Customer Experience value key for marketers to maximise CX return

01 July 2016

The secret to maximising CX return is to focus on customer experience value, says Andy Main, head of Deloitte Digital in the US.

Marketers are competing on experience now more than ever. Yet, while experience is the new marketing currency and marketers have a huge influx of data, they have lost sight of the value of customers. We need a new era of customer management.

Customer experience has made the leap from buzzword to true competitive differentiator. In fact, 89% of businesses now expect to compete mostly on the basis of customer experience (CX) -- up from 36% just four years ago, according to Gartner. No wonder so many companies are investing time and money trying to get it right.

Unfortunately, many are seeing a return on their CX investments that is much lower than expected. The secret to maximising CX ROI is to focus on customer experience value (CXV) -- creating the most experience value for those customers that will create the most business value for the company (now and in the future). To make it happen, companies need to improve their approach to CX in four key ways:

1. Clearly understand the value of CX from both the business and customer perspective. Most companies look at CX value with one eye closed, focusing on either business or experience measures, but not both. In addition, marketers should look at a customer's past and current value in order to predict its future value -- especially the value that will be created if the company makes the right CX investments.

Customer Experience value key for marketers to maximise CX return

2. Know which customers drive the most value and what they care about. Traditional segmentation analysis is based on demographics or "financial value" (grouping people based on their spending and profitability), but in order to make smart CX decisions, marketers need to adopt a more precise approach that reflects both perspectives – starting with demographic segments and then adding on a value layer to create micro-segments.

3. Invest in the moments that matter to customers. A more comprehensive view of CX value, combined with a more precise view of customer segments, will enable marketers to focus their investments where they will do the most good – specifically, on the moments that have the biggest impact on a customer's overall experience.

4. Measure the total value being created by CX investments and adjust the CX strategy accordingly. Many companies struggle to quantify the value created by their CX investments, either because they are locked into a narrow view of value, or they don't know how to get the right data.

These issues can be addressed by capitalising on the wealth of technology that is currently available and analysing customer data across every touchpoint – from retail and online stores to mobile devices, email and social media. This comprehensive analysis – combined with a closed feedback loop – provides deep and constantly improving insights about customers and business value.

To enable these four key steps, marketers will need to integrate data across their ecosystems, including front-office data (e.g., sales), back-office data (e.g., billing) and third-party data (e.g., individual search). This in turn will require companies to determine where organisational and technology gaps exist, then strategically design systems to enable a comprehensive customer-centric view and break down organisational silos.

Focusing on customer experience value (CXV) will help companies maximise the returns on their CX investments (and delight their customers). Just as important, it will give them hard data about the actual value their CX investments are creating, so they can adjust their CX strategies to create even more value in the future.


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Branding the modern consultancy: why reputation hinges on it

03 April 2019

The reputation of firms and brand strength remain a key aspect of business in the management consulting industry. Karla Alexander, Brand Manager at Propero Partners, below reflects on the state of reputation management in the consulting industry.

In a time where public perception is enough to make or break a company, the wise are reminded that when it comes to brand and reputation, the strength of one does not necessarily equate with the quality of the other. Nowhere is this more clearly demonstrated than in the impact a spate of recent issues has had on firms that form the backbone of the industry, including KPMG and Grant Thornton.

Such was the damage to KPMG’s reputation last year, that the Bank of England took the decision to investigate its viability following a string of high-profile corporate scandals. Whether or not the sum total of the firm’s track record is enough to restore its image remains to be seen.

This proves that brand and reputation are not only among the most valuable intangible assets – they are also among the most fragile. And their reach extends into the centre of any firm, regardless of its size or market share.

The lesson here for challenger firms and smaller consultancies is two-fold. As well as learning from the mistakes of their peers, it’s also important not to conflate brand with reputation. While they both share the same objective – to win the hearts, minds, and wallets of clients – brand provides the opportunity to differentiate, whereas reputation provides the opportunity to demonstrate credibility. Far from being the same thing, it’s this very difference that binds them together.

Branding the modern consultancy: why reputation hinges on it

Reputation is the driving force behind a person’s decision to award a firm their business, based on values that align with their own – be it honesty, transparency, integrity, accountability. However, none of these characteristics are particularly compelling or distinctive on their own. To carve out key points of difference, to stand out, and to become known, liked, and trusted among a sea of competitors offering similar services, companies should turn to their brands.

Brand is the culmination of culture, vision, values, and identity, which when used consistently and religiously, can create fresh opportunities for firms. People no longer buy services in isolation but look for a purpose or a lifestyle to buy into. Strong brands create an appetite for themselves and command a higher price tag because people will pay for them. The more pulling power and emotional resonance a brand has, the more successful the firm will be.

Protecting a brand

That’s why, regardless of abundant choice, there is still only one Deloitte, one PwC, one EY – and there’s a reason why the Big Four audit nearly 100% of UK’s top 100 corporations. This relentless focus on building and protecting their brands and reputations on the basis of being the best, has, over time, resulted in a market monopoly. However, problems arise when one is given more weight than the other. This point is particularly relevant in the case of KPMG, and in others where firms have flaunted their reputation for being untouchable in the face of the client.

Brand and reputation working together are directly attributable to significant business outcomes (such as financial performance, loyalty, awareness) and should be treated as such. Focus too much on brand and you risk alienating the people who value credibility, such as prospective and existing clients, shareholders, and the best talent. Focus too much on reputation and you risk stagnating in the market, with a service that no one knows or cares about.

In order to overcome these challenges, the first step for many firms will be to take a step back. Before any meaningful work can begin, consulting firms need to assess the current state of their brand and reputation, and establish key characteristics for both. For brand, this might be relevancy, consistency, positioning, identity, and appeal. For reputation, this might be staff turnover, service quality, growth rate, client relationships, leadership, and diversity and inclusion.

Regardless of the findings, there’s always room for improvement. An uptick in the performance of brand and reputation can be achieved by measuring the impact that one has on the other, integrating business and marketing strategies, and setting strict KPIs.

Guardianship and getting results from this activity isn’t the job of one person or one team. People at all levels of the firm should be thought of as brand ambassadors, and should be willing to do what it takes to protect the reputation of the business no matter the cost. After all, everyone benefits when good things are said about a firm when it’s not in the room.

Related: Why building trust and brand belief is key for consulting firms.