The Digital (r)Evolution, created with insight from some of Europe’s top marketing executives including GHL Hotels, Pho, Citi Private Bank, Direct Line and Forrester has just been released by the Digital Marketing Exchange.
This report uncovers how some of the most digitally savvy organizations are continuing their evolution to ensure they not only remain competitive but continue to engage with customers in the rapidly changing digital landscape.
With individuals engaging with new media more and more, and becoming wiser to the ways of traditional media, organisations now themselves must adapt to keep up with the customer. The digital revolution has happened and now the question for enterprises is “How do I evolve to keep up with the pace of change?”
Samuel Lehmann told us: For senior marketing executives the digital revolution represents a great opportunity – almost a levelling of the playing field, whereby if you market smart you can attract new customers and gain marketing share. But with great opportunity, there is also great risk and challenge. How can you attribute your marketing successes across a myriad of channels? How can you deliver a meaningful and effective content? How can you benefit from marketing automation & artificial intelligence technologies? These are the questions we have asked some of the best marketing brains from across Europe as they look into the future of the always evolving digital landscape.
There’s a continuing digital disconnect in corporate marketing departments—and a widening digital divide as well. Many companies have refocused their marketing functions on a digital or an omnichannel approach. But too many appear to be spending more on digital without building up the capabilities that produce bang for the digital buck. Advertisers ascribe high importance to such capabilities as digital- content development and to fast-rising digital channels such as mobile advertising.
The current situation presents both sides of the digital-marketing partnership with questions about how they should work together going forward. Advertisers, in particular, need to build up their digital capabilities in order to improve their own performance and guide their agencies’ work effectively.
Spending on digital channels continues to rise. Global spending on digital advertising is $250 billion. Digital channels now represent a third of all advertising spending worldwide; this year, they will overtake TV, driven by the strong growth of social media and video. Advertisers are buying more digital services from agencies: digital’s share of agency revenue passed 60%. And agencies are responding to the demand. US agency employment reached its highest point since the dot-com bubble of the late 1990s—almost 300,000 people.
Digital and mobile channels and advanced marketing techniques, such as digital targeting and data analytics, are reshaping consumers’ purchase pathway for companies in all industries, from travel and hospitality to consumer products and retail to financial services. Different channels increasingly require different content, and the more advanced marketers are using technology to actively shape consumers’ cross-channel experience of their brands and products.
The risk for many advertisers is that they keep falling further behind, since digital technologies and the complexity of their application are advancing at dizzying speed. While many companies are struggling to develop digital content and employ social media, digital marketing is already moving toward new capabilities. The most significant may be personalization, marketing to individual consumers at scale.
It’s particularly surprising that advertisers and agencies continue to give themselves low scores on testing, since testing, learning, and adjusting the campaign approach or design are among the most powerful capabilities enabled by digital technologies. The ability to see what is working and what is not, and to experiment almost in real time with adjustments and improvements, is essential to using digital channels effectively. This is especially true in fast-growing channels that are also evolving at a rapid pace, such as mobile web and apps, in which both advertisers and agencies—perhaps not surprisingly—also score poorly.
While a good number of agencies and some advertisers report that they understand the role of video in the consumer journey, they are still mostly putting existing TV assets online and not investing in the digital capabilities that make online video a more effective medium than TV. Too few companies, for example, create more than one video per campaign, tailor their video creatively to fit consumers’ use of different devices and digital platforms, or make use of such tools as hotspots and sequential retargeting to keep consumers engaged with their brands. In other words, marketers are still using new and advanced tools in old-fashioned ways.
Advertisers and agencies that are behind the curve may not be aware of how much they lag or why. But whatever the reasons for a company’s failure to make progress, lack of talent, in particular, hurts its ability to plan, execute, measure, and improve digital campaigns. As a result, many companies either mount subpar campaigns or rely on the support of their agencies to plan the work, do the work, and measure the results. So far, it appears that many are following the second course—outsourcing campaign development and execution, just as they have long outsourced creative development and media buying.
Those that outsource pay a big price—in more than just agency fees and commissions. Digital campaigns are different from their offline equivalents. They are continually modified and adjusted in real time based on real-time results. Marketers that are not actively involved in the test-learn-adapt process lose touch with both their campaigns and their digital consumers. They don’t know whether their strategies are being faithfully executed or how their budgets are being spent. They are hard-pressed to explain how or why success—or failure—occurred. And perhaps most critically, they don’t learn how to access and use the plethora of digital data that campaigns generate—the data that makes more advanced techniques, such as personalized outreach, possible.
Advertisers face another skills-related challenge. Unless they improve their performance and their learning and development, the digital divide is set to widen. These companies will find it increasingly difficult to attract technical talent as they compete for skills not only with agencies but, more significantly, with digital natives, tech startups, and other organizations. Since talent attracts talent, it will become harder and harder for advertisers that lack technical skills to fill the void.
