As Bob Dylan once said, "The times they are a changin'," (for those of you who don’t get the reference, see here). Although Dylan wrote that song in 1964, those six words are just as true today as they were in 1964 B.C. We're not talking about small changes, either. The direct-to-consumer trend has created a shift so fundamental that it enables certain businesses to grow exponentially, while forcing those who do not embrace it to close their doors. What does this mean for the direct-to-consumer customer experience?
It's easy to understand the allure of direct-to-consumer model for brands. As Deloitte puts it:
"Imagine being able to control your consumer experience. Now more than ever before, brands have the power to own their customer relationships. Digital platforms and tools are empowering brands to open new channels and broaden their customer reach—driving increased revenue streams, profits, and financial performance."
Deloitte goes on to explain how the direct-to-consumer model allows brands to:
Directly engage with customers
Improve the shopping experience
Gain valuable data at every point along the path to purchase
Sounds great, right? Even better, this access is not just available to large brands; eCommerce and the elimination of the need for physical storefront further democratize the playing field, greatly reducing the barriers to entry and to getting your product in front of the customers who will love it.
In this AtlasRTX multi part blog series on direct-to-consumer customer experience, we'll break down:
How the way people prefer to communicate has changed
The winners and the losers of this change
What you must do to be on the winning side of this change
Direct-to-Consumer Customer Experience: A Higher Bar
This great promise of increased access to and insights into customers does not come without a price; the same macro trends that made the direct-to-consumer approach take off also demand an unprecedented level of responsiveness—on consumers' terms.
These terms have changed and, with them, expectations. Forbes estimates Millennials have purchase power that will soon eclipse that of Baby Boomers, and creating a compelling customer experience for this generation "requires you to think hard about an uncomfortable subject: where human employees are helpful to customers, and where they just get in the way. Today’s customers often do want you out of the way."
How you meet these expectations—or fail to meet them—now has the power to differentiate you from your competitors. Gone are the days where products, features or a high NPS, alone, can break through the clutter to differentiate you. In a 2017 global economy, it's not difficult for a startup to build an amazing product or service. Everyone has access to high quality manufacturing, developers, marketers and other resources to go to market, and your next newest competitor will have even more than you did, getting started.
Price is out the window, as a primary differentiator, too. Much like exceptional customer service, which has become table stakes, while a pricing and packaging strategy well aligned with your target market is imperative, as a differentiation strategy, it's reactive and one dimensional. You can't carve out a lasting name for yourself as the low cost provider only, if you want to be in business for more than 30 seconds. What's left that is uniquely yours, that others can't copy or steal?
Designing Your Direct-to-Consumer Customer Experience
Now that we've established what aren't lasting differentiators, let's discuss what willmove the needle for you. We live in a world where your customer experience defines what you are to the outside world, for better or for worse. It is what we at AtlasRTX have coined your CXS—or Customer Experience Score—and it acts as a leading indicator of whether your brand will find itself in the winners or losers categories we mentioned earlier.
To understand CXS, we must first define customer experience (CX). According to SAS, customer experience is "defined as your customers' perceptions—both conscious and subconscious—of their relationship with your brand resulting from all their interactions with your brand during the customer lifecycle." Every experience customers have with your brand, whether or not you are aware they are having it, contributes to their customer experience.
Creating a flawless customer experience isn't just about warm and fuzzy feelings. There are real dollars and cents consequences to ignoring it, as well as real returns for investing in it. According to Clarabridge, for every $1 invested in CX, you can expect $3 in return. Not only that, a strong multi-channel CX strategy leads to retaining customers at a rate of 89%. Companies that have weak multi-channel CX retain customers at mere 33%. Now you see why, everything else more or less equal, CX can make or break your business.
From online customer experiences, such as desktop websites, mobile websites, social media presence, digital advertising, email and text messages, to offline customer experiences with phone customer service, in-store (if you have it) associates and TV and print ads, one of the keys to success is to have a consistent, seamless experience across all channels. For example, no one likes to chat online with a company, then have to repeat yourself to the phone agent, when they call. Simply put, your brand should feel like one unified (and positive) brand, no matter where a customer experiences it.
Differentiating with Your Direct-to-Consumer Customer Experience
The speed and modalities with which you engage and react to your customers and the industry are two factors you control directly that differentiate your customer experience. Consider this: 90% of customers say they have a poor experience getting support on mobile, yet mobile is where most consumers are shopping and engaging with brands. You can’t afford to have a mobile customer service strategy that doesn't include text messaging.
The considerable edge that you can get from engaging rapidly and on the right channels becomes apparent when examining the exploding direct-to-consumer mattress space. What were once "cumbersome and opaque experiences like shopping for a mattress are made easier thanks to brands like Casper and Leesa, and without a middleman taking a cut, more people have access to quality products at an affordable price." With more consumer access comes more competitors—a sea of competitors, in fact, all looking similar and claiming the same innovative mattress technology.
For the new consumer mattress shopping at midnight in their pajamas, who will likely never touch nor feel the product, until it arrives in the mail, belief in your claims is directly impacted by your responsiveness, 24/7. Say that customer texts or chats into both Purple or Casper to ask a question, and only Purple responds. Who do you think is getting the business?
In a future installment of the AtlasRTX direct-to-consumer customer experience blog series, we'll take a deeper look at the highly confusing and competitive space of direct-to-consumer mattress companies, unveiling CXS winners and losers and how its impacting their bottom lines.