When is customer experience a competitive advantage? Improving customer experience in the technology, media and telecommunications sector
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1 When is customer experience a competitive advantage? Improving customer experience in the technology, media and telecommunications sector
2 Too often TMT providers reveal their internal silos to the customer. To meet rising customer expectations you have to offer an integrated customer experience, with digital as the common thread. Improving customer experience continues to be the number one strategic priority for technology, media and telecommunication (TMT) leaders, and it s been that way in recent years. So why is it still such a key area? And what s stopping TMT businesses rising to the challenge? As outlined at our recent digital customer experience forum, which brought together business leaders from across the TMT sectors, one of the main reasons is the sheer speed at which customer expectations and behaviors are changing. Traditionally, TMT companies have launched new products and services with the expectation that they would stay relevant and unchanged for months, if not years. But now businesses must be able to respond continuously and adapt instantly. Complexity is the other crucial factor, as new entrants disrupt markets at unprecedented speed, able to scale up to tens of millions of users within days. Digital disruption means that, at current rate, 75% of the S&P 500 in the next decade will be businesses that don t exist today. These days automobiles run on more code than software products and banks recruit more developers than technology providers. So, even if not formally TMT service providers, these new entrants will, at least in part, be technology firms. So how do TMT companies leverage advances in customer experience to gain competitive advantage? From our own research and successful work with TMT clients, we have identified four key trends, all of which illustrate the need for a new and more integrated approach to customer experience. 2
3 From bundle to platform 75% of business users think they are paying for services they don t need. For TMT companies, bundling has been a major growth driver for decades: customers get all their needs met in one go, while providers had a predictable path to growth. But bundle fatigue is setting in as 37% of quad play adopters say that they are likely to switch providers and 75% of business users think they are paying for services they don t need. Instead, customers are gravitating towards platforms where they can pick and choose services, only pay for what they use, and often access more than one provider. As just one example of the growing power of platforms, 65% of news consumption in developed markets now takes place not on the providers own channels, but on aggregator sites. What does this shift mean for customer experience? Put simply, the winners will be those able to build platforms that customers enjoy using a place where customer activity within a certain domain can take place. That means making platforms easy to access, register on, trial, and navigate. It also means providing all the elements that customers want from valuable, relevant services to training, coaching and support. Delivering this requires not only a more sophisticated digital infrastructure but one that s flexible, intuitive and integrated. We see our platforms becoming increasingly important to our enterprise customers because they provide a means for them to respond quickly to consumers rapidly changing needs. You have to integrate to innovate. David Burnand, EMEA Enterprise Marketing Director, ADOBE 3
4 From conversion to engagement Only 17% of households say they used more than 40% of device and app functionality in media consumption. Whether a TMT company is selling a media bundle or the latest version of a software tool, traditionally the focus has been on signing customers up and helping them get the product up and running. This often leads to a sell and forget approach and over-engaging the perceived decision maker to the exclusion of other customer personas in a household or business buyer environment. Also dissatisfaction and underuse among customers results: only 17% of households say they used more than 40% of device and app functionality in media consumption, while 60% of business users believe they spend too long looking for ways to use their solution effectively. Not surprisingly, that model is changing fast, facilitated by new technology. Businesses can now engage and interact with customers throughout the use cycle, providing everything from training to upselling opportunities. New business models demand this by explicitly linking revenue generation to engagement at the user and feature level. One example is the move to cloud based-solutions which, instead of simply providing the latest version of software, can continually update, track usage, add new features and expand adoption. Also new business models like Over-The- Top or x-as-a-service can explicitly link revenue generation with engagement at the user and feature level. Again, the ability to benefit from this trend depends on new levels of digital capability that not only provide friction-free customer experience but enable two-way interaction, so TMT businesses can not only deliver, but listen and evolve their offer accordingly. 4
5 From self-serve to omni-solve For too long digital transformation has been a by-word for channel shift to online channels and primarily in the context of customer support. However this is too narrow, because: Customers will often choose multiple channels to interact with their providers The objective should be to resolve issues throughout the lifecycle, not just deflect contacts. That is why we find there is an equilibrium of ~60% of transactions being resolved fully through self-serve channels where all the customer interactions can be taken into account. The role of digital Third tier Maximize the impact of assisted /physical interactions by putting the right information at the right time in the channel used at the time Second tier Support self service through online portals, FAQ s, intelligent automation etc. First tier Help to anticipate and iron out faults at the point of service design We are introducing self-serve support across the customer lifecycle and pulling it together with marketing and product information in new ways to increase personalization and align with our strategic focus on customer experience. Richard George, Head of Customer Self-Service, Thomson Reuters 5
6 From persona to person 71% of people are cautious about disclosing information, even if the website is a brand they trust. Personas and microsegments are useful tools for service design and base management. However when it comes to actual interaction with a customer, any degree of abstraction can be too much. Full personalization should be the aim and it gets results. Nearly half of marketers report that personalization boosts revenues by over 10%, while 70% of businesses value personalized recommendations on how to use services. That makes personalization a powerful tool for providers, enabling them to not only delight customers but also expand sales by tailoring content to usage patterns and continuously extend consumers adoption of services. Personalization is driven by data so its careful collection, in line with regulatory and customers privacy concerns, is essential. Customers are growing increasingly cautious about disclosing their personal information online yet but want relevant recommendations delivered in a timely manner. This means that organizations must strike the right balance between using digital to orchestrate personalized digital experiences versus using information for short form engagements. But also harvesting and using customer data in a transparent and compliant way. The challenge for many companies as they aim to go from selling digital products to being digital companies is balancing the longer-term benefits of continuous CX improvement, such as increased NPS, with day to day commercial pressures. Jonathan Guberman, Senior manager: Digital transformation, Capability and UX BT 6
7 Taking the integrated approach If there is one simple conclusion to draw from these trends, it is that point solutions are no longer adequate. Rather than undertaking separate digital projects in pockets across an organization, there needs to be a comprehensive, integrated approach. One that delivers across all touchpoints, enabling two-way interaction and able to respond rapidly and continuously to customer needs. That means back end as well as front end, rethinking rather than retouching. Meaning that TMT companies will need to go from doing digital to being digital. Through helping major TMT clients to transform their customer experience we have developed DICE, our Digitally Integrated Customer Experience proposition. DICE is the continuous approach of compelling experiences for customers with the aim of creating business value. By establishing a continuous and iterative approach that harnesses different disciplines from user research to analytics, rapid prototyping and technology architecture DICE helps TMT companies to increase their relevance to customers and establish competitive advantage. 7
8 To find out more about DICE contact our TMT team: Ioannis Melas Partner, EY UK&I Technology, Media & Entertainment and Telecommunications Ernst & Young LLP Martyn Whistler EY Global Media and Entertainment Analyst Rahul Gautam EY UK&I Technology, Media and Telecommunications Leader EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com EYGM Limited. All Rights Reserved. EYG no GBL ED None In line with EY s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. The views of third parties set out in this publication are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made. ey.com/uk
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