Traditional marketing tactics dictate that organizations follow the 4P’s model of the marketing mix which is a more business-oriented model, as opposed to a customer-oriented one, consisting of the following variables: product, price, promotion, and place.
Modern marketing tactics, on the other hand, follow the 4C’s model of the marketing mix as proposed by Bob Lauterborn in an article written for Advertising Age back in 1990. Lauterborn declared that the 4P’s were no longer relevant and helpful in aiding today’s marketer address any real issues. Instead, he transformed the 4P’s in the variables he believed were vital.
He started with ‘consumer wants and needs’ as the primary focus of any organization’s marketing strategy. Next, he used the variable of ‘cost to satisfy’ to debunk price as the deciding factor in customers’ purchases. Following that was the third variable, convenience to buy, a vital concept in today’s world of 24/7 availability. The often neglected variable, i.e., communication was the fourth one, which implied that instead of the manipulative one-way communication of traditional marketing, organizations should invest in a two-way dialogue between the customer and the company. Therefore, the 4C’s model of the marketing mix came into existence that consists of the following variables: consumer, cost, convenience, and communication.
While on a surface level, the 4P’s and the 4C’s model may look like two sides of the same coin, there is a critical distinction between them; the 4C’s model reflects a change in the overall organizational mindset of viewing their customers as more than just an unspeaking and unthinking audience. 4C’s model encourages an overhaul in the traditional marketing process and value chain and urges marketers to view everything from a customer’s point of view. The model diverts action towards niche marketing, where the conversation is often one-to-one between customers and companies, and a more significant effort is put into understanding just what it is that customers truly want. This entails a thorough knowledge of the market a company wishes to target and come up with solutions designed to be optimal for both the organization and the customer.
In understanding the 4C’s model, one would do well to look into them in juxtaposition to the 4P’s model of the marketing mix. After all, it would be in the best interests of the marketer to consider both the customer’s and the organization’s point of view for creating effective marketing strategies.
The 4C’s of the Marketing Mix
Consumer vs. Product
Modern marketing tactics encourage marketers to focus on selling only that which customers are willing to buy, the information of which is acquired through detailed market research. This is exactly opposite of the previously used traditional marketing tactics of selling just about any product to the general audience regardless of whether the audience desires said product or not.
For years, businesses took a company first approach to marketing, but over the years, things have changed. With the customer being the king of the market now, companies have wised up and decided its a better idea to first ask the customer what they need to provide better experiences that lead to more customer loyalty.
Cost vs. Price
By definition, price is the amount of money that a consumer is willing to pay to acquire a good or service. Cost, on the other hand, is the sum of the value of all inputs to the production of said good or service such as land, labor, capital, and enterprise. Other factors, like the cost of time to acquire the product, the cost of conscience of consuming the product, the cost to change to a new product, the total cost of ownership, and the opportunity cost of not selecting an alternative, are also included in the cost of an offering.
Communication vs. Promotion
Lauterborn considered promotion to be a manipulative means of selling to an audience, without taking into account any feedback received in return. He emphasized having a two-way means of communication between the customer and the company. This approach encourages dialogues and feedback. It takes into account customers’ opinions on what they would prefer and what would satisfy them. This type of communication improves brand loyalty and sales for an organization and provides in-depth knowledge about their consumer base.
Eighty-six percent of respondents to a Harris Interactive survey said they would pay more if they could guarantee superior service. Eighty-nine percent of respondents who had recently switched from a business to its competitor did so because of poor service.
Convenience vs. Place
Thanks to the technological advancements, customers have no reason to physically seek out a location to meet their needs — they don’t even have to when there are endless options available online. The digital era requires a marketer to be aware of the current trends regarding the changing retail landscape and how to keep up with the customers to be able to cater to them in the means most convenient.
Summing-up
When it comes to creating a perfect marketing strategy, nothing’s a hit or a miss as long as something new is learned out of the experience. However, to save time and money, it’s wise to target the tech-savvy customers of today by making use of the 4C’s marketing model which provides a more customer-centric approach to drafting a marketing strategy that revolves primarily around customers and their needs.
Consumers aren't getting what they want from brands' social marketing efforts.
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What brands believe consumers want from them on social media doesn’t quite line up with what consumers actually want from them on social media, according to the Sprout Social Index 2018, a new study from social media management tool Sprout Social.
The company asked more than 2,000 social marketers about their approach to “structure, goals and content,” and it then cross-referenced their answers against input from consumers.
Sprout found that the top three priorities for social marketers are posts that teach something (61 percent), posts that tell a story (58 percent) and posts that inspire (53 percent).
