In periods of economic uncertainty, maintaining a strong customer focus assumes renewed focus as the wariness to invest by businesses is quite apparent. Companies are now holding more cash than at any time in the past. However, the organisations likely to achieve high performance during these difficult times will be those that invest in understanding the evolving customer base now, that are willing to experiment with and chart out new routes to reaching new customers, and that focus on fostering trust-based relationships with the customers. The winners of tomorrow will be those seeking the right opportunities today, making bold moves while staying on course. Indeed, when faced with uncertainty in the past, history shows that the most successful companies, or so called “game changers”, have been those organisations that did just this, making long-term and often unconventional bets.
But making bets on the future, whether short-term or long-term, is an especially difficult challenge in a market where stakes are high and customers have more choice and information than ever before. Indian consumers are more demanding and better informed today. They are demanding greater customisation in the products and services they consume. As these shifts in customer segments, priorities and behaviours reshape the market landscape, gaining a firm grasp of what customers want and then knowing how to address demand profitably have become essential.
The Accenture 2011 Global Consumer Research Study, based on a survey of over 10,000 end-consumers in 27 different countries, revealed that many companies are not doing enough to keep the customers engaged. This becomes all the more critical as the study confirmed that more than 75 per cent of the Indian consumers now have higher expectations for “faster” and “easier to obtain” customer service. Price is no longer the primary differentiator. Our study found that more than 60 per cent of Indian consumers are unwilling to trade quality for low price in either product or services.
Accenture experience suggests that leading organisations are trying to address these issues unique to the Indian consumers through different approaches.
Harnessing the power of data: High-performance businesses consider understanding the intentions and preferences of target customers, creating a strong foundation for evaluating the options their first priority to. They know their customers along multiple dimensions — what they value, how they behave, what motivates them — and in a geographic context — local needs and regional differences-and use this knowledge as the basis for actionable, reliable decision making.
However, having data and obtaining actionable insights are two very different propositions. High performance businesses are using analytics to uncover insights into what consumers expect and value. For instance, a leading telecom player in India has adopted an analytics-driven segmented approach for increasing revenue and reducing churn. The company has developed a structured usage and retention framework to better understand the needs of customers at a micro-level and provide them with a targeted set of products. This has helped in improving the effectiveness of its customer retention, as well as up-selling and cross-selling campaigns. The company has also developed analytics driven tools for business monitoring and governance. The results are evident: the organisation has witnessed a 10 times increase in response rates to its campaigns from 0.2 per cent to 2 per cent, a 80-90 per cent increase in the average revenue per user of respondents and a more than 30 per cent success rate in predicting churn.
New media connections: The proliferation of social media offers another source of insights into customer needs and preferences. It is creating unprecedented opportunities for companies to supplement traditional sources of customer insight with a wealth of unfiltered feedback from customers gathered by listening in to community sites such as Facebook, LinkedIn and Twitter. Globally, companies that invested early into harnessing the power of social media claim returns as high as 20 to 1. Though the impact of social media on Indian business remains small today, but it could ultimately surpass the musings of the industry’s most daring visionaries.
According to an Accenture consumer survey, a third of the Indian customers believe that positive comments posted on social media sites contribute to their consideration of buying a product or service. To bridge the gap, companies need to ensure their social media initiatives align to larger business objectives. They also need to position social media as a cornerstone of a robust customer strategy that pursues opportunities in a variety of areas-from marketing, sales and service to partner collaboration and offering innovation to new areas such as supply chain, procurement and shared services.
Sales force effectiveness: Accenture research suggests that many high performance companies are also taking a more scientific approach to selling that complements and augments their sales force’s experience, judgment and intuition. Analytics can enable correct prioritisation of pipeline opportunities by analysing the historical sales patterns.
For instance, an integrated steel player has embarked on a full customer relationship management (CRM) programme for effective monitoring of both its sales force and business to business sales to drive growth. The CRM programme will increase the company’s sales force effectiveness by providing them with a single view of their customers and also aid in customer analytics by consolidating transaction, relationship and interaction information. The implementation of the CRM programme will also help optimise market spend and increase customer satisfaction.
Customer insight driven innovation: A true understanding of customers is critical to driving growth from innovation. An Accenture consumer survey confirms that more than 80 per cent of the Indian customers are interested in participating in innovation efforts for a company online as well as offline. A number of high-performing companies are already tapping customers for coming up with new product and service ideas. For instance, a leading oil marketing company has developed “innovation councils” across geographies to develop deep customer understanding, generate grass-roots business initiatives, act as an incubator for large-scale change ideas and seed the culture to scale customer centricity across the organisation.
By conducting intense customer immersion activities with over 1,000 customers and 200 dealers and distributors, the innovation councils have generated over 400 ideas across customer segments ranging from cross-sell, up-sell to new business opportunities. Not only this, the company is segmenting its existing customer base across the multiple offerings and identifying products and services that complement current product portfolio to create synergies and scale economies. As a result, the company has been successful in uncovering opportunities worth US$27.5 million for its business.
Delivering relevant customer experience: Customer experience has today become the key to attracting and retaining customers. Yet few companies are distinguishing themselves for service quality. Our consumer survey found that the highest level of switch among service providers in the Indian retail segment was occurring in response to poor customer service. To make matters worse, more than 89 per cent of the Indian customers confirmed that they have shared their bad customer service experience with people around them over the last year. One in three has reacted by posting negative comments about the experience online. In a country where word-of-mouth is still the most widely used channel by customers to gather information and has the highest impact on their buying decision, such negative feedback could prove disastrous for companies.
Our research suggests that high performance businesses create customer loyalty by delivering a customer experience differentiated (highly relevant) to the needs and intentions of specific customer segments and consistent with the promise of the brand. They design experiences that reflect a deep understanding of what satisfies and frustrates specific customer segments, and consider multiple customer values — timeliness, reliability and convenience as well as price — rather than focusing on one element, such as price, at the expense of the others. And, they execute these experiences consistently across customer channels and touch-points. At the heart of these efforts is trust. An offering can be commoditised. Even an experience can be commoditised. A trusted relationship, however, will always remain a unique differentiator. More than 60 per cent of our survey respondents admitted that they like it when a company “provides them with a special treatment” and “recognises them” when they do more business with that company.
A leading life insurance company in India, for instance, has rolled out a comprehensive customer contact programme to better connect with customers and provide products and services aligned to customer needs. It has also restructured the service organisation, such that it is independent of the sales function and is geared towards delivering consistent customer experience across multiple channels. The benefits are multifold: better enablement of delivery channels to close service requests on their own, flexibility or choice to customers to report and follow-up service requests through any channel, better targeting of customers based on their unique preferences and propensity to buy and, above all, improved retention and share of wallet.
In summary, the cultural, economic and demographic drivers that are shaping and defining consumer segments in India today call for new strategies and capabilities for knowing the consumers, reaching them in innovative ways and delivering satisfying experiences.
Sanjay Dawar is managing director, management consulting, Accenture India, and Anurag Sekhri is managing partner, customer relationship management, Accenture India