What will happen in Loyalty in 2013?
Big Data, Rewards versus Experiential Loyalty, Showrooming, Multi-channel? What will be making headlines and commanding the attention of Loyalty professionals in 2013.
Loyalty Magazine asked industry experts to predict what the biggest trends will be over the next year.
Paul White – CEO of mplsystems
• Widespread deployment of mobile apps – while customers increasingly appreciate the immediacy and control that mobile apps can deliver, they also want the certainty that comes from knowing their issues are being resolved. The most successful mobile apps will be those that integrate 100 percent with existing contact centre queues and processes
• Increased focus on self-service channels – traditional voice channels are still by far the most dominant UK contact channel, but there’s a growing preference for more effective self-service. Customers don’t want to be kept waiting, so self-service channels that can bypass frustrating IVR and call centre queues will become increasingly popular
• Web chat & Instant Messaging starts delivering – web chat will see increased take-up during 2013, particularly with enhancements such as multi-way chat and growing customer participation in self service forums via “communities of interest”
• Cloud contact centres go mainstream – there’s a growing maturity about the Contact Centre as a Service market, with Gartner recently identifying cloud-based contact centre platforms as an alternative to traditional on premises-based infrastructure deployments. Initiatives such as the Government’s G-Cloud programme will also drive public sector adoption. Significantly, Gartner suggested that it was application specialists that offer the broadest set of capabilities, particularly for deployment scenarios such as infrastructure refresh, or the addition of new channels to the customer communications mix
• Social Media gets rescued from Marketing – despite massive growth in social media networks such as Facebook and Twitter, it’s probably still a bit too early to hope that social media will be rescued from the Marketing Department and transferred to the customer service contact centre where it rightfully belongs.
• Optimising your existing technology investments – next year will see organisations actively looking to unlock further value from their existing technology infrastructure rather than opting for a more aggressive refresh approach. Deploying universal desktop solutions that integrate existing systems and applications with new functionality such as mobile apps, web chat and social integration can deliver significant added value
• Recognising and responding to customer preferences – amongst all the mobile apps, social and web chat initiatives, it’s important not to forget that a significant proportion of the customer demographic are unlikely to want to engage in this part of the customer service journey. Acknowledging the value of these customers, and ensuring that you still have agents available to answer and address their requirements, will still be of real importance during 2013 and beyond
• Getting the customer contact balance right – 2013 will see smarter organisations leveraging their mix of customer service technologies to achieve the right balance between simply servicing a customer account, and actively engaging to handle more complex issues. We expect to see more routine interactions such as orders, balance inquiries or FAQ matters handled by customer service apps, web chat and self-service, while issues that need resolution such as complaints, returns or fraud concerns will be dealt with by live agent interactions. Organisations will need to make sure their service operations are ready and able to address this distinction
Steve Rothwell, CEO of Eagle Eye
1. Mobile will become the lynchpin of loyalty: Many brands and service providers, including the likes of Apple, Google, and PayPal, are making their first foray into the mobile wallet. As a result, UK users are becoming increasingly familiar with using mobile as part of their instore retail experience, for both payment and loyalty. Retailers are adapting their point of sale (POS) in order to accept these digitally savvy customers, and gather a wealth of data on actual behaviour in order to personalise offers and close the digital loop. With customers responding positively to the immediacy and convenience mobile devices bring, this type of retailer offer is going to grow rapidly in 2013.
2. POS will become truly mobile: New entrants into the payment market, such as Square, iZettle and mPowa, are giving retailers a whole new way to accept payment transactions via mobile devices such as tablets and smartphones. This is just as applicable to the large multinational retailers as it is to the local UK tradesmen. There will be less scrambling around for cash to pay the window cleaner in 2013, as mobile becomes an even more integral part of a transactional process for the digital and physical world. The launch of 4G will only accelerate this.
