Digital has changed that simple equation. In a fragmented and diffuse world, consumers have far more choice, unprecedented access to information and much higher expectations. They also find it easier to switch from one provider to another and are exercising that prerogative with increasing frequency. In fact, an Accenture survey revealed that across 10 consumer industries, one in five consumers switched providers in 2012, up 5 percent from 2011.
The good news, however, is that the research shows consumers want to be loyal. Nearly all the “switchers” said their existing service provider could have prevented them from leaving had they done something different. The main sticking point was service that fell short of expectations. Nearly half of all respondents said they had higher expectations of receiving special treatment for being a good customer than they did 12 months ago. But nearly two-thirds described themselves as extremely frustrated by service that failed to live up to its promise. Three-quarters were likely to switch away from providers that failed to meet expectations.
So what can businesses do to engage more effectively with the new, digital consumer? Two key drivers stand out. The first is the move from loyalty to relevance. And the second is personalization. To achieve both, businesses need to harness the power of analytics to unlock the value of the large and growing amounts of consumer data at their disposal. Simple information must become actionable insight.
Analytic insights need to be available across an entire organization. It is not enough to focus attention on marketing activities. Across the business, every single customer touchpoint must be supported with instantly accessible customer details. For example, when a customer calls a contact center with a query, his or her history needs to be immediately available to the contact center agent. Accenture’s research shows that 50 percent of consumers are irritated by having to repeat themselves in their conversations with call centers, so much so that they seek out other service providers.
This insight-based approach needs to extend beyond direct customer interactions. Analytics should be utilized in every available channel in order to provide potentially valuable information that can create a specific offer, at the right time, for the right customer. A purchase from one channel should trigger a flow of information that prompts responses in others. For example, a customer who buys a baby carriage from a retail outlet is sending very clear signals about likely future purchasing activity.
The enhanced ability to spot – and act upon – the right customer signals will become ever more important. As consumers discover and contact businesses through an expanding number of channels, companies need to become more adept at handling interactions across all of them. Accenture’s research shows that consumers typically use five to six channels, and place increased reliance on social media as a source of trusted information. Those interactions are an invaluable source of consumer intelligence for businesses that perfect their listening skills with analytics. And if they don’t, the competition will.
The tried and tested methods for engaging and retaining consumers have passed their expiration date. One-size-fits-all is now one-size-fits-none. Fresher, tailored approaches are vital. Treating customers as individuals and being able to respond quickly to, or even anticipate, their needs is the fast track to getting ahead of the competition.
There is only one way in which companies can meet the needs of the digital consumer with the relevance and personalization they expect and demand — through embedding advanced analytics capabilities across the business. Of course, that is no easy proposition. Most consumer businesses have introduced some analytics capabilities, but they tend to restrict them to promotional activities. One of the challenges often cited is achieving sufficient scale. While there is more than enough data available (often too much), the ability to harness it and process it at scale is less common.
The other major challenge is making analytics work across the organization as a whole. Overcoming that means extending analytic capabilities into all areas of the business. All decisions – from product and service design through to pricing – need to be made according to the facts that are available to everyone. It’s a change that has to start at the very top of the business. Senior leaders need to wholeheartedly embrace the analytic models, processes and methods that bypass hunches and gut instincts and rely solely on hard evidence. Change at scale is never easy. But failure to adapt and understand exactly what customers want will likely drive them to the competition.
Narendra Mulani is the managing director of Accenture Analytics. Leading an integrated community of more than 15,000 management consulting, technology and outsourcing professionals who serve clients around the globe, he is responsible for driving Accentures strategic agenda for growth across business analytics. Mulani is a member of Accentures Global Leadership team. He graduated from Bombay University in 1978 with a Bachelor of Commerce. He received an MBA in finance in 1982 and a Ph.D. in multivariate statistics in 1985, both from the University of Massachusetts. Prior to joining Accenture, Mulani ran his own consulting company.