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Back to the future: human interaction is here to stay

By October 7, 2021Insights

In 2021, CGA celebrates the milestone of being 20 years old and the world has changed exponentially in that time. Some changes have been good, some dramatic, and some challenging, but they have all had an impact on the world of the customer and consequently the demands placed on customer experience.

In light of this special anniversary, this month’s Navigator Forum was led by CGA’s own CEO Chris Garthwaite, who offered an in-house perspective on customer experience spanning his pre-CGA days, into the present and considering the implications for the future as well. From his family business in brewing to creating the first highly authentic coffee shop in the centre of London, and moving into the world of digital, Chris has a deep understanding of how customer experience has evolved and where it’s going.

From service to experience

Chris set the scene by establishing the changes in customer experience in the ‘80s and ‘90s when he went into the brewing sector. The emphasis was on being human centric, and was focused on the question: ‘how do you deliver the best service?’ In many ways, this human centricity remains at the forefront of customer experience, however the challenge in today’s environment is achieving a human connection in a digital world.

From the ‘90s onwards, customer experience has moved from making goods or products, to delivering a good service, to the staging of an experience. We have seen experience manifesting in different ways, all invariably underpinned by technology. So prevalent is technology in driving the approach to customer experience, that it is not only part of the mechanics of the way brands interact with their customers, but technology-based brands are innovators in customer experience in general.

In 2021, eight of the top 10 largest companies in the world by market capitalisation were technology-based companies. Apple led the way, and if we look at their world-famous approach to customer care, it’s all about the way you experience the product that they are selling, whether you visit in store, online or when you have a question post purchase. This is often where Apple has set itself apart from competitors – with the store layout, its Genius Bars and its ecosystem of products.

Should tech remain in the driver’s seat?

Technology and its capabilities have moved in phenomenal ways, and its rapid evolution continues to change how customers interact with brands. In many ways it is dictating experience. However, the discussion raised the need for brands to not be blindsided by technology and to remember that it’s the customer who should be at the centre of customer experience design.

Looking at the pace of change, we have gone from thinking Google maps is the height of intelligence, to autonomous cars. We have gone from ‘Dr. Google’ to editing DNA. Amazon has gone from being an online book distributor to the world’s most sophisticated distributor of all products. Amazon has begun using predictive algorithms to ship items that you might buy, for the sake of efficiency, and even the now relatively prosaic supermarket self-serve checkout embraces technology to improve efficiency.

However, tech has also created a challenge for customer experience, because while it creates greater efficiency from a business perspective, it can make the experience less personal from customer point of view. The challenge that we face is working out how we stay in contact with our customers and develop deep and meaningful relationships. Understanding what that means is imperative for how businesses present themselves to the market.

How to be human in a digital world

When you get into a relationship, even that between company and customer, everyone wants it to be human. Many companies find that while they know there’s a need to digitise their experience, how they do that is less obvious. A study in the Harvard Business Review found that 70% of the money spent on digital transformation in businesses, is wasted because there’s a tendency to take an analogue approach and convert to digital without considering its impact on the customer. We have found, and the group discussion verified, that often the issue is where data is collated and used but without focusing on the emotions of the customer.

However, when technology, data and analytics are used well, they can enhance the customer experience in exciting ways that have a positive impact on business objectives. Successful examples included:

  • com: An online, membership-free wholesale retailer that uses AI to understand an individual’s forward commodity consumption needs at home, and which then sends them to you ahead of time. In effect, it is outsourcing daily decision making based on your habits.
  • Domino’s: Having invested hugely in leveraging the data they had on their customers, Domino’s realised that the majority of people order the same pizza every time. The menu of over 100 options was more of a hindrance than a help, so they wanted to make it easy for individuals to get what they wanted, fast. They launched their zero-click app in April 2020 (just as lockdowns were beginning). It orders your pizza, prepaid, as soon as you open the app, and it immediately tells you how long it will take to get to you. It has enabled the brand to drastically outperform the competition. Estimates from Merrill Lynch show that Domino’s generated nearly 55% of sales from its digital channel last quarter, while Pizza Hut made an estimated 47%, and the average restaurant business produced 20% of revenue through this channel.
  • Toutiao: The Chinese content aggregator is installed on over 240 million monthly unique devices, and tailors content to the user preferences. The downside is that it allows the government to control the data that’s sent to you, but also allows you to build up your knowledge and passions. In the last four years its revenue has been unmatched, even by Google.
  • Bugatti: At the UAE Biannual Conference, one bank featured a Bugatti Veyron sports car on an impressive stand. Passers-by were encouraged to take an iPad on which you could select the features they preferred. They were then asked to select how much deposit they could put down and how they would prefer to finance their purchase. In four clicks, you could see a path to owning the dream car. They had ascertained through data, that normally people don’t want money, they want a dream or a product (a house… or a Bugatti). So instead of asking people what they wanted to borrow, they approached sales by asking people what they wanted to achieve instead.

