Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at how retailers are failing post-purchase, what customers actually think of personalised content, and the lack of understanding about what service design is.
Key news
- Medallia has surpassed more than one million active weekly users leveraging its artificial intelligence-driven capabilities.
- Gartner this week posted a new prediction. They said that by 2026, investment in generative AI will lead to a 20% to 30% reduction of customer service and support agents, but also create new jobs to enable the technology. Many organisations have already made headlines by drastically reducing or even eliminating their customer service employees and replacing them with generative AI-enabled chatbots, which Gartner research shows was a fear among customer service agents even before the introduction of tools like ChatGPT.
- WFH Research’s latest working paper, published by Stanford’s Institute for Economic Policy and Research, found that working remotely full-time is associated with 10%-20% lower productivity. The researchers said that challenges to productivity lay in less efficient communication and a lack of motivation when working remotely. It also means missed mentoring opportunities and chances to foster connections, while the lack of structure adds to remote worker stress. They suggest the answer may lie in hybrid or flexible working and reskilling managers to enable them to focus on “mentoring, culture-building, and motivation”.
- Royal Mail has started trialling the use of drones on Scotland’s remote Orkney Islands. Drones will carry letters and parcels from Stromness, a relatively populous town and part of Mainland Orkney, to the islands of Graemsay and Hoy, where postal staff will finish the final leg. The Speedbird Aero DLV-2 model drones can carry up to 6kg payloads. While this inter-island project is only for three months, it could be continued on a permanent basis if successful.
- Drinks with alcohol by volume (ABV) below 3.5% will be taxed at a lower rate. However, tax on drinks with ABV over 8.5% will stay the same. As the changes came into force, industry experts have warned that the rises would “cripple” hospitality businesses. Wetherspoons founder Tim Martin said it gave supermarkets an unfair advantage.
Retailers are failing customers with post-purchase experiences
While only 18% of retail leaders believe the post-purchase process can be significantly improved, a staggering 83% of consumers think there is room for improvement. That’s according to survey results from Delivery Experience Platform Sorted. The survey consisted of 1,000 consumers and 250 retail leaders across the UK.
93% of consumers consider the post-purchase experience to be important. However, only 40% of retailers believe that the post-purchase experience is fully optimised. This indicates that retailers need to invest more into their delivery experiences to fully meet growing consumer expectations in an increasingly competitive landscape.
Of particular concern is the impact of a poor delivery experience. 79% of consumers admit they would be deterred from purchasing from a brand again if they encountered a subpar post-purchase experience. This highlights the critical need for retailers to prioritise and enhance their delivery processes to avoid losing customers.
The survey also reveals that 60% of retail leaders who have invested in improving the post-purchase experience report seeing an increase in sales and revenue.
“The notion that ‘the customer is always right’ is a guiding principle in the retail sector, and this data suggests that our industry could – and should – be doing more. It’s becoming increasingly evident that the post-purchase experience shouldn’t be a secondary concern. From preventing potential lost sales and maintaining brand credibility, to delivering a seamless and personalised experience for each customer, focusing on post-purchase experiences is key. Customers see the value in this aspect of the journey, and so should retailers. It makes a big difference.”
– Carmen Carey, CEO of Sorted.
Half of personalised content is “boring” and “unhelpful” according to UK consumers
51% of UK consumers say that the targeted content they receive online is often “boring” or “unhelpful.” That’s according to new research from Optimizely, which reveals that while personalisation holds great potential for enhancing customer loyalty, the reliance on assumptions and outdated technology remain major obstacles.
The Personalised to Personal report is based on a comprehensive study of 100 UK marketing leaders and 1,000 UK consumers. It shows that an overwhelming 70% of consumers feel frustrated that the promotions they receive are not directly relevant to their personal interests.
Concerningly, 83% of marketers admitted that their current personalisation efforts heavily rely on assumptions about customers rather than high-quality insights. 71% also acknowledged that generalisations still form the foundation of too many personalisation campaigns. This points to a significant gap between the personalised experiences consumers desire and what brands currently provide.
The study also shed light on how outdated technologies hinder effective personalisation. Only 33% of marketers claimed to possess the necessary technology to deliver hyper-personalised experiences tailored to individual customers. These shortcomings largely stem from outdated technology, with a staggering 74% of marketers feeling that their current personalisation tools are no longer adequate.However, the report also highlights the immense potential of personalisation to foster customer loyalty. A notable 65% of consumers are more loyal to a brand that has taken the time to understand them on a deeper, more personal level.
Organisational change at risk as 38% of businesses admit a lack of know-how
According to new research from Code Computerlove, 38% of respondents admit they don’t know what service design means or its impact on the effectiveness of business change initiatives. The survey of 1,002 business leaders was commissioned to understand the current level of knowledge amongst those responsible for digital transformation and organisational change. Findings highlight a stark lack of understanding about what service design is, and a serious level of underfunding. The majority of businesses admit to committing less than £100,000 for service design focused projects.
Asked why this was, 27% cited resistance to change. Typically, budgets below £100k focus more on discovering problems than implementing the necessary changes. This is the wider problem of service design; a roadmap for the future with no guidance on how to implement will almost never deliver organisational change. This is a theory supported by a McKinsey report which found that only 4% of service design methods focus on implementing change.
This research highlights a substantial disconnect between what people understand and know about service design and what it actually is and does. This industry should address this gap if businesses are to harness the power of service design as part of wider organisational and long-term business change, and then be able to measure its impact and success.
Other survey highlights include almost 40% of respondents admitting they didn’t know what impact service design projects have, and 15% stating they do not measure its impact at all. For those that do, customer satisfaction ranks the most important measure of success at 40%, followed by team efficiency (34%) and team effectiveness (30%).
Thanks for tuning into CXM’s weekly roundup of industry news. Check back next Friday for the latest updates of the week!