Balancing digital implementation whilst retaining customer relationships
Yawar Choudhry, Head of Client Services Proposition, Legal & General
Below is an insight into what can be expected from Yawar’s participation at CeFPro’s Customer Experience Summit.
The views and opinions expressed in this article are those of the thought leader as an individual, and are not attributed to CeFPro or any particular organization.
How can digitalization be used to enhance relationships with customers?
Digitalization can meaningfully enhance customer relationships. The first and most important benefit is convenience. It enables customers to access products, services, and information from anywhere at any time.
The second is personalization. It helps businesses to tailor services to their target market using analytics from digital (and non-digital) interactions. Businesses can use these insights to learn about customers’ behaviors and preferences, which will help them to develop appropriate strategies and cater to individual preferences.
Businesses can communicate with customers digitally in real time and sometimes even instantly. This can help businesses to answer customer questions or provide support easily and quickly.
Self-servicing platforms give customers more control. They empower customers to do what they need to do independently and without assistance. Digitalization can also make products and services more accessible to people with disabilities. This offers businesses an opportunity to broaden their customer base. Digital technologies such as augmented and virtual reality can create deeply immersive experiences and allow businesses to test and learn in a more cost-effective way.
Digitalization offers a huge range of benefits; however, it relies on businesses using and understanding their digital analytics and then implementing learnings and improvements to their customer journey. It is equally important to understand your customer segments and their level of digital maturity. This will help to ensure that your digitalization capabilities are aligned with and support your business strategy and model.
Is the customer population as straightforward as a one-size-fits-all, or is it more complex than this?
The short answer is no – there is no one size fits all customer population. Customers are complex and diverse, with varying preferences, needs, behaviors, and psychologies. Treating all customers the same can lead to missed opportunities and customer dissatisfaction.
Businesses need to consider how they can segment their target markets and what insights they can derive from those segments. Do they vary by age, location, or gender? Are the users also buyers, or are they different? How easy or difficult are they to reach? What are their consumption habits, motivations, lifestyles, and attitudes, and which values drive their behaviors?
Digitalization can empower businesses with valuable customer insights, which can help them to finesse their products and services continuously. Careful consideration must be given to the nuances within segments, especially around customer attitudes toward technology adoption. The key challenge is to find the right balance between those who do not want or are unable to engage digitally, those who do engage digitally, and those who want flexibility in how they contact or interact with your business.
There is no right or wrong approach as long as you can stay on top of the customer trends and keep evolving your capabilities.
How can digitalization be used as a competitive advantage in today’s environment?
I believe digitalization is THE difference between a successful and a non-successful organization. Without it, an organization will be reactive and unable to keep pace with the changing market and customer demand.
As mentioned before, businesses can learn more about their customers from digital platform analytics, which can be used to improve services for a competitive edge.
Digitalization is already shaping customer expectations, needs, and demands and is blurring the lines within and across industries, including B2B, B2B2C, and B2C. It is not a matter of ‘if’ but ‘when’ your customers will be expecting a degree of the same digital experience they are receiving elsewhere. Digitalization continuously shapes customer experiences, and any business that fails to have the right capabilities is at risk of losing its competitive advantage.
Large organizations with legacy platforms, architecture, and complex business structures are more at risk of losing out to newer businesses that do not have the historic baggage weighing them down. The challenge, therefore, for such businesses is to find a way to ensure their core capabilities do not convert into core rigidities and become their competitive weakness.
Why should institutions be segmenting their customers by age? How do the services that they are looking for differ from other segments?
Segmenting customers by age can be a useful way for an organization to assess if their target customers’ needs differ today and, more importantly, how they may change after the purchase of their product. Attitudes, expectations, and – most importantly – values continue to change and can have a direct impact, such as on product innovation, marketing, and communication strategies.
Age segmentation helps a business to focus its efforts accordingly. We are living in an aging population which brings a range of challenges that can be cognitive and/or physical, along with various forms of vulnerability. What customers found easy ten years ago may not necessarily be easy for them now. No matter how groundbreaking or well-intentioned, digitalization may not work for everyone. Customers in later life may require a higher degree of assistance, and as such, service level agreements like average call handling times may not be an appropriate metric. Also, increasing safeguards to protect against scams, financial crime, data protection, and cyber security could lead to a complex customer experience. So, there is clearly a fine balance to be struck.
Age alone, therefore, cannot be used in isolation. Other factors such as lifestyle, demographics, values, and behaviors must be considered for a more holistic understanding of the customers.