with customers to that department.
“Too small because the average size of a large company’s centralised department is 12 people, but the person has on average 84 in-direct reports. The person has a limited budget but a lot on his plate, that’s the biggest pitfall of organisational collaboration to move towards customer centricity,” she added.
The second biggest pitfall that brands should take note of is that technology often wrecks the customer experience according to Huang.
“Over-engineering is a big problem, and over pushing self services is also a big problem. Using your customer as an R&D base to test new technology is also a big problem,” said Huang.
“The human factor of the customer experience is very important, and organisations that push customers to only digital channels to save costs will see the customer experience drops,” she added.
This is ever pertinent in today’s digital age, as Huang elucidates the issue with an analogy, “When was the last time you said I love my bank because they have an excellent app?”
“You can have an app with excellent experience, but when human beings talk about customer experience, they talk about a customer’s perception and feelings to a supplier’s products, services, employees and channels,” said Huang.
Citing the example of buying a car, Huang pointed out that the first half of the process is almost emotional, where customers look at the product. The other half is based around the customer experience of the service rendered.
“The car industry half is product, half is service. If you look at the channel they face, when did you buy a car by looking at a website and clicking on it without talking to someone? You don’t, you go down to the showrooms, talk to your friends, etc,” said Huang.
“As a company the human interaction, the face to face, is the biggest impact on customer experience, then phone, chat which is still human, then self-service automated space. The long lasting impact of emotion particularly over innovation, where all the competitors are innovating on the same track, will be last in a year. You’ll lose it and have to move again, you have to keep moving ahead, when you design your products or services based on this, face to face will not go away,” she added.
Physical engagements still key
While brands targeting the younger population to utilise digital channels might work, Huang noted that targeting a wider population might not work.
“The starting point is not about what we want to do, the starting point goes back to design, who are your customers and you meet them there, that’s the right way to do it,” said Huang.
Citing Singapore’s OCBC Bank’s Frank outlets, which was to engage 18 to 35 year olds who didn’t intend to bank, Prentice pointed out that physical spaces still play a key role.
“Around people and emotions is an important part. A lot of what designers are trying to do is create things that create these positive emotional experiences,” said Prentice.
“The ultimate point of customer experience is a really good human to human interaction, nothing can beat that, but you also have to figure out ways for people to have a really good interactions,” he added.
A positive emotional experience is when customers feel that brands “get me and understand me, took the time to understand my needs and you presented to me in a way that I understand that no one needs to explain to me, in a way that is visually appealing,” according to Prentice.
Prentice cited the analogy of gift giving, where someone might think a good gift is the one that a person has pointed out.
“You’re not giving me a gift, you’re just shopping for me. The best gift you can get is one that you weren’t expecting, it doesn’t have to be expensive, but there’s something inside that gift that have you going, ‘they really though about me and they bought me this thing because they understood,’ it really strikes a chord,” said Prentice.
“That’s the most powerful thing in gift-giving is not the cost of the gift, is the amount of effort people put into thinking about you that matters. That core emotion is what drives great design,” he added.