The Deloitte Consumer Review CX marks the spot: Rethinking the customer experience to win November 2016 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Contents
Foreword 01 Executive summary 02 At a glance 04 Serving a market of ‘one’ 06 Focusing on what the business wants to be known for 14 Defining the customer experience 17 What about the rest of the value chain? 20 Appendix – Consumer research findings 23 Endnotes 31 Contacts 32
About this research The research featured in this report is based on a consumer survey carried out by an independent market research agency on behalf of Deloitte.
In this publication, references to Deloitte are references to Deloitte LLP, the UK member firm of DTTL.
Please visit http://www.deloitte.com/view/consumerreview for additional content related to the Consumer and Industrial Products industry. The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Foreword
Welcome to the latest edition of the Deloitte Consumer Review. This edition focuses on how the customer experience is fast becoming a tool for differentiation.
Every consumer wants a different experience when shopping and that ’experience’ has become the differentiating factor for many successful business models. However, businesses are finding it increasingly difficult to predict what consumers want as their expectations continue to change.
Deloitte research shows that the experience plays an important role in the consumer’s decision to buy a product or service. Indeed, when consumers were asked what was important when making their decision, over half cited the overall enjoyment of the shopping experience.
How should businesses go about providing their consumers with the best experience possible? Businesses need to become more agile and flexible to respond to consumer demands in real time. Focusing the entire company on delivering a positive consumer experience will be critical for future growth.
With rising consumer expectations driving change across the entire value chain, how can business-to- business companies integrate the end-consumer demands into their delivery model? In addition, how can they learn from the interactions business-to-consumer companies have with their consumers and replicate it with their trade customers?
We hope this report provides the insight and data needed to understand both the opportunities and challenges the customer experience presents, and welcome your feedback.
Richard Small Partner, Deloitte Digital, Consumer and Industrial Products
01 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Executive summary
Consumers have become increasingly comfortable interacting with brands in a seamless way, switching between channels and allowing their data to be used to provide a personalised experience.
According to Deloitte research, more consumers are now purchasing products online than in store. However consumers have become less tolerant of brands that do not provide an easy and seamless experience.
Businesses are now being forced to focus their efforts and investments on developing the capabilities to sell across channels while transforming their operating model to serve a market of ‘one’. The additional complexity and cost of these new channels and services have made delivering a consistent experience more difficult. New channels and services have increased the potential risks along the path-to-purchase, resulting in negative experiences for the consumer.
Focusing the entire company to deliver a positive consumer experience will be key to securing new growth opportunities. This has become even more important given the exponential growth in start-up and technology- led competitors eager to fill any gap they spot in the market.
To rethink the customer experience, businesses need to map the different ways consumers wish to connect with their brand and develop the appropriate capabilities while aligning their resources accordingly. Deloitte research shows that across the shopping journey, from finding inspiration to completing a transaction or sharing their experience with others, consumers have many paths-to-purchase.
Businesses also need to get to know consumers better. Legacy research tools are no longer fit for purpose. In addition to traditional consumer insight methods, businesses need to use advanced tools to collect the right data about individual consumers and use it to respond in real time to their specific needs.
Establishing a lasting relationship with consumers is based not only on giving them what they want or knowing them well, but also on gaining their trust. Deloitte research shows that compared to 2014 there has been an increase in the number of people claiming they do not trust anyone to provide honest feedback.
A strong customer experience can not only lead to stronger financial performance but also form the basis for competitive differentiation. Successfully differentiating the brand both in terms of products and the experience can have a positive impact on a company’s bottom line with higher conversion rates and increased customer loyalty.
02 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Having a customer experience vision will not be enough unless the governance is in place to implement and reward it. The customer experience needs to be a strategic priority, not only at board level, but also as part of a vision shared across the entire company where every function believes they play a critical role in the overall customer experience.
Aligning the business functions to implement the customer experience vision is not always straightforward. Businesses cannot do it all and need to be strategic in deciding what they want the company to be known for and act on it.
There are a number of practical steps a company can take when seeking to optimise its customer experience.
1 . Diagnose the ‘as-is’
2 . Set a realistic ‘to-be’ goal of what it wants to achieve
3 . Set out clear and actionable next steps to implement its vision.
Having set a clear goal for the customer experience, companies need to prioritise what is required which includes:
1 . Correct – lower effort and/or investment, tactical quick wins
2 . Optimise – medium effort and/or investment, optimise existing capability
3 . Disrupt – higher effort and/or investment, disrupt and innovate.
Finally, collating the appropriate measures of customer experience will be important to assign customer experience performance metrics and staff responsibilities across the business, not just to the front office. Making customer experience measurement an inherent part of the reward programme will also be critical in promoting a customer-first strategy.
Changing consumer behaviour has potential consequences across the entire supply chain serving the business-to-consumer (B2C) sector. Business-to-business operators (B2B) also need to respond to the changing behaviours of their own end-consumers and can learn some lessons from consumer-facing businesses.
In future the distinction between B2B and B2C is likely to become less clear. And, in today’s digital world, it is more and more about the end-consumer. The overall customer experience will be determined by how seamless and effective the experience is across the entire value chain.
03 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
t a g ance
Online has overtaken in-store purchasing for the first time Over half of consumers say that the is important in their ro u ts a product or service. 45% in-store vs
48% online ervi es Trust in reviews is eroding 29% in physical location vs e er than 1 in 10 no trust ...but 1 in 2 consumers still trust family retailers... and friends for honest feedback 58% online 2014 2016 2014 2016
vs vs
Customer journeys are complex...and paths-to-purchase vary across categories Clothin n ootwe r le tri l e ui ment 16% 7% 60% 58%
Online Online 32% 59% Next steps for rethinking the customer experience
In store In store ve le r o l n e i e the riorities or our C str te 66% Click & collect 36% Click & collect 4% 12% How much investment is needed?
