The coronavirus crisis has a major impact on the way we interact with each other today. This crisis will give a tremendous boost to digital transformation. But, what are the consequences of this digital acceleration for the relationship between companies and their customers? Will we be going back to what it was like before the crisis? Or has the relationship between businesses and consumers changed permanently?
Digitization: look from a customer perspective
We no longer need to explain what social distancing entails. You will notice the impact when visiting a store, when jogging, and walking on the street.
“A meter and a half away” has become the norm.
At the same time, we try to do everything digitally as much as possible: appointments and meetings for work, ordering our groceries, contacts with family, friends, and acquaintances.
Apps such as MS Teams, Zoom, and WhatsApp run overtime.
Just like the package and meal deliverers.
Many companies have started digitizing in recent years, which was only accelerated by the corona-crisis. Customers are provided with more digital channels to communicate with the company to prevent needless human contact.
However, companies now also look at it from a different perspective asking the question:
how can we make our services cheaper and more efficient?
The Digital invasion into our lives can be run successfully only if it’s expanded from a customer perspective. Customer perspective does not only mean that it becomes easier for customers but also responds to customers’ goals. A customer-driven intervention is aimed at building and maintaining a sustainable and meaningful relationship with the customer.
Sustainable customer relationships in a digital world
A sustainable and meaningful relationship has many building blocks, such as:
- freedom of choice
The digital transformation has an impact on all these building blocks.
In the best-case scenario, digitization leads to more freedom of choice in the selection of products and services and the use of communication channels.
Besides, digitization can offer customers the opportunity to exert more influence on the process. However, the big risk is that digitization of our “human” life also leads to less engagement and less trust in the business.
This entails the danger of:
- lower customer satisfaction
- lower reference rate
- lower loyalty
Far too few businesses are aware of this risk.
Several scientific studies have now been conducted into the effects of digitization on customer experience and customer relationships.
Their research has already shown that offering digital communication channels does have a positive effect on the customer experience. But they do not yet have any effect on the standards and values that customers have in the relationship.
Customers who are in a purely commercial relationship with a business – (assuming a balanced correlation between costs and benefits) – will not suddenly adopt different standards or find other values important due to digitization.
However, that could be the case if digitization will continue even further, in case not only the “individual contact,” but the “entire relationship” between customers and the business becomes digital.
Digital Channels Control
Digitization can provide benefits for both the business and the customer. However, how do you get customers always to use the digital channel?
A phenomenon that has emerged in recent years is the phenomenon of ‘channel management‘: companies that send their customers to a digital communication channel, which can be done with a firm hand by closing certain non-digital channels.
On the other hand, it can also be done gently by tempting customers consciously or unconsciously to choose the digital route.
Research shows that once customers are aware that they are being directed in a certain channel, this leads to worse customer experience.
The customer feels that his freedom of choice is insufficient and obviously does like it.
Does the customer still feel connected to the business?
According to the Israeli psychologist Daniel Kahneman, people are always looking for maximum convenience.
This also applies to customers.
Using digital channels or self-service applications can make customers’ life a lot easier, and it will certainly have a positive impact on customer experience.
On the other hand, the latter does not apply to customers who cannot find their way in the digital landscape.
This group of customers is likely to feel less or no longer involved in the business. They can feel unengaged or disengaged.
Many scientists consider the involvement of the customer (customer engagement) as one of the key success factors for a lasting relationship.
The literature indicates that there are different perspectives from which researchers have defined and studied customer engagement.
One of these aspects is the perspective in which customer engagement is mainly examined on the behavioral aspects. Customer engagement is seen as the customer’s behavior that goes beyond the transactions that the customer has with the company.
This perspective is particularly interesting for a data-driven customer approach.
In the past, it was difficult to gain insight into customer involvement using conventional methods; however, the availability of massive amounts of data and stats has changed this.
More digital, less involved?
If customers don’t feel that their wishes and needs matter, they will feel and behave less involved. This can even lead to some form of customer apathy.
This can pose major risks, especially for companies in the public domain, from banks to health insurers and energy companies. Customers have not only “rights” but mainly obligations with these types of businesses, and there are often also rules that customers must adhere to.
Therefore, companies need to measure not only the customer effort score but also the customer engagement score. Only then does the organization keep an eye on the group of customers that are disconnected from the business
Trust as a precondition for personalization
Digitization can increase the distance between businesses and customers because there is less personal contact.
This not only has consequences for the customer’s involvement, it can also affect the trust that customers have in the company.
Personal contact is an important source of trust.
Service providers are trusted when they are seen as competent, benevolent, and honest. Trust is important because the duration of the relationship is closely and positively related to the customer’s trust in the business.
The more trust a customer has in a business, institution, or organization, the longer the relationship will last.
If customers have more confidence in your company, you can also afford to provide more services.
But more importantly, perhaps in the context of digitization, customers are more likely to share their personal data.
That is a very important success factor in the digitization process: are customers willing to give up their personal data if that could lead to improved customer experience? Where is the exchange for customers? Most businesses have no idea.
Deploy the data analysis techniques
Data analysis techniques – such as customer journey mapping, process mining, text mining, and natural language processing – make it possible to track customer behavior on different platforms. Without knowing it themselves, customers produce a lot of relevant and useful data for businesses. By analyzing this data properly, companies have many opportunities to make communication and services more personal. Personalization of services could positively influence customer involvement, and trust in the company provided this is done correctly.
It still proves to be very difficult for companies to use the data ethically in a coherent, integrated manner.
Because companies do not yet have sufficient insight into the entire experience and what drives customers, they also do not know how to better respond to the needs of the customer by adjusting their processes or interacting with the customer. The difficulty is not to collect data, but mainly to analyze this data properly and link interventions to it.
Possible digital interventions
What can companies do in the digital age to keep the customer engaged?
Despite the possibilities that digitization offers to improve customer engagement, organizations still find it a huge challenge to shape it. The main reason is that most organizations focus mainly on the benefits of customer engagement for the company.
While little or no attention is paid to the benefits for the customer, it is especially important to understand the customer’s perspective on why, how, where, and when they want to get involved. And what preferences customers have when it comes to entering into a relationship. Not every customer wants involvement.
And some customers prefer a specific form of involvement.
Web forums, online communities, and webinars are examples of successful interventions that can contribute to customer involvement.
But visual engagement in the form of video calling, co-browsing, screen sharing, and screen annotations increases engagement. However, these new techniques have not yet been tested for actual effectiveness. The challenge for future research is to see the return of the various interventions in terms of customer involvement. The success and failure factors are of these interventions in a customer-supplier environment, and whether there are other successful interventions.
The customer in the post-corona era: to be engaged or not to be engaged?
In short, there is currently a great challenge for organizations. Think about what you can do to keep the customer engaged in the digital post- corona era. The challenge here is to think beyond the technical and organizational possibilities. Look especially from the customer’s perspective (motivations, emotions, cognitive styles of customers), which interventions will and will not lead to involvement and trust.