Is ‘same-same’ customer experience an own goal for businesses?

Customer experience (CX) spending by businesses is expected to reach $641bn this year, a far cry from its humble origins in the 1960s, when a handful of engineers formalised the concept of design-thinking. While this set the wheels in motion for the emergence of customer-centricity in the early 2000s, a few years later the mobile phone revolution began. Just like the opening of Pandora’s Box, this changed the game for both businesses and their customers forever, as suddenly — especially when armed with Web 2.0 tools such as social media, and later, apps like WhatsApp — the latter gained enormous power, and communication changed direction for good, giving consumers the first and the last word.

Businesses had to adapt, fast — or be left behind

CX increasingly became the next competitive battlefield for business, but for it to really work it needs to be taken seriously by all operations within a business, firmly starting with the CEO. While CX is a nonnegotiable for CMOs — they are, after all, the consumer champion within their organisations — most CEOs put CX (aka the customer) in the middle of the pack of their priorities, according to the latest edition of the Marcum-Hofstra University CEO Survey. Brand fail.

Customers ARE the business. Without their willingness to part ways with their rands, brands are mere empty shells peddling products to whomever may happen to buy them. In fact, CX is why Jeff Bezos of Amazon fame (worth $2.011-trillion) has famously kept an empty chair at his boardroom table, representing the customer. He also highlights customer-metrics when reporting financial results, proudly touting the financial impact of his organisation’s “customer obsession”.

Why, then, have we reached a state of lethargy in 2024 towards CX, in-house and out, in which businesses tend towards the “same-same”, a homogenised experience that has more to do with addressing pain points than with truly engaging a customer and nurturing that relationship while enhancing their purchasing journey and reducing any friction?

This is among the key findings of the annual “South African Customer Experience Report”, which I co-author with Rogerwilco’s Charlie Stewart and ovatoyou’s founding director and researcher, Amanda Reekie. Now in its sixth consecutive year, it polled 2000 South African online consumers about their personal CX experiences, alongside 75 local businesses, to better understand their perspectives.

Beyond this apparent uniformity of CX of too few local brands offering memorable moments of delight that create an emotional, instead of a functional, experience with their customers, businesses also appear to be out of touch with regard to their level of CX prowess compared with their customers’ expectations.

Consider that among businesses their key reasons for thinking why their customers buy from them is that they like their brand (56%), believe they can trust them (71%) and understand their personal needs (40%). The opposite is in fact true: among consumers, reliability (71%), having the best prices (63%) and offering a valuable delivery service (60%) are the top three reasons for the till to ring, again and again.

Are businesses drinking too much of their own Kool Aid?

One can argue, of course, that we are living in extremely tough economic times in which it’s obvious why price and discounts are a compelling drawcard for consumers, but there is more to it than just the current operating environment. Individual brands’ X-factors have largely disappeared — a handful of names remain the poster children of CX (Yuppiechef, Sixty60, Takealot) — while consumers’ expectations of CX have fallen too. Interestingly, when asked if their customers would be willing to pay more for products or services if they delivered an improved customer experience, 69% of businesses said yes — and indications are that consumers concur.

Don’t do as I do, do as I say

Underscoring this is research by PWC  that suggests that 43% of all consumers would pay more for greater convenience and 42% would pay more for a friendly, welcoming experience. In line with this, among most of the categories we surveyed, at least 50% of South African consumers were willing to pay more for a better experience. It seems, then, that even in such a cash-strapped commercial climate, consumers still want that little bit extra. They want to get the feeling that they matter, that their purchases are of a high quality, that what they buy will do what it says it does on the box, and that their orders are received in good nick and on time.

The enemy within

The argument is clear: customers, despite being financially under pressure, want brands to go the extra (last) mile and make more of an effort. And they’re willing to pay for it.

“Same-same” experiences have become the norm. Our research shows that many CX teams in SA have stalled out, with 60% facing a lack of skills or resources and 59% being constrained by their budget. And, while AI presents huge opportunities, the application of this technology is still in its infancy.

Challenges notwithstanding, opportunity exists for those brands that are willing to invest in CX. Unfortunately, many CEOs are reluctant to do so. A study by author Joe McKendrick reveals that only 50% of CEOs surveyed said they are willing to invest in digital CX. This unwillingness to commit proper funding for CX can and does result in the tendency to hire less experienced CX professionals and to provide lower budgets for CX initiatives, because the degree of return on investment is too vague (it can be tricky to measure a moment of delight), causing a catch-22 situation among the C-Suite and CX consultants.

It’s an ongoing debate, and one that is not going to untangle itself any time soon. Those in the CX space need to push harder for more budget, and should upskill those coming into the industry, while showcasing why their work matters to the C-Suite and most importantly, that it generates a return.

For now, the best advice I can give brands in these tough times is to follow Bezos and put the customer at the centre of their strategy and to establish methodologies for measuring CX impact. Reliability and price points are nonnegotiables in this market, but so are those now all too rare golden moments of delight and excellence.

Julia Ahlfeldt is a CX professional and the producer and presenter of the podcast Decoding the Customer, which explores business trends and innovation in customer experience. The “South African Customer Experience Report”, now in its sixth iteration, uncovers consumers’, customers’ and brands’ views of the role CX plays in the omnichannel purchasing journey. Since inception the report has shown the growth of online usage and posited, through extrapolations and calculations, the value that this has on the total retail pie.

The big take-out: Put the customer at the centre of your CX strategy and establish methodologies for measuring CX impact.