Introduction: Great expectations
Businesses have always had to manage high customer expectations, but the shift to digital channels has ramped up demands for speed, convenience and responsiveness. Over the last few years, the scope and volume of customer interactions taking place online have surged.
Always an early adopter in the e-commerce space, China is expected this year to become the first country where online sales exceed those from brick-and-mortar retail. But the trend is global, and other markets may soon catch up. According to one recent survey, nearly two-thirds (61%) of Americans have made the bulk of their purchases online during the pandemic, and an overwhelming majority plan to continue shopping (71%) and banking online (92%) when the pandemic is over.
What’s more, this behavior isn’t limited to consumers. Since 2019, research shows the proportion of business-to-business interactions taking place online has jumped from less than half to almost 60%.
Adding to the pressure, when customers engage in digital interactions, they expect those interactions to be seamless. Almost 60% of those polled by Salesforce said the pandemic had raised their standards for customer service, and 80% believe the experience a company provides is every bit as important as the quality of its goods and services. All this has exposed the gulf between businesses who already have effective digital channels in place, and those struggling with what’s essentially a new medium.
Pandemic drives consumer expectations higher
“A customer will have some form of goal in mind when they engage with an organization, and they don’t expect that to require submitting a form and then waiting a few days for a call back or an e-mail,” says Kristan Vingrys, Managing Director, Australia, at Thoughtworks. “They’re looking for the ability to achieve that goal more or less, instantly. That means a lot of the organizations reliant on manual processing have been impacted, especially those depending on distributed or offshore locations affected by COVID-19. Processes slowed down drastically and they weren’t able to meet demands for a timely response, so the customers would shift. It’s easy to go somewhere else, to an organization that’s more automated and better positioned to act quickly on the customer’s behalf.”
Many companies are investing heavily in technology to meet new customer demands. In a recent Forrester Consulting study, commissioned by Thoughtworks, on the secrets of successful digital transformation, improving customer experience was named the number one goal of organizations’ modernization or transformation programs. But expectations will continue to evolve, meaning businesses will be chasing a moving target.
Top enterprise modernization priorities
This constantly rising bar presents a challenge, but also offers substantial rewards for those enterprises that manage to crack the customer experience code.
Rujia Wang, Head of Customer Experience, Product and Design Service Line at Thoughtworks China, notes businesses that acted quickly in the initial stages of the pandemic to develop platforms that they could leverage to bring more products and services online are experiencing something of a revelation.
Many are now realizing those same platforms can support the “move into completely new business models, something they never did before,” she says. “It’s not just about being able to service customers remotely, but also thinking about new products and services that can be offered. There’s more room for innovation.”
Businesses should also keep in mind that in striving to enhance customer experience they don’t necessarily need to aim for perfection, as long as they can distinguish themselves from the rest of the pack. “It’s a race for brand equity, and you only have to do a better job than your competitor,” says Joe Murray, Chief Digital Officer, North America at Thoughtworks. “You don’t have to solve world hunger. As long as you’re continuously one step ahead of the competition, you will own market share. You will enjoy the highest margins, and the most customer loyalty. So you should always be reaching as high as you can.”
i. Empathy as the new currency
Fundamentally, building brand equity comes down to answering one key question - what do customers really want?
Research suggests the answer is ‘everything.’ Consumers hope their interactions with companies will blend quality, speed and a high degree of personalization. Consumers notice the efforts that brands make to connect with them online and according to one recent survey in most industries, speed was viewed as the top quality of excellent digital CX. Among customers who suffered negative digital experiences during the pandemic, a quarter were frustrated by the inability to reach a real person, and 14% pointed to the interaction being impersonal.
At the most basic level, what customers are looking for is empathy - the sense that the business is genuinely attuned to their individual needs, and is solving problems or delivering services and solutions, to match. Demonstrating empathy has an immense impact on long-term customer engagement. In Salesforce’s survey, almost three-quarters of consumers said businesses that showed empathy during the pandemic earned their loyalty. Yet customer empathy is a quality that many organizations still struggle to deliver.
