There is a considerable gap between the experience brands deliver to their customers, and the experience customers have come to expect. In new research from Harris Poll, in a survey commissioned by Redpoint, marketers were roughly twice as likely as consumers (51 percent vs. 26 percent) to say that brands consistently deliver an “excellent” customer experience.
The report explores the various reasons for the customer experience gap, one of which is the fact that consumer expectations are solidifying around receiving a hyper-personalized customer experience in which a brand demonstrates a thorough understanding of a customer as an individual. This is a base-level expectation. In the survey, 39 percent of consumers said they will not do business with a brand that fails to offer a personalized experience. Roughly half of the consumers also said they feel undervalued by brands they interact with.
The CX gap has not historically been as pronounced or noticeable primarily because of the predictable way many companies served their customers, combined with a complacency among many consumers. Experiences were largely driven by face-to-face or other single-channel interactions. As such, they were product-driven, and the relationship between a brand and a customer was very much transactional – going to a dealership to buy a car, or a retail store to buy a pair of jeans. The likelihood of an integrated post-sale service experience as part of the customer journey was slim, as was the likelihood of the brand using transactional data to generate a more complete customer understanding meant to improve the customer’s future experiences on the same or a different channel.
A Comprehensive Customer Understanding
But it is a new day. Digital transformation is unleashing a proliferation of touchpoints and creating an explosion of hugely valuable data as a result. Customer journeys are far more complex, dynamic and unpredictable than in years past, consisting of a combination of digital and physical touchpoints.
Consider a McKinsey report from a year ago that probed changing consumer behaviors. Roughly 80 percent of US consumers said they had tried a new shopping behavior (post Covid), with 73 percent saying that they planned to continue the behavior indefinitely. Curbside pickup, buy online and pick-up in-store (BOPIS), and digital returns are among the trends gaining traction.
The competitive landscape is rapidly reshaping through superior customer experiences where the customer is at the center of everything. Consumers expect seamless and frictionless experiences irrespective of how they choose to interact with a brand. To satisfy this expectation, brands must harness the wealth of customer data generated from both physical and digital channels, using it to deliver new and exciting customer experiences, and persist those experiences across the entire customer journey.
Delivering superior customer experiences consistently starts with having the most comprehensive understanding of each customer and being able to effectively utilize that understanding across the entire enterprise regardless of when or how a customer chooses to engage. The fuel to drive this understanding — perfect customer data — is defined as the most complete, continually updated in real-time and always available data about each and every customer. Many brands fail to deliver superior experiences, in large part, because the quality of their customer data is simply not adequate — incomplete, siloed, latent, over-matched, under-matched, duplicated — making it near impossible to derive the best insights at the cadence of the customer.
From the customer’s perspective, inadequate data translates to inconsistent, often frustrating experiences. Irrelevant offers, a lack of cross-channel awareness, or being out of synch with a customer journey are common points of friction that make it appear a brand does not care enough about a customer to communicate with one consistent voice.
Unfortunately, these frustrations are all-too common. In the Harris Poll survey reference above, just 49 percent of marketers are “very confident” in the quality of their customer data. Accuracy is a top concern, cited by 34 percent of marketers as the area most in need of improvement to meet customer expectations.
An Enterprise-Wide Golden Record
One reason for the disconnects that produce less-than personalized experience delivery is that brands have historically relied heavily on third-party cookies to digitally track customers across the internet, with a misguided notion this approach was an acceptable stand-in for developing a deep customer understanding, and an opportunity to deliver relevant content. But privacy advocates have killed third-party cookies. Next to go are reference files, which are used by the biggest agencies to blend data about people, without their permission, from any number of their clients’ databases.
The shifting landscape, far from generating panic, is a wake-up call for data-driven organizations that understand they already possess the best and highest-quality data: first-party customer data. Companies just need to bring it all together — transform, match, standardize, geo-code and build an enduring key — so the identity of each customer persists over time.
The result is a pristine and perfected, always-on, always-updated “golden record” that contains everything that is knowable about each customer and can be used enterprise-wide. To achieve this, it’s crucial to have a single point of data control, meaning overcoming data silos and multiple versions of the truth.
For the delivery of a seamless, omnichannel customer experience, the data about each customer must be the most complete, freshest, most accurate and timely required to deliver superior experiences and outcomes at the cadence of the customer. A golden record must include both a contact graph containing all of the identities of a person and all of the transactional and behavioral information about a that person. Soon, the overall data quality equation will soon include consent and contracts where value is exchanged between a brand and a customer for use of their data. From the perspective of a marketer, individual customer data, its purpose and the length of time the data can be used are all necessary components that comprise the golden record — whether this information sits in a customer database or in a PII Vault.
Conversely, a brand that uses or sells customer data against a customer’s stated preferences will destroy the value exchange, erasing any built-up trust and goodwill. In the Harris Poll survey, 66 percent of consumers said they are willing to give brands more information about themselves if they use it to create a more valuable customer experience. Honoring consent preferences and being a good data steward builds trust and enhances the value exchange.
The Bottom Line
The good news for brands ramping up digital transformation initiatives to deliver an omnichannel customer experience is that they have the opportunity to capitalize on tremendous revenue growth and it starts with having perfect data.
An Edelman report, Trust Barometer: Brand Trust in 2020, reveals that only 46 percent of consumers trust most of the brands they buy. If just 46 percent of consumers trust the brands they interact with, that means that more than half are open to becoming a loyal customer to a brand able to build and persist a trusting relationship through perfect data.
As the Harris Poll research clearly shows, loyalty is earned by brands that demonstrate a thorough understanding of each customer. In the survey, 82 percent of consumers (up 5 percent since 2019) said that they are loyal to brands that demonstrate a meaningful understanding of them as a unique customer.
For some measure on what this loyalty is worth, new McKinsey research reveals that companies that excel at personalization generate 40 percent more revenue from those activities than those that don’t. The study suggests that shifting to top-quartile performance in personalization would generate over $1 trillion in value across US industries. To make the shift, brands need to recognize that the key to driving transformational change and a differentiated customer experience lies in having the most comprehensive understanding of each and every customer in each and every interaction. Customers expect and deserve nothing less.