The experience economy is no longer just an emerging trend. Customers are holding brands to high expectations, and sub-par CX can have significant real world consequences, in lost market share and business.
Author: Sajid Azmi, CEO, Yegertek
According to a PwC study, 32% of customers surveyed globally are prepared to stop doing business with a brand they love, after a single bad experience. The contemporary customer places a high value on CX (customer experience), no matter which domain you operate in. Whether you’re in the business of ride-hailing services or you run an e-commerce store—good CX is an absolute must today to acquire as well as retain customers for the long haul.
The massive impact of the COVID-19 pandemic on the economy is forcing businesses in all sectors to adapt. The importance of delivering consistent quality in CX has never been more important. It’s no wonder that the radically accelerated the adoption of digitalization across all industries, is emerging as a key strategy.
Microsoft CEO Satya Nadella recently revealed that the tech giant witnessed two years of digital transformation within just two months—as part of their response to the COVID-19 contagion, which has crippled our access to the physical world.
So why this sudden and dramatic focus on digitization? The answer is obvious. The experience economy is no longer just an emerging trend. Customers are holding brands to high expectations, and sub-par CX can have significant real world consequences, in lost market share and business.
Why go digital?
No matter how good your product or distribution strategies are, you won’t be able to cut any ice without a good CX strategy. Market studies back this up too. As the previously mentioned PWC survey found, many of your customers need just one bad interaction to abandon your brand forever—often without warning.
Across all industries, most brands offer more or less the same set of things—similar price range, lookalike features, and similar product quality. Today, you can’t bank on making your brand standout based on the set of features you offer or your competitive price.
Your brand differentiation depends on the the CX you deliver - how fast you resolve queries and how rich your customer relationships are. With so much riding on avoiding a single misstep, adopting digital technologies in CRM is inevitable.
Good CX is what differentiates good brands from mediocre ones. It’s your most critical USP and has a direct impact on all aspects of your business metrics—customer retention, brand loyalty, and customer lifetime value.
Traditional brick-and-mortar business models have been rendered obsolete by the phygital marketing model. Digital CRM and loyalty solutions can help you ensure consistently high standards in CX, over every interaction in a customer journey, across all channels.
Building an agile, integrated application platform with a digital-first approach could be the single most critical initiative you undertake, in the post-pandemic economy. Let’s look at a brand example to understand why this is important.
How Sephora cracked the code of good CX
Sephora is a global chain of personal care and beauty stores headquartered in France. Anyone familiar with the beauty and skincare business will tell you that this one of the most competitive and cut-throat retail segments of all!
But Sephora has carved its own niche despite being in such a hostile business environment— thanks to its infallible omnichannel CX strategy.
To say that Sephora is obsessed with its customers is putting it mildly. The brand unifies its offline in-store customer experience seamlessly with a range of digital services, in a way that sets it apart in its domain.
The brand’s dogged determination to deliver world-beating CX won it the #1 spot in the Retail Personalization Index two years in a row, in 2018 and 2019, beating brands like Nordstrom and Nike.
If you’re a Sephora customer, you’re in for a special treat the moment you step into one of their 2,300 stores spread across the globe. In a cutting edge example of technology-driven personalization, an in-store technology called ‘Color IQ’ will digitally scan a customer’s skin and help find the perfect lip gloss to go with it.
The company’s virtual makeover platform brings this same engaging level of CX to the digital domain. It allows customers to try Sephora’s products virtually, through photo filters similar to those found on Snapchat and Instagram. Sephora’s online Foundation Finder offers an interactive experience to its digital-native customers, who are looking for ‘try-before-you-buy’ assurance.
Clearly, Sephora knows that the future of retail is digital. The brand has spared no opportunity to offer out-of-the-box CX that leverages all available digital channels—email, mobile, and in-app notifications—to offer hyper-personalized services.
Sephora also has an amazing loyalty program called the Rewards Bazaar, which incentivizes its customers to stay loyal to the brand, while offering memorable customer experiences. In fact, unlike many other loyalty programs, Sephora’s rewards program lets customers control how they want to spend their loyalty points.
And the best part? Having pulled off all of these initiatives in the pre-pandemic era, Sephora is all set to bounce back in the game, without much loss.
Tech-enabled CX will be the key brand differentiator
According to McKinsey, online penetration in China increased by 15 to 20% in the aftermath of COVID-19, and in Italy, e-commerce sales rose by 81% in a single week. Businesses trying to maintain their market share, and protect their bottom-line against a probable recession, are identifying CX as a means to thrive in the ‘new normal’. The time to recalibrate your growth strategies and quickly pivot to build powerfully connected digital platforms is now.
Seize the moment to integrate your digital storefront with your physical retail store, your supply chain network, and your entire back-end operations.
Of course, an added layer of data analytics is the essential cherry on top, to gain insights into your customer’s preferences. In fact, collecting and analyzing customer data is probably the single most effective competitive advantage for businesses, in what is going to be an uber-connected, hyper-competitive post-COVID-19 economy.
It’s time for you to accelerate your digital transformation and evolve as a tech-savvy company that gives its clients the services and CX they expect, in the new normal.