For Creating an effective Customer Experience (CX) is more about just ensuring your customers receive the products and services they desire in a timely and efficient manner. It’s also about creating touchpoints with real people who can evangelize and grow your brand through their social media and offline interactions with friends and family.
More important, a superior CX enables enterprises to recognize the untapped potential of their customers and decides how best to unlock value for the business through dynamic personalized experiences. There is no doubt that 2022 will bring with it its own set of ups and downs. To understand the influence of CX on the financial metrics of a company and qualify how CX creates intrinsic and sustained value for an enterprise. KPMG in India, undertook a detailed research across 12 cities and 23 sub sectors which was further enhanced by direct interactions with CEOs. The studies and findings of which was compiled in the report titled “Customer Experience – The key to sustained value creation”
Isabelle Allen, Global Head of Consumer & Retail; Partner, KPMG International and Harsha Razdan, Partner, Head – Life Sciences, Consumer Markets & Internet business, KPMG in India, in a candid conversation, speak on the critical role CX plays in generating sustained value for businesses, the influence of CX on the financial metrics of a company and the importance of the report in strategizing customer experience.
Isabelle: At KPMG here. We’ve been talking about customer experience for a really long time globally. And in India I have realized just how much has changed in this marketplace. The levers that you’ve exposed in this methodology of the report are really interesting. So can you tell us more about why you looked at this topic in particular at this point in time and also what the report is showing up?
Harsha: I think it’s a really interesting time for India, the hypothesis of this repot was customer experience and of unleashing the value of customer experience and enough value to be had amongst them. Through our interviews with over 3000 consumers. We went around 23 odd sub sectors. Had 30 plus CEO interviews. And a hypothesis was ratified. One was that every company, whether B to B or B to C, there is a role for customer experience in every company that sort of clarifies for every possible industry, no matter what size, shape. The second thing was that it there is around $200 billion of value, which is uncaptured in the Indian environment
And this quantifies for nine of the 23 sectors, but still, it’s a big amount on the table. And when we looked at all of the sectors, the ranges of value jumps that you could get by having good, appropriate customer experience was 100% to 400%. So if you have the right impactful customer experience, you can get 100% or a few hundred percent kind of a jumping on those. There were a few sectors that spread out. It was relevant to all sectors such as ecommerce, direct to consumer, automobile was especially getting very active where every rupee that you spend on customer experience seems to have a Rs 2 increase in the overall number of revenue increases. So in fact, a very good insight for the India firm.
Isabelle: Okay. And what this formula says really is that maybe there’s a tendency to look at the customer experience through the soft component of it. So the sentiment that is associated with your relationship with the brand. But what this report shows very clearly is that the levers of ultimate value are that sentiment when it’s combined with the revenue opportunity and the profitability opportunity. We have talked about this quite a lot. So one of the things I think is standing out is there are a lot of digital native sectors that you’ve talked about as being very good in this customer experience. But what the report is also showing is this is not linked to size, this is not linked to the sector. And you can unlock value if you actually harness the power of this in a particular way. Have you got any specific levers of harnessing this which come out of the report?
Harsha: I think a few levers that I can call out is keeping the message simple, understandable and logical. So having the message or the brand message simple, understandable, logical, and comprehendible. The second message that comes around is that typically your customer experience has to be very focused, in particular geographies, where there’s a way of democratizing it across a particular customer segment of target.
And the third thing I would say is that it’s a big mechanism to drive value in brands. We do look at customer experience but don’t seem to connect it to what it means to my company valuation, enterprise value, but there is a connection and hence look at it as a revenue driver or something that assures the integrity of your brand over a period of time that will help you get your investment experience.
Isabelle: It might be so and I know we keep saying that and it’s easier said than done. But truly, when you look at the customer experience leaders in all the countries that we’re visiting, those companies that stand out and let’s say it’s again, regardless of size, regardless of segments, are the ones who really made the consumer and the consumer journey front and center of everything that they do. And in return, that gives them higher revenue, higher loyalty, hopefully higher profitability because the lifetime customer value increases over time. There are a couple of areas which I’m particularly interested in going forward, which is and particularly struck me in India over this week. Given that the talent story of this country, the link between the customer experience and the employee experience, and how you can drive the two to unlock further value.
Harsha: In your opinion what are some of the things that which companies in India should look at?
Isabelle: One of the things that struck me having been across the country in this week, I maybe was expecting more geographical variation of the customer experience results, which the survey doesn’t show. So I think what this tells me is to go back to what we’ve talked about before is it really is around truly understanding what your customers want from you. And there are few things that come to my mind as you talk through one. Again, it’s about size of company. But it’s there for everyone. The 200 billion dollar number is large enough for any discussion to be had. The second thing which comes to my mind is again. It’s not just B to C, it is much bigger, it is B to B which is very underrated in India. Typically because you go after consumers, forget the large B to B category. And the third thing. Which I would summarize is that keep your message simple and consistent. Don’t make it too complicated. Let the consumer or customer understand.
Harsha: What would be some of the watch outs that you would have for global readers and consumer details as we look forward to 2022?
Isabelle: So I know we keep using the word unprecedented times, but they really are. And if I step out of India for a second, maybe three things to watch out for. One is outside of India, where it’s more structural and embedded in the economy, the level of inflation in the rest of the world is truly unprecedented. So the impact of that on consumer behavior is already through the false checks that we’ve done in a couple of countries. It’s showing us that you need an intimate understanding of your consumers. You can’t stop at a 50,000 ft segmentation because the psychology of consumers has been very disrupted both by COVID but also by the digital transformation and the way that they access consumption and the brand experience. The second trend is around ESG. I think we have not matured yet on the true understanding of the customer’s relationship with the ESG agenda. Yet in all the surveys in a number of parts of the world, the consumer repeatedly say that they are ready to pay more for companies that provide products which are ethical respectful of the environment.
But we’re also seeing consumers being quite contradictory in their behaviors in certain aspects so that I think has not played out.And understanding again the demographics of your customer base is really important and then I would go back to just the importance of being insight led and data driven. It’s complicated enough to manage a company at the moment in this space with the technology disruption and all the new forms of interacting with brands. If you’re starting with a blank sheet of paper and you’re going blind into that environment, I think you’re leaving a lot to chance. We are seeing the power of really granular analysis of the performance and your pattern of performance and where you are the most successful meeting the consumer, Where’s they go. And I think that’s probably the three things that we’re going to be paying a lot of attention to in the coming year.