Enterprises failing to bridge the empathy gap
“It’s a well-known fact that buying decisions are driven by emotions,” notes Murray. “So the more you can build a basis of empathy and emotionally connect with your customers and what they’re wrestling with, the more successful you can be. There’s an old adage in customer service that there’s no better time to sell a customer something than right after you’ve solved their problem.”
Knowing and understanding the customer contributes to empathy, but according to Vingrys, empathic customer experience is ultimately defined by action. “People talk about it a lot, but it’s putting the customer at the center of what you’re doing; not just the customer as an individual, but the journey or goal they’re trying to achieve,” he says. “It’s figuring out how you line up your systems to help customers achieve that goal, rather than looking at the way you’ve traditionally structured your organization, then putting technology around that to make the operation more efficient without considering the impact on the end-user.”
“One of the dimensions of winning companies is that they design the business around their customer instead of their internal processes,” agrees Murray. “Bigger, blue chip businesses tend to struggle with that more than smaller ones because of what I’ve come to think of as the ‘Six Sigma hangover’ - they’ve focused and invested so much on optimizing their internal processes and reaching zero defects that the concept of the customer and what the customer agenda is has been lost.”
Empathy then can’t be just a mindset shift. It often involves deep and meaningful changes to the way the enterprise is structured, operates and creates.
“Organizations need to move away from just working by themselves to move closer to the customer, considering what they really need and transferring that empathy directly into product design,” Wang explains. “That can also mean uncovering things customers never knew they needed, by digging into the goals and motivations behind their behaviors and pain points.”
ii. Developing a customer experience platform
Beyond a customer-centric mindset, the other critical ingredient of success in the experience economy is a platform that allows the business to develop, redeploy and build on a range of customer-facing capabilities. “A lot of businesses can build a single app very well, or a website,” Wang says. “But if you look at how much of the work or features that go into that are actually reusable, it’s very little.”
That leaves enterprises vulnerable when customer demands shift or accelerate - which Murray notes is all but inevitable. “The importance of quickly executing is more important than ever because the dynamics in the market change so rapidly,” he says. “The shelf life of ideas has never been shorter.”
An effective customer experience platform equips the enterprise with a standard toolkit that can be drawn on regardless of how demands evolve. While technology-based, a platform is built “not so much around the technology as it is around business capabilities, so you can easily add new technologies as they come about,” Vingrys explains.
With a platform, common capabilities such as payment systems or a recommendation engine “can be repurposed so the business can support different ideas and bring them to market very, very quickly, instead of building those basic things over and over again,” Wang says. “The businesses that are moving faster than others have that sort of thinking set up, and are reusing core tech capabilities in different products.”
Because platforms are broadly standardized, they also provide a basis for more consistent customer experience across the various channels used by the business, even when new channels are added. This consistency is a vital part of demonstrating empathy to the customer, and an area where many businesses continue to fall short.
“Separate mobile and web teams will end up creating very different experiences for customers using the mobile versus the web application when there’s no consistent business capability, like a single e-commerce solution, to draw on,” notes Vingrys.
According to Murray, a robust customer experience platform incorporates three basic layers – design experience, product strategy and the application programming interfaces (APIs) -- that come together to deliver key customer touchpoints.
Investing in all of these, he says, creates a “single source of truth that allows you to deliver a consistent brand and experience through your touchpoints - but also gives you a lot of flexibility and resilience to leverage different aspects of the platform as you deliver experiences on top of it.” In other words, an engine of customer engagement, and, by extension, brand equity.
The architecture of a customer engagement platform
iii. Customer-centric design
The first platform layer is created by making customer experience the focal point of the design process. This may be achieved by developing a service design model or journey map that’s built around the customer agenda. But trouble starts if these are seen as set in stone.
“I’ve worked with a number of companies where they say: ‘Oh yeah, we’ve done customer research and built our journey map two years ago - there it is,’ and you see it posted on a wall,” says Murray. “But as soon as you print your customer journey map and put it on a wall, you’re setting yourself up to fail, because it gets stale over time.”
