Tech investments must directly connect to the customer experience, according to KPMG.
In any digital transformation project, IT and business leaders must remember one important factor to maximize success: The customer experience (CX). Brands that deliver the best CX achieve 54% higher revenue growth than brands that are ranked poorly by their customers, according to a Tuesday report from KPMG.
In a survey of some 55,000 consumers across 14 markets, the top brands named as providing a strong customer experience in their national markets include Marriott Hotels in Mexico, Alipay in China, Emirates Airlines in the UAE, and Navy Federal Credit Union in the US.
These brands were ranked across KPMG's six pillars of customer experience excellence: Personalization, integrity, expectations, resolution, time and effort, and empathy.
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"Great customer experience significantly fuels growth and underpins strong performance," Julio Hernandez, global head of KPMG's global customer center of excellence, said in a press release. "Brands that know the most about their customers and use that insight to deliver truly exceptional customer experiences are outperforming those that do not. This isn't just about driving return business - it's also about making smart investments that reduce friction in the customer journey which not only improves the overall customer experience but also reduces costs - a winning combination."
Other hall of fame brands include the Apple Store in Italy, Lush in the Netherlands, and QVC in the UK.
While technology can transform the customer experience, many organizations continue to struggle to drive value from their tech investments due to poor internal alignment around CX outcomes, the report found.
Leading brands have found ways to leverage tech to improve the customer experience, in ways such as using remote diagnostics and Internet of Things (IoT) devices to predict customer problems, and tapping intelligence interactions with voice commands to simplify customer engagement and problem solving, the report noted.
"Companies are investing significant capital into digital and new technologies so they can deliver a more personalized experience than their competitors," Tim Knight, managing director at KPMG Nunwood, said in the release. "Integrating new technologies into the customer journey is great, particularly if they reduce costs, remove friction and deliver value to the customer. But if the investments aren't focused on executing against targeted customer outcomes, they often come across as impersonal and inauthentic. It's a fine line."
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Top brands view their customers as both an asset and a source of competitive advantage, rather than only a revenue stream, the report said. These brands invest in, maintain, and manage their customers in the same way they would other assets on their balance sheet.
"Brands are thinking about how they can move their customers onto the balance," Hernandez said in the release. "Leading brands recognize the power of their customer base and are creating their customer franchise as an asset to be protected, invested in and nurtured. We are seeing investors incorporating customer experience into their valuation approach as a proxy for sustainability. It only makes sense for brands to start regarding their customers as assets rather than simply as transactions."
This mirrors the results of a recent IBM study, in which CXOs named customers, rather than technology, as the top factor that will impact their business in the coming two to three years. Some 68% of CXOs surveyed across 20 industries reported that they expect organizations to emphasize customer experience over products in the future, IBM found.
The bottom line? If you're going to invest in tech, make sure it's tied to CX if you want to drive real revenue drive.
The big takeaways for tech leaders:
- Brands that deliver the best customer experience achieve 54% higher revenue growth than brands that are ranked poorly by their customers. — KPMG, 2018
- Leading brands have found ways to leverage tech including AI and IoT to improve the customer experience. — KPMG, 2018
- Digital transformation: A CXO's guide (TechRepublic)
- Eight obstacles to overcome in your digital transformation journey (ZDNet)
- Cheat sheet: How to become a data scientist (TechRepublic)
- Why AI and machine learning need to be part of your digital transformation plans (ZDNet)
- Why employees are the key to digital transformation success in the enterprise (TechRepublic)