No surprise, there’s a strong positive correlation between customer satisfaction and the financial performance of individual companies. This has been empirically validated by a study1 that looked at customer satisfaction and performance using the American Satisfaction Index, the ACSI; the index could predict how well companies performed in terms of corporate revenue and earnings growth. A satisfied customer is therefore an economic asset to a company and can be expected to generate future income.
Getting customer experience wrong can be a serious risk to business, and one that needs to be avoided and/or quickly fixed. Even after just one negative experience2:
Research shows that a customer’s experience is in fact a result of the utility (e.g. price and services) and something that’s often underestimated, a positive emotional connection.”
Getting customer experience right, on the other hand, can be a competitive differentiator, as agreed in one survey3 by 81% of organizations. In another survey4, making improvements to the customer experience led to increased customer loyalty (92%), an uplift in revenue (84%) and cost savings (79%).
Research shows that a customer’s experience is in fact a result of the utility (e.g. price and services) and something that’s often underestimated, a positive emotional connection5. Experiences that are linked with emotions are far more memorable than others. One survey6 reported that:
So we need to look at customer experience from a holistic perspective. We can’t just deliver what’s needed from a purely utilitarian perspective, creating a positive emotional connection (“emotional value”) with the customer is equally as important.
Having the right building blocks then enables the organization to transform the customer experience, and to transform faster.”
This is a journey that starts with a customer-focused vision and corresponding culture.
Having the right building blocks then enables an organization to transform the customer experience, and to transform faster – these building blocks are (1) a decentralized and flexible architecture, (2) the capability to harness data and leverage AI, (3) the ability to integrate into the wider product/services ecosystem and (4) an agile culture.
Strong data harnessing and AI capabilities (aside from the many provider benefits, such as for decisioning and fraud detection) take the customer experience to the next level, enabling for example:
A digital ecosystem is an interconnected, interdependent network of various market players that combine their strengths to create better value for the customer.
Orchestrating a new digital ecosystem is not trivial. Joining an existing ecosystem is in many instances the best strategy and the fastest way to access a broad range of capabilities that together improve the customer experience. For example, we have seen several cases of service providers (health clubs, clinics, hospital, insurers, payment service provider, wellness apps and many others) joining hands on a common platform.
Strategic ecosystem participation and partnerships can allow an organization to:
At the heart of ‘agile’ is the ability to move and react quickly, incrementally and continuously. An agile organization will:
Offering the best customer experience is at the centre of our approach. This is reflected in our products and services.
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8 smoker propensity model https://www.verisk.com/insurance/life-insurance/products/tobacco-usage-propensity-model/