Correct Optimise Disrupt
Home delivery Home delivery ow investment e ium investment i h investment 22% 46% actical uic wins Optimise existing s ills Disrupt and innovate
04 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
t a g ance
Online has overtaken in-store purchasing for the first time Over half of consumers say that the is important in their ro u ts a product or service. 45% in-store vs
48% online ervi es Trust in reviews is eroding 29% in physical location vs e er than 1 in 10 no trust ...but 1 in 2 consumers still trust family retailers... and friends for honest feedback 58% online 2014 2016 2014 2016
vs vs
Customer journeys are complex...and paths-to-purchase vary across categories Clothin n ootwe r le tri l e ui ment 16% 7% 60% 58%
Online Online 32% 59% Next steps for rethinking the customer experience
In store In store ve le r o l n e i e the riorities or our C str te 66% Click & collect 36% Click & collect 4% 12% How much investment is needed?
Correct Optimise Disrupt
Home delivery Home delivery ow investment e ium investment i h investment 22% 46% actical uic wins Optimise existing s ills Disrupt and innovate
05 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Serving a market of ‘one’
Consumer expectations are constantly evolving making delivering a positive experience more difficult.
Challenges in serving a service, over half of consumers consumer. In the midst of all the market of ‘one’ mentioned the overall enjoyment transformations businesses are For businesses it is getting of the experience of purchasing going through, the old axiom that increasingly difficult to predict the product or the service (see ‘the consumer always comes first’ what consumers want, especially Figure 2). might just be getting lost. as digital technology evolves and consumers’ expectations continue As a result businesses are being In their effort to develop a to change. Consumers not only forced to focus their efforts and consumer-centric business model, expect personalised products investments on developing the companies are faced with some and services as standard, they are capabilities to sell across channels fundamental issues such as also embracing different ways of while transforming their operating removing the barriers between buying or enjoying products and model to serve a market of ‘one’. In the different functions, managing services. According to Deloitte doing so businesses must review legacy technologies, finding cost- research, more consumers are their legacy systems, rethink efficient ways of serving the more now purchasing products online how they collate and use their complex nature of consumers’ than in store. While nearly half consumers’ data, and align their shopping journeys and managing of consumers bought a product resources and staff towards new the necessary cultural change online (48 per cent), 45 per cent ways of serving consumers. that comes with transforming any bought it in store. In the service business model. sector people are even more likely However, the additional to complete their purchase online complexity and cost of these Resolving these issues is (58 per cent). More and more new channels and services have difficult and businesses need consumers are developing a taste made delivering a consistent to choose where to focus their for the additional convenience and seamless experience more efforts whether it is the website these new channels and services difficult. With the proliferation of experience, the mobile site, the offer (see Figures 1, 5 and 6). choice, channels and influences in-store experience, the loyalty consumer expectations are programme or the omnichannel The research also showed that changing faster than businesses experience. Aligning the entire the share of ‘the experience’ in are able to respond to. New company on delivering a positive the decision to buy a product channels and services have consumer experience will be or service is significant. When increased the potential risks along key to securing new growth asked what was important in the path-to-purchase, resulting opportunities. their decision to buy a product or in negative experiences for the
06 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Figure 1. Channel used to buy a product Mapping complex % UK consumers who made a purchase in the last three months consumers’ journeys Thinking specifically about where and how you bought the product, Improving the customer which one of the following did you do? experience has to start with Buy in-store 40% a better understanding of Buy online using desktop/ laptop and delivered to home 28% consumers’ experience across Buy online using a tablet and delivered to home 8% each step of the shopping journey. Deloitte findings reaffirm what Order in-store for home delivery 5% most companies appreciate, but Buy online using desktop/ laptop and delivered to the 4% store for collection often fail to respond to, which is Buy online using smartphone and delivered to home 4% the need to commit their resources Buy online using a desktop/ laptop and delivered to a third party location 1% and investments and reshape Buy online using a smartphone and delivered to the their operations to serve a market store for collection 1% Buy online using a tablet and delivered to the of ‘one’. Not only will shopping store for collection 1% Buy online using a tablet and delivered to the journeys be different based on third party collection 1% the ‘missions’ consumers might Buy from a catalogue/ mail order 1% be on, so too, will consumers’ Buy online using a smartphone and delivered to a expectations of the experience third party location 0% they receive. Businesses need to Buy via TV shopping 0% map the different ways consumers Other 7% wish or expect to connect with their brand to develop the Source: Deloitte research appropriate capabilities and align their resources accordingly. This has become even more important Figure 2. Important criteria in decision to buy % UK consumers who made a purchase in the last three months given the exponential growth How important were each of the following in your decision to buy this product or service? in start-up and technology-led competitors eager to fill any gap Transparency of prices 80% they spot in the market. With every Overall level of convenience 78% new business model offering a better experience, consumers’ Clarity and usefulness of product/ service information 67% Ease of navigating the website to research or buy the expectations grow as does the 60% product/ service line pressure on traditional businesses Delivery timeliness and accuracy (if relevant) 54% to adapt and transform their Overall enjoyment of the experience of purchasing the product/ service 56% business models. Time needed to complete the purchase 55% Deloitte research shows that Ease of communication overall 55% across the shopping journey, from The company’s appreciation of your specific needs at the time 50% finding inspiration to completing a transaction or sharing the Source: Deloitte research experience with others, consumers have many paths-to-purchase.
07 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Looking at the first few stages of be different depending on whether they want, they are looking to find the shopping journey, our findings they are looking for inspiration where the product or service is show that consumer activities will or whether, once they know what available (see Figure 3).