Enterprises understand that a technology platform has to continuously evolve, but may not realize the same applies to their customer experience design, Murray adds. “We've been evangelizing the idea of a customer experience evolution work stream - a team of people that are focused on continuously understanding and gardening the customer experience. You have a platform evolution team that's doing the same. And in between the two, you have application work streams that are deploying product life cycles informed by that evolution work,” he says.
As well as recognizing that the customer journey, and expectations, will change, customer experience design has to be assessed through two lenses - value to the customer, and value to the business - and deliver on both. Rarely are these mutually exclusive, and Murray notes the first will often lead to the second, as delivering positive customer outcomes builds loyalty with existing customers and attracts new ones.
The principles of design thinking, and human-centered design are by now firmly part of the business mainstream, and very few enterprises would admit to not designing for their customers. Yet well-intentioned design often fails to translate into positive experience due to common disconnects.
“A lot of businesses have their design function in this ivory tower that’s doing all of these great empathy-driven exercises to understand the customer,” Murray says. “They pull all of that together in some documentation and throw it over to the engineering team who goes and builds features identified by the design team. But the engineering team doesn’t understand the context of these features, so what gets built doesn’t meet the designed intent. There’s a lack of design fidelity.”
Another issue is that the customer research used to inform design is not always adequate, because it’s a self-contained exercise.
“Customer research can’t be a one-off thing where you conduct a survey, come back with a report and some data, and use that to guide all decisions from then on,” Wang points out. “We continuously embed research as a capability in our product teams. It has to be continuous, not on and off, and qualitative as well as quantitative, so you’re looking at what customers are doing in real-life scenarios.”
“The second thing we do is look at the data from our product use itself and see whether that is actually changing over time,” she adds. “And the third is to constantly update past demand forecasting models. If recommendation engines are based on previous customer behavior but a structural shift takes place, we’ll need to think about whether those models are still able to predict customer demands and needs.”
As Murray notes, customer surveys often depend on “interrogation versus observation,” meaning companies have in effect formed their conclusions prior to the research exercise and construct questions based on these assumptions, thereby, even if unintentionally, dictating the results.
Observational research, based on monitoring customer interactions with products and services in a real-life context, is a better foundation for insights. Data analytics can be a powerful tool to collect and analyze information on these interactions, particularly if it’s applied at all stages of the customer journey and used to cultivate a single point of view.
“Data analytics, when done well, helps draw a picture and personalization of the customer and better tailor services to meet what the customer will normally do,” Vingrys notes. “But you need to have the right analytics and analysis across the customer journey, and test and learn how customers are using what you’ve put into production. Having a consistent way of measuring your customer interfaces and interactions, collecting similar data so you can actually have a more unified view of your customer across the different products they’re engaging with, and ensuring it’s one product team looking at all of that, is all part of creating true comparisons and identifying inconsistencies.”
As more businesses become part of broader ecosystems, building a complete profile of the customer may mean going outside the organization.
“It’s really important to gather data from the end-to-end customer journey, and in China that’s quite difficult because a lot of customer behavior happens on mass third-party platforms,” Wang says. “If a customer disappears it may not be that they left you as a brand; maybe they just switched to a different channel or platform to take advantage of an offer. We’ve formed partnerships with companies like Alibaba to leverage their data models and understanding of the customer because they have so much information - from maps, takeaway services, shopping, health care - that we don’t. We’ve found ways to collaborate where we design based on real scenarios and leverage data to improve the customer experience, while they have a lot on the engine side to provide insights across all systems.”
iv. Strategy and touchpoints that serve customer goals
Turning customer-centric design into working applications that play well with a web of existing technologies requires a unified product strategy. “There’s a core principle that every company should be aiming to follow - that every conversation with a customer begins exactly where the last one left off,” notes Murray.
An integrated and coherent product strategy serving as the next layer of the platform is key to removing the many discrepancies between cross-channel experiences, systems and the teams behind them. Without it, organizations remain constrained by the inability to capture a complete customer profile and consistent source of truth.