Meanwhile, the top three things that consumers are looking for are discounts or sales (72 percent), posts that showcase new products or services (60 percent) and posts that teach something (59 percent).
Sprout wrote, “The sole overlap between top marketing priorities and consumer preferences is posts that teach. If you aren’t already, meet consumers in this sweet spot in the consideration stage. This content takes consumers a step beyond knowing who you are, to knowing what you do and what space you are a part of or an expert in.”
Other content-related findings from Sprout Social Index 2018 included:
Consumers are 13 percent more likely to engage with entertaining brand content than to share it with their audiences.
Consumers are equally likely to engage with and share inspirational content.
Consumers are 31 percent more likely to engage with storytelling content than to share it.
Consumers are 24 percent more likely to engage with promotions and deals than to share them.
Consumers are 150 percent more likely to engage with employee advocacy posts than to share them.
Consumers are 90 percent more likely to engage with posts that showcase company personality and announce company happenings than they are to share them with friends on social.
Consumers are 50 percent more likely to engage with posts showcasing new products and offerings than to share them.
The company also found that the No. 1 challenge for social marketers is measuring return on investment, with 55 percent of them citing it, well ahead of the rest of the top five: understanding cross-channel social success (42 percent), developing a strategy to support business goals (39 percent), determining what content to post (27 percent) and securing budget and resources (25 percent).
Customer service came up quite often in Sprout’s research. The company found that 88 percent of social marketers understand the importance of customer service via social media, and 45 percent of consumers had reached out to companies via social media.
For those consumers, 57 percent had questions for the company, 45 percent had issues with products or services and 34 percent wanted to commend the company on their product or service.
“When a customer reaches out with a question—their No. 1 reason for reaching out on social—use this as an opportunity to form a relationship, not just resolve an issue,” Sprout wrote.
The survey found that customer care on social not only contributes to brand perception, but also impacts a company’s bottom line. Twenty-one percent of consumers are more likely to buy from brands they can reach on social, the report noted, and 21 percent said they would rather talk with a brand on social platforms than call.
“This tells us that social customer service has a financial impact and is swiftly becoming the consumer’s preferred care channel,” Sprout continued.
Sprout called employee advocacy “the new influencer marketing,” saying that 71 percent of social marketers currently use employees as influencers or advocates or want to do so in the future, while only 19 percent had budgets for influencer marketing programs.
On the consumer side, 61 percent said they would be more likely to research products or services recommended by friends on social channels, compared with just 36 percent for plugs from influencers or celebrities.
Despite the clear importance of social media to brands’ marketing efforts, more than one-half of social marketers told Sprout they did not have access to all of the software they needed, and 65 percent expressed the need for dedicated resources for content development.
When it came to which social channels they focused on, 97 percent of social marketers said Facebook was their most-used and most-useful social network, and 83 percent said they buy ads on Facebook, which is also used by 94 percent of the consumers Sprout spoke with.
In a bit of a surprise, Instagram dominated Snapchat among respondents to Sprout’s research, with 83 percent of marketers saying they use the Facebook-owned photo- and video-sharing network, compared with just 13 percent for Snapchat, and 51 percent of consumers using Instagram, versus 30 percent for the messaging application.
Customer experience maps are a collaborative way of allowing business to visually represent complex customer interactions. Experience maps highlight possible pain points, enabling businesses to find opportunities to ensure the best possible customer experience with their products and services. This brief guide gives you some high level recommendations on what you should include when designing your customer experience map.
What are customer experience maps?
Customer experience maps are an incredibly useful way of documenting your customer experience from your customer’s viewpoint. It is vital that they are based on customer research, else they run the risk of becoming internally driven process flows.
They show how your current customers are using your products and services and typically break down activities such as the related phases of a purchasing journey, listing relevant channels or touch points. They can go by several other names including ‘customer journey map’, ‘customer touch point map’, and whilst there is no right or wrong way of labelling these, ‘customer experience maps’ are the way we refer to them here at Spotless.
Why are they useful?
Customer experience maps give you a really handy (often one page) holistic view of your entire customer experience across multiple channels and, critically, they also identify opportunities on how to improve this experience. They show you the pain points and difficulties your customers are having, as well as things that you are currently doing well and should continue to do. Often stakeholders within a business look after a specific area or product and are not always aware of how other areas of that business work or interact to combine together in one end-to-end experience e.g. the web, mobile apps, CRM, and call centre. Having stakeholders discuss and review this visual artifact can be really useful to stimulate conversations around customer improvement.
What should you include in your customer experience map?
