Management / Customer experience: What big brands can learn from start-ups

Customer experience: What big brands can learn from start-ups

In recent years, consumer demand has shifted when it comes to customer experience, with more emphasis being placed on employee behaviour and how tailored the experience is to the customer, rather than price.

This has led to large companies transforming their customer services, using methods such as data collection to create more personal customer service with the aim of securing repeat business, brand loyalty, and ultimately commercial return.

This arguably draws from the approach of start-ups, which are able to develop more personal relationships with clients. These emerging businesses are creating a new form of competition through their more personal, tailored approach to consumer needs.

Strong customer service can be utilised as a key differentiator from competitors, especially in markets where services and products are homogenous.

Mike Petrook, director of policy at the Institute of Customer Service, told Business Reporter: “We’re finding increasingly that consumers are more concerned with an employee’s attitude, their confidence and their behaviour than they are concerned with their price.

“The organisations that are focusing on that; developing their employees’ skills and providing the right level of training are the ones that are seeing an increase in customer satisfaction.”

A large company currently succeeding in providing excellent customer experience is Amazon, which saw a turnover of $107 billion (£80.5 billion) in 2015.

The company was ranked in first place for UK customer satisfaction in a survey conducted by the Institute of Customer service published in January.

Amazon was awarded an 86.6 by the 10,000 customers that were polled nationwide, giving it the top spot out of all UK companies in the UK Customer Satisfaction Index, the institute’s bimonthly report.

Amazon’s managing director Christopher North said: “We are grateful to customers for ranking Amazon #1 in customer satisfaction in the UK.

“We are constantly working to improve the overall experience we provide for our customers and set ever higher standards.”

However, a positive customer experience does not just increase brand loyalty.

Customers are likely to value products sold by a company that provides excellent customer service more highly, with 74 per cent of customers saying they would be prepared to pay more for a product if it came with better service, according to the Retail Eyes Report.

Furthermore, more than 50 per cent of UK customers will spend more on products and services if the service experience was guaranteed to be first class, the American Express Global Customer Service Barometer has found.

The establishment of a trusting relationship between a consumer and the companies they are dealing with has been identified as one of the key elements to ensure a good customer experience.

Furthermore, the institute is reporting an increase in analysis of personal data. The results allow companies to tailor their services to customer needs more effectively.

Petrook said: “The key to making a more personalised, relevant and meaningful service is through getting greater insight about customer’s behaviour.

“Although that sounds easy to say and do, it isn’t. The issue is organisations, no matter what their size, have to build up a level of trust.

“Customers will not be willing to give away personal details to companies they do not trust to keep them safe.”

Breaches in security are highly damaging to both customer experience and companies.

Instances such as the October 2015 TalkTalk cyber attack have caused 28 per cent of those polled to say they would avoid companies that had experienced a breach, according to the institute.

This attack saw company profits fall by more than half compared to the previous year, from £32 million in 2015 to £14 million as of May 2016.

Nevertheless, the use of personal data is important to enhancing customer experience.

Therefore, those companies that are able to build up the trust to access these details are likely to have the means to offer a competitive, tailored customer experience.

With a smaller workforce and arguably closer relationships with clients, this is perhaps where start-ups have the edge.

According to the institute, mass consumerisation, which larger organisations have tended to favour, is a thing of the past.

Mike said: “Customers want a personalised service if they are going to keep coming back. If loyalty, recommendation and repeat purchase is going to be the way forward then getting to know the customer is important.”

In keeping with this analysis, customer satisfaction is on the rise, having previously experienced significant and long-term falls.

In the last year, customer satisfaction has risen from 76 to 77 out of 100 on The UK Customer Satisfaction Index.

This index has reported almost continuous increases in satisfaction year upon year, the score having increased from 72 in January 2009, for example.

It seems therefore that in recent years big brands are appreciating more and more the value of positive customer experience.

Through data collection methods and more extensive employee training programmes, large companies are tailoring their services more personally to customers, closing the gap on the high-quality customer service offered by many start-ups.