All the data in the world, but we still don't know why? |Coffee & Conversation: Ben Nottle
"If you look at the concept of personalisation within customer experience, I think for quite a number of years organizations have been focusing on getting the right product recommendations to a customer, and presenting the right content to a customer. And this has really been considered to be the Holy Grail. I think organisations are starting to get very good at that, and where we will see personalisation going now is in the actual business processes and the transactions with customers."
My name is Ben Nottle. I'm based here in Singapore, working for SAP as the Head of Customer Experience Advisory in SAP. I spend my time in Asia Pacific working with our top customers together on customer experience strategies and bringing technology to our customers, and then looking at the continuous innovation of those customers and how they constantly improve the strategies around how they engage with their customers.
Customer Relationship Management vs. Customer Experience Management
I think we've gone through a transition where organisations have been looking at Customer Relationship Management, which is essentially an inside-out view of how they would manage their relationships with customers.
So, organisations have transitioned from this focus on Customer Relationship Management (CRM) to Customer Experience Management (CEM).
So essentially, it's around providing a more personalized experience to a customer who is in control, and providing a consistent experience to the customer across a journey. So, if you consider now a customer who's going through a buying experience, will go through a number of digital channels while they research products into physical channels while they try products out. Then they might make a purchase to buy a product through a digital channel.
And there are many points of potential failure and disconnect across the customer journey. One interesting statistic is a research piece from Bain which says that while around 80% of organisations think that they provide an exceptional customer experience, only around 8% of consumers actually agree that organisations provide that experience, and this is what we call the experience gap.
Operational data vs. Experience data
We look at two important types of data - so we look at what we call operational data which is something that is typically quite easy for an organization to collect. Experience data is far more difficult to collect for an organization. This is the emotional side where a customer is telling you why they've made a particular purchase, why they've returned a product, why they're interested in the content you've provided them through a marketing campaign. And it's only through being able to collect the experience and the operational data and associate them together, that an organization will truly understand what is happening as well as why it's happening.
So it's very important to have a high level of intelligence in the data collection as well as the data processing to be able to root out bias as a part of that process. I mean AI is essentially the constant improvement in what you're doing with the data.
Example of an experience gap: Shoppers Stop
Interesting example of an experience gap where we've been working with a client in India by the name of Shoppers Stop. Shoppers Stop is a leading departmental store in India and they're very heavily into fashion, and one of the key issues around fashion is that customers often select the wrong sizes through e-commerce and there's a very high level of returns - typically a 20-30% return when a customer buy a garment online.
Personalisation Within Customer Experience
If you look at the concept of personalisation within customer experience, I think for quite a number of years organizations have been focusing on getting the right product recommendations to a customer, and presenting the right content to a customer that this has really been considered the holy grail. I think organisations are starting to get very good at that, and where we will see personalisation going now is in the actual business processes and the transactions with customers.
Moving from Customer Relationship Management (CRM) to Customer Experience Management (CEM)
Most major organisations in Southeast Asia have some sort of CRM initiative. I think that this has begun very much around financial services, telco, airlines etc. These industries that are very consumer-oriented, consumer focusing businesses, and I think more recently that's even started to move into manufacturing and more traditional B2B organization.
I think the penetration is relatively high in Asia from a Customer Relationship Management (CRM) perspective. I think what's interesting is to look at how we can improve the focus in moving from Customer Relationship Management (CRM) to Experience Management (CEM).
E-commerce in Asia
In Asia, from a technology perspective if anything, organisations are more advanced. If you look at the e-commerce marketplace, China is the number one country from e-commerce penetration. E-commerce across Asia has got a 25% growth rate, whereas in the United States it only has a 15% growth rate.
I think where we will see the next big transformation in Asia is around B2B. And particularly markets like India, where you have a very complex distribution relationship between a manufacturer and a consumer, you go through a dealer and a sub-dealer and so on. And I think what we'll see is the technology will enable organisations to break down the multiple barriers between manufacturers and customers.
Brick-and-Mortar Fighting Back
I would say that the organisations that provide the best customer experience will grow the fastest and I think it then becomes around economies of scale. E-commerce is a business where you need very large scales in order to be profitable. So you then create barriers to entry where it's very difficult for other organizations to come in.
We're now seeing brick-and-mortar retailers fighting back. We saw a number of years ago the acquisition by Amazon of Whole Foods in the United States for example, and we're seeing Alibaba now start to invest in brick-and-mortar retail as well. I think we will see the opportunity for established brick-and-mortar retailers to be able to enter the digital sphere very quickly while the digital-only players are taking a long time to enter the brick-and-mortar sphere.
It was interesting the last few years how we've coined the term digital disruption. I think everybody's been speaking about how Uber was the biggest transportation company that didn't own any cars - actually they did.
And I think people were trying to build business cases around innovating because other organisations are innovating. I think the idea now of having experience-driven innovation where we take customer feedback, and we have far more rapid innovation, but it's based entirely on customer feedback that's what will set organisations apart.
And I think it's what will avoid organisations from falling down that trap. However, it's very important for organizations to avoid painting themselves into a corner and they need to look at not only the individual sprints of fast innovation, but also the big picture of where they're trying to go and to make sure that they are looking at a platform that's going to help them to scale in the future, and to be able to help them to support not only small innovations around things like payment gateways and content delivery and so on, but large innovations so things like new business models, B2B, B2C, becoming a marketplace, working together with partners and so on.