Whilst there is no set standard on what must go in to a customer experience map, we have found the following to be areas that have come up on most projects. As with all of these things it’s important to understand the overall business objectives of the project and tailor your experience map accordingly.
Customer profiles — We strongly recommend using your customer personas in the customer journey map, as you can identify each of these on the map, and plot the experience each one has.
Legend — Whilst this may sound obvious, try and leave adequate space for any key or legend you are planning to use to explain various elements of the map. This document will often be circulated around an organisation or printed and put on the wall, and not everyone will have had access to background discussions or walkthroughs of the map
Phases of the journey — Each major phase of the journey should be broken down and represented on the map. This really helps stakeholders to visualise the process their customers are going through and the activities that sit in each phase.
Pain points or barriers — Perhaps one of the most key things to put on your map are the areas where a customer is experiencing difficulties or issues with the product or service.
Positive experiences — Lets not forget that you should highlight what you are doing well in the map, so that stakeholders understand that these activities are creating a positive customer experience and adding value.
Channels and touchpoints — In order to align the customer experience and identify pain points in between channels and touchpoints, the map has to include which channels are in focus. Its important to identify these changes in channels e.g. moving from mobile to email and then to the call centre for example.
Customer goals– It’s important to document the customer goals throughout the map and also where the goals change throughout the process. A customer goal does not always remain constant throughout and this should be identified in the map. Changing goals offer opportunities to identify improvements in the service.
Combining other customer data — You can really enhance a customer experience map by bringing in customer data from other parts of the business e.g. a Net Promoter Score that you have been tracking. Customer quotes from research are also a brilliant way of elevating a Customer experience map. We will combine callouts and customer quotes from interviews to bring the map to life.
Summary
Customer experience maps are a vital part of defining and improving your customer experience strategy, and are really effective at aligning internal stakeholders to ensure the customers do not fall between the various cracks that may appear as the customer moves across the various business channels.
We looked at 10 industries to find out how CX is evolving. What we found: More technology, more speed and higher expectations will force companies to evolve or be left behind.
If you want to know what the future of customer experience will look like, just picture today’s customer journey with more speed, better technology and higher expectations.
Today’s customer already expects quick delivery, more shopping options and instant responses from companies. Customers are so used to great customer experiences that 32% say that they’ll walk away from a brand — even a brand they love — after just one bad experience, according to a 2018 analysis by PwC.
But what will the expectations be for traditional touch points like in-store retail, new technology like artificial intelligence and new services like ride-share apps?
Marketing News spoke with 10 customer experience experts to learn what we can expect over the next decade. These interviews have been edited for length and clarity.
Augmented and Virtual Reality
The augmented reality and virtual reality market, taken as a single entity, was worth $11.4 billion in 2017, according to International Data Corporation. By 2021, IDC expects it to be worth $215 billion. “There is a lot of potential to use these technologies to make customers’ lives easier and better,” says Blake Morgan, a customer experience expert and host of the “Modern Customer” podcast.
AR and VR are already being used as important parts of customer experiences. Morgan cites Sephora, which uses AR to allow customers to “try on” makeup through the company’s smartphone app.
“We also are seeing other companies, like Yamaha, that allow customers to use a special headset to look at the mechanics of their motorcycle and see virtual renderings of the engine, the composition of the fuel and other parameters,” Morgan says. “Alibaba is another company that launched a virtual reality shopping program in 2016, which gives 400 million users the ability to generate 3-D renderings of thousands of products and allows retailers to create their own virtual reality stores.
“The potential to give customers an idea of what they can expect from a product is strong.”
Marketing News spoke with Morgan about customer expectations, industry trends and the future of customer experience with AR and VR.
Q: What are the current customer expectations for AR and VR?
A: It’s very nascent, but if Sephora’s augmented reality app doesn’t allow you to perfectly line up your face with the fake eyelashes that you’re trying on, that doesn’t look good for the brand. The accuracy is important, but that’s the power of AI. The accuracy of AI is improving companies’ abilities to understand what customers want and provide a tangible experience for them with few errors.
Q: I imagine customer expectations will rise as the technology improves. What will companies need to offer as part of an AR/VR experience in the future?
A: If the AR/VR experience is just for fun — like a marketing ploy — that’s going to die. But if it truly serves a purpose in the customer’s life and makes it easier and better, then the experience will have staying power.
Q: What trends do you see happening over the next five to 10 years?
A: I was interviewing Jay Samit, the independent vice chairman of Deloitte digital, and he predicted that smart glasses will be so omnipresent one day that if you’re walking in a rice paddy in China and you see a sign, the glasses will translate the characters into your native language. Some people think these technologies will be embedded in the human brain in the future, but that sounds terrifying to me.
