Insights applied
The latest thinking from New Zealand and the global Kantar network April 2020 2020
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Contents 1 Welcome
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2 Where to from
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here?
3 Does COVID-19 mark the end of the Experience Economy?
4 Building meaningful brands through
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customer experience
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5 Focus first on the customer experience
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6 Humanising brands
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7 Everyone can make a difference: the ‘secret’ to
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exceptional customer experiences? Your people
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Welcome
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We are finalising this e-zine in extraordinary times. The speed that the Covid-19 virus went from being a threat, through inconvenience to a major health and economic shock was disturbing. I'm sure many of us are thinking "What next?" Our personal and working lives have been up-ended and there is still a lot to be figured out. There are two critical certainties that must be our guiding light as we navigate this unchartered territory.
— Meeting our customers’ needs has to remain central to all we do as businesses. These needs have changed and understanding these changes so we can respond to them is going to be critical.
— The role of our staff in enabling us to discover and meet customer needs cannot be underestimated. It is fitting, therefore, that we have decided to focus on customers and staff in this issue. We believe the insights are enduring, despite the change taking place around us, even if some of the content was written before Covid-19 took hold. We trust you find this interesting and welcome any thoughts or questions.
Enjoy the read, and take care of yourself, your families, staff and customers. Regards
D a v i d
T h o m a s
Managing Director Insights Division Kantar, New Zealand David.Thomas@kantar.com
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2 Where to from here?
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Nigel Green Executive Director, CX Domain Lead Insights Division, Kantar New Zealand nigel.green@kantar.com
Forces of change
Of course, it is too early to say but we can start to identify the conflicting forces that will be in play:
Even as Covid-19 and the government’s restrictions to get it under control are at their most severe, we need to start thinking about how it will impact business beyond the current restrictions.
ꟷ The need and desire to revert to ‘normal’. As restrictions reduce, people will begin to go about their everyday lives and many routines will return – possibly curtailed a little by residual health concerns and restrictions.
Certainly, the impact is going to vary massively by business. Those businesses fighting for survival will no doubt remain focused on doing just that. Other businesses, varying from those that are closed temporarily, operating as virtual businesses or operating as essential services will all need to come to grips with how the world has changed for our customers once we pass through the depths of the crisis.
ꟷ Changing outlook on life. Some people will find this event life-altering (from which we can expect more risk aversion and changing priorities) while others will brush it off. We can expect every response in between. At this point it is anyone’s guess where the balance will lie but expect this to be a major theme in coming months.
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ꟷ People have started doing some things differently and will stick with it. A big jolt like this can get people who have been stuck in their ways, either through apathy or the effort required to learn something new, to change.
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Where to from here?
Getting up with the play Home confinement will reinforce the on-going trend to online interaction. Many late adopters of online services will be discovering the benefits as they increase their reliance on online shopping, service delivery and workplace collaboration. It is likely that people will see online services as better than what they had previously used. In a recent study, we were surprised to see an emerging gulf between the perceived experience delivered by businesses with slick online experiences and traditional retailers. Customers are telling us that businesses that are purely online (such as Spotify and Mighty Ape) or those that are increasingly digitally focused (such as banks and travel agencies) are delivering the best all round experiences.
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Traditional retail might not see its customers return so enthusiastically. At the other end of the scale, Liquor and Fuel retailers are performing worst out of the sectors we considered. While the personal touch is often thought to be an advantage of retail, in practice it is being left behind by technology that is increasingly able to delight customers. We have found that apps are twice as likely to deliver an ‘enchanting’ customer experience that is both effective and emotionally engaging (20% vs 10%). We see these findings, and the current situation, as furthering the case for an acceleration in the use of technology in retail and other services. However, a human face will remain essential and we see the most successful future retailers being those that free up employees from routine tasks to provide a greater level of assistance to customers.
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Where to from here?
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Customer magic happens at the intersection of brand and experience
New Zealand companies are hot on the heels of global giants in customer experience
Our recent study of brand experience in New Zealand goes beyond traditional measures by bringing together all facets of brand and customer experience, including clear brand promise, memorability, empowered customers and employees, and exceptional delivery. We include New Zealand and global brands that New Zealanders are actively using.
Spotify achieved a score of 66 on Kantar’s index of customer experience, edging out Air New Zealand, Flight Centre, House of Travel and Mighty Ape all achieving 60 or above. Netflix came in 10th place, with Southern Cross, Kiwibank, AA Insurance and ASB all edging ahead of the media giant.
