How leading businesses are creating value by ensuring that customers get value
Businesses are quick to talk about the value of customers, but don’t often think about value for customers. The truth, however, is that customers who get value, create business value in return. It’s important to understand value in the new economy.
Did 2020 lead to customers valuing different things? Some things have changed, and some things have stayed the same. Customers have become more digital and empowered, and care more about simplicity and avoiding risk. What hasn’t changed? Customers still seek hope, relevant engagement, authentic experiences and value.
But what is value? Simply, value is defined as what the customer gets for what the customer pays. Sounds simple enough, but what the customer gets is a bundle of things that are both real and perceived. Real value spans several dimensions:
Economic value – the amount spent or saved
Functional value – what the product offers or does
Symbolic value – the status offered through the use of the product or brand
Experiential value – the experience of using the service or product
Successful value delivery across these dimensions will result in business profitability and boosted market share(1). Failure will result in the alternative – poor value delivery, churn, profit slumps and reduced market share.
A critical point: customers’ perception of value is holistic, based upon their end-to-end journey with the business, not just at isolated points.
McKinsey & Co. have reported that more that 50% of customer interactions happen during a multi-event, multi-channel journey. They’ve also found that journeys matter more than touchpoints, and that journey-led approaches are more positively correlated with important business outcomes.(2)
Practically, what does this mean? Your customer’s interaction with your call centre today is important, but cannot be seen as an isolated event. To ensure value delivery, businesses need a view of where customers are on their journeys, an understanding of their goals, certainty about what they want customers to do at each step, an understanding of the value that needs to be delivered at each step, and a tool-box to ensure conversion.
The approach works. At inQuba we’ve seen a doubling in customer conversion (as they try to achieve their goals) by ensuring value delivery throughout the customers’ journey.
So, what are the steps to achieving this?
2. Measure actual value delivery
Are you delivering value? It shouldn’t be a mystery. Does your business understand the extent to which your customers perceive value as having been delivered? Today’s customers are mobile and omni-channel. Dynamic mechanisms should be used to measure sentiment and collect feedback at every step of their journeys, in real time. Unstructured feedback from social channels? Analyse it algorithmically to extract sentiment and themes, and build an emotional curve. You’ll now have layered insight – real journeys and actual emotion – which will help you with the next step.
3. Understand goal success, and failure
The two previous steps have provided the what and the why. Having discovered actual journeys (step 1) and overlaid the perception of value delivery (step 2), you can now determine whether goals are being achieved or not, and why.
- Are bank card applicants dropping off due to poor functional value delivery, or merely effort?
- Are insurance clients terminating due to poor brand factors, or is it a channel failure?
- Are mobile network customers upgrading due to positive brand experiences at a particular touchpoint?
Different segments will react differently at different points of their journeys. This deep insight is invaluable when designing corrective measures.
4. Design intervention strategies
Customers demand personalisation more than ever. Empowered with deep, layered insight on goal achievement, organizations need a tool-box of approaches that will move customers forward when they get stuck. These may be in the form of digital nudges (such as a personalised prompt to an applicant to provide outstanding information), a value communication (such as a reminder of a particular benefit), or even contact by a consultant. Interventions need to be contextual, personalised and relevant, driven by a single view of every unique customer.
5. Review and optimise further
Finally, review the effectiveness of your interventions. Did the interventions boost customer conversion? Did the nudges reduce customer drop off? Which nudge was most effective? How have these decisions translated in terms of customer experience and value delivery? Analytics will provide a view of outcomes against control groups, and across segments. Effectiveness insight will then inform the fine-tuning of digital nudges and other interventions, further optimizing for ROI.
This post is a summary of the discussion from the webinar “Delivering Customer Value & Boosting Retention in Financial Services”, which was co-hosted by Microsoft and inQuba. To watch the full recording and access the slideware, please click below.