Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at consumer attitudes to small businesses’ customer service advantages, and how staff wellbeing is impacting business growth when neglected.
Key news
- Meta has completed its customer service platform and officially released Kustomer, the CRM startup it acquired last year, for approximately $1 billion. Kustomer’s valuation has significantly reduced to $250 million, as reported last week and confirmed by CEO and co-founder Brad Birnbaum. Birnbaum will continue to lead the company, while Meta will maintain a minority ownership stake.
- European watchdog fines Meta $1.3 billion over privacy violations. These are in relation to EU privacy laws. Meta breached these laws by transferring the personal data of Facebook users to servers in the United States.
- GLL has taken an important next step towards powering its facilities with renewable energy with the announcement of its first ‘Green Gym’. Charlton Lido and Lifestyle Club in South East London boasts a 350 m2 gym with over 40 pieces of equipment, many of which are “Self-Powered”. Since installing a brand new 38 kW solar array on the roof, the power generated now has sufficient capacity to operate the gym by renewable energy for the first time.
- Like-for-like grocery price inflation has fallen for the second month in a row and now sits at 17.2% for the four weeks to 14 May 2023, according to the latest data from Kantar. Take-home grocery sales rose by 10.8% over the month in comparison with the same period last year.
- A new feature in Google Ads has incorporated a chat-like experience that uses plain, everyday language and combines your knowledge with Google’s AI. Here’s how it works: You choose a page on your website that you want to promote. Google’s AI will read the page and summarise what it’s about. Then, it will suggest things like keywords, headlines, descriptions, images, and other things you might want to include in your ad campaign. The automation and ease of work that AI provides is only growing.
Commentary share – Google Ads new AI system
“With AI at the helm of innovation in advertising, we are poised to unlock unlimited opportunities for precision targeting, hyper-personalisation and enhanced campaign effectiveness.
By harnessing the power of AI, advertisers will gain an unparalleled understanding of customer behaviour, enabling marketers to craft compelling, tailored experiences that resonate on a deeply individual level. Gone are the days of generic messaging and one-size-fits-all approaches. This exciting development empowers us to deliver ads that genuinely connect with audiences, cutting through the noise and fostering authentic engagement.
Moreover, the fusion of AI and advertising promises to streamline operations and maximise efficiency. From automated optimisation to predictive analytics, these tools can drive results with unmatched speed and accuracy, which means teams will be free to focus on strategic creativity and meaningful interactions to amplify the impact of campaigns.
However, this intriguing shift could imply a diminished significance of SEO strategies, a trend already discernible across various industries, compelling marketers to embark on a journey of upskilling and adaptation.”
– Flavia Colombo, Country Manager, UK and Ireland at HubSpot
Small businesses have a CS advantage; but are they fully utilising it?
FM Outsource’s new report investigated whether small businesses are meeting customer expectations. It found that 60% of consumers feel that larger businesses offer a higher quality of customer service across a range of key areas in which smaller enterprises should have a natural advantage.
Only 40% of respondents think that small businesses resolve their complaints quicker than larger businesses. But just 39% of people said that small businesses seem to care more, despite challenges such as the cost-of-living crisis impacting earnings. Additionally, only 37% said they believe small businesses are more likely to go the extra mile to resolve an issue. Less than a third (32%) said they are more flexible when coming to an agreement on a problem.
“While larger businesses typically have the advantage of greater resources to invest in their customer service, smaller businesses should – in theory – have their own advantage in being able to offer a more flexible, personalised service to their customers. The research shows that unfortunately many are failing to do this and may be experiencing negative consequences as a result.”
The research also revealed the business implications of substandard customer service with just (41%) saying they would be equally as likely to leave a negative review for both small and larger businesses following a poor customer service experience.
The research really emphasises that small businesses cannot afford to rest on their laurels when it comes to customer service. Consumer expectations are continually increasing and it’s clear that there is a real risk of small businesses suffering negative online reviews, and an associated loss of custom, if they fail to meet those expectations.”
–Martin Brown, CCO at FM Outsource
Digital agencies neglecting staff wellbeing may be hindering their growth opportunities
Cloudways launched its new Digital Agency Landscape Report. This has exposed the obstacles preventing digital agencies from growing during times of uncertainty. It found that 40% of digital agencies prioritise growth above personal wellbeing, suggesting that digital agencies are neglecting the welfare of their employees in their pursuit of expansion.
58% stated that growth is important “but not at the cost of personal wellbeing/lifestyle”. The revelation that many agencies are not taking employee welfare into consideration as part of their growth plans is concerning.
Considering growth as “all-important” could be counter intuitive. Unproductive teams (9%) and not enough staff (30%) are key challenges for small digital agency growth. While growth in the current economic climate is keeping many business leaders awake at night, the survey found that around a quarter of those in digital agencies are held back by in-house issues, such as poor cash flow (24%) and taking on bad fit clients (26%), with just over a fifth (22%) citing the current state of the economy is a barrier to growth.
Sales and marketing were also key issues for digital agencies’ growth. More than half (52%) of digital agencies blame their sales and marketing strategies for hampering their growth. In addition to this, 40% of those surveyed said their average customer lifespan doesn’t exceed 24 months, suggesting a lack of insight needed for customer retention.
Interestingly, agencies were split in their approach to investing in tools for their growth, with 44% of agencies showing a preference for all-in-one tools, and 56% preferring more specialised tools. This is indicative of a divide in what agencies are offering and the differing approaches they take to value proposition – niche or all-encompassing offerings.
“The key challenge for small digital agencies is knowing how to market themselves to more niche target audiences, without losing out to larger agencies who claim to have expertise in all areas. It’s imperative that small digital agencies promote the areas they are experts in whether that’s branding or SEO, opting for a specialist agency means businesses benefit from a specific set of services that elevates the general marketing offer.”
– Aaqib Gadit, CRO of DigitalOcean and Co-founder of Cloudways
Thanks for tuning into CXM’s weekly roundup of industry news. Check back next Friday for the latest updates of the week!