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Digitising CX will increase customer loyalty

Building customer loyalty is vital to long-term success. Loyalty is built on repeatedly delivering a good customer experience (CX), which is why digitisation is so important.

Johannesburg, 14 Dec 2020
Read time 5min 10sec
Joe Kanyua, Customer Experience Lead – E/W Africa, SAP Customer Experience
Joe Kanyua, Customer Experience Lead – E/W Africa, SAP Customer Experience

When it comes to businesses seeking to differentiate themselves from the competition, customer experience (CX) is undoubtedly the new battleground. Obviously, this does not suggest that companies don’t care about profitability, but CX is at the forefront for the simple reason that as long as you take care of your customers properly, the profit will take care of itself.

A key reason CX is so crucial today is that the better the experience for the customer, the more likely they are to feel a higher level of loyalty to your brand. This is particularly important today, where loyalty is no longer the given it may have been three or four decades ago. Loyalty programmes, for example, are less vital than ensuring that your brand is consistent and delivers what customers demand – this is really what keeps them coming back.

According to Joe Kanyua, SAP’s CX Lead for East/West Africa, the only thing customers want to know is whether a business provides the value it promises and delivers a quality service. Get this right, he says, and retaining a customer will be easier – we all know customer retention is far less costly than customer acquisition.

“In fact, I have seen statistics that suggest that a mere 5% improvement in customer retention can translate into a 95% improvement in profitability. It is all about maximising the customer lifetime value, and those businesses that understand the customers’ journeys and offer them the tools they want to use will ultimately lead the way. Digitisation only makes it easier to know the customer better and to anticipate their needs proactively,” he says.

“It has been recognised that those brands with high levels of customer loyalty tend to be the ones that know more about their customers, which logically translates into a higher level of service. Today, segmenting customers into groups like ‘males aged 20-30’ is no longer good enough – hyper-personalisation is the future of CX, and this can only be achieved by knowing everything you can about each individual customer.”

Kanyua suggests this means businesses have to develop long-term relationships with their customers. Organisations need to gather information about each customer as the relationship develops – what he calls progressive customer identity. In other words, iteratively ask customers for specific nuggets of information about themselves that the business requires, then reward them for providing this.

As the relationship develops in this non-invasive way, it becomes clearer for the customer to understand that the more the business knows about them, the more effectively and efficiently it can serve them. This is a win-win situation.

“I cannot over-emphasise how essential customer data security and privacy is to this process. The more data you have about a customer, the more important it becomes to secure their peace of mind. It is a well-known fact that both cyber criminals pose risks to your cyber security posture, and customer information therefore must be properly and effectively guarded. This is vital. If there is a data breach, trust will be lost – and it is extremely difficult to regain it.

“I would say that for a company to truly deliver exceptional CX and thus achieve greater customer loyalty, an intense focus on the three key priorities of digitisation - people, processes and technology – is required. Firstly, you need to ask yourself whether you have the right people with the right skills to drive the organisation in the direction needed. Secondly, business processes are critical for effective operations. It is about having a proper synchrony between the front office and back office.”

Finally, technology is vital to obtain a true understanding of the customer, explains Kanyua, suggesting the underlying technology needs to be a solid customer data platform. Also required is an intelligent engagement platform, which can not only determine what the customer is interested in, but can also tailor it specifically to them. Whether the customer is researching, buying, using or repeating a purchase, intelligent engagement is a must. Technology is indispensable here.

“As your digital transformation progresses, you need an intelligent sales engagement tool and an intelligent and seamless customer service platform to ensure that wherever and however the customer chooses to interact with your brand – whether in-store, online or even via an application – you do not lose sight of who the individual customer is or what they need.”

Looking to the near future, Kanyua adds that artificial intelligence (AI) and analytics are ideal for generating insights from huge data sets, while technologies like blockchain are also becoming more important. This is especially so when the last mile delivery of a product may be undertaken by a third party, as blockchain is ideal for such track and trace scenarios.

“As we move forward, I believe digital transformation is going to have a massive impact on CX and customer loyalty. As the digital wave breaks, there will be winners, laggards and losers in the digital game. If you want to be a winner, you need to already be investing in the right technologies.

“In the world of tomorrow, where an increasing number of the customers being served are going to be digital natives, businesses will need to be on top of their digital game if they wish to succeed. In the end, effective CX builds loyalty, and the best CX is achieved by using the right technologies, in the right ways, to reduce the friction between the customer and the brand by as much as possible,” he concludes.

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