“One of the most common problems is the use of separate logins for different channels, for example using a phone number to log into one, email address for another and Facebook ID for a third,” says Wang. “At the back end, these systems are not connected and the customer appears to the business as three separate people.”
Broken communication between customer channels and back-end systems like inventory management, or the use of separate order management systems for each channel, inconvenience customers, preventing them from viewing their entire order history, making returns easily, or wasting their time selecting a product that is out of stock.
An effectively executed, comprehensive product strategy solves these issues and gives customers the experience they want: quality, speed and personalization, delivered seamlessly and empathically.
“The key question for organizations to ask when formulating a strategy is: How do I align my underlying systems and technologies to the customer journey - seen in the context of a customer’s ultimate intent,” says Vingrys. “Businesses have to understand the whole journey or the experience customers go through to achieve a goal, both offline and online, not just this one interaction they have with a particular representative within a business unit, or a particular system.” Once that’s achieved, technology can be leveraged to make the operation more efficient.
Accurately assessing goals requires critical thinking about the role that the product or service plays in the customer’s life. For example, a bank’s customers “might be saving up so that their kids can get an overseas college education. That's much more important to them than the process of inquiring about different loans, which is mapped onto the customer journey but only looks at their needs on the surface,” notes Wang. “When the bank realizes that the underlying reason for inquiring about loans is to help their children study overseas, they can offer more relevant services to support those goals.”
Forming long-lasting product teams oriented around the holistic role of a product or service, rather than functional lines, facilitates this approach. “There’s a need to move away from project-based work to product-based work, adopt product thinking, put in place things like continuous delivery so you deliver quickly into the production environment and get new features out to test and learn,” notes Vingrys.
Unlike project-based teams, typically built around specific tasks or targets and organized by departments, product teams comprise mixed capabilities - product design, analytics, development and operations. These teams are equipped with the breadth and depth of expertise and insight to solve problems and deliver new features that align with customers’ end goals, and sustain that success with constant upgrades to meet new demands.
A diverse, multi-disciplinary product-centric team
Because they can tackle a problem or task from more angles, diverse teams tend to be more creative, and to come up with better ideas. “For example, when asked to perform observational research in a shopping mall around a shopping experience, the observations that software engineers came up with were very different from what the designers and the product people presented. But when we put them all together it painted a really robust picture,” says Murray.
“Moving to multi-disciplinary teams positions the business to create viability, likeability and feasibility - the essential components of a good product strategy,” Murray adds. “There’s a much better chance of coming up with products you can actually bring to market in a reasonable period of time, and to capture the desired customer and business outcomes.”
v. Embedding experience capabilities
Supported by a unified product strategy, experience APIs form the top layer of the customer experience platform and enable a range of interactions not just with customers, but also external partners and collaborators. They make it possible for the enterprise to deliver relevant, seamless personalization across all its touchpoints, reinforcing the consistency and integrity of the customer journey and also serving as a channel for insights on customer behavior.
“One of the big challenges companies face is having separate personalization platforms for the call center versus the web. Customers end up getting different offers depending on which channel they come through. Taking a platform approach to these experience APIs means having one source of truth for customer profile and preferences, one source of truth for personalization, and one source of truth for ecommerce objects, shopping carts and retail habits," explains Murray.
An uninterrupted flow of credible information between organizations and their customers makes coordinating an effortless transition between digital and in-person interactions easier. Take for example an automotive company in China that delivered empathy and personalized service by enabling potential buyers to video call a salesperson through its online e-commerce platform, visit a showroom remotely and view a detailed 3D model of the car while guided virtually. Interested buyers could then book a door-to-door test drive experience, without having to set foot in a dealership. Afterwards, they were offered the option of customizing the car remotely before finalizing their purchase.
“Buying a new car is a big investment for many. And the company understood that asking visitors to order a car online based on static photos and having that purchase delivered to their doorstep isn’t sufficient,” says Wang.