All of this spells opportunity for agencies, with the caveat that they need to raise their own game as well. That agencies gave their capabilities a higher rating than advertisers do makes sense. Agencies do have an opportunity to increase billings by compensating for their clients’ weaknesses, but to add the most value, they need to improve their own skills in several key areas, starting with mobile and video. These channels are critical now, and their importance will only increase in importance. Testing is another area of weakness. The ability to test and adjust creative content and campaign formats and methods is one of the biggest advantages that digital technologies provide marketers. Yet both advertisers and agencies give themselves poor grades in how they test content, creative materials, targeting options, and offline content (such as TV commercials on YouTube).
The bigger opportunity for agencies lies in building long-term partnerships with their clients. These partnerships should be based on the development of joint skills enabling the design and execution of digital campaigns that can further continuing consumer relationships and engagement both online and offline. Such campaigns are the ultimate promise of digital marketing, but so far they are more the exception than the rule.
Agencies believe they are good at developing digital-content strategies that tailor content to key moments in the consumer journey and at translating marketing objectives into a set of actionable metrics.
Agencies have the lead in digital-marketing skills and capabilities. Smart agency heads will resist the temptation to use this advantage to maximize near-term agency revenues by taking over more and more of their clients’ campaign work. Instead, they will field multiskilled teams that work with clients to design and execute orchestrated campaigns that achieve measurable results, and in this way, build long-term digital-marketing partnerships that work.
Digital customer care is still new territory for many companies. They can learn a lot from the natives.
Today’s customers expect digital service. More and more are getting it, too, across sectors from telecommunications to banking and from utilities to retail. For example, telco customers conduct roughly 70 percent of their purchases either partly or wholly online—and 90 percent of their service requests as well.
The rapid shift to digital customer care (or e-care) should be good for everyone. Automation and self-service cuts transaction costs for providers. When e-care is done well, customers prefer it, too. Our research among telecommunications customers shows that customers who use digital channels for service transactions are one-third more satisfied, on average, than those who rely on traditional channels. And since companies that excel in customer satisfaction also tend to create more value for their shareholders, there is even more incentive to get e-care right.
Despite e-care’s advantages, however, many companies struggle to give their customers a consistently good digital experience. The same research revealed that while more than two-fifths of service interactions with telecommunications companies begin on an e-care platform, only 15 percent are digital from start to finish. We’ve also found that use of digital service channels lags a long way behind awareness. In Europe, for example, 98 percent of mobile phone users in one survey knew their provider offered a service website, but only 37 percent made use of it. In the United States, meanwhile, only 18 percent of mobile users said they used their providers’ online service platforms.
And e-care is getting more complex to implement. Not only do customers now want access to a fully comprehensive range of online service offerings—they also want to access these offerings using a variety of platforms, including both conventional web browsers and a growing pool of mobile devices and dedicated apps. Customers expect their experience to be continuous and consistent as they migrate from one platform to another, but they also want service options that make sense in the context in which they are asking for help.
Finally, customers are getting harder to impress. The rapid rise of “digital native” companies, such as Spotify or Uber, exposes customers to simple, streamlined user experiences designed from the ground up for digital delivery. Established companies that build their e-care offerings and processes on top of, or alongside, more traditional channels often find it hard to meet the same standards.
That comparison is becoming increasingly important. When customers think about the e-care service they receive from their bank or phone company, they don’t compare it with its competitors in the same industry but with the other digital services they use every day. When the online experience doesn’t meet their expectations, customers go back to the phone. As a result, some telecoms companies have seen call-center volumes—and costs—rise as they attempt to move to a digital service model.
Making e-care work
Companies that have been able to move more customer-care services to online channels and articulate strong e-care offerings excel across seven dimensions:
Simplicity starts with a clean, clear, and intuitive design that requires few mouse clicks or screen touches to achieve the desired task. The main functionalities are easy to find and well explained. The language is concise, simple, and easy to understand. Apple offers a wide range of products aimed at very different customers, for example, but its product information and support websites use the same clean, pared-down design, with key information presented clearly and more detail available with a minimum of clicks. In financial services, companies such as PayPal have dramatically simplified online payments, in many cases requiring only the recipient’s email address or mobile-phone number as identification.
Convenience means customers are offered a wide variety of services and a choice of support channels. User interfaces are easy to navigate and critical information is not hidden within long pages or complex menu hierarchies. Even better are sites that use data intelligence to tailor page content dynamically based on who is accessing it. Similarly, biometric identification techniques using fingerprint or voiceprint technologies accelerate authentication steps and reduce the mental burden on users without comprising security. One telecom company has developed a dynamic FAQ system that suggests possible support articles as soon as a customer begins to type a query and that loads the most relevant content automatically without requiring a page refresh.