3. The retailer mindset will shift – enough of the omnichannel already: Phrases such as multichannel and omnichannel have become a central part of retailer jargon. In actual fact, there are just two channels, digital and physical. So the likes of scommerce, mcommerce, ecommerce, and tcommerce will be replaced with one universal term – Dcommerce. For retailers, Dcommerce will be essential for embracing customer engagement on any platform, across the digital and physical world to drive sales. In fact, instore Dcommerce will usher in a new era for payment, promotional marketing and loyalty as much as it will do for sales.
4. Showrooming will make its mark: Research in the US, by EKN, predicts that 80% of retailers will be affected by showrooming during the festive period this year alone. Furthermore, research from IBM also claims that mobile is a bigger purchase influencer than ever before. As the lines between the digital and physical worlds continue to blur it is true that retailers will find themselves competing not only with their neighbour on the high street, but with the growing number of online retailers too. However, this needn’t be cause to panic and shut up shop. There’s an opportunity in the year to come for retailers to step up and provide the knowledge and service instore that will translate into sales. From the basics of customer service, to the latest tech including interactive barcodes, mobile vouchers and coupons there’s an array of tools available to bolster retailers’ arsenal in 2013.
Shaun Collins, founder of CCS Insight
“We predict that by the end of 2014 Google will start to share some of its advertising revenue with companies that make smartphones running Google’s Android operating system. This will make Android phones cheaper, helping Google to realise its stated goal of putting ‘an Android phone in every pocket’.
“As smartphones start to all look the same, it’s what you do with them that counts. Although the look and feel of a mobile phone will still be a factor when people are buying a new device, its importance will be dramatically reduced over the next three years. The experience and the apps on a phone will increasingly be the things consumers care about most.
“Looking further ahead, we see a world where customers can buy the same phone with different operating systems, whether it’s Android, Windows Phone or something else. By 2015 we expect you’ll be able to select a design you like and leave the shop with the operating system of your choice.”
Mike Fromant, MD of Contis Group
“Brand tie-ups and personalised deals will heighten consumer demand and drive greater competition amongst e-tailers, more payment cards with bolt on loyalty schemes will launch
For decades, brands have been enticing customers back with schemes designed to increase their loyalty. But the recent economic hardships, together with the rise in digital voucher schemes and independent discount and cash back sites, have sharpened the consumer mindset to the business of bagging a bargain. According to uSwitch, some 90% of UK adults now use recession-busting strategies when they do their weekly shopping.
In 2013, prosperous merchants will no longer rely on smart product selection and across-the-board pricing to attract custom. Today’s consumers want bigger discounts and greater rewards, and thanks to increasing sophistication in the mobile and digital channels, they can cast the net further and wider than ever before in their search for the best deals.
Here are Contis Group’s top five market development predictions for loyalty and reward schemes in 2013:
1. More high street brand tie ups: Today’s consumers are prepared to divulge greater amounts of personal data to merchants in exchange for discounts and cash back and brands have been quick to react. With the right analysis, merchants can transform this data into valuable commercial intelligence which can help personalise their customer marketing, be sold on to other merchants, or used as a bargaining chip to negotiate promotional tie ups between brands targeting the same demographic. These opportunities are spurring major brands in loyalty to open their schemes to other merchants who share their interests. In 2013 we will see a clear increase in the number of major schemes that will enable points to be earned and rewards redeemed at a variety of different online and high street outlets.
2. Personalised offers and rewards will gain greater traction: As merchants and loyalty scheme providers learn more about our shopping habits, the tailored discounts and rewards on offer in 2013 will become better targeted to our tastes and thus more alluring. As consumers, it seems we are ready to play ball. With 32.3% of consumers admitting that the recession has made their participation in retail rewards programs more important , consumers are welcoming relevant opportunities to save with open arms.
3. More merchant branded payment cards with integrated reward schemes will launch: We will see an increase in the number of merchant branded payment cards launching with their own loyalty schemes bolted on. In 2013 big merchants will continue to explore new revenues generated from their customer data. A merchant branded credit card offering cash back and/or rewards on purchases made with the card is a shrewd product for brands wanting to track spending habits while encouraging regular and repeated spend in their stores. Next year, more retailers will move to get a piece of this action.
