Customer participation and information exchange are the two critical dimensions that inform a company’s approach to customer experience. That’s our key take-out from a study by Capgemini and the MIT Initiative on the Digital Economy, called “From UX to CX: Rethinking the Digital User Experience as a Collaborative Exchange”.
According to study co-author and Capgemini Senior Vice President & Global Practice Leader Digital Transformation, Didier Bonnet, “What we were looking for was really what constitutes a good relationship, within the customer experience, between the firm and customers.”
He told Which-50 that much of the debate and research had traditionally centered around who controls that customer experience — and therefore who controls the brand.
“We went from an era where it was all driven by marketing volume and broadcasting — the Mad Men era, where it was really the firm talking to customers about what they thought the customer wanted to buy,” he said.
“A decade ago social media arrived and then the prevailing view was, ‘A-ha!, now all the power has shifted to the customer because they can exchange ideas, they can talk, they can comment, they can critique, they can share their views openly online’.”
That has lead to a belief that power is now entirely with the consumer. However, according to Bonnet, the truth is more subtle.
“Recently, with analytics and big data, it’s big corporate coming back. We can now gather a bunch of data and infer consumer preferences through analytics and algorithms.”
But rather than viewing the relationship as an arms race, the researchers say the relationship more resembles a value exchange.
With that in mind, Capgemini and MIT Digital delved deeply into two dimensions — participation and information exchange — to understand the way companies build out their customer experience philosophy.
“Creating win-win experiences in this two-sided exchange has become a key part of customer experience design in the digital age. Relying on granular analytics alone will not be sufficient, it needs to be balanced with a focus on human empathy – human behavior will remain as important as data in the digital economy.The future of customer experience will be driven by these collaborative exchanges. Firms that do not grasp this evolution will be left behind,” he said.
“In the old days, firms were like a house. There were four big walls and you didn’t know what happened inside. You might run some focus groups at the beginning and then bump out some products or services at the end and hope for the best,” said Bonnet.
But in the digital world, company boundaries are so porous that there’s ample opportunity for the customer to participate in the production system and in the value chain. “The consumer has become an active participant in the value change. It is a kind of a paradox because we’re asking consumers to do some work on behalf of the company. And the paradox is — and the research indicates — often they love it.”
According to Bonnet, “You see it in R&D, with co-creation right down to services, self-service, and recommendations. Consumers are becoming really active participants. They are more informed, and they want to be engaged in the production.”
However, companies should understand that this is not simply about pushing the cost of self service onto the customer. “If you approach it solely as a money-saving exercise, then it’s unlikely that you’re going to take a very customer-oriented view.”
The second dimension in the study is the information market. “There is an opportunity for a flow of data to happen. And since we’ve multiplied the touch points in the digital world, we’re getting a lot more information.”
Once again, however, there is a need for caution — because any information exchange is tricky, says Bonnet.
Companies gather information that is offered willingly in return for the service (such a registering for Facebook). There is information companies gather as customers use the service (such as the profile that Facebook builds on you as you use it), and then there is third-party information (such as retargeting tags that link Facebook’s data to cookie data externally).
“The question becomes: what do you do with the information? It’s not as simple as saying we’re going to gather the maximum amount of information so we can personalise this service to the customer. The question is, what does the customer get in return? You need to find an equilibrium where the customer is willing to give you information because they’re getting something in return.”
When will they learn?
Which-50 asked Bonnet to identify a surprising result from the study.
“We found out that firms are still gathering as much information as they can from consumers — but not to offer a service. Rather, in the hope they will find some insight,” he said.
“Yet many firms are using only a fraction of information they gather. There are examples where less than ten per cent of the information collected was actually used.”
The study also identified four archetypes of companies across the different quadrants created by crossing the two dimensions:
- Hosts — firms that gather information about their users by opening up their value chain to shared participation;
- Companions — firms that work alongside their customers so that the shared participation and gathered information about users can be leveraged to change the customer experience;
- Directors — firms that provide services and offerings based on controlled participation and gathered information by the firm;
- Advisors — firms that leverage information about their customers to further develop and refine their services.
Bonnet said it was common to find certain types of archetype to be present in specific industries.
That is reflected in the report, which says, “Some industry sectors exhibit a natural affiliation to a dominant CX archetype. Sectors that trade on security or that are highly regulated have a higher cost of failure when translating data into insights or opening their internal activities to participation. Therefore, firms such as banks or pharmaceuticals may more likely be Directors. Conversely, sectors that are known as knowledge providers such as healthcare organisations are predominantly Advisers because they rely on leveraging data to create insights, while keeping their expertise internal.”