We surveyed over 2,000 New Zealanders about their opinions on over 100 of New Zealand’s top companies in financial services, online shopping, media and entertainment, telecommunications, energy and retail.
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As all these brands show, excellence in customer experience is not all about soulless efficiency. Certainly, every one of them has a finely tuned digital experience. But more than that, they deliver to a clear brand promise, engage their customers emotionally and empower their staff to delight customers.
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Where to from here?
Memorable experiences drive brand success Spotify, like many leaders in our study excels in the five areas that define successful customer experience. From a customer perspective, Spotify leads New Zealand in delivering an exceptional experience as well as providing lasting memories, this latter point being critical because forgettable experiences will not help your brand.
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A key to their success is providing the digital tools for customers to easily do things for themselves while allowing staff to focus on tasks requiring a personal touch. Flight Centre and House of Travel took out the top 2 spots in employee empowerment, one of the five key drivers of customer experience success.
The current situation does provide an opportunity to create long-lasting brand perceptions. Emotions are high and a positive experience in such an important moment will be remembered. While the outlook for the tourism and travel industry is bleak for some time to come, several businesses are well placed to win back customers when normality begins to return. Air New Zealand, Flight Centre and House of Travel did exceptionally well in our study and have survived previous challenges such as the emergence of online-only ticket buying sites.
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Where to from here?
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Ta k i n g t h e c u s t o m e r experience journey More broadly, businesses have been getting better at delivering on customer experience, and it is no easy task with new channels emerging all the time and many internal stakeholders that need to work together. There is further to go. Many businesses have achieved consistent experiences – over time and across channels. The next stage in the journey is to ensure that the brand permeates throughout the journey and the best brands are achieving that. Make it memorable as well and you have a recipe for success.
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3 Does COVID-19 mark the end of the Experience Economy?
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Does COVID-19 mark the end of the Experience Economy?
Based on the changes we are seeing in customer behaviour and perceptions, brands may be entering a new era when it comes to experience. More than 20 years ago, B. Joseph Pine and James Gilmore described the transition from services to experiences as entering a new era of economic history: The Experience Economy. They stated, “Focusing on goods and services alone leads down the road of economic austerity. Experiences are a distinct form of economic output, and as such hold the key to promoting economic prosperity”. Their foundational idea has since become a reality for the majority of brands. With goods and services being perceived as more and more interchangeable, companies are now competing on providing experiences that make them stand out from the crowd.
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Are we entering the Tr a n s f o r m a t i o n Economy? When revisiting their work a couple of years ago, Pine and Gilmore also addressed the question of what comes next. They observed the rising importance of experiences becoming transformational – going beyond the actual moment and aiming at transforming a person. There is certainly a lot of evidence to support this. More and more offerings help customers to change if not all, but certainly some, aspects of their lives. Sales of selfhelp books have risen hugely, there is an abundance of online learning courses, fitness courses, and suggestions on social media on what to do differently with your life. Even the popularity of Marie Kondo – whose website homepage claims “tidy your space, transform your life” – signals that customer needs go beyond experiences now.
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Does COVID-19 mark the end of the Experience Economy? COVID-19 might accelerate this transformational movement. Not only because the shift from physical to digital touchpoints means a different type of experience, but also because our daily routines are so profoundly disrupted. We are staying at home. With few activities available (outdoor, restaurants, meeting friends), we are likely to be more focused on ourselves. Indeed, over 30% of consumers globally state that they are focusing on personal development to better manage their mental health during the crisis (COVID-19 Barometer). We have more time to reflect. We are confronted with terrible tragedies all around the world and in some cases near to us, which is leading many of us to reassess what’s really important. Care for our neighbours and communities is taking on a new sense of importance, for example in the UK where 750,000 people signed up to be COVID-19 volunteers in the space of a couple of days.
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Sufficient evidence to call out a new economic era? It is likely that some of the changes we observe right now are here to stay. Brands that have built digital purchase journeys as a response to the crisis won’t withdraw that offering once the pandemic subsides. We are likely to have a stronger sense of the importance of health and safety. Working from home might permanently increase, and our travel and mobility habits might change. But does this mean that experiences are losing relevance, and customer needs are shifting to transformation? At Kantar we reviewed recent data from real-time customer listening programmes, all feedback collected during the last couple of weeks. A couple of common themes emerged strongly in open text answers: how well retailers and service providers handle health and safety regulations, and how customers perceive the cleanliness of stores, workshops and other sites.