4. More cash back and e-voucher schemes will be deployed in order to direct web traffic: With one in every ten purchases now being made online, the business of attracting custom to an e-tailer’s site has reinvented the way many e-voucher and e-discount schemes are being used. In 2012, many major brands have begun to work deals with cash back and money saving sites like Quidco and MoneySavingExpert, who can direct their members to a merchant that is making an attractive offer. As consumer use of these sites increases in 2013, they will become more attractive to merchants who, as a result, will raise their engagement.
5) Consumers will use more pre-paid cards with multi-brand loyalty schemes to earn cash back and rewards
With the market for prepaid payment cards growing at 22% every year, there is no doubt that 2013 will see an increase in the number of consumers using this payment format to earn rewards and cash back. Preloadable cards like credEcardplus offer incentive reward and loyalty schemes linked to multiple high street merchants, enabling customers to gain valuable cash back on the money they spend. As the numbers of individuals excluded from the traditional banking system continues to increase in 2013, more brands will enter this area of loyalty in a bid to attract custom.
Richard McCrossan, strategic business director at Genesys
1. Reduce the churn – focus on your brand promise AND execution Companies across the globe spend billions of dollars capturing new customers every year with exciting promises which may not be fulfilled. By focusing on your brand promise and executing that promise to customers, companies can reduce churn, reduce customer effort and improve customer loyalty in 2013 and beyond.
2. Deliver Omnichannel
’Omnichannel’ is fast replacing multichannel as a requirement for customer service. In 2013, we’ll see an increased shift to an omnichannel approach, with companies tracking customers across all channels and retaining the customer interaction history at the same time. With this increased knowledge, companies will certainly provide superior, customer-centric service, regardless of the channel used. Again we reduce customer effort and keep those customers – helping us keep NY resolution Number One!
3. Mobile – the centre of our digital existence The one device the consumer has with them all the time – even by their bedside – is their mobile phone. It’s becoming the centre of our digital life. So it’s important for companies to remember that all of these cross-channel elements happen on just one device: buy, query, research, socialise, chat, and even talk! If companies embrace this device as the centre of consumers’ digital existence, there’s huge potential to add value to their customer service.
4. Make Mobile work – when is a smartphone not so smart? When it’s a phone! Yes, this is a phrase we’ve heard a million times before, and yes, mobile has already played a huge part during 2012, but with the massive rise in the use of mobile, companies will have to integrate mobile apps into existing marketing strategies and into the overall customer experience.
But companies must beware that the low effort which is provided through a mobile app is completely wasted if this doesn’t form part of a seamless strategy, and if the customer has to move to another channel in order to resolve an issue. Back to Resolution Number Two – it’s a key part of an omnichannel strategy.
5. Will video finally take off?
Video has always been a bit of an old (Christmas) chestnut. Despite the advent of applications such as Apple’s FaceTime, there hasn’t been a huge take up in mobile video customer service. Maybe as investment in mobile customer service apps continues to increase, video will take off as it’s further enabled in mobile in 2013.
But it’s in web customer service that we’ve seen video being used more and more to great effect, and we’re receiving more requests for video as it begins to form a greater part of our customers’ overall strategy. So consider video as part of your web solution.
6. Social media – the fear is gone In 2012, our research with the Economist Intelligence Unit showed that fear of customer criticism across social media was a huge concern for senior executives – 40 per cent of respondents were primarily concerned with the potential effect this criticism could have on their company.
No more. In 2013, organisations will embrace social media as part of their customer service strategy – engaging with customers, not simply monitoring social media out of fear. In 2013, organisations will start to reply to customers in-media, so if a customer Tweets a query, they will Tweet them back – not provide them with a number to call.
7. Unlock the power of your data The commoditisation of inexpensive data storage has made it easy for enterprises to retain and maintain massive amounts of data from various internal departments such as customer service, marketing, and others. Over 2012, the volume of digital content grew to 2.7 zettabytes, up 48% from the previous year. As a result, new computing frameworks – called big data and aligned with Web 3.0 and cloud computing – are emerging to extract high-value insights from this