In my experience, CEOs know their organizations need to become more customer centric. And my conversations with company leaders suggests they recognize that tomorrow’s competitive battles are already being influenced by today’s customer experiences.
Yet, many CEOs that I speak with are struggling to establish the real financial value of customer centricity. Few have any clear understanding of the link between the quality of the experience being delivered and the value being created. Fewer still are able to accurately calculate and measure the value being generated longer term.
This is not through lack of trying. In fact, according to a 2017 Gartner survey, 93 percent of organizations are measuring the ROI on customer experience (CX) improvement projects. The number is probably even higher today.
Indeed, we increasingly see clients investing significant time and resources into better understanding – even predicting – the needs, wants and desires of their customers. We’ve worked with some to help them restructure their organizations to create better customer experiences.
But I’ve also seen others completely reinvent themselves – deconstructing processes and channels – to get ahead of customer expectations. In a recent global survey of CEOs conducted by KPMG International, 70 percent said they feel a growing responsibility to represent the best interests of their customers and 67 percent said they want to focus on building trust, with three in five agreeing that protecting customers’ data is one of their most important jobs as a CEO.
My view suggests that the problem isn’t that CEOs aren’t looking to the horizon; it’s that the landscape they see is constantly changing. New experiences and new competitors are continuously resetting customer expectations. At the same time, new technologies – artificial intelligence, machine learning, bots, predictive analytics and a host of others – are radically changing the way brands engage and interact with their customers. And while one in three CEOs said they are actively repositioning their brand to respond to the expectations of millennials, it seems the customer relationship has never been in such flux.
My conversations with CEOs suggest they want to know how their customers feel about the experiences they are getting from their brands. And they want to turn that insight into practical steps to help them continue to manage and meet their customer expectations while also delivering value for shareholders. So we went out to almost 55,000 consumers across 14 countries to find out the answers.
In a report released in June 2018, KPMG International’s Global Customer Center of Excellence identified which brands are delivering the best experiences in each of the 14 countries. The Customer Advisory team explored how leading brands are creating exceptional customer experiences and we shared some insights on how top brands are addressing the needs of today to connect the ideas and technologies of the future.
What we found was clear evidence of the financial value of customer centricity. In fact, our data shows that outstanding customer experiences deliver outsized financial returns. Consider this: the revenue growth of the top 50 brands in the countries in our survey was 54 percent greater than the bottom 50. And the EBITDA growth of the top 50 brands in the measured countries was 202 percent greater than the bottom 50.
Our study also shows that the leading companies are the ones that have managed both customer expectations and customer experience to strike the correct balance and capture this higher level of returns. They are the ones that are now working to connect their enterprise in a way that removes silos and eliminates friction in the customer journey and they are enjoying success as a result.
My experience suggests that the very best brands for customer experience excellence are now starting to think of their customers as assets that should be protected, nurtured and invested in. They view their customers’ loyalty as a form of equity in the company. And they are thinking about how they might start to move their customers onto their balance sheets vs a simple transactional relationship that appears periodically on the income statement as a revenue item.
I believe that, to cultivate true loyalty and trust with tomorrow’s customers, today’s organizations need to look beyond the traditional demographic and segmentation approaches to understand each customer as an individual. They need to offer their customers something more than just products and services.
Customers of all ages – but millennials in particular – are looking for brands that are working towards a higher vision than simply making profits for their shareholders. They’re looking for organizations with integrity – those that communicate their core beliefs openly and credibly – and where the ‘why’ and ‘how’ is as important as the ‘what’.
Ultimately, I believe those brands that will prosper in tomorrow’s customer-centric business environment will be the ones that were able to overcome limitations of their organizational design and legacy models to start thinking more holistically about how they embrace the trends and technologies of the future and align their organization to deliver tomorrow’s customer experience today.