On the negative side, customers are more willing and able to move spend when they encounter poor experiences, meaning companies are facing the risk of confronting a 10% churn reality if they underperform in CX.
Yesterday’s decision by UK citizens to leave the European Union (“Brexit”) brings about short-term uncertainties and unintended consequences that will make it harder for UK businesses to keep customers and attract talent. While times of high-market volatility can tempt firms to panic and cut spending on customer-focused initiatives, now is the time to drive innovation in order to win, serve, and retain customers.
As decisions over the next several years are determined by legislators and driven by compliance, UK companies will be challenged to operate as customer-obsessed firms. Forrester believes that the UK’s decision will have five major implications, including:
Digital and customer-facing talent will migrate out of the UK. Concerns about immigration laws (i.e., who will have the right to stay) will both drive footloose talent to look for jobs abroad and dissuade others from coming. And CIOs will find it even more difficult to recruit already-scarce developers and engineers to build customer-facing systems.
Product and delivery innovation will slow. Companies will now have to spend more time and effort to deliver products across borders and less time innovating on new customer-focused solutions.
But what does this prevented merger really mean for the UK telco market? What does it mean for business customers? And what does it mean for the telcos concerned? In my opinion:
UK consumers should expect the same dull mobile offers that they have been receiving for years. There are no signs that any telco in the UK market is about to radically rethink its offering along the lines of the T-Mobile US reset that John Legere kicked off several years ago after the T-Mobile/AT&T merger fell through. Rather, I expect more business-as-usual in the UK and no step-change in mobile broadband investments, and as a result, no great benefits for consumers to arise as a result of the merger blockage.
Marketers are always falling in love with mobile’s latest “shiny new object” and new technology acronyms — 5G, BLE (Bluetooth Low Energy), NFC (near-field communication), RWD (responsive web design), etc. — and they’re constantly looking for the next platform, whether it’s virtual reality (VR), bots, artificial intelligence (AI), or the internet of things (IoT).
However, it is time to stop this quixotic quest for a paradigmatic new platform to replace mobile! Instead, recognize that mobile will activate these adjacent technologies to enable new brand experiences.
Over the past decade, smartphones have become a sort of black hole, integrating a huge array of sensors, but mobile is now exploding back out to our environments. Sensors and connectivity are expanding beyond smartphones to our wrists, bodies, cars, TVs, and washing machines as well as to buildings and “invisible” places in the world around us. The IoT is generating tectonic shifts among digital platforms and tech vendors, signaling a new wave of disruption, and unleashing new forms of competition.
The IoT is also redefining brand engagement by enabling marketers to:
Listen to their customers and analyze their real behaviors.
Create more frequent and intimate consumer interactions.
As always each year, Huawei hosted its analyst event in April, with hordes of analysts descending on Shenzhen. Here are a few observations from the event:
In 2015, Huawei’s revenues grew by 37% to €61 billion and its EBIT grew by 34% to €7 billion, keeping the operating margin stable at just under 12%. Huawei’s strategy paid off across all of its divisions in 2015. Huawei’s Carrier Business pushed deeper into carrier transformation support and grew by 21% in 2015. Its Consumer Business operations entered the mainstream: The division grew by 73% in 2015, with Huawei gaining the No. 3 spot in the global smartphone league table. Huawei’s Enterprise Business is gaining traction and grew by 44% in 2015.
There are four distinctive aspects that go some way to explaining why Huawei keeps on outgrowing its peer group. First, Huawei’s heart beats in its R&D division, and most of Huawei’s top managers have come through the ranks of the R&D team. Second, Huawei benefits from strong internal collaboration and flexibility. Compared with other vendors, Huawei seems a lot less process-driven. Instead, Huawei seems to tolerate, even encourage, self-organization among employees — despite strict management hierarchies. Third, Huawei has a flexible and unconventional approach to customer experience. Huawei completes projects that overrun without overanalyzing whose fault it is. Fourth, Huawei is not listed and therefore not answerable to external shareholders. This gives it the freedom to experiment and take a long-term view.
Our new report, "How To Spur Collaboration Across Your Customer Experience Ecosystem," grapples with the enablement question from a technology standpoint. Why focus on technology? The people who constitute a CX ecosystems are never entirely colocated, yet they must share and discuss business artifacts (e.g., marketing collateral, contracts, designs) in order to make decisions that affect customers' experience. This problem requires a technical solution.
From discussions with our clients in the financial services industry (FSI) in Asia Pacific, we’ve noticed that their digital agenda has changed dramatically over the past 18 months, shifting from a consideration of acquisitions and distribution channels to a broader business transformation imperative.
In fact, leaders at banks and insurance firms are increasingly realizing that:
Customer experience is fast becoming the only competitive differentiator.
Banks and insurance have to accelerate their ability to innovate and deliver new sources of value to customers faster.
If you like horror shows, forget The Walking Dead and check out global markets: In 2016, US stocks got off to their worst start ever. Oil prices are in the toilet — taking oil company stocks with them — and neither looks to fully recover any time soon. Of course, both of these Nightmares on Wall Street might pale in comparison to what a Brexit could do to volatility in foreign exchange rates (and therefore your profit and loss).
Companies that obsess over these developments might be tempted to panic and cut spending on customer experience improvement programs, despite the fact that many firms are sitting on piles of cash. But cutting CX budgets is a terrible idea because CX is the greatest potential source of competitive advantage — especially in times of high market volatility. For example:
Customers use digital experiences to help satisfy their needs every day. Digital tools expand our experiences and change our lives at home and at work. Digital is now intertwined into the fabric of our lives at work and at home. We expect digital tools to add value to us no matter what we’re doing. Some 89% of executives believe digital will disrupt their business in the next twelve months.
To keep up with the rapidly evolving digital expectations of customers, businesses must not just develop a digital strategy but also become a digital business. This means more than building a few bolt-on mobile apps. It’s a fundamental rethink of your business model within a dynamic digital ecosystem that impacts every aspect of your business.
Transforming into a digital business is complex enough. But the rapid evolution of digital products and services makes it even more challenging for business leaders to navigate the landscape of digital business. Slow innovation cycles jeopardize the survival of traditional firms, and winning businesses will move toward an ecosystem business model. Digital businesses need to embrace digital ecosystems that support the continuous exchange of information and data to create value.
To master digital business, business leaders must minimize the complexity of digital ecosystems and learn to create value within such ecosystems. Digital ecosystems drive faster innovation, more efficient production, and more agile go-to-market activities, because:
As all organizations operating in Australia understand, the line between brand, marketing, and customer experience (CX) disciplines has blurred as people gain access to companies, services and products on their own terms. How can you thrive in this dynamic environment? Start by effectively coordinating between brand, CX, and marketing teams.
We’ve filled our agenda with senior CX and Marketing professionals from leading organizations across Australia, and beyond. Key topics they’ll cover include:
Driving business results, competitive advantage, and growth by delivering the right customer experience.
Identifying the key practices and behaviours that fuel CX innovation.
Building and maintaining a brand in a digital world.
Instilling an understanding of customer emotions into design experiences and branding strategy.
Systematically improving CX through effective measurement.