The pandemic acted as a crash course in customer experience. Organisations have been forced to rethink every customer touchpoint and rebuild their customer journeys at record speed. According to a McKinsey survey, digital transformation initiatives were accelerated by three to four years, as companies were forced to activate new ways to reach and care for customers.
While the struggles were overwhelming at times, the lesson learned was significant: to build a valuable brand, organisations must prioritise empathy over everything else.
Businesses that understood – and were sensitive to – their customers’ needs and the struggles they faced have thrived, despite the trials of the pandemic. Now, as we slowly but surely reach the other side of covid-related disruptions, the customer experience gap continues to permeate almost every industry. Businesses have had to play catch up as the number of customers engaging with businesses online jumped significantly, from browsing brand websites, using apps and switching between social platforms on a regular basis. Business leaders are now asking: How do we retain customers? How do we boost customer lifetime value? How do we grow our revenue?
The answer lies within a brand’s ability to close the customer experience gap, by building more empathetic business practices.
Mind the gap
The customer experience gap is centred on a customer’s expectations and the brand’s inability to meet them: Brands believe they are delivering a top-notch customer service, while consumers report a less than satisfactory experience. The concept is not new. More than five years ago, research showed 85% of brands believed they were delivering exemplary customer experiences while less than 65% of customers were happy with brand experiences.
This disconnect has only intensified during the past year, due to several reasons.
For one, Gen Z is growing faster than any other demographic. They are digital natives – having grown up on screens, navigating their adult life through mobile devices. This consumer segment is not connecting with a brand via a single channel. They are jumping in and out of the customer journey, visiting a brand’s social account, messaging the brand via Snapchat, and comparing products on Amazon – all channels outside of the brand’s control.
The cross-channel proliferation of Gen Z is becoming increasingly significant to the customer journey, while simultaneously widening the customer experience gap.
And it’s not just a specific demographic impacting the customer experience gap. Social media adoption for customer care issues boomed during the pandemic, with many turning to a business’ social page, not only to research a product or service, but to purchase a product or engage with the brand over a product question or customer service issue.
With the introduction of in-app purchasing capabilities on sites like Facebook and Instagram, the full customer journey can now happen within one visit of a brand’s social media page – again, platforms not directly controlled or owned by the brand. This social commerce trend means brands must devise new strategies to identify, acquire and retain customers outside of their owned digital properties.
The importance of empathy
If your primary KPI is revenue growth, then your focus should be on boosting retention rates and increasing the lifetime value of customers. These objectives go hand-in-hand with empathetic customer experiences. Customers want to do business with brands that care about them and mirror their values.
Brands aiming to grow their customer base, retention rates and revenue must demonstrate that they care not only about the customer, but social issues and the world at large. Organisations that fail to align their values with that of their customers are not only ignoring the customer experience gap, but also risk losing millions in revenue. In fact, Forbes reported that poor customer experiences were costing businesses $75 billion a year, with many consumers ceasing to do business with a brand because they did not feel appreciated.
While the trend to adopt more empathetic practices began well before the pandemic, COVID-19 has accelerated the need for businesses to show more empathy. It’s no longer enough simply to provide a positive customer experience. Brands must care about the communities they serve.
Employ customer advocates
To really achieve an empathetic customer experience, you must have someone who stands for it internally – who wakes up every morning focused on customers and their experience with the brand. Adding a Chief Experience Officer (CXO) to the C-suite ensures there is a top-ranking executive advocating for your customers when top-level business decisions are made.
Because so much of the C-suite is focused on financial outcomes, organisations benefit from having someone not tied to revenue numbers be part of the conversation when building customer strategies. A CXO looks beyond whether transactions are happening at an efficient rate or if ad campaigns are effectively upselling the customer on new products. Instead, the CXO looks at the entire customer journey, making sure each touch point is tailored to the customer’s needs.
Another key step toward building an empathetic brand, is making sure every employee understands their “line of sight” to the customer. This means every team member, even those who may not be customer-facing, knows how their work impacts the consumer.
For example, there may be members of the finance department who aren’t directly involved with customers. Instead, they are focused on building transactional processes and ensuring those processes benefit the organisation. This person may not be thinking about the customer, but the transactional processes they design directly impact how a customer interacts with, and therefore feels about, the brand. Their line of sight to the customer enables them to understand how their work influences the customer experience and improve it.
When employees make decisions based on their line of sight to the customer, they help build a more empathetic framework.
In essence, a truly empathetic brand is one that has ingrained empathy into the heart of their culture, driving positive customer experiences at every level.
A brand that is able to embed empathy at its core is inherently more valuable, ultimately increasing customer loyalty and delivering major revenue gains for years to come.