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Does COVID-19 mark the end of the Experience Economy? But above all, customers showed an overwhelming sense of gratitude for employees on how well they handle the situation, how hard they work to keep shelves re-stocked, and how quickly brands have adapted to the required changes with creative and innovative ideas. For many companies, we observed a surge of 5 to 10 points in KPIs within a week. The secret to this was simply to provide a great experience in difficult times: quickly adapt to new customer journeys, empower employees to react to the new situation, and demonstrate genuine care and customer empathy. Experiences still matter hugely, and employees are still key in delivering to a brand’s promise.
The new Experience Economy While the end of the era of experience might not be here yet, it is likely that we are entering a different type of Experience Economy. Certain aspects of experiences are becoming more important than others, reinforced through the pandemic.
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The first is Memorability. The heightened emotions during the current crisis make this a period where lasting memories are going to be made. People will recall brands that were authentic in their care and humanity, and found ways to adapt their experiences to customers’ changing needs. Transformation is indeed another. This will go beyond the current focus on personalisation, to brands having a genuine link to people’s lives, aspirations and dreams –many of which will be different after COVID-19. People will expect brands to adapt, understand what is now important, and provide experiences that have a lasting and positive impact on their lives. And last, but not least, Sustainability. The pandemic has reminded the whole world that there is more to life than material possessions, and has demonstrated what is possible when we act collectively. Anjali Puri, a Global Director in Qualitative Offer and Expertise at Kantar, has published an excellent piece on the ways that the COVID-19 response is going to redefine what it means for a brand to be a leader, particularly when it comes to sustainability. When the current crisis has passed, people will not be willing to revert to the status quo when it comes to global challenges.
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Does COVID-19 mark the end of the Experience Economy?
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Kantar has the global knowledge and tools to help companies find their place in this new world. Get in touch to discuss how we can help. Reference: Pine, B.J. and J. Gilmore (2013), The experience economy: past, present and future. In: Sundbo, J. & F. Sorensen: Handbook on the experience economy.
This article was originally featured on https://www.kantar.com/Inspiration/Coronav irus/Does-COVID-19-mark-the-end-of-theExperience-Economy
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Dr. Susanne O'Gorman Global Head of Customer Experience, Insights Division
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4 Building meaningful brands through customer experience
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Victoria Fedotova Brand Strategy & Guidance Lead Insights Division, Kantar New Zealand victoria.fedotova@kantar.com
To succeed, brands need to build strong equity by ensuring they come to mind first and are meaningfully differentiated from the competition.
All aspects of brand equity are strongly influenced by how existing customers perceive the brand. Thus, customer experience is the foundation upon which strong longterm brand growth is built. Our research shows that when customer experience exceeds expectations, brands grow faster. Successful brands grow by placing their customers at the centre of their organisation. These brands seek to understand what their customers value, what motivates them, what memories they treasure, what experiences add meaning to their life, what matters to them the most.
By deeply understanding customers’ values, brands can identify the best opportunities to deliver meaningful experiences that add significant value to customers’ lives.
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Building meaningful brands through customer experience
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Research has proven that our brain, rather than processing every bit of information as new, works by retrieving memories of previous experiences. Memories are made through emotion. If something is causing a deep feeling – either positive or negative – our brain keeps this experience for future reference. In other words, we don’t choose between experiences, but between memories of experiences. When brands create experiences that carry emotional significance to the consumer, they have a greater opportunity to build positive, longlasting brand perceptions. Experiences create a neural association with the brand. Brand building around an entire experience, therefore, creates stronger emotional connections with the brand. It is more rewarding to find meaningful differentiation from an experience than it is from a product or service. Brands create signature experiences when they succeed in linking an experience laced with positive emotions to the brand. Such experiences play a significant role in brand building, creating differentiation, driving loyalty and preference, and ultimately brand value.
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5 Focus first on the customer experience
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J. Walker Smith Chief Knowledge Officer Kantar Consulting
Customer experience is what makes or breaks brands. It is no longer enough to simply provide a good product or ser vice; consumers want a great experience with it, and the better the experience the more value commanded by a brand. As the research and consulting expertise of Kantar bears out, in many ways the importance of experience now dwarfs everything else.
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In the digital era of the last decade, ushered in by smartphones, the consumer journey has become exponentially more complex. It will become even more complicated as AR, VR and AI gain traction with brands, and become familiar to people. Technology may have simplified and improved much of our lives, but it also means people are bombarded with more brand and advertising messages than ever before. Which means brands compete not only for share of wallet, but also for share of headspace. Yet we know that many brands are failing to deliver consistent, relevant experiences in this complex new world.
