It is no secret that consumers are demanding more from businesses. Nor is it a surprise that society has dramatically altered due to the rise of connected devices.
But while we may accept these changes, when we quantify them into dollars, it is clear this is a major challenge for many businesses.
Customer switching swallows potential profits
At the end of last year, global digital strategy firm Accenture Interactive released its latest update on the state of customer experience, uncovering some unnerving statistics. Customer switching to other service providers is costing American businesses a whopping $6.2 trillion a year, up from $4.9 trillion in 2010. This spike, according to Accenture, is attributed to the external trends mentioned above.
Over half of US consumers reported switching providers because of poor service. However, 80 percent of those that switched said they wouldn't have if their problem had been better resolved.
But good service is not limited to face-to-face interactions, as Accenture argues. Nowadays, every consumer is a digital customer. And while 24 per cent of consumers may demand more digital channels from providers, many businesses are looking at the digital revolution wrong.
Businesses respond to digital without direction
McKinsey & Company addressed these issues back in 2014, stating that "tools and standards are changing faster than companies can react." However, two years on we are seeing a new problem arise.
Businesses are breaking the fundamental rule of marketing by over-promising and under-delivering, suggested Accenture. They are trying to keep up with new trending technologies, but in the flurry they are forgetting about remaining consistent.
Even with good intentions, adding additional channels increases the risk of fragmenting the customer experience and delivering a less satisfactory level of service.
Adding additional channels increases the risk of fragmenting the customer experience.
Small business in a strong and agile position
Managing director of Accenture Interactive Anatoly Roytman built on the research finding that just 10 per cent of consumers feel businesses are able to cross the bridge between digital and traditional business effectively.
"Many companies have considerable ground to cover on their path to becoming digital enterprises," he said. "They're challenged with setting a digital vision and strategy, getting the right people in place, and measuring digital success."
This challenge marks an opportunity for Australian small business owners to, as explored by McKinsey & Company, discover, design and deliver a powerful customer experience. With Accenture finding 34 per cent of consumers are open to nontraditional players, thinking about how your customers actually behave right from the start is sure to serve you well.
Large business with rigid structures are often intimidated by major disruptions. Therefore, implementing a customer experience strategy at the time you set up your small business operation will put you in a position to drive sales and build a loyal customer base.