Q: You mentioned that AR and VR need to serve a purpose. How can each company find their best purpose for these technologies?
A: Anytime you need to provide an experience to someone remotely, that can be an interesting use case. That can mean training nurses to give them the experience of being in the emergency room or providing customers with a medium between e-commerce and bricks-and-mortar stores. It could be interesting for a sports arena where you can experience the game from literally any seat in the stadium; you can imagine how immersive that would be. That would completely disrupt the cable world.
Q: What should companies avoid doing with these technologies?
A: Marketing something that is not useful to customers. The technology is half-baked if it’s not making customers’ lives easier and better. If it isn’t thoroughly vetted, do not release it, and do not talk about it because it can be very disappointing. It makes you seem like you only care about advertising and not the customer experience. If you provide a good experience to your customers with these technologies, they will talk about it.
Retail
We live in an omni-channel world, says Chris Petersen, CEO of Integrated Marketing Solutions, and the bricks-and-mortar retailers that don’t realize it are going out of business.
“The customer doesn’t see channels anymore,” Petersen says. “To them, it’s all commerce. Some days, I prefer to shop online. Some days, I’d much prefer the store. Sometimes I’m in the store, and I want to ship what I buy home. Retailers that understand and execute this are doing extremely well. Retailers that are struggling — such as Sears and Toys R Us — use the old-school model: You come to us, and we sell you something. They’re dying quickly. It’s all about helping, engaging and creating options for the customer as opposed to just selling product to price.”
Marketing News spoke with Petersen about the future of in-store customer experience and how successful retailers are measuring customer lifetime value.
Q: In retail, the number of employees and in-store sales are declining. This can be frustrating for customers. How can the in-store shopping experience be improved?
A: Stores are an incredibly important touch point. They used to be the only touch point for customers, but they’re now one of five or six. The difference today is customers are empowered and can research all kinds of places to buy from, including brand websites. There are good reasons for coming to a store — you want to have a personal interaction, you want assistance in confirming the best solution, you want to touch certain products. If I bought a brand of toilet paper before and I liked it, I can order it again from Amazon. But if I’m buying a computer, that’s an entirely different considered purchase.
But how do we do retail CX with fewer employees and fewer sales? Apple is a great example of turning that paradigm on its head: It treats employees as an asset to building the brand and selling. Everybody forgets about Apple. That’s the retailer that sells more per square foot than any other retailer in the world. [Editor’s note: Apple earns $5,546 in sales per square foot, according to CoStar.] And the reason is that it uses technology to free up the associates to engage you as a customer. They’re not there to sell you something today. They’re there to create an Apple experience.
Q: What do you think customers will expect from the in-store touch point in five to 10 years?
A: Let’s start with where they are today: Customers expect choice in terms of selection, where they purchase and how they pay, and it has become important to provide choice of delivery. Customers want to be able to immediately track their purchase; that’s why Amazon does so well.
One of retail’s biggest missed opportunities is the importance of customer relationship management (CRM). They’ve marketed to old baby boomers and Gen X — that was sufficient when they used mass media to engage customers. Today, they need individual relationships. They need to know the customer’s preferences and purchase patterns, so they can make recommendations based on past purchases. That all requires individual detail and Big Data and analytics.
Amazon, Walmart and Best Buy are investing heavily in CRM to sell relationships and maintain them versus selling products. Best Buy almost went broke, but it realized that it needed to recreate a model around service. Now it makes its money on services more than products. Its transformation was becoming the digital plumber rather than the gadget guys. It engages with you through maintenance contracts and providing unparalleled service. And if it does that, it has earned your business for life, not just sold you a computer today.
Q: You’re saying that brands are looking for return business through different means than just selling products?
A: All old retail was built on selling product models; you had many people visiting the store, numbers of sales, net conversation rate and how many units you sold. Best Buy now has formulas based on its relationships with customers. If you buy a TV, what kind of relationship does that create? Best Buy thinks of add-on purchases: such as the Wi-Fi network or hooking up the smart TV system. It is a solution-oriented environment rather than a sales environment, one where [the retailer] looks at what individuals need and how the company can help them buy.
Social Media
To create a great social media customer experience, a company needs to do more than respond to complaints, according to Shep Hyken, a customer experience expert and author of the forthcoming book The Convenience Revolution.
One of the foundational tenets of social media customer experience is realizing that social media is a conversation, not just a help desk, he says. The companies that are best at social media publish personalized content that is segmented to their markets. For example, marathon runners who follow Nike will get content on running shoes, not basketball shoes.
