SHOW ME YOU KNOW ME: Playing to Win by Building Relationships at Scale

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1. We introduced this theme and shared findings from the 2013 Global Consumer Pulse Research in “The Digital Customer: It’s Time to Play to Win and Stop Playing Not to Lose

Many organizations have invested millions of dollars in the latest tools and practices in an effort to engage customers, but they just can’t increase satisfaction and loyalty. In fact, the $5.9 trillion global “Switching Economy” is composed of dissatisfied customers continually looking for new providers that can better address their changing needs. In the US alone, that Switching Economy is estimated at $1.3 trillion.1

Accenture’s Global Consumer Pulse Research of more than 13,000 consumers in 33 countries revealed that a majority of consumers (61 percent globally and 51 percent in the US) have switched providers because of poor experiences. Overall, an overwhelming majority of consumers (85 percent) said they switch providers because companies simply don’t make it easy to do business with them.

For years, most companies have been playing “not to lose” when it comes to building and developing their customer relationships. It is time for companies to start playing to win (see sidebar “Playing to Win”), and one crucial component is developing relationships at scale.

By “relationships at scale”, we mean how companies can use digital technologies to develop greater intimacy with customers to build lasting, trusting relationships. It is about reinstating some of the benefits of historic in-person relationships, i.e., picture the local grocer many decades ago. But that intimate relationship disappeared for much of the industrialized world. Face-to-face interactions with providers were largely replaced by global call centers and web pages leaving many consumers feeling they were treated with indifference and lack of personal attention. To counteract this, we discuss four steps companies can take to develop relationships at scale.

RELATIONSHIPS AT SCALE: HOW COMPANIES CAN USE DIGITAL TECHNOLOGIES TO DEVELOP GREATER INTIMACY WITH CUSTOMERS TO BUILD LASTING, TRUSTING RELATIONSHIPS.

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The feeling of indifference and being just one of thousands of faceless customers has contributed to less loyalty: On average, just 23 percent of consumers said they feel loyal toward their providers across all the industries covered by our survey. One-third of consumers said they consider shopping around for better deals, which means providers are vulnerable to losing a significant percentage of their customer base.

Our survey provides strong evidence that this is the case for many consumers around the world. For instance, fundamental to building relationships at scale is having the service and support experience match the promise a company makes to customers upfront. Yet fully half of consumers we polled said they were not satisfied with how their providers deliver on this promise. Consumers were equally frustrated with how well companies lived up to the

Barriers to Today’s Relationshipsexpectations they set during the marketing and sales process—with 79 percent saying they find it frustrating or extremely frustrating when companies promise one thing and deliver another, more so than any other issue.

One of the biggest impediments to building relationships at scale is the issue of privacy and trust. As personal data becomes much more available to companies—and, indeed, is often readily given to providers by customers—the opportunity for that data to be misused increases exponentially. That’s why companies need to “double down” on protecting consumers’ privacy and the use of personal data, lest consumers punish them for what they perceive to be a breach of trust. In fact, 75 percent of consumers said they find it frustrating or extremely frustrating to realize that companies they deal with during the marketing and sales process can’t be trusted to use the personal information consumers gave them.

Furthermore, consumers’ wariness of companies’ use of personal information is preventing many from using companies’ online channels to get more information on providers and their offers. Thirty-six percent said they don’t use online sources to learn about providers’ products and services because they don’t trust those companies and are afraid they will track their activities and spam them later. Twenty-two percent said the same about their reluctance to use online sources to learn about companies’ customer services and support. In both cases, consumers would be more motivated to use online sources if they could get assurances that companies wouldn’t spam them and, instead, companies would use personal information to tailor the channels to suit consumers’ needs and preferences. This view is far more prevalent among consumers in emerging markets than mature ones.

79% of consumers find it frustrating or extremely frustrating when companies promise one thing and deliver another.

75% of consumers find it frustrating or extremely frustrating when realizing their providers can’t be trusted to use the personal information given to those providers.

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Ultimately, companies need to remember that customer relationships are fragile and can break quickly when a company missteps. In fact, often companies do not get a second chance. For instance, after they have had a bad customer service or support experience, 52 percent of consumers said they shifted a portion of their spend to another provider and the same percentage said they quit doing business with that provider immediately. Amazingly, 82 percent of consumers said

their previous service provider could have done something to prevent them from switching—from something as simple as resolving their issue on the first contact to contacting them proactively to let them know about ways to enhance their experience with the company, recognizing and rewarding consumers for doing more business with the company, offering better service and support options via consumers’ mobile devices, and offering consumers preferential treatment.

Companies also need to be aware that these relationships begin before an individual becomes a customer, i.e., they are formed and shaped during the marketing and sales process. Thus, any negative interactions have the potential to short-circuit promising relationships. Indeed, after a bad experience with the marketing and sales practices of a company, 60 percent of consumers stopped engaging with or doing business with that company immediately and 66 percent started to also look at or engage with other companies they had not yet considered.

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Playing to win means being offensive minded. It means making bets and taking calculated risks that pay off in a big way: superior competitive differentiation, greater customer retention, or higher customer revenues and value. It also requires companies to adopt a new model (see Figure 1) that is aligned with how consumers behave in today’s digital world.

Companies that play to win—and, as a result, are noticed and valued by customers—base their customer blueprint on five core elements, one of which is relationships at scale (see Figure 2).