Interactivity reflects the fact that customers now expect their online experiences to be dynamic and interactive, with blogs, social-media feeds, user reviews, and customer forums all playing important roles in modern e-care. These are especially important for millennial consumers, who have grown up steeped in social media and online interactions. Accordingly, an active user community is central to UK-mobile-phone-network giffgaff’s strategy. Users receive account credit for helping others with their queries, and individual community members are regularly highlighted on giffgaff’s support website. One of the company’s core product offerings—a bundle of text messages, voice minutes, and data known as a “goodybag”—was introduced as a direct result of suggestions on user forums. Moreover, through interactive games and a cocreation system that lets users build new services for other community members, customers now help set giffgaff’s direction.
Consistency is essential: customers require that the appearance, functionality, and information available in e-care services be consistent regardless of which device or software they use. Amazon, for example, shows customers essentially the same menus, the same links, and the same tone and language across all of its mobile and website channels, giving customers the same experience as they move from one channel to the next. This commitment significantly reduces any need for relearning after each switch—and any attendant digital friction.
Value results only if e-care works for the customer. Services must be designed to reflect the user’s individual needs, rather than the company’s internal processes, and must evolve as those needs change. One insurance company, for example, uses real-time rendering technology to create a customized video presentation of the coverage included in the customer’s quotation. The video combines professionally scripted and presented content with customer-specific data drawn from multiple sources, and its content is adjusted based on the customer’s choices and responses during the presentation.
Desirability is a product not only of a consistently appealing visual design but also of the tone and presentation of the site’s content. Both usually require adaption to suit local tastes, which may require dramatically different choices depending on the specific context. For instance, Chinese websites are typically very crowded, with lots of information available, while sites in the United States and Western Europe tend toward a more streamlined aesthetic.
Brand is not just a label: it is how customers experience a company’s products and services. Given that e-care has become one of the primary ways customers interact with a business, brand reinforcement should be a primary e-care goal rather than an afterthought. The best companies therefore integrate their brand values deeply into the design of their e-care offerings.
To buttress its message of providing exactly the services its customers need, one mobile-phone company has tailored its service experience to support unique “moments of truth” in the customer journey. Once a customer logs in, the website’s navigation changes dynamically based not only on what the customer is doing but also on behavioral insights based on previous interactions with the company.
A customer who’s usually pressed for time may see just three simple plan alternatives, cutting through the clutter, while one who wants to be assured of getting the best deal will see more detail on plan options, so she can feel in control. The site then guides the customer through activation steps, offers clear instructions on how to get the most from the service, and anticipates the most common questions with detailed answers.
To understand how leading players measure up under this harsh scrutiny, we evaluated the e-care offerings of more than 20 major telecommunications companies across the world, covering both online services and dedicated apps. We tested half a dozen common service activities, including access to billing and consumption information, technical-support queries, and sales or upgrade queries.
Our approach looked at the way e-care platforms were designed and presented to the user, the functionalities on offer, and the information available within each of our target service activities. Under each of those three main concepts, we rated the offerings across the seven dimensions described above.
Overall, our analysis should be sobering reading in all sectors for incumbents that are digitizing their customer-service offerings. We found only one area—the presentation of information using simple, jargon-free language—where most of the companies surveyed are demonstrating best practices. Elsewhere, we did find examples of best practices, but they have not been adopted by every company, and they are not always consistently applied even when they have been adopted.
The best websites and apps in our survey sample, for example, offer a wide range of services using a clear, easily understandable architecture that requires few clicks to access relevant content. Several, but by no means all, companies provide a convenient search function to help customers access technical support. Only a few make “search” the core navigation method for technical-support information.
Indeed, not many of the surveyed companies are taking full advantage of digital platforms’ unique capabilities. Interactive features such as support wizards or explanatory videos were rare. Only the very best-performing companies managed to integrate their e-care offerings seamlessly with live channels (such as e-calling or traditional telephone support) to create a truly multichannel experience. And just a handful have deployed the most advanced e-care technologies, such as artificial intelligence or chatbots.
For many of the services we evaluated, customer experience was inconsistent between web and app platforms. Apps sometimes offered less functionality and frequently provided less information than their web counterparts, which companies tended to position as the full-service option. On further examination, differences in look and function between apps and web often arose because of the relatively recent introduction of app offerings, or the use of different design and development teams.
As they move further into the digital world, many incumbents clearly have work to do to give their customers the best e-care experience. But that’s no reason to set their sights too low. Leading companies not only make their digital channels highly useful and consistent at every customer touchpoint—they also make them fun and emotionally appealing. They personalize the experience and keep it relevant across the entire customer life cycle. For these top digital players, e-care doesn’t just work, it builds a brand that engages and delights customers.
That’s the standard, and it’s lifting customer expectations for everyone else. To keep up, traditional companies must measure their own performance against the best of the best of best—and embrace a culture of rapid, continuous evolution and improvement. There’s no time to lose.
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