With an effective customer experience platform and APIs, businesses have more avenues to incorporate innovative design concepts and stake out new territory, whether by creating new products or services or using the platform to interface with other enterprises. As noted by research firms like Gartner, shared platforms tend to multiply value creation exponentially, and will represent one of the main paths to growth and opportunity in the future.
“Essentially, you are putting a business capability layer on top of your technology platform. Besides greater flexibility to create solutions that help your customers achieve their goals, you can also easily innovate and try out new technologies to develop a full, complete solution,” explains Vingrys.
“Business is moving beyond the ‘omnichannel’ buzzword and into every channel - including channels that aren’t your own,” notes Murray. “Customer needs can only be met by a mashup of your company and a couple of others, so you need to set yourself up to accommodate that. A perfect example is how Uber directly solves the customer problem by embedding their service into Google Maps because Uber knows the customer agenda is to figure out the quickest, least expensive way to get from point A to point B.”
“Platform thinking is not limited to internal processes; it can be deployed externally to an ecosystem of partners as well, to facilitate innovation,” Wang adds. “For example, a car company can make the data they have gathered on road conditions available to the government to help them identify roads that are bumpier than others.”
Examining the customer’s entire purchasing journey and what they are trying to achieve is an effective method for identifying new opportunities for products and services. “Financial services is an area where we’re seeing massive change,” notes Vingrys. “Traditionally, organizations tend to think that certain services are the domain of specific providers - for example that providing credit is the bank’s role, plumbing companies sell plumbing products and delivery companies offer delivery services only. But a company that started out selling plumbing products to plumbers may now be thinking about providing their customers with credit to pay for those products, and when a customer orders a product, how to pick it up and deliver to a certain location.”
“The best approach to innovating is to maintain a portfolio of multiple ‘bets’ at any given time,” notes Wang. “You can’t really predict financial returns in the traditional way if you’re evaluating completely new business models, so we look at other means to do it using innovation accounting, and much more customer prototyping, testing and validation.”
vi. Making customer experience future-proof
To retain customer interest and engagement, innovation also means being constantly on the lookout for novel ideas and emerging technologies that can enhance existing experiences or create new ones.
Looking outside your own industry for inspiration can help spark fresh yet feasible applications, according to Wang. “For example, if you're trying to design a luxurious retail experience you can look at how high-end hotels serve customers, or break down the idea of luxury from a scientific or psychological point of view,” she says.
On the technology front, more interactive experiences - enabled by promising technologies such as augmented reality (AR), virtual reality (VR)and voice - are helping product teams to explore and develop new means to enable customers to achieve their goals. For example, IKEA’s 3D wardrobe app, built using augmented reality, allows shoppers to customize furniture virtually and see how a full built-up model would look in their home. IDC’s most recent Worldwide Augmented and Virtual Reality Spending Guide predicts strong growth in AR and VR over the next few years, with retail showcasing among the top five use cases.
“The types of technologies we have at our fingertips to equip humans with better insight into what the customer's real challenges are is becoming more and more sophisticated,” notes Murray, who sees the evolution of contact center technology as a big leap forward in customer experience. “Cloud-based technologies that bring the call center into the same digital ecosystem, and thoughtful and measured application of machine learning algorithms to that experience, can make a big difference.”
According to Murray, one retailer saw a lift in sales when a personalization engine based on machine learning algorithm was applied to their call center routing logic to predict caller intent and pair them with the best or most experienced agents for corresponding products. “We’ve only just begun to discover really interesting and innovative ways to apply machine learning to deliver better customer experience,” he says.
However, as companies explore new customer experience frontiers, Vingrys advises them to stick closely to first principles.
“Whatever new technology you’re considering, focus on customer goals and think about how technology can help achieve them,” he says. “Ensure the technology is actually enabling and enhancing the customer experience, and not getting in the way. Whether it’s dealing with existing legacy systems or new technologies, having that deeper understanding of how to solve customer problems and aligning that to customer outcomes is what’s really important.”