Team eCommerce Next interviewed Mike Wallgren from Hero Digital to get more insights on where businesses should invest in their customer experiences. Following is our interview with him:
1. What matters most to consumers – are brands listening to them as well as they should?
There are so many new popular digital platforms promising to provide the best customer experience. Customer service chatbots are rising in popularity as they can seamlessly integrate with many CRM’s and can provide real-time solutions to common customer problems. Advances in Marketing Automation Tools, Intent tools, and Loyalty platforms are also key digital features that many retailers are implementing to automate their customer experiences and reduce customer attrition.
However, it’s important to note that many brands feature these CX benefits, and simply investing in a loyalty program or chatbot for the sake of saying you have the capabilities won’t effectively move the CX needle in consumers’ minds.
Let’s take loyalty programs as an example. When the pandemic struck, every consumer-facing business rapidly moved online. At the time, only a handful of brands offered loyalty programs for their customers. But now, everyone does. Consumers, on average, are a part of 15 total programs, but are only active in 7. As you can see, and according to the data, loyalty programs are not effective for roughly half of brands. Sure, these businesses made the investment, but they didn’t truly put their weight behind the program. Consumers need to be engaged, and if you want your loyalty program to cultivate return visits, you’re going to need to do more than the bare minimum as a brand.
Chipotle is a company that is great at engaging its users via its loyalty programs and demonstrates how effective the technology can be. Recently, the QSR announced they’ll be offering Chipotle Rewards members the chance to score buy-one-get-one offers while watching the NBA Finals. Last year, Chipotle launched a rewards exchange with a video game and Tesla Model 3 giveaway. From a consumer perspective, would you rather be an active member of Chipotle’s program that constantly offers new and exciting ways to win or a simple point structure that nets you a free drink after X amount of visits? I’ll let you decide.
This example can be applied to other aspects of the digital customer experience. With so many new technologies available, many brands are implementing them without first understanding whether these will make the overall customer experience better or will add more friction on the path to purchase.
There are many different areas of the CX that businesses can invest their efforts into, what do you see as being the most important area of focus?
CX investments are not a one-size-fits-all approach. Brands should align with specific use cases, so that you really understand the job that the various technology components will be doing and then determine which technologies will help them accomplish their goals. Otherwise, you risk making purchase decisions based on trends and the vendor’s desired outcome, rather than focusing on the technology that will truly help your business. Before undertaking customer experience and digital transformation initiatives, it’s important to make sure what you’re doing matters to the people you serve.
How can businesses best evaluate which aspect of their CX needs the most attention?
When planning for digital business transformation, prioritizing where to invest resources is difficult. Small mistakes can cost companies millions of dollars, or worse. Often, in an effort to keep up, companies invest in technology, without first examining the human needs that drive change. Decisions around digital strategy should be aligned around three key components:
- Customer journey touchpoints
- Key business processes
- Tracking the right KPIs
These three factors need to be finalized before making technology decisions.
How can businesses better leverage customer data to inform these decisions?
Data is key and it may take some digging, but your current systems most likely hold information about customer and prospect behavior, demographics, and path to purchase.
Interviewing employees in customer-facing roles like Sales and Services. This will give you qualitative and quantitative information that you can use to better understand the customer journey.
Additionally, despite increasingly consumer-focused data privacy regulations and growing concerns, people continue to expect personalized messages and shopping experiences from brands. In fact, two-thirds of consumers expect companies to understand their individual expectations and needs. Personalization should remain a top priority in today’s crowded commerce space, but retailers must note the importance of offering customers a personalized experience, whether that be in-store or online.
You don’t need a big data approach, you need a smart data approach. We have been fed the same narrative for years: Collect as much data as you can to glean the best insights. In reality, the hype around “big data” may not be justifiable. Instead, you should create detailed hypotheses and focus on the quality of your data rather than its quantity — a smart data approach. Start small by identifying a specific CX problem and run a test on a certain group of consumers.
Ultimately, as long as you remain compliant with privacy regulations, provide value and trust to your customers, and have the right tools and talent, you’ll be on the road to creating personalized CX.
How can companies narrow their focus and be sure they are making the correct digital bets when it comes to their customer experience?
Companies can narrow their focus and ensure they’re making the correct digital bets when it comes to the customer experience by understanding their customers from a holistic perspective. As mentioned earlier, this isn’t a one-size-fits-all approach. The “right” CX investment will be different for each organization. Moreover, brands need to dedicate adequate attention to their investment. Investing for the sake of investing won’t facilitate a positive CX experience and bring customers back to your business.
Prioritization of technology investments should follow the path- Available Data- Customer Use Cases, Key business processes and KPI tracking. Once you decide your needs, you can then build a roadmap that will help you iterate toward an optimal technology stack.