Despite these success stories, there was a feeling within the group that there is a danger of getting too excited by technology, and that these are examples of how technology can be used well because it is used alongside emotional intelligence.

One contributor from the fintech market highlighted that while much in the market is done digitally, what they find when they speak to a customer properly, is that they might have enquired about a loan at the outset, but they soon ask about other products or show evidence of actually being interested in something else. He felt there’s a need to build a human ecosystem to absolutely understand the points that are important for the customer before that can be translated into digital.

Meanwhile, the proliferation of online ordering systems in restaurants, particularly during the pandemic, was noted as an offering with very mixed and sometimes damaging results. Examples were made of instances where customers resented the loss of human interaction and viewed it being an attempt on behalf of businesses to simply make more money but with fewer staffing costs.

AI is only as good as the people who train it

For all the excitement and advancement around technology, there was also a level of scepticism around its capabilities. One contributor, who we first met 20 years ago when he was working in voice recognition cautioned strongly that businesses must keep the customer front and centre and not place the technology first. He highlighted that although technology has become incredibly intelligent, it does have its limitations and is only as good as the people who train it.

For example, the question was raised as to whether one day, we will not ask the likes of Alexa to find a recipe but to simply ask it, ‘what’s for dinner?’ Will we ask it to make our decisions for us He noted that when artificial intelligence (AI) makes a decision like that, it’s less about the individual and more to do with a demographic that it’s placed the individual into. The issue with that is that the demographic is limited by the information it’s been fed, which raises issues of bias amongst other things.

Having spent the last three years with a company that collects data to train AI, such as chatbots, he was very realistic about how the lack of personalisation that can come from AI can lose customers very quickly.

Who owns the customer relationship?

One of the big changes raised by the group, and something that will continue to impact the customer experience, is the question of who owns the relationship.

We are seeing an increasing move from competition between companies to competition between networks. There are strategic benefits for companies in deciding which networks and platforms they want to support, or need to be on, to reach and be relevant to their customer group. However, brands do need a direct relationship with customers to foster loyalty and prevent competitors from stepping in.

It was felt that addressing this demands a step change in how businesses tell their story and how they connect emotionally with customers. Patagonia was mentioned as a particular example of a brand that does this well, having built a strong community of fans based on a real set of values so that they retain ownership of the relationship.

One contributor also felt that the move towards networks presents an opportunity for businesses to work together to achieve their goals. She felt this required real leadership and that networks are an opportunity for organisations to be more human together to meet the needs of people.

Staying loyal to our customers

Perhaps the point that the navigators were in most agreement on was the need for businesses to find ways to remain loyal to their customers.  We often talk about how we keep customers loyal to companies in this era of enormous choice, but the idea was raised that the focus should be on companies staying loyal to their customers.

It’s almost frightening how customer expectations have changed in the last 18 months, demonstrating the need brands to continuously ask ‘is my value proposition still relevant?’ and ‘do I have the right strategic capabilities to deliver?’.

One contributor mentioned a client who had recently had the realisation that there isn’t much need for their customers to be loyal to them. Their competitors had good sites, there’s lots of options and the alternative products were just as good. This prompted the need to self-reflect and think about why they were relevant to their customers. There was a feeling that taking stock of the competitor environment and being humble about it is a good thing.

The current situation with the Royal Institute of Chartered Surveyors (RICS), was raised as an example of where an institution had not remained loyal to its members and has suffered serious consequences. The 153-year-old organisation has recently been faced with a damning report into a financial and corporate governance crisis – a situation that almost presents as a case study in how to mismanage an organisation and lose customers.

Building on logic to create magic

The overarching feeling from the discussion was that we shouldn’t get ahead of ourselves with technology, and that despite advancements, humans remain at centre of customer experience. With the support of technology, data, and the changes in customer expectations, that experience can and should be a more personal than ever. It is also subject to continuous evolution.

Chris highlighted that one of the things we have found at CGA is that there’s often a lag between the inside-out and outside-in view of customer experience (the company thinks customers are experiencing one thing, and it’s very different from the customer perspective). It’s by taking that outside in view along with the data that we have available, to build on logic, support our clients and create something truly special in the customer experience.

 

Find out more about how CGA designed customer experience or contact us to discuss the needs of your organisation.

 

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