The era of AI Everywhere coupled with the storms of disruption, such as inflationary pressures and a sea of digital sameness, has led to a positive trend for customer experience (CX). Its ability to augment value creation in knowledge management, customer service, and customer engagement has enabled greater personalization, more efficient issue resolution, and so on. Proof of this is that CX initiatives continue to be in the organization’s top investment areas and most immune to budget reduction in the next 12 months, according to IDC’s Future Enterprise Resiliency and Spending Survey (FERS) (Wave 8).
There is still a tug of power though as C-suite leaders fight internally for power and budget influence. The C-suite needs to shift towards a tug of value where everyone works together to create flows of value across the entire stakeholder system and connect them to quantifiable metrics.
However, there is still a lot more to be done by Asia/Pacific excluding Japan (APEJ) organizations to truly execute customer-centric CX transformation initiatives. IDC’s Future of Customer Experience Survey 2023 found that the main obstacles hindering CX transformation journeys are:
- Technological – legacy infrastructure, lack of unified customer view due to data siloes
- Organizational – limited strategic support, challenges to provide business value, lack of focus on operational efficiency
- People related – lack of skills and resources
Aside from implementing customer data platforms and data privacy regulations, which will play a pivotal role in setting the technology and data layers for value orchestration, IDC has recently released IDC FutureScape: Worldwide Future of Customer Experience 2024 Predictions — Asia/Pacific (Excluding Japan) Implications, which short-lists the 10 most urgent business and technology trends. CX executives must pay attention to and build a gameplan for these trends, to emerge resilient against increased similar offerings from competitors, maintain a competitive edge, and not get left behind in the race to demonstrate value and get buy-in from the C-suite.
Among the predictions, I will focus in this blog on #10: Value streams trump experiences. I will show this in real-life situations, and why IDC thinks that by 2027, to differentiate and drive loyalty, 30% of organizations will undergo structural and technological changes to deliver value outcomes, shifting focus from providing experiences to value parity.
While customers expect brands to deliver great experiences, experiences aren’t all that matters.
The value customers get in the exchange is what makes them come back and continue purchasing from the same brand. However, such value needs go both ways. It is when both brands and customers fulfill their goals in frictionless and contextually relevant engagements that value parity is achieved, which is exactly what prediction #10 is all about. However, to do this, brands will need to undergo structural and technological changes which we are now seeing in some organizations:
- Starbucks, for example, has constantly been innovating through technological changes ranging from mobile apps (reinforcement learning), and greater customization (extra foam, less sweet) to more automated machines, and blockchain – they are planning to launch an NFT marketplace with the goal of attracting a new user base.
- Telecom operators, such as Starhub and Singtel, are undergoing organizational restructuring and decentralization with the goal of coming closer to achieving strategic priorities and direct accountability respectively.
The end goal is simple. Value parity is what organizations will strive towards. It is the balance between delivering high-quality experiential value to the customer, as well as, bringing value back to the company and its ecosystem.
Donning my consumer hat, let me cite some examples:
Retail: Why do I go back to buy my coffee from Starbucks again and again, despite them not being a cost-friendly option? It’s because I know after a few purchases, I will be rewarded, whether with a size upgrade or 2$ off my next coffee. The idea of getting a bang for my buck allows me to outweigh the short-term cost with the long-term benefits. It also clearly benefits brands like Starbucks to build a loyal customer base and attract the most valuable customers. I also appreciate their proactive real-time issue resolution, such as when my coffee was flat and bitter, and they made me another cup as per my required customization. How a company takes action on a bad experience in real-time to rectify it is a crucial part of customer service and forms a lasting impression in the customer’s mind.
FSI: What makes customers put in the additional effort of setting up alternative wallets, such as GrabPay and ShopeePay in Singapore, and using these for transactions, especially when they can easily use PayNow or NETS to pay through their bank account? For me, like other customers, it is the added value I get in terms of rewards once I collect enough points. By ensuring continuous value gained from digital wallets, these companies are also able to ensure value parity when the value comes back to them through repeat transactions.
Telco: In the telco space, a very important aspect that appeals to customers is the freedom to choose and customize services. Losing an existing customer because of a single service can lead to unwanted loss across all the services the customer has signed up for. Personally, Giga is a great example of a mobile virtual network operator (MVNO) by Starhub, as it offers a great level of customization based on your data usage without any contractual obligation. Its transparency makes the porting-over process very smooth. Their incentives also make me want to continue my subscription. A recent example is a reward program where existing customers are rewarded with 0.2GB of data when they log onto the app every time it rains in Singapore. Simple but smart, isn’t it? By ensuring competitive pricing options and reducing the customer pain points of lock-in periods and contractual obligations, Giga enables customer retention. This further helps with continued subscription and customer advocacy, again enabling value parity.
A few other examples of companies in the region that have realized this and have moved in early are Klook (points), Shopee (cashback vouchers), and Yuu’s cashback tie-up with banks.
After all, which customer doesn’t like feeling rewarded? This is particularly a very evident trait in Asian customers; however, this goes both ways. As companies gain a lot in delivering this value, one bad experience may also cost them a lot. The minute a customer feels they are not getting value they will be quick to switch. Regardless, this area is still constantly growing, with more tie-ups between different vendors and innovations in the type of rewards (particularly crucial for Asia Pacific as rewards tend to lose power over time if customers don’t see value in them). This only goes to show that value is indeed considered a currency in today’s economy, but to effectively create mindshare, companies need to be quick and wise about their approach to creating this value.
Interested in finding out more about the IDC FutureScape: Worldwide Future of Customer Experience 2024 Predictions — Asia/Pacific (Excluding Japan) Implications?