Another tenet is customer service. “Many companies are slow to react to opportunities to fix problems where they could not just win customers over, but make them evangelists,” Hyken says. “Response time is a huge issue in social customer care, which is a big part of customer experience. The average response time is abysmal. If I want my question answered in seven hours, I’ll wait seven hours to ask the question.”
Marketing News spoke with Hyken about the future of customer experience on social media.
Q: What happens if a company responds slowly or poorly to complaints on social media?
A: Response time is key. I have no problem if the response comes from a chat bot or a human being; if I can get my questions answered quickly, that’s what I want. If it’s done in a cordial manner, what do I care if it’s a robot or a machine answering me rather than a human being? It’s the response that is important.
When somebody posts a complaint on a social channel like Twitter or Facebook, it is imperative for the company to respond in a timely manner because the time stamps are posted, and somebody who’s interested in doing business with that company will look and say, “Wow, somebody made a complaint, and in 18 minutes, the company responded.” My friend Jay Baer, another customer service experience expert, has the best line: Social media customer care is a spectator sport. Everybody gets to watch if they want to.
Q: What do you think will change in social media customer experience over the next five to 10 years?
A: Customers are smarter than ever because they’re experiencing great service from certain brands, and those rock-star brands are setting the bar higher for everyone else. The first thing you’re going to see is companies trying to catch up and do a better job in virtually every sector. You’ll notice there’s been an uptick in customer satisfaction over the past couple of years, but billions of dollars have been lost due to poor customer service. Customers are saying, “If you don’t treat me how I want to be treated, I’m going somewhere else.”
Five to 10 years from now, two things will happen: №1, there will always be leaders that are constantly setting the bar higher for everyone. There are technologies we haven’t discovered yet that are going to be implemented and will hopefully create a better customer experience. №2, in the next one to five years, there is a strategy that is starting to come to light that I don’t believe has been exposed to the masses yet: convenience. Amazon is more convenient than its competitors, and it disrupted them. Convenience is the next big wave of customer service, and it’s going to be a revolution.
Artificial Intelligence
Whether customers realize it or not, they have likely used artificial intelligence. HubSpot reported in 2017 that 63% of people who used AI — such as voice search, web chats and voice-controlled assistants like Siri and Alexa — didn’t realize it. “To them, it’s just a strange box that does smart things,” says Karsten Weide, program vice president of media and entertainment at IDC.
Despite sometimes being unaware of what AI is, people love what it does. Voice-controlled assistants — as well as online customer service chat bots and interactive voice response systems on phones — stick close to their scripts rather than “thinking” new thoughts. But Weide believes they’ll take on human-like personalities in the next 10 to 15 years.
In large part, this humanization of technology is what customers want. A survey from Capital One and Wakefield Research finds that 82% of Americans believe an AI assistant would be helpful (for financial help, in the case of this survey), and 77% believe AI should take on a human-like personality. “It’s going to be your assistant. It’s going to know everything about you,” Weide says. “It’s going to know more about you than your wife or your mother. It’s kind of scary, but it’s the case, and it’s going to be everywhere.”
Improved AI will likely mean improved customer experience, but Weide says that it also presents some unanswered questions. What, for example, are the implications of human-like AI on data collection and customer privacy? How will it impact marketing and advertising? Weide believes that as the technology becomes more intimate, consumers will see advertising as obtrusive. Marketing will have to be so good that people seek it as they would content.
Many companies have already started creating their own apps for Alexa, which Weide believes will be the closest these devices get to advertising directly to users. Otherwise, advertising to users through these speakers — similar to how companies would advertise to radio listeners — might be seen as a betrayal of the customer’s confidence.
While consumers will have to wait for human-like AI, they likely won’t wait to spend billions of dollars through devices such as the Amazon Echo or Google Home. Retail purchases made via these AI- and voice-controlled devices are set to rise from $2 billion this year to $40 billion in 2022, according to a study from OC&C Strategy Consultants. This sets up a big market battle between Amazon, which eMarketer says owns 66.6% of the voice-controlled speaker market, and Google, which owns 29.4% of the market. Surprisingly, Apple has not yet been a factor in this market. Price of the devices may play a role — while the Amazon Echo and Google Home retail at about $100, Apple’s HomePod retails at about $350.\
Even with analysts expecting increased sales, both Amazon and Google will need to improve the intelligence of their voice-controlled speakers. Weide says that he has Alexa-controlled devices installed throughout his house, but he has had a very hard time researching and ordering certain products — dishwasher pods have given him the most trouble. “Scripts have to get better,” he says. “And there has to be more intelligence if that’s going to happen.”