Figure. 3 Different stages of the shopping journey cons mers who ma e a p rchase in the ast three months
Imagine!"#$!%& Locate & find Choose & select !"#"$"%&'$()'*)+#"$)',-'$()'.,/01%2'-3,/'*(".('4'/15)'/2' s t t e e s te o t e com s t t e e s te o t e com s t t e e s te o t e com rom063.(1#) c m e m urc se rom c m e m urc se rom c m e m urc se s e se rc e e e oo e s t t e e s te o ot er com es s t t e e s te o ot er com es se s m r oo s or ser ces se s m r oo s or ser ces !"#"$"%&'$()'#$,3)',3'0(2#".1;';,.1$",%'-3,/'*(".('4'/15)'/2' ec or scou ts s e se rc e e e oo e s t t e store or s c oc t o 063.(1#) rom c m e m urc se !"#"$"%&'$()'*)+#"$)',-',$()3'.,/01%")#'#);;"%&'#"/";13'&,,5#',3' s t #)3?".)# t e store or s c oc t o s t t e store or s c oc t o rom c m e m urc se rom c m e m urc se s e se rc e e e oo e s t t e e s te o ot er com es se s m r oo s or ser ces ec t stoc ec or scou ts o s er re e s recomme t o s o s er re e s recomme t o s rom ot er customers ec or scou ts rom ot er customers
o s er recomme t o s rom o s er re e s recomme t o s ec t stoc r e s m rom ot er customers o s er re e s recomme t o s o s er recomme t o s rom rom e e e t e erts r e s m s r ce com r so e s te s r ce com r so e s te s t ot er stores t t e o e rom s r ce com r so e s te c com ete m urc se ro s t e com s c t o ue s t ot er stores t t e o e rom o s er recomme t o s rom roc ure c com ete m urc se r e s m
Shopping!"#$!%& – Products Shopping!"#$!%& – Services !"#"$"%&'$()'*)+#"$)',-'$()'.,/01%2'-3,/'*(".('4'/15)'/2'Channel used !"#"$"%&'$()'*)+#"$)',-'$()'.,/01%2'-3,/'*(".('4'/15)'/2'Channel used 063.(1#) 063.(1#) n ine n ine n store h sica ocation Deliver method used te ephone !"#"$"%&'$()'#$,3)',3'0(2#".1;';,.1$",%'-3,/'*(".('4'/15)'/2' !"#"$"%&'$()'#$,3)',3'0(2#".1;';,.1$",%'-3,/'*(".('4'/15)'/2' C ick063.(1#) co ect echnolog 063.(1#) used !"#"$"%&'$()'*)+#"$)',-',$()3'.,/01%")#'#);;"%&'#"/";13'&,,5#',3' !"#"$"%&'$()'*)+#"$)',-',$()3'.,/01%")#'#);;"%&'#"/";13'&,,5#',3' hir #)3?".)# part co ection point esktop#)3?".)# ome e i er a et echnolog used martphone esktop a et martphone
Transact!"#$!%& Service & Advocacy Share !"#"$"%&'$()'*)+#"$)',-'$()'.,/01%2'-3,/'*(".('4'/15)'/2' us cre t e t c r ecomme e t e ro uct ser ce e ter 063.(1#) ce tre to r e s m us co t ct ess cre t e t s te store oste comme t o m o soc c r me e !"#"$"%&'$()'#$,3)',3'0(2#".1;';,.1$",%'-3,/'*(".('4'/15)'/2' c s tter ccou t oste comme t o t e ser ce ro er s 063.(1#) or ro uct m u cturer s e e !"#"$"%&'$()'*)+#"$)',-',$()3'.,/01%")#'#);;"%&'#"/";13'&,,5#',3' #)3?".)# ce oo e rote re e o e e e t us re e e s te us tr s er ess e o r or orum m e t e ser ce ro er s or ro uct m u cturer s customer ser ce oste comme t o t e ser ce ro er s us t ouc ers e c t o com e s te or ro uct m u cturer s soc me e c e ue oste mess e comme t o eo c t o com e s te co sumer orum s t er e t e ser ce ro er s or ro uct m u cturer s customer ser ce t o t s o rce: e oitte research
08 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
When comparing shopping i ure here oes ins ir tion ome rom behaviours across product and cons mers who ma e a p rchase in the ast three months service categories, the research Thinking specically about what you did before completing a purchase to find inspiration also shows very different journey and help you decide what to buy, which if any, of the following influenced you? ease se ect a that app behaviours. For example, in the more commoditised categories or ll ro eries househol Tr in e such as shopping for groceries te ories in store li n es ti ets holi s or train tickets, consumers will s t t e e s te o t e com rom typically engage in very few c m e m urc se activities because they know s e se rc e e exactly what they are looking ec or scou ts for. When the purchase requires s t t e store or s c oc t o more consideration, consumers rom c m e m urc se are more likely to engage in s t t e e s te o ot er com es se s m r oo s or ser ces more activities before making o s er re e s recomme t o s a decision. This is particularly rom ot er customers o s er recomme t o s rom true for categories such as major r e s m household appliances or packaged o s er re e s recomme t o s holidays (see Figure 4). rom e e e t e erts s r ce com r so e s te
ro s t e com s With every new c t o ue roc ure ec or ouc ers cou o s business model Receiving offers via email offering a better s t ot er stores or s c oc t o s t t e o e rom c com ete m urc se experience, e re e s t e ress or m es consumers’ Talking to staff expectations grow s as does the pressure oo or orm t o o soc me s tes on traditional oo or orm t o o o s businesses to adapt Considering recommendation from staff and transform their customer ser ce business models. se store touc scree
Receiving offers via social media
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09 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Beyond the initial stages of the channels, using different technologies the preferred options for categories path-to-purchase where consumers and delivery methods depending on such as major household appliances are looking for inspiration, they are the category. Our research shows or flights, while in-store shopping increasingly expecting to pick and that the online channel and home remains the main channel for choose from a selection of shopping delivery are increasingly becoming groceries (see Figures 5 and 6).