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Focus first on the customer experience
An aspirational shift from accumulation to access The value of experiences in people’s lives has never been greater. From the ‘conspicuous consumption’ of previous decades, there is now a greater emphasis on lifestyle and experiences – and this is where growth and value are to be found. A twelve-year longitudinal analysis of BrandZ data by Kantar found that brands high in Experience Capital outperformed the market by up to 188 percent. In contrast, brands with low Experience Capital declined in value. People are spending more on experiences, partly due to the commoditisation of products and services. However it is mostly because of an aspirational shift from accumulation to access, or from owning things to hiring things as needed. What people want from brands (and therefore what they are spending more of their money on) is the experience, so marketers must find ways to turn goods into experiences, and to find new sources of value to meet growing experiential competition.
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Customer experience is more than digital One of the paradoxes of digital is that more digital has meant more demand for all things human and analog. Sales of LPs and printed books are up. Urban greenways are the new byways. Voice technologies are the coming analog interface of digital. There are even digital apps and tools to help people cut back on digital. Digital is not slowing down, but analog and human scale are picking up as people demand experiences that are deeper, more engaging and more meaningful. As never before, the customer experience is the centre of everything, whether it’s shopping, lifestyles or digital. The imperative for brands is as simple and as difficult as one clarifying idea: put the customer first by focusing first on the customer experience.
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6 Humanising brands
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Cristina Colombo Chief Officer and Expertise Officer Italy Insights Division, Kantar cristina.colombo@kantar.com
It all starts with a purpose. The blurring of physical and digital boundaries, the ever-present nature of communication, the rapid pace of technological change, the massive volumes of content being produced, and the misguided supremacy of data over decorum guiding interaction, make digital marketing today frustrating for consumers and marketers.
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More importantly, it’s inefficient. Investment is wasted on ads that are a nuisance, poorly articulated content that is viewed suspiciously, and misguided customer service interactions that are unfulfilling. Business leaders face unprecedented complexity, constant disruption and profound questions: customers and employees demand more transparency and value from the brands and companies they do business with. Brands need to re-examine their relationships with people — what the brand stands for, how they present themselves, what they say, how they say it, and how they behave. But there’s hope. Brands need to learn to be more … human, because brands with high emotional intelligence win.
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Humanising brands
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When brands behave more like humans, in a more nuanced way, with appropriate intent, demonstration of value, relevance, good timing and emotion, they develop stronger bonds with consumers. To better engage with consumers, businesses must start with brand purpose.
Unlike the corporate social responsibility programs of yesteryear, brand purpose today serves to empower organisations through the concerted focus of efforts around a singular idea that connects core capabilities to a wider social impact.
In the words of Keith Weed (former Unilever Chief Marketing and Communications Officer), “Brand purpose is a deep and intrinsic connection to the brand and what it stands for. Purpose must sit at the core of the brand, driving everything it does. It cannot be an add-on or something that comes and goes according to whim or budget. It’s this authenticity that consumers recognise and reward, because today’s consumers, especially Millennials, can smell bullshit a mile away ”.¹
Think of Tesla’s focus on accelerating the world’s transition to sustainable transport, Dulux’s desire to add colour to people’s lives. Less about “do-good” moralism, brand purpose
Purposeful positioning is all about how your brand makes a positive impact on people’s lives and the world they live in. It must go beyond what you sell, transcending the product category but having a natural connection to it.
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today acts as a corporate compass with practical implications. When brands have a “why” to address, it focuses resources, guides decision-making, eliminates inefficiencies and inspires innovation. When done right, it adds to the bottom line.
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Humanising brands The value of brand purpose to businesses today is no longer questionable; it is quantifiable. Research and experience show that purpose is required to sustain an enduring competitive edge in consumer preference, talent acquisition and business growth. In the Marketing 2020 work completed by Kantar Consulting, and first published in the Harvard Business Review in 2014, interviews with 600 CMOs and 15,000 consumers worldwide identified “purposeful positioning” as a critical driver of marketing success, behind only “big insights” and “total experience”. The BrandZ™ Top 100 Most Valuable Global Brands ranking shows that of the 87 brands evaluated in both 2008 and 2018, brands in the top third for brand purpose grew 212% in value, compared to 77% growth for those in the lowest-scoring third.