Weide says that AI has been around for decades and has always reportedly been a decade away from mattering, but he believes that the technology will soon reach its tipping point and become a bigger factor in the customer experience. “We’re at the very bottom of the S curve now,” he says. “There’s going to be a lot of improvement in a short amount of time because we don’t see the upward slant of the S curve. A lot of things can happen.”
But users aren’t completely over their fear of mobile banking; growth has slowed over the past few years as consumers have become more aware of security and privacy issues. Business Insider Intelligence reports that the growth of mobile banking users by the three largest U.S. banks — JPMorgan Chase, Wells Fargo and Bank of America — has declined since 2012. According to BI Intelligence:
Use of Chase’s mobile services grew by 51% in 2012; in 2017, it grew just 3%.
Use of Wells Fargo’s mobile services grew by 29% in 2012; in 2017, it grew 2%.
Use of Bank of America’s mobile services grew by 30% in 2012; in 2017, it grew 11%.
Peggy Anne Salz, founder of MobileGroove, says that if financial companies want to overcome customer fear, they must get customers to use mobile banking apps as a part of their daily lives. “It’s a matter of making the value proposition very clear,” she says. “Banks need to be more than banks. There’s a financial decision behind every personal decision you’re going to make as a consumer. Banks need services, messaging and value propositions to move up the food chain and not just be in the last link of a process.”
Salz has spoken with banking executives who have considered making their apps a hub for other services. For example, potential homebuyers might use an app with a litany of other services to shop for — such as repairs — as they’re signing up for a loan. “You build trust through familiarity and frequency; Seth Godin started off with the idea,” Salz says. “The more often you use something, the more familiar you are with something, the more you trust it.”
Meanwhile, consumers are finding daily uses for fintech apps, such as Venmo, a peer-to-peer payment app from PayPal that reached $12 billion in volume this year (up 80% from last year). To Salz’s point, perhaps users trust Venmo because they use it often during social outings. It becomes a bigger part of their life, one that has a defined use.
“We want a one-stop shop,” Salz says. “We want a frictionless journey. We want to deal with a couple of trusted partners — not a whole bunch of apps. Fintech apps do have excellent customer experiences and an excellent approach to customer service; that’s why they’re disruptive. Banks could learn from them and do even better because they offer a broad range of services and products from one source. Apps are trying to be more like financial institutions, but financial institutions could try to be more like apps. From the perspective of having a mix of capabilities, banks can nail this; apps are going to have a harder time.”
In the future, Salz says that banks should make their customer journey more intuitive to create a better experience. This is something they can learn from apps like Venmo: Get to the point straightaway.
While simplicity is fintech’s forte, Salz says that mobile banking apps can top fintech apps by having a better and larger variety of customer service options. Instead of relying on AI, FAQs and automation to answer customer complaints and questions, banks have the resources to hire real people to answer questions from consumers on the phone or over SMS messaging. This may help ease the average customer’s privacy and security fears.
Grocery Delivery
The list of companies willing to bring groceries directly to your door is growing. The milkman aside, Peapod was one of the earliest grocery delivery services, and Amazon and Walmart have been battling it out for consumers’ food delivery dollars. Then Instacart jumped on the scene, its shoppers’ ubiquitous reusable bags popping up on grocery conveyor belts en route to consumers.
Some shoppers who want even fewer steps between the grocery store and their plate subscribe to meal delivery kits, such as Blue Apron or Fresh Direct. These services offer pre-portioned ingredients to cook meals. Even home cook extraordinaire Martha Stewart has her own take on the trend: Martha & Marley Spoon.
One newcomer, Imperfect Produce, is a grocery delivery company that purports to deliver “ugly” produce for 30% cheaper than grocery store prices. The company is striking at an audience that’s not only hungry for convenience but is tired of waste in the food supply chain.
Reilly Brock, content manager at Imperfect Produce, says the brand isn’t trying to disrupt food delivery so much as it’s trying to improve the food system. Younger consumers like convenience, but they’re also drawn to environmentally friendly brands. A 2015 global study by Nielsen found almost three-quarters of millennials are willing to pay extra for sustainable products. Buying food that would otherwise wind up in a landfill fits that bill nicely, and Imperfect Produce also uses less packaging than carefully portioned meal kits.
Consumers also want more transparency. A 2017 report from The Hartman Group found approximately 70% of consumers say they want retailers to be more transparent about their sustainability efforts.
“Transparency is central to our customer experience,” Brock says. “If you only ever buy food from the supermarket, it is pretty opaque. It just shows up in these cases, and you don’t really know where it’s coming from. But we try to give people more info about where it’s being grown, why it’s ugly or imperfect or surplus.”