i ure Ch nnel eliver metho s n te hnolo use ro u t te or cons mers who ma e a p rchase in the ast three months le tri l e ui ment ll ro u t te ories ro eries online u s ri tion se me l its usi n or me i su s ri tion servi es Clothin n or ootwe r or househol li n es C r ro eries instore orts n or leisure oo s oo s me i urniture n or homew res Channel used store e Deliver method used c o ect r rt co ect o o t ome e er echnolog used es to et m rt o e
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i ure Ch nnel n te hnolo use servi e te or cons mers who ma e a p rchase in the ast three months ll servi e te ories C r hire otels ommo tion li hts Ti ets or evenin out e l out Tr in ti ets e holi s
Channel used e e e o e s c oc t o echnolog used esktop a et martphone
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10 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Get to know the individual incentivising or rewarding them In addition to Beyond understanding the with gifts or money. But this path they take to completing a resulted in a backlash and an traditional consumer transaction, businesses need increase in the number of people insight methods to get to know consumers as not trusting any reviews. Deloitte individuals better. Businesses research shows that compared such as focus groups need to rethink their consumer to 2014 there has been an or segmentation segmentations to focus more on increase in the number of people serving an audience of ‘one’ to claiming they do not trust anyone surveys, businesses offer personalised experiences to provide honest feedback. need to use that are timely and relevant to However, this lack of trust is a specific individual. Businesses perhaps directed more at the advanced tools to should move beyond simple company rather than independent collect the right data personalised recommendations sources of feedback. The research to more genuine real-time shows that consumers’ trust in about individual personalisation and targeting. retailers and manufacturers has consumers and use Legacy research tools are no declined by more than half since longer fit for purpose. In addition 2014. Businesses need to act, as it to respond in real to traditional consumer insight at risk is the erosion of consumers time to their specific methods such as focus groups or trust in businesses’ ability to segmentation surveys, businesses provide honest information about needs. need to use advanced tools their products and services, not to collect the right data about the importance of independent individual consumers and use it reviews which will more and more to respond in real time to their be the main source for product or specific needs. Businesses are now service information (see Figure 7). able to ‘listen’, for example using social media and to ‘remember’ by collating and storing personal data i ure ost truste sour es or in orm tion and preferences to avoid asking cons mers consumers the same question In general which of the following do you trust to provide honest feedback on twice and recognising them when product/ service information and reviews? (Please select all that apply) they next interact with the brand. ami rien s The issue of trust Customer reviews Establishing a lasting relationship n epen ent pro ct ser ice experts with consumers is based not only Store staff/retailer website on giving them what they want but ro ct man act rer ser ice pro i er also on gaining their trust. Having appreciated the importance of ther ot app ica e on t tr st an thing or customer reviews in improving an one to pro i e honest ee ack sales conversion, many companies have started to encourage consumers to post reviews by o rce: e oitte research
11 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
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12 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
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13 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Focusing on what the business wants to be known for
The share of ‘the experience’ in the overall business proposition is growing. Focusing the entire company on delivering a positive consumer experience will be key to securing new growth opportunities.
What is the customer unique way, it will not only gain a It was Aristotle who experience? strong competitive advantage but The customer experience can will also have a positive impact said “the whole is be defined as the sum of all the on the bottom line. Typically, greater than the interactions a consumer has with companies will focus on a particular a brand as well as their opinion part of the experience in which to sum of its parts” and of the brand. Interactions include lead. Apple aims to inspire; Amazon this is certainly true visiting the website or store, owns the online fulfilment space speaking to a member of staff and John Lewis differentiates itself with the customer or reading a marketing email. on the customer service skills of experience. And The opinion of the brand, on the its ‘partners’. other hand, is often driven by the every part of the feelings consumers have when At the core of a great customer company has a role they interact with or think about experience is the ability to provide the brand. Customer experience a seamless experience regardless to play in consumers’ is holistic in nature and does not of touch point, yet many experiences. focus on any single interaction or companies are a long way from feeling, but rather on the impact of achieving this. all of these things together. It was Aristotle who said “the Analysis done for the retail In the first group are a whole is greater than the sum of sector by Deloitte Consulting in number of retailers competing its parts” and this is certainly true the US shows that experience predominantly on value and with the customer experience. differentiation can lead to stronger convenience. These retailers And every part of the company financial performance indicators focus on driving down operating has a role to play in consumers’ especially when combined with costs to offer customers better experiences. product differentiation.1 The team value and convenience. The developed a framework to group second group of retailers focus Why the customer experience retailers into one of four cohorts. on creating highly differentiated matters in delivering growth Each retailer was given a score experiences but sell a set of Customer experience can be based on the level of product products not that differentiated the key source of competitive and experience differentiation, and often available at many differentiation. If a business from low to high. By plotting other retailers. They also focus can create an experience that each retailer along these two on providing easy and enjoyable seamlessly connects all the dimensions they were able to interactions with staff, offering interactions a consumer has with develop four distinct groupings education and entertainment, and their brand, and does this in a (see Figure 8). personalised content.
