Key takeaways

  • A good customer experience leads to customers who will pay a premium, yet many companies ignore its importance.
  • Getting customer experience wrong is a costly business, with the majority of brand advocates ready to abandon their loyalty after just a few bad encounters.
  • Customers want more human interaction, not less – particularly when things go awry.

Three-quarters of consumers say that customer experience is an important factor in the decision to buy – just behind price and quality.

Not only that, a good experience leads to patrons willingly paying a premium.

These are findings from the latest in PwC’s Consumer Intelligence Series report, which examines the role of customer experience when it comes to purchasing behaviour.

To the average shopper on the street, finding out that good customer experience is a prerequisite to loyalty (and sales) is probably not a surprise, yet, more than half of those polled in the US said that the customer experience needs improvement.

Clearly, there is a customer experience disconnect, as well as a misunderstanding around what makes for a good encounter. While seamless technology is a must, it’s only an enabler. The richness of the human interaction will trump it when it comes to what makes a good experience.

Tech is important,
but…

The retail sector has been hammered with the message that they must embrace digital, and that’s still unarguably true, but it cannot come at the expense of knowledgeable employees and friendly service, which rank as the most valuable when it comes to customer experience just behind convenience and speed.

While technologies that enable memorable service are critical, and expected, they do not tangibly define a good experience to the customer. For example, when asked to rank the importance of customer service aspects for the future, speed and efficiency came equal first to Australian customers at 78%, alongside ease of payment and knowledgeable employees.

And while having a good mobile experience or up-to-date technology do rank as important to Australians (in the lower half of the top 10), fewer consumers would pay more for those benefits (just 16% and 27% respectively) compared to the number who would pay more for efficient service (47%), knowledgeable/helpful service (41%) or convenience (43%).

Of course, these numbers are reflective of the fact that customers expect that a store’s interactions with them will be at a certain standard (mobile-friendly, personalised) and should not be mistaken for customers not caring about a seamless experience – that is just their baseline.

Human lives
matter, too

The study also revealed that the human experience is important to consumers when interacting with a brand. In fact, more than 80% of Australians surveyed said that they will want more human interaction in the future, not less.

This seems to go against conventional digital wisdom and suggests that so far, retailers having been getting the balance between technology and staff wrong. This is echoed in the finding that the majority of consumers believe companies have lost touch with the human element by relying too much on technology (65% in Australia, 59% overall across the 12 countries surveyed).

This is critical error, because 75% of Australians surveyed believe that employees have a moderate to high degree of impact on their brand experiences. The benefits of great experiences are immense, and so human interaction is important. But, as the number of people who say they will stop shopping with a brand after unfriendly service (72% in Australia, quite a jump from the broader average of just 60%) suggests, that human touch must be exceptional, with a good attitude and friendly service.

Brands should be investing therefore in technology that enables human interaction, rather than replaces it, enabling staff interaction with customers to be more consistent in quality and have a greater impact. Empowering employees to provide superior service is a digital problem more often than many might think, so again, the result brands should be pursuing is a balanced one.

Happier customers =
happier brands

If the above statistics aren’t enough to convince you to prioritise your customer service experience, consider this: great customer service yields real business value. Customers will pay more for good service. In the US this is up to 18% more, though 16% across the 12 countries surveyed and 10% in Australia, this is still a substantial amount.

They will also share more data, be more loyal, engage more, and go with a brand when it attempts to enter new markets or branch out with new product lines. The bottom line is good experience equals goodwill and customers will repay it.

The other crucial juncture where good customer interactions will pay dividends is in the reduction of risk and corresponding increase in brand forgiveness. While it turns out that Australians are more forgiving than the broader average, 24% will stop doing business with a brand that they love after just one bad experience (over the 12 countries this rises to 32%). Over half of Australian consumers will stop shopping with a brand they love after a few bad experiences, which can be anything from bad attitudes, inconsistency or a lack of knowledge.

In this volatile landscape of customer intolerance, providing a buffer against losing customers, not to mention adding the promise of higher-paying customers, is quite simply mandatory.

Mix your humans
and your tech well

The overwhelming conclusion of the study is that brands need to embrace humans and machines and ensure that they get the balance right. Technology is critical, but it should enhance the customer service experience, not define it.

Digital channels, with their lower interaction costs have been misappropriated by brands as a way to bombard customers with messaging that has consequently lost its impact. In a retail world where this is often the norm, a live presence can mean the difference between a customer ignoring a purchase and making one.

Of course, technology plays a key role in raising the quality and cutting the cost of human interaction, but its importance may be felt in unexpected places. In many cases, digital tools for frontline staff that enable rapid onboarding and upskilling, as well as bringing greater quality face-to-face interaction with customers, are what will enable a brand to dial up its impact in the moment that matters.

The fact that multichannel customers who engage face-to-face as well as via digital channels are more valuable to a brand attests to this fact that a mix is critical.¹

Creating phenomenal
customer experiences

Human interaction is important, particularly in situations where technology has failed, or where increased knowledge is required, but employees cannot afford to fall short of excellence in a market where customers have high levels of choice and even loftier expectations.

The reduction of friction and getting the core elements of the experience right – such as convenience, quality, speed and price – will enable brands to charge, and get, a premium from their customers. And it will also mean that they are more satisfied, more loyal and more likely to forgive when things go wrong.

As the report says, “done right, companies can create phenomenal customer experiences and reap the resulting benefits.” These include increased revenue, brand loyalty, quicker adoption of extensions into new categories, more goodwill among customers, and more productive, happy employees.

Far from window dressing, the future of customer experience is the future of brands themselves.


For further insights, download the full report on the future of customer experience, or visit the Consumer Intelligence Series: Experience is Everything site.

 

Contributor

Richard Blundell

Richard Blundell is PwC’s retail and consumer specialist in the Digital Services team.

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