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Harnessing a customer first approach in a changing world

Harnessing a customer first approach

Harnessing a customer first approach

GSG Insights

gsg insights

The GSG Insights contributed by our strategy experts provide further understanding of strategy issues. As the world's operating systems are rewritten, our experts bring their perspicacity, inspiration, method awareness and experience to help clients design winning strategies.

Harnessing a customer first approach in a changing world

“The future is all around us, it just isn’t evenly distributed yet”, as the famous fiction writer William Gibson once said. And indeed, the technologies, ideas, methods and approaches that will seem ‘disruptive’ are already present in our world today. The challenge is making sense of them and start using them in a way that delivers a competitive advantage and a superior customer experience. 

Our recent research at KPMG suggest, that leading firms around the world have made considerable progress in how they make sense of, and use, new technologies and approaches in order to create that unique experiences for their customers today. Our research suggest, that leading brands tend to share four common elements of success: 

1. A deep understanding of the mind of the customer and their evolving needs

Customer behavior and decision making is rapidly changing. Firms are finding the mind of the consumer more difficult to understand. Past behavior is no longer a reliable indicator of future behavior. The underlying drivers of human decision-making have become exponentially more complex in recent years. Macro and micro environmental factors, demographic and economic shifts have accelerated the mass adoption of new technologies. The impacts on consumer behavior have been unpredictable. This means decision-makers now need to understand their customer at a deeper, more profound level than ever before.

The problem is that transactional data, traditional market research and demographic profiles alone are no longer enough. They explain what customers are doing, but not necessarily why or when. Our research suggests that the leading firms are combining advanced qualitative insight methodologies (such as ethnography and cognitive research) with an entire ecosystem of quantitative data-driven observations about their customers to achieve much deeper customer understanding. 

2. First-mover knowledge and experience of new technologies and approaches

Whether through innovation labs, experimentation or advanced ethnographic design, the brands offering the top customer experiences in our research are those that are committed to matching emerging customer needs with advanced technologies. They are the ones working to get to the future before their competitors. Artificial intelligence, machine learning, bots, predictive analytics and innovative digital applications all play their part in the leading firms’ technology palette. It is how these technologies are harnessed around the organization’s brand purpose that creates differentiation.

This will require organizations to take an iterative approach of matching new technologies to emerging needs while minimizing time to market – something that start-up firms are particularly adept at. The challenge for traditional firms is to decide not only which technologies and where they should be deployed, but also how to get them to market quickly and in a customer-ready way. 

3. Mastery of The Six Pillars of customer experience

We found that the leading companies stand out in mastering what we call The Six Pillars of customer experience, which gives these companies an advantage over competitors. Firms that master The Six Pillars are purposeful and deliberate in the customer experience they create. They are authentic and transparent and they are able to create new and exciting customer journeys. 

six pillars of customer experience

The Six Pillar model of customer experience provide a precise and practical definition of the kind of emotional outcome a successful experience needed to deliver. The Six Pillars are inextricably intertwined and, in combination, provide a powerful mechanism to help decision-makers understand how well a customer experience is delivered across channels, industries and company types. The Six Pillars are rooted in human psychology and motivation and, as such, are relevant across B2B and B2C. In fact, they are also as relevant for employees as they are for customers. The leading firms demonstrate mastery of these pillars and are outstanding at all of them. The pillars are:

Personalization – Using individualized attention to drive emotional connection

Personalization is the most valuable component of most experiences. It involves demonstrating that you understand the customer’s specific circumstances and will adapt the experience accordingly. Use of name, individualized attention, knowledge of preferences and past interactions all add up to an experience that feels personal. 

Integrity – Being trustworthy and engendering trust

Integrity comes from consistent organizational behavior that demonstrates trustworthiness. There are trust-building events where organizations have the need to publicly react to a difficult situation, and trust-building moments where individual actions by staff add up to create trust in the organization as a whole. For all customers, it is the degree to which the organization delivers on its promises that is consistently top of mind. 

Expectations – Managing, meeting and exceeding customer expectations

Customers have expectations about how their needs will be met, and these are increasingly being set by the best brands they have encountered. Great organizations understand, deliver and exceed expectations. Some are able to make statements of clear intent that set expectations (“never knowingly undersold”) while others set the expectation accurately (“delivery in 48 hours”) and then delight the customer when they exceed it. 

Resolution – Turning a poor experience into a great one

Customer recovery is highly important. Even with the best processes and procedures, things will go wrong. Great companies have a process that not only puts the customer back in the position they should have been in as rapidly as possible, but also make the customer feel really good about the experience. A sincere apology and acting with urgency are two crucial elements of successful resolution. 

Time and Effort – Minimizing customer effort and creating frictionless processes 

Customers are time-poor and increasingly looking for instant gratification. Removing unnecessary obstacles, impediments and bureaucracy to enable the customer to achieve their objectives quickly and easily have been shown to increase loyalty. Many companies are discovering how to use time as a source of competitive advantage. Equally, there are clear cost advantages to saving time, as long as the other pillars are not compromised. 

Empathy – Achieving an understanding of the customer’s circumstances to drive deep rapport 

Empathy is the emotional capacity to show you understand someone else’s experience. Empathy-creating behaviors are central to establishing a strong relationship and bonds. Empathy-creating behaviors involve reflecting back to the customer that you know how they feel. And then making that extra effort because you understand and care about how they feel.

4. Orchestration and connectedness across their ecosystem of partners

How connections are being made across all areas to ensure a consistent outcome for the customer is critical to delivering a superior, yet financially feasible, customer experience. The leading organizations in our research connect with their customers in the right way, empower their workforce to deliver on this experience, remove barriers across the front, middle and back office to execute effectively and ensure their partners understand and honor the commitment they have made to customers. 

The leading firms, according to our research, realize that getting ahead in the competition is not a destination, but rather a joint journey you do with your partners. It starts with a deep understanding of the customer and the ability to creatively connect technology, people and process to solve an underlying customer need.  Obviously, there are no silver bullets for creating a more connected business which excel on delivering outperforming customer experience. Rather, it requires organizations to take a holistic approach – to consider the organization as a system with multiple connections that each need to be managed, nurtured and harmonized. It is the whole, not the parts that matter. I believe that to prosper in tomorrow’s customer-centric business environment, you will need to commit to excellence and competitive superiority, high levels of staff engagement and employee experiences that connect with the customer experience, an obsession with high-quality execution and clarity on the economics of experience. Many organizations are struggling to turn their strategies into reality. The successful ones are focusing on the customer.

Contact Information:

Kim Lehto 
Director, Global Strategy Group
+358400891222
firstname.lastname@kpmg.fi