Figure 2 Customer-driven Blueprint for Digital Experience

Accenture 2013 Global Consumer Research: Playing to Win

Hyper-relevancePredict their behavior

one step ahead

Relationships at ScaleCreate new approach

to intimacy for all

Seamless ExperienceGlue it all together to

avoid breaking the flow

Inherently MobileGo and surprise them

where they are

Naturally SocialEngage customers as

they want to be engaged

Brand content & channels Open content & channels

D

iscove

r

Purchase

Use

Consider

Promise DeliveryEvaluate

Figure 1 Accenture Nonstop Customer Model

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Companies should start by recognizing that data about customers and about their context is the foundation of relationships. Relationships develop over time along multiple interactions, which essentially are an exchange of data and information. Today’s technology not only enables but also accelerates interactions between companies and consumers. Companies that want to transform their transactions into true customer relationships, using technology to reach scale, need to enact the following:

Break Down Data SilosDespite companies’ best efforts over the past decade, customer data remains frustratingly fragmented, housed in silos across multiple functions and databases. With data thus dispersed, companies cannot create a strong relationship with their customers because they lack the full picture of each customer’s history and interactions with them. To create customer relevant relations at scale, companies must break down those silos. Doing so typically requires not only new technologies to make data accessible to those who need it when they need it, but also new governance that supports the blurring of the artificial boundaries—and barriers— among marketing, sales, service and other customer-facing functions.

Importantly, governance also needs to include data protection. Data capture requires stewardship; companies need to take extreme care with each customer’s information and prove that they respect the value of what the customer has shared.

How to Build Relationships at ScaleRecognize Data is Fluid Not StaticJust like anything in nature, customers don’t stand still. Their needs, expectations and behaviors change (seemingly constantly) over time. That’s why companies need to avoid falling into the trap of treating data as static—focusing on customers at a given moment in time—and, instead, gather and use data across the lifespan of the relationship. In doing so, companies can evolve along with customers’ needs with more agility and thus, remain relevant throughout the different stages of their lives. Furthermore, different data moves at different speeds and need to be treated as such. As data velocity increases in the world of digital interactions, companies must be quicker to react to opportunities—embracing the mantra that speed is more important than precision.

A German utility introduced a new approach to customer segmentation. Rather than defining static segments based on deep customer analytics, it implemented an “agile segmentation” approach, enriching segment insight along a continuous cycle of iterations. As a result, treatment strategies along marketing campaigns were constantly refined in a “test and learn” modus.

Take Measured Risks It’s not uncommon for companies to be paralyzed into inaction by the idealistic pursuit of perfection: They are reluctant to take any steps out of fear that incomplete or inaccurate data will make them look bad in the eyes of customers. But leaders do just the opposite. They embrace imperfect data and use it to test ways to increase value to customers, and ultimately, build greater loyalty. They see it as an opportunity to enrich their data, and they

use their inherent agility to change their interactions with customers based on what they learned from their tests. Today’s technology enables companies to take risks at the individual level but reap rewards at scale.

Digital optimization of websites across devices illustrates this in one way. Being able to test web-page layout options with large numbers of consumers eventually facilitates optimized sites for customer segments, even if all segment members did not receive the optimal site.

Utilize Indirect AccessThough common wisdom tells us that “the shortest route between two points is a straight line,” this does not always apply to today’s customers. To build a relationship with a customer, a company may find that going direct to that customer is much less effective—and more difficult—than interacting with someone who influences that customer. That’s especially true today, as digital channels enable customers to be more connected to and part of a variety of networks. Thus, building relationships at scale often requires analyzing and understanding key influencers in a customer’s network and generating insights to include in the company’s customer engagement strategy. For many organizations, this will mean investing in social media listening tools and technologies to obtain a better understanding of customers’ networks and participate in their network’s information exchange.

A US-based auto manufacturer tapped into influencers to drive the uptake of its newest electric car. Customers with high influence were identified and then invited to a test drive. Their feedback on the experience was then shared through social media.

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As our research has shown, most companies clearly have not been taking full advantage of their opportunities to develop customer relationships—and are paying the price in terms of customer willingness to consider competing offers. Companies’ insistence on playing not to lose has rendered them more vulnerable to being cast aside in favor of more attractive providers.

Conclusion

Read Accenture’s perspective based on our research and client experience:Masters of the Digital Universe

Accenture Technology Vision 2014

The Digital Customer: It’s Time to Play to Win and Stop Playing Not to Lose

IT Governance: Spinning into Control

Digital Transformation: Re-imagine from the Outside-in

The reality is that companies need to strive for the kinds of personal relationships that were typical years ago, between shoppers and the corner store. Specifically, they need to rethink their digital strategies to offer more effective and engaging communication, create more tailored products and services, provide more customized experiences and build trust. Companies that do this

will become more adept at delighting customers, and nurturing authentic personal relationships that can help drive revenue growth.

Copyright © 2014 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.

Contact Us To learn more about how Accenture can help you, visit www.accenture.com/strategy or contact our managing directors:

Robert Wollan Senior managing director – Accenture Strategy, Sales & Customer Services Lead robert.e.wollan@accenture.com

Saideep Raj Managing director - Accenture SaaS lead and Cloud Computing NA lead saideep.raj@accenture.com

Michael Malinchock Managing director - Accenture Technology lead for Sales & Customer Services michael.g.malinchock@accenture.com

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About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 293,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.