Many enterprises have embarked on some form of customer experience (CX) transformation. While such initiatives vary in terms of scope and maturity, organizations are using CX as a differentiating lever for future business resiliency and growth. In fact, data from IDC’s Future Enterprise Resiliency and Spend (FERS) survey show that organizations see improving Customer Experience as a top business priority for 2021 and beyond.
Technology driven CX initiatives are beginning to democratize the brand engagement experience for customers. This in turn continues to push the envelope on customer expectations for differentiation into newer areas thus far unexplored or being done by a select few. One such factor that reinforces the strategic priority for the Future of Customers and Consumers (FoCC) is the greater demand from customers for value parity in the relationship with brands.
Every engagement (interaction and/or journey) that a customer has with a company leads to an exchange of value – at its most basic, the customer expends cost (money, time, effort) in exchange for a product/service from the company. This exchange of value can be observed as two sides of the same lens – the Enterprise perspective and Customer perspective. Companies employ a whole host of metrics (e.g., revenue per customer, customer lifetime value, wallet share, among others) to determine the value gained from a customer.
IDC has identified this as ‘Lifetime Value’ – one of four core business outcomes in the FoCC framework. Undeniably, companies need money to survive and succeed. Too often though, the Value created FOR the customer gets lost. Customer demand for equitable value will require companies to consider the customer perspective of the value exchange as they look to succeed at driving customer-centric future growth.
Value created for the customer can be considered in terms of following customer centric elements:
- Utility Value: Functional advantage derived from using the product or service in terms of the product features compared to similar products in the customer’s consideration subset, was the customer’s outcome accomplished by using the product/service, and how effectively did the product serve the customer’s purpose.
- Experience Value: Customer’s perception of their own personal experience and how they feel based on a single, and the collective, interaction(s) that they have with a brand including those with partners/channels directly or indirectly associated with the brand.
- Monetary Value: Advantage that the customer derives from a financial standpoint (e.g., more attractive pricing compared to similar products and services, perks such as loyalty credits, or even newer ideas such as customer data or attention as customer’s equity).
- Social Value: How the customer perceives being associated as a user of the brand and what it outwardly signals about them and in turn how the customer is perceived by their social network as a function of being affiliated with a brand.
The above structure expands the perspective for enterprises from merely thinking about the utilitarian dimensions of CX with more avenues to bridge the disparity in the exchange of value with customers through the prism of data and technology. For example, companies capture first party data through numerous interactions with their customers. Only 24% of consumers however, report seeing the value of personalization as the result of sharing data and only 15% feel they’re getting good value.
Instead, companies can drive more equitable customer value by shifting from reacting to anticipating and offering customers what they want, when they want it, and to understand the best way to deliver it. Another example is reducing the “cost for the customer” through clear, successful, outcome-based frictionless journeys that can be completed in a fraction of the time while allowing customers to effortlessly traverse channels during their journey.
It is true, meeting the future customer’s need for more equitable value exchange does require enterprise investment. However, by improving the value delivered FOR the customer, there is evidence that when done right, CX initiatives indeed result in a non-zero-sum situation for enterprises and customers.
IDC’s Future Enterprise Podcast Series offers thought-provoking and in-depth conversations on the leading edge of technology. Learn more about the Future of Customers and Consumers in the podcast “How will Your Relationship with your Customers Evolve in the Future?”
If you would like to learn more about the Future of Customers and Consumers or other IDC’s “Future of X” practices, visit our website at https://www.idc.com/FoX.