14 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
The third group of retailers Figure 8. Experience vs product differentiation compete with highly differentiated products and services that cannot Highly differentiated Highly differentiated igh be found elsewhere, although the offering offering & experience brand experience offered is less differentiated. Finally, in the fourth cohort, there are a small number of retailers who successfully offer both highly differentiated Value & Highly differentiated convenience experience products and experiences. They
understand consumers and offer Product differentiation experiences and unique products or services that address, or even Lo surpass consumers’ needs and Lo Experience differentiation igh expectations. o rce: e oitte Cons ting The analysis also showed that retailers competing on both highly differentiated offerings Businesses cannot do it all and is unique about it, who the and experiences, delivered solid need to be strategic in deciding consumers are and what the EBITDA growth of almost 15 per what they want the company to issue is the product or service will cent per year and revenue growth be known for and act on it before help them to solve. of nearly 11 per cent. In contrast, their competitors. This can range retailers competing on value from simply improving one aspect Creating a clear, communicable and and convenience had compound of the existing experience, to meaningful vision for the customer annual revenue growth of 3.5 per developing entirely new innovative experience is critical in ensuring cent and experienced a negative and engaging propositions to meet that the business transforms compound annual EBITDA growth consumer needs. towards a more customer of 3.2 per cent. experience-focused model. When considering the level Defining where to play of product and experience The changing environment differentiation in which to invest, described in the first section points businesses need to achieve to an opportunity for businesses a balance between the value that can find new ways to remain their product or service offers connected to consumers and consumers and the cost of create value (and margin) by delivering the added experience differentiating their brand both in and product differentiation. terms of their products and the Businesses need to define what experience they offer. the brand stands for, what
15 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
The customer experience first to make the customer through path-to-purchase governance model experience vision a priority and and to avoid the silo mentality. While businesses are eager to second to make it a function However the customer experience transform their existing model to inherent in the business model. team should not tell the rest of become truly customer centric, the company what to do but the reality is that breaking through There are three types of rather coordinate, motivate and the functional barriers and structures commonly used to empower teams to think of ways to reviewing existing key performance drive customer experience within serve customers better. indicators to measure customer an organisation: a standalone experience is challenging. customer experience team, The business transformation Transformation is being hindered a customer experience team required for implementing the by an inherent resistance to within a function, often within the customer experience vision will change, a lack of leadership, strategy or marketing team, or also have implications for the skill organisational culture and/or the no specific customer experience set the company will need. The costs involved in implementing the team. The latter implies a leadership will need to incentivise required change. multidisciplinary approach where the behaviours that favour the customer experience strategy implementing the customer Having a customer experience is driven by a set of processes experience vision. If an executive vision will not be enough unless across all functions. decides to reward staff based on the governance is in place to customer satisfaction, and gives implement and reward it. The The marketing function often customer satisfaction scores customer experience needs becomes the customer experience equal weighting to other financial to be a strategic priority, not function by default. However, the performance indicators, there only at board level, but also conflict inherent in this structure will be a paradigm shift in the across the entire company is that the customer experience organisational culture. where every function works group does not own the selling towards and believes they play channels. In a retail business Ultimately, the successful a critical role in the overall the store channel and the online implementation of a customer customer experience. Decisions channel often will have business experience strategy could around the framework, vision development teams. If there is negate the need for a customer and direction for the business, a customer experience team it experience team. Companies including the experience they must play an active role in the might not need a customer team want their customers to have, governance process for approval if they have the right mechanisms first needs to be endorsed of any activities that might in place to reward staff based by the executive leadership. influence the customer experience on customer satisfaction scores. Without the leadership and new either directly or indirectly. Each Also giving staff the autonomy to key performance indicators project should be presented to solve customer issues can often to measure it, changing both a finance and a customer remove some of the barriers that organisational behaviours will committee. The key role of the prevents the staff, and ultimately be very difficult. Regardless of customer experience team is not the company, from delivering its where the company starts on the only to approve the investment for customer experience vision. path to changing the customer each customer experience project experience, the goal is twofold, but also to ensure consistency
16 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Defining the customer experience
Developing a customer experience model aligned to what the business wants to be known for.
Approach to rethinking the The market analysis involves an lead the way in omnichannel retail customer experience assessment of how the company will focus on the entire journey There are a number of practical fares against the leading direct whereas leading in delivery speed steps a company can take when and non-direct competitors. Does can be more focused on the latter seeking to optimise its customer the company lead the market parts of the experience. experience. in some areas? Themes and examples from market leaders Once defined the goal should be 1. Diagnose the ‘as-is’ will emerge and should provide tested with the target market. consumer experience the necessary inspiration. This Companies might find that the The first task is to assess, with a market analysis should enable areas in which they believe they minimum amount of detail, the the company to understand should invest are in reality not existing customer experience to better where they fall below, are important to customers with understand what is working, what consistent with or lead the market whom they wish to engage. is not and why. There are two key across their customer experience lenses through which to consider activities. 3. Set out clear and this: the customer and the market. actionable next steps 2. Set a realistic ‘to-be’ goal Having set a clear goal for When considering the customer Once the current customer the customer experience, a lens, a company needs to assess experience performance has prioritisation exercise is required. where the ‘pain points’ and ‘magic been measured, the next step Generally, customer experience moments’ are for their customers. is to determine the company’s investments will fall into three For example do customers get customer experience ambitions high level categories which are frustrated with the customer and ensure they match the driven by the anticipated share of service? Do they enjoy the corporate strategy. Often, due to investment or effort required: personalised note in the delivery limited resources, companies set box? A thorough review of the goals in specific areas admitting 1. Correct – lower effort and/or current customer experience, it is okay to be ‘average’ in other investment, tactical quick wins using the right insights from areas where it would be difficult across the business such as to differentiate their product or 2. Optimise – medium effort primary consumer research and service. There is no clear rule and/or investment, optimise Net Promoter Scores (NPS)2, will regarding the number of areas in existing capability help identify where improvements which companies should strive to are needed. become leaders, and some will be 3. Disrupt – higher effort and/ much broader than others. For or investment, disrupt and example, a company wanting to innovate.