And according to Kantar Purpose 2020¹ report…
Top brands better deliver on all three aspects of brand purpose functional, emotional and societal. Looking to the future, almost twothirds of Millennials and Centennials, who are fast becoming the economic engine, express a preference for “brands that have a point of view and stand for something”. Locally, 72% of New Zealand youth aged 13-17 say it is important that their future employer is socially and environmentally responsible.² Getting purpose right can be a struggle for marketers. However, when the bar for marketing success is set ever higher by our “search, skip and share” culture, purpose matters. Purpose provides the basis for a compelling and consistent platform on which to build an integrated set of content likely to engage and motivate an otherwise-uninterested audience. This article was originally featured in our Brandz top 30 most valuable Italian brands 2019 report.
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¹ Purpose 2020 report, visit: https://consulting.kantar.com/purpose2020/ ² Colmar Brunton Better Futures 2020
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7 Everyone can make a difference: the ‘secret’ to exceptional customer e x p e r i e n c e s ? Yo u r people
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Susanne O’Gorman Global Head of Customer Experience, Insights Division, Kantar, Germany
For your employees to deliver exceptional customer experiences, they need more than just the right skills: they need to believe in what they are doing. Which is why fostering the right culture and attitude is key.
Niels Berndsen Regional Director Customer Experience, Insights Division, Kantar, Netherlands
It’s no surprise that customercentricity is a key driver for brand preference, leading to loyal customers and financial success. A customer-centric culture doesn’t just come from front-line employees – the decisions everyone makes can impact on the experience. Empowering employees means enabling them to positively influence customer journeys, make their own decisions and learn from mistakes. It encourages them to invest the extra effort it takes to make each interaction the best it can be. The critical factor here is consistency – if employee effort is piecemeal, customers may assume that “despite the system, they have some nice people”. However, when consistently great service is delivered across all organisational silos in the moments that matter to customers, the positive experiences become associated with your brand, rather than with any individual.
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Everyone can make a difference: the ‘secret ’ to exceptional customer experiences? Your people Of course, it isn’t easy to create a customer-centric culture, and an environment where employees are empowered. It takes top-down commitment, discipline, and a touch of inspiration.
Find the people who embody your brand USAA (our top ranked bank in the U.S.) understands that customercentricity starts with recruitment. They serve military customers, and almost exclusively hire ex-military employees, or their family members. This shared background creates a high level of understanding, and USAA consistently tops rankings for both customer service, and is one of the best places to work in the U.S.
Don’t just tell people you value them – prove it In the UK, John Lewis department store employees aren’t employees at all – they’re partners, and are coowners of the business, which means they receive a percentage pay-out of profits each year. To publicly emphasise the value of their staff, the company rebranded
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to become ‘John Lewis & Partners’ in 2018, with the message “When you’re part of it, you put your heart into it”.
Encourage honest communication – and act on it Encourage honest communication – and act on it UK online grocery retailer Ocado outperforms on ‘empowered employees’ in our CX+ ranking. Their initiatives include a mobilefirst communication strategy with a social platform that enables colleagues to share best practice and promotes self-development. They’ve also switched from an annual employee survey to an ongoing pulse programme and can now respond to employee issues and ideas swiftly, in a way that matches their agile culture.
Let the customer tell you what they want A customer-centric culture requires employees to have access to customer information in real-time. It gives them the ability to act upon it, through closing the loop with individual customers as well as using the learnings to drive process improvements. 27
Everyone can make a difference: the ‘secret ’ to exceptional customer experiences? Your people
Heav y-handed corporate communications are becoming a thing of the past. Instead, many of the best ser vice companies foster a sense of community among their employees, with the shared vision of helping the customer at its heart. They may include an element of fun, or even gamification. Either way, it ’s worth noting that younger generations tend to be more motivated by personal growth than by institutional goals.
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Fundamentally, cultural norms and behaviours cascade downwards through an organisation: employees need to see consistent exemplary behaviour by their leaders, and to be part of the customer experience conversation. Positive feedback should be celebrated, and negative feedback discussed objectively, so that ever yone can contribute to making improvements. After all, given the opportunity, most employees will relish being agents for positive change.
This article was originally featured in our CX+ Netherlands Retail Banking Report.
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Check out the global CX+ website for more thought leadership and in-depth industry studies.
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Insights Applied David Thomas Managing Director Insights Division Kantar David.Thomas@kantar.com 46 Sale Street, Auckland New Zealand
April 2020
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