Brock says the company is hoping to offer consumers more customization abilities with their boxes and potentially add an app, but he says Imperfect Produce is “proudly not a meal kit company.” Convenience has its shortcomings, he says, and a 2017 poll by Morning Consult and Money Magazine offered some examples: Of respondents who canceled a meal kit service, 49% cited cost as the reason for canceling their subscription, and 13% cited not liking the recipes. An analysis by Daniel McCarthy, an assistant professor of marketing at Emory University, found Blue Apron is losing money on about 70% of its customers due to increasing cost of acquisition and low retention. Meanwhile, online grocery sales are expected to capture 20% of total grocery retail by 2025, according to the Food Marketing Institute.
Ride-Sharing
Despite all the talk of autonomous vehicles being the future of ride-sharing, there may be a glitch in the system that puts that dream in neutral. “This is going to be a two-steps-forward-one-step-back situation in terms of public opinion,” says John E. Carroll, a partner at Ipsos. Recent fatal accidents involving autonomous vehicles will slow, if not halt, the progress of autonomous car technology, he says, including in the ride-share sector.
In that context, some are asking how else ride-share companies will improve customer experience. Where competition exists, it hasn’t been over customer experience, Carroll says. “The standard competitive stances are price, product innovation or customer service,” he says. “Uber is mostly a product innovator type of company. Lyft is trying to compete on service. I don’t think there’s going to be a significant change in customer service in the U.S. markets where these competitors are playing. That’s not what we see them talking about.”
These companies are innovating in other ways. For instance, Uber now offers Uber Eats, a restaurant delivery service; Uber Freight, which matches carriers with shippers; and Uber Health, a ride service for patients and caregivers. Carroll says the ride-share industry is still in its early stages. Brands are trying to get the basics right. Before they can compete with one another, ride-share companies have to fight for their right to do business on a city-by-city basis with local regulators. Autonomous cars will be yet another battle.
“Autonomous driving technology may be a risk to the brand,” Carroll says. “When you take away the human interaction on the service, what is left?” Lyft’s success has hinged on human interaction, he says, whereas Uber’s innovations have not significantly impacted its base customer experience.
Those companies that may be able to compete in the autonomous car space are more likely to be technology companies that have an existing customer experience. Think of an autonomous vehicle from Apple that runs on its user-friendly operating system, or if Alphabet combined its technology and CX with Ford’s hardware.
“It’s like a Venn diagram of two dark clouds,” Carroll says. The first cloud is the deaths related to autonomous cars (there have been four recorded) and the fears surrounding the use of robots in the future. The second cloud is rooted in the history of ride-share, wherein consumers have found their experiences with taxis to be negative. “You want to merge those two concepts and think you’re going to get rainbows and unicorns?” Carroll says. He predicts the negative stigmas of these industries will hold them back from great CX.
Some have found ways to offer positive experiences with autonomous vehicles, such as Pizza Hut and Toyota’s self-driving delivery truck. Carroll suggests keeping an eye on non-U.S. markets, China in particular. “The Chinese government doesn’t have to ask for permission at a local, regional level,” he says. “If they want to lay beacons into roads, they can do that. They could accelerate autonomous tech.”
Streaming Subscriptions
Streaming services are in more homes and on more devices as consumers continue cutting cords. A “CNBC All-American Economic Survey” found 57% of consumers use some form of streaming service. Among those who stream, 51% subscribe to Netflix, while 33% subscribe to Prime Video (Amazon’s offering) and 14% subscribe to Hulu. Among music services, Statista found Apple Music had 49.5 million monthly users in the U.S., followed by Spotify with 47.7 million, Pandora radio with 36.8 million and SoundCloud with 34.2 million as of March 2018.
Bob Gilbreath, co-founder and CEO of Ahalogy, provided his predictions for streaming entertainment, in which he sees an increasingly ad-free future where brands compete across categories.
Q: What trends are you seeing in streaming services as they relate to customer experience?
A: Netflix may say, “We’re video streaming, so our competition is the other video players.” Sirius XM might say, “I’m going against the other music software.” At a high level, they’re all competing with each other because consumers have these apps on their phones, their tablets and their home TVs. If there is one feature that you get on Netflix — a way to get recommendations — then when you turn on your Sirius XM the next morning, you’re expecting that there, too. The expectations don’t stay within one category of media. Consumers are very selfish. They have high expectations, and that means brands have to copy one another both because the expectation is there, but also because, who’s to say Netflix can’t add audio? Who’s to say Sirius can’t add video?