17 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
The ‘correct’ category will typically In contrast, some companies can How to measure customer include changes which are clear shy away from any attempt to experience from the outset and require disrupt. They might believe they There are three levels of customer minimal effort or investment to are working towards leading the experience that can be measured: improve the experience such as market but in reality end up being the overall customer and optimising the layout of a website too focused on improving what brand relationship, the discrete homepage, or increasing the they already do or hiding behind customer journeys and individual number of staff on the shop floor. the performance indicators that events or interactions.3 manage the efficiency of the ‘Optimise’ relates to areas in business. •• Relationship surveys allow which capability exists but is not customers to indicate their optimised in the right way, for Companies should be willing to satisfaction about their overall example inspirational content not invest in innovation even when relationship with the company being used across touchpoints the returns are not clear because or brand, and are typically run at consistently. the value lies not only in creating least once a year tangible customer impact but also The third category, ‘disrupt’ refers in generating key learnings for the •• Journey surveys allow customers to the areas where the company business. An iterative ‘test, learn, to indicate their satisfaction at is looking to lead. Such areas can, and be willing to fail’ approach is vital the end of a particular experience but not always, require significant if a company is looking to innovate and tend to be based on a survey investment in strategic initiatives across its customer experience a couple of days after the event such as rethinking customer and beyond. It requires the buy-in took place service, loyalty offering or from the board and a cultural shift content strategy. towards the fail-fast mentality. •• Interaction surveys allow customers to indicate their Companies can be overly It is important to note that satisfaction with a specific event, confident with the disrupt during the end-to-end process for example a transaction or a category. For example they could of rethinking the customer complaint. Unlike relationship launch a new channel, product, experience there should be no or journey surveys, interaction service or process improvement limits to the number of questions surveys are administered without fully understanding or that are asked. If the assessment immediately or soon after allowing for the impact on the prompts the company to look wider the event. wider customer experience, than the customer experience resulting in a disjointed experience and explore new business models for consumers. or product offerings, then this should be an option. It can be a deeply educational process which can pose difficult questions and challenges to the leadership team.
18 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Companies often focus heavily Companies should also seek to Making customer on the relationship metric, which understand the primary drivers is typically used by the marketing of satisfaction. Once the drivers experience department. However, this metric are understood, it becomes measurement can be influenced by a whole much easier to predict scores. host of external factors making it For example, if a customer an inherent part difficult to identify the drivers. On reported a broadband fault in their of the reward the other hand, interaction surveys home and the support team was can be limiting in that they only able to attend the following day, the programme will be provide insight into a single event. ability to select from a dedicated critical in promoting To gain the best measurement of timeslot or receive a phone call customer experience, a mix of all before the support team arrives a customer-first three is required. The company might not be as important to the strategy. should identify correlations customer. Their satisfaction score between all three and share results of the event could be the same across the business to drive the without these additional services Companies should right actions from everyone across which only become critical to the also seek to the organisation. It is important customer after a few days. Such not only to share this information insight enables the business to understand the but also to assign customer make informed decisions between primary drivers experience performance metrics investing in reducing the time slot and staff responsibilities across window from four to two hours and of satisfaction. the business, not just the front investing in providing reliable next Once the drivers office. Making customer experience day support to attend to faults. measurement an inherent part are understood, of the reward programme will be it becomes critical in promoting a customer- first strategy. much easier to predict scores.
19 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
What about the rest of the value chain?
Rising consumer expectations are driving change across the value chain.
B2B organisations can learn The most successful B2C How can they engage with buyers lessons from B2C businesses businesses focus on delivering and influencers across a range of Increasing choice of products a seamless experience to their platforms, including social media, and delivery options, combined consumers. They have used by using compelling content? with the availability of information digital platforms to ensure that that can be accessed in real- consumers have access not only A growing opportunity to time and on-the-go, have raised to relevant information they need go direct consumers’ expectations. These to make a purchase, but also to Changing consumer behaviour raised expectations are driving compelling content. They ensure has had a knock-on effect change across the value chain, that the process is personalised beyond the way people consume reshaping competition, redefining and that they are able to identify products or services and has what it means to be a profitable and recognise individuals, potential consequences across business. Through this process regardless of the shopping the entire supply chain serving the new demand is created – as are channel they choose to shop business-to-consumer sector. This new competitors. and ensure that the experience is particularly true for consumer is tailored to their preferences, brands which have traditionally Business-to-consumer (B2C) utilising data drawn from their acted as trade suppliers to the B2C operators have been on the previous purchase behaviour. sector. Chief marketing officers in frontline of these changes for the Moreover, B2C businesses have companies who have traditionally last ten years, but as consumer redesigned their supply chains and manufactured consumer goods influence spreads across more are reorganising their operational are now being asked to rethink of the value chain, business-to- structures to facilitate this these products’ route to market. business operators (B2B) are also process. They are also being asked to being challenged to respond to the start developing the same kind of changing behaviours of their end- The challenge facing an increasing customer experience and brand consumers. number of chief marketing officers experience that the CMOs at B2C (CMOs) at B2B businesses is businesses have been developing Business buyers are also how can they deliver a similar for years. consumers. Consumers that experience for their trade have become used to a certain customers? How can they provide level of experience and service access to product information are reluctant to leave this behind and reviews across a range of when at their workplace. digital platforms and in real time?
20 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Consumer expectations As they continue to develop The internet of things (IoT) could have been raised, not just by expertise in new areas, many also benefit CPG companies. businesses’ efforts to improve are starting to make acquisitions Consumers can already purchase the shopping experience, but also or create their own brands that devices for the home which enable by developments in consumer are designed to trade direct- them to buy washing detergent technology. Consumers are to-consumer in a way that their or kitchen rolls by pressing a becoming more demanding traditional brands were not. button or talking to a speaker. in terms of the amount of the Retailers are likely to continue These devices may well be of more information they expect to have playing a role in consumer use to CPG companies, that sell access to regarding the products packaged goods (CPG) companies’ a smaller range of products in or services they buy. People have business models, because large volumes, than to retailers become used to having instant consumers are used to buying who sell a wide range of products. access to information online, and certain types of products at the IoT technology is developing in addition, they are increasingly supermarket, and because the quickly, and it is likely that in a interested in where products business model of these brands few years consumers will buy come from – where ingredients has been designed around this some household products in were grown, or where a product approach. But digital technology an automated fashion. If a CPG was made. This means that coupled with changing consumer company decides to develop the manufacturers are required to behaviour have opened up necessary infrastructure to fulfil have a more direct relationship new routes to market for CPG these orders directly, it could help with consumers than they did in companies, and new potential protect or increase margins. It also the past. future revenue streams. gives the company direct access to and control of the relationship Some brands are embracing The number of ways with the consumer, as well as this change and are playing a manufacturers connect with any relevant data that could be driving role in its development. consumers will continue to evolve collected. Digital technology has made it and could possibly expand. The much easier for manufacturers emergence of the subscription In future the distinction between and distributors to have a direct business model, for instance, B2B and B2C is likely to become relationship with their customers, is a particularly interesting way less clear. And, in today’s digital allowing them to reach and for CPG companies to serve world, it is more and more about interact with consumers. This consumers, with many of their the end-consumer. The overall means more than just shopping products suiting the model. For customer experience will be online – it could mean developing example, Dollar Shave Club, which determined by how seamless and a dialogue on social media, or sends its customers new razors on effective the experience is across using digital marketing methods a regular basis, is a subscription the entire value chain. to give a brand a new dimension model that attracted Unilever’s and for a business to have a direct interest who acquired the dialogue with consumers. business in July 2016.
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In future the distinction between B2B and B2C is likely to become less clear. And, in today’s digital world, it is more and more about the end- consumer. The overall customer experience will be determined by how seamless and effective the experience is across the entire value chain.
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Appendix Consumer research findings
Methodology Research design To better understand consumer experience, Deloitte Respondents were asked about a given category they commissioned an online consumer survey carried out shopped in over the last three months. They were by an independent market research agency. The survey asked about each stage of the shopping process was conducted with a UK nationally representative from finding inspiration to whether they shared their sample of 2,084 adults aged 18 and over. experience with others.
Figure 9. Consumer activities at the phase of inspiration of the path-to-purchase % of UK consumers who made a purchase in the last three months Thinking specically about what you did before completing a purchase to find inspiration and help you decide what to buy, which if any, of the following influenced you? (Please select all that apply)
Visiting the company from which I made my purchase Using a web search engine (e.g. Google)
Check for discounts Visiting the store or physical location from which I made the purchase Visiting the website of other companies selling similar goods and services Considering reviews/recommendations from other customers
Considering recommendations from friends and family Considering reviews/recommendations from independant experts Using a price comparison website
Browsing the company’s catalogue/brochure
Check for vouchers/coupons
Receiving offers via email Visiting other stores or physical locations than the one which I completed my purchase Reading reviews in the press or magazines
Talking to staff
Using an app
Other
Looking for information on social media sites
Looking for information on blogs
Considering recommendations from staff
Calling customer service
Use an store touch screen
Receiving offers via social media
Visiting the restaurant/hotel from which I made your purchase Visiting other restaurants/hotels than the one from which I completed my purchase Talking to restaurant/hotel staff Not applicable – I didn’t do anything before to find inspiration and help me decide as I knew exactly what I wanted to buy
0% 5% 10% 15% 20% 25% 30%
Source: Deloitte research Products Travel/ Hospitality/Leisure services Total 23 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Figure 10. Consumer activities when locating the product or service % of UK consumers who made a purchase in the last three months Thinking specically about what you did to select the product or service you bought (e.g. assessing/comparing different product or service), which, if any, of the following did you do? (Please select all that apply)
Visit website of the company from which I made my purchase Visit the website of other companies selling similar goods and services Using a web search engine (e.g. Google)
Visit the store from which I made the purchase
Check availability/stock
Check for discounts
Consider reviews/recommendations from other customers
Consider recommendations from friends and family
Use a price comparison website
Visit other stores from which I completed my purchase
Talk to in-store staff
Check for vouchers/coupons
Use an app
Browse the company’s catalogue/brochure
Consider reviews/recommendations from independent experts
Read reviews in the press or magazines
Call customer service
Consider recommendations from staff
Look for information on social media sites
Look for information on blogs
Use an in-store touch screen
Visit the restaurant/hotel from which I made your purchase Visit other restaurants/hotels than the one from which I completed my purchase Talk to restaurant/hotel staff
None of these
5% 10% 25% 0% 15% 20% 30% 35% 40% Source: Deloitte research Products Travel/Hospitality/Leisure Services Total
24 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Figure 11. Consumer activities when selecting the product or service % of UK consumers who made a purchase in the last three months Thinking specifically about what you did to select the product or service you bought (e.g. assessing/comparing different product or service), which, if any, of the following did you do? (Please select all that apply)
Visit website of the company from which I made my purchase Visit the website of other companies selling similar goods and services Visit the store from which I made the purchase
Using a web search engine (e.g. Google)
Check for discounts
Consider reviews/recommendations from other customers
Check availability/stock
Use a price comparison website
Visit other stores from which I completed my purchase
Consider recommendations from friends and family
Check for vouchers/coupons
Talking to in-store staff
Browse the company’s catalogue/brochure
Consider reviews/recommendations from independent experts
Use an app
Read reviews in the press or magazines
Consider recommendations from staff
Look for information on social media sites
Look for information on blogs
Call customer service
Use an in-store touch screen
Visit the restaurant/hotel from which I made your purchase Visit other restaurants/hotels than the one from which I completed my purchase Talk to restaurant/hotel staff
None of these
0% 5% 10% 15% 20% 25% 30% 35% 40% Source: Deloitte research Products Travel/Hospitality/Leisure Services Total
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Figure 12. Channels, delivery methods and technology used to buy the product % of UK consumers who made a purchase in the last three months Thinking specifically about where and how you bought the product or service, which one of the following did you do?
Buy in-store
Buy online using desktop/laptop and delivered to home
Buy online using a tablet and delivered to home
Order in-store for home delivery
Buy online using desktop/laptop and delivered to the store for collection
Buy online using smartphone and delivered to home
Buy online using desktop/laptop and delivered to a third party location
Buy online using smartphone and delivered to store for collection
Buy online using a tablet and delivered to store for collection
Buy online using a tablet and delivered to third party location
Buy from a catalogue/mail order
Buy online using smartphone and delivered to a third party location
Buy via TV shopping
Other
0% 5% 10% 15% 20% 25% 30% 35% 40% Source: Deloitte research
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Figure 13. Channels, delivery methods and technology used to buy the service % of UK consumers who made a purchase in the last three months Thinking specifically about where and how you bought the product or service, which one of the following did you do?
Book/buy it online using desktop/laptop
Walk-in (e.g. restaurant, cinema, hotel etc.)
Book/buy it in a physical location (e.g. travel agent, agency, train station etc.)
Book/buy it on the telephone
Book/buy it online using a tablet
Book/buy it online using a smartphone
Other
0% 10% 20% 30% 40% 50% Source: Deloitte research
27 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Figure 14. Payment methods used % of UK consumers who made a purchase in the last three months Which payment method did you use to purchase your product or service?
Paid by using a credit/debit card and entering a pin (e.g. chip & pin)
Paid by using a contactless credit/debit card
Paid by cash
Paid using Paypal
Paid using a bank transfer
Paid using gift vouchers
Paid by cheque
Paid using mobile pay (e.g. Apple pay)
Other
0% 10% 20% 30% 40% 50% 60%
Products Travel/Hospitality/Leisure Services Total Source: Deloitte research
28 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Figure 15. Customer service activities % of UK consumers who made a purchase in the last three months Did you contact customer service?
Visited a store
Call centre
Twitter account
Facebook page
Message board or forum
Live chat on company website
Video chat on company website
Other
N/A – I didn’t do this
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Deloitte research
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Figure 16. Consumer activities when sharing their purchasing experience % of UK consumers who made a purchase in the last three months Thinking specifically about whether you shared your experience about using or enjoying your product or service, which, if any, of the following did you do? (Please select all that apply)
Recommended the product/service to friends and family
Posted a comment on my own social media page (e.g. Facebook, LinkedIn, Twitter etc.)
Posted a comment on the service provider’s or product manufacturer’s webpage
Wrote a review on an independent review website (e.g. Trip Adviser, or Reevoo, Trusted reviews etc.)
Emailed the service provider’s or product manufacturer’s customer service Posted a comment on the service provider’s or product manufacturer’s social media page (e.g. their Facebook page)
Posted a message/comment on a consumer forum(s)
Called the service provider’s or product manufacturer’s customer service
Sent a written letter to the service provider or product manufacturer’s customer service
Contacted a newspaper or magazine
Not applicable – I didn’t share my experience in any way
Other
0% 10% 20% 30% 40% 50% 60% 70% 80%
Products Travel/Hospitality/Leisure Services Total
Source: Deloitte research
30 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Endnotes
1. https://cmo.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-retail-volatility-index-POV.pdf
2. Net Promoter Score (NPS) measures the loyalty that exists between a provider and a consumer. NPS is based on a single question based on a consumer’s overall interaction with a company which is: how likely are you to recommend our company/product/ service to your friends and colleagues? Net Promoter Score is a registered trademark of Fred Reichheld, Bain & Company, and Satmetrix Systems
3. http://reprints.forrester.com/#/assets/2/153/’RES91981’/reports
31 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Contacts
Leadership team
Nigel Wixcey UK Industry Leader, Consumer & Industrial Products +44 (0)20 7303 5007 [email protected]
Richard Small Partner, Deloitte Digital Consumer & Industrial Products +44 (0)20 7303 7971 [email protected]
Authors
Celine Fenech Rebecca Thomson UK Research Manager, UK Research Manager, Consumer & Industrial Products Consumer & Industrial Products +44 (0)20 7303 2064 +44 (0)20 7007 0891 [email protected] [email protected]
Ben Perkins Francesca Atkins UK Research Director, Consultant, Consumer & Industrial Products Deloitte Digital +44 (0)20 7007 2207 +44 (0)20 7007 3402 [email protected] [email protected]
Contributors
Oliver Vernon-Harcourt Partner, Retail Consulting +44 (0)20 7007 1628 [email protected]
Romilly Fell Director, Monitor Deloitte +44 (0)20 7303 0786 [email protected]
32 The Deloitte Consumer Review | CX marks the spot: Rethinking the customer experience to win
Notes
33 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte. co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte LLP is the United Kingdom member firm of DTTL.
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