5 Experience Predictions for Retail in 2019
In the retail industry, one that’s known for its ability to continually reinvent itself and find new ways to connect with consumers, the huge shift in consumer behavior from physical...
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Customers have more power than ever.
They’re armed by information — a vast supply of it, all on the Internet — and it’s undermining the traditional ways of building a “brand.” It’s creating transparency, and making it easier for consumers to share their experiences. And as customer’s’ power has grown, so too have their expectations — encouraged by the delightful and disruptive experiences of leaders like Uber, and emboldened by services like Amazon. Don’t deliver an experience that meets these expectations? Well, they have a range of alternatives open to them. And they’re only a click away.
It’s no surprise, then, that some have heralded this as the Age of the Customer.
This is changing the way that companies compete. From telecom and retail, all the way to B2B and banking, traditional sources of competitive advantage have eroded. Barriers to entry are collapsing, and new players are entering the market all the time. They will outmaneuver and slay those who aren’t as innovative or customer-focused as they are.
The question then becomes: what to do about it?
Well, this is a question that we’ve spent a lot of time on — both with some of the leading researchers in the world, and some of the world’s leading brands.
What we’re seeing: experience is becoming the key source of sustainable competitive differentiation. Medallia research published in the Harvard Business Review quantified the impact. Controlling for all factors other than the quality of the experience that individual customers had when they walked in through the doors of that business, we looked at how much each customer went on to spend with that business over the course of the next year.
In effect, we are able to see just what the financial impact of customer experience is, by looking at the subsequent spending of customers based on the quality of their experience.
That impact turns out to be rather dramatic:
Perhaps this is intuitive — many great companies are known for having great customer experiences and seem to benefit from them. But while we might be able to conceptualize the value of these experiences, achieving them in a systematic and sustainable way is an entirely different beast.
So how do companies — especially large, global organizations with thousands of employees and operational silos — get this right? How do they leverage the power of the customer as a business catalyst?
Our research has identified four key capabilities that will allow companies to win with their customers. They’re not a set of discrete practices operating in isolation, but an integrated and mutually reinforcing set of capabilities designed to discover, disseminate, develop, and implement customer-driven insights:
We’ve just published the definitive whitepaper on these capabilities. We’re going to be exploring them further over the coming weeks — sharing the research and discoveries we’ve made. The overall goal? To introduce an entirely new way for companies to think about how they engage with their customers — and provide the means to operationalize this framework.
And if you’d like to download the white paper on the capabilities and the research behind them, it’s available here: www.medallia.com/resource/operationalizing-the-management-of-customer-experience/