Q: The ad-free offering appears to be one of the bigger trends in streaming — is that going to stick around?
A: As people get used to paying for content or paying for an ad-free experience, that will pervade other categories. Now advertising is annoying — not because we’re at the 3,000th impression of the day, but because we start changing our habits to a more ad-free experience, and the ads that get through become more painful.
There are rumors that Netflix or Amazon is going to add ad-supported versions. I highly doubt them because there’s not a problem to solve. It’s almost going against the grain. Imagine if you’ve got millions of people deciding to pay out of their pocket — that’s a great business model — now you’re going to take some of them out of that? The money that you make from direct payments is more profitable than from ads, and it frees you up. If you have to create an ad sales team, put in ad tech and do reporting for advertisers, that would be really painful for a business like Netflix that’s already proven that it can go without advertising. Why would they mess with a good thing?
Q: Aside from being able to download content and consume it on the go, are there other ways that people are using subscription content?
A: One thing that can be interesting is extended content. We’re seeing that in gaming: Instead of an expansion pack, customers buy a subscription to receive updated content, levels and add-ons. Publishers don’t have to release a game every three years. Instead, they have a continual release, which is not only better for the buyer, but creates an always-on business. Whether it’s a marketing campaign or a movie release, it’s painful to gear everybody up for this one big shot. How do we just make incremental content every day? You can plan for that. You can hire for that. You know it’s predictable revenue, which means you can make predictable investments.
Health Care
The future of customer experience in health care is starting at the ground floor: Companies — some for the first time — are putting the patient at the center of the enterprise.
“Generally, health care organizations put the care providers, the doctors at the center of their organizations,” says Denise Lee Yoh, a retail brand consultant and author of What Great Brands Do and Fusion. “It’s a wholesale change by putting the patients there instead.”
This customer-centric shift comes at a low point for health care CX. PwC’s “Future of Customer Experience Survey 2017/18” found a 25% disparity between the level of satisfaction health care customers expect and the level they actually experience.
Health care organizations have begun to listen: A 2017 report from The Beryl Institute found 82% of those working in health care reported patient experience as one of their top priorities for the following three years.
As traditional health care organizations put their patient experience plans into place, startups are moving into the space with CX as their explicit purpose. One such startup, California-based doctor house call app Circle Medical, allows users to scan their insurance card, arrange a visit and receive updates about appointments, Yoh says. Patients without insurance pay a $200 flat fee for the service.
“What’s great about Circle Medical is that all their communication is done through an app on my mobile phone — the way that I would normally communicate with any other person or entity in my life,” Yoh says.
Other health care startups are disrupting the industry by reducing barriers to care. Some patients willing to pay a premium have sought out concierge medicine, which gives them a higher level of personal interaction with a physician for an annual fee.
Much of the new wave of patient experience includes digitized components, which have provided an opportunity for some tech companies to join the health care market. Yoh points to the joint health care venture formed by Amazon, Berkshire Hathaway and JPMorgan, but analysts are watching the more than 300 health care-related patents filed by Alphabet, Microsoft and Apple between 2013 and 2017.
“Huge established enterprises getting into the space and saying ‘We need to do things differently’ will prompt a lot of the larger health care organizations to make changes,” Yoh says. “They may go after some of these startups (as acquisitions) in order to incorporate their learning and their technology.”
Yoh doesn’t expect traditional insurance providers or health care organizations to disappear completely, but as technology companies have shaken up retail, media and many other sectors, health care may feel the rumblings of a tech-based CX revolution as well.
Education
For years, online courses have provided remote students an alternative to bricks-and-mortar institutions. Though online learning platforms are not a new concept, they’re no longer just an alternative to traditional education, but a supplement. Emily Poague, vice president of marketing at LinkedIn Learning, offers a glimpse of the way the platform is being used and by whom.
Q: Are LinkedIn Learning and similar platforms picking up where traditional in-person education leaves off?
A: LinkedIn Learning complements in-person education. To be competitive, it’s important for people to always be learning. We want people to have the flexibility to learn on their own anytime, anywhere. If used in addition to in-person education, online learning can help teachers modernize the classroom. Teachers can supplement course work with online courses and videos that align with learning objectives. By assigning video tutorials and training as homework, they can reserve class time for concept mastery.
Q: Where do you expect customer experience in education to head in the future? Will we see more online opportunities?
A: To be competitive, education tools and resources need to be easy to access and not just available on desktop. Being able to access learning technology on the go is important and gives people flexibility. As online learning evolves, we anticipate that it will be more social, more community-driven and flexible. We also believe that data will play a significant role in informing actionable insights, so people can develop their own skills for their future career development.
