Banking on better CX

Eugenio Tavolaro
COO & CGO, Italy
Kantar - Insights Division

The value of focusing on brand experience

Everybody knows that we live in the “Age of the Customer”, but few companies have so far been able to create brand experiences that are truly customer-centric.

Businesses know, though, about the importance of CX (customer experience) in driving brand success, considering that:

– a totally satisfied customer contributes 14 times as much revenue over time as a somewhat dissatisfied customer;

– investing in CX is now the main the focus of 68 percent of marketers.

Nevertheless, only 19 percent of banking consumers, just to name a service-intensive market as an example, perceive they are getting a satisfying customer experience.

Look at Millennials: they are the current and future consumers of many brands and, based on our research, 72 percent of them prefer to spend their money on experiences rather than on “material things”. Think about the increasing traction that the “experience economy” is getting, especially among younger generations. The concept of “everything as a service” is becoming the winning business model within a number of traditional sectors that are being digitally disrupted, in a world where hyper-personalization and localization win out over mass marketing and commoditization.

So why are most of the traditional – “non-digital native” – brands failing to intercept these trends? Because, in the new digital ecosystem, they are no longer able to fully deliver on their brand promise.

First, do they even have a clear brand promise? Have they worked on a thorough definition of an overarching brand purpose that allows them to define what they stand for and why they are good to society and communities overall, besides being good to their shareholders?

Let us suppose they do, and that their marketing team is doing a great job of building awareness and directing people down the purchase funnel. But did they also design a CX vision that reflects this brand promise, and if so, are they able to deliver it consistently across all the moments and touchpoints that matter most to their customers?

Most traditional brands – and financial services providers are a good example – have made the mistake of massively  investing in moving from offline to online delivery. But they have done this with the sole intent of increasing their operational excellence, hence their profitability, through digital channels and automation, while shrinking the human factor that used to contribute the most to the emotional components of their brand experience.

However, as the recent acquisition of physical stores from Amazon shows, consumers do not really distinguish between physical and digital any more; they only want a seamless experience as they shift between online and offline, and vice versa. Therefore, traditional brands undertaking their digital business transformation must remain focused on the human factors that make them successful in those moments that matter the most to their customers, regardless of whether they are online or offline.

Positive emotions in the moments that matter lead to memorable experiences, which in turn activate positive associations for your brand, hence your brand becomes preferred over your competitors. Such preference, along with a good performance at each relevant touchpoint, sustains a strong relationship with customers, which results in loyalty and repurchase.

On the flipside, if the experience you deliver does not reflect your brand promise, chances are you will not activate this loyalty loop at all.

United Airlines is probably one of the best examples of what not to do when turning a brand promise and CX vision – they call it “Fly the friendly skies” – into actual experience. When, in 2017, their passenger David Dao was forcefully removed from an overbooked flight, they lost $1.3 billion of market value in one day as consumers reacted vigorously on social media with the hashtag #unfriendlyskies.

This shows clearly how underperforming on CX – focusing on profitability at the expense of customer care – can damage brand image and financial results, sometimes irreversibly. Humanizing CX does not necessarily imply using humans instead of machines: if humans do not apply emotional intelligence in executing policies (as they did with David Dao), then AI might be better than a human at being empathetic.

All in all, marketers need to consider their brands as the sum of every brand interaction, and this includes advertising, word of mouth, customer service, the retail environment, marketing communications, consumer reviews and all other touchpoints. They should determine which of these contributes the best ROI, and strive to deliver on their promised benefits, especially at these high- ROI touchpoints, because these are the moments that matter most.

Successful brands – including many of those in this year’s Top 30 Italian Brands ranking – continuously delight consumers with positive emotions and consistent experiences. This is what differentiates them from the competition and helps building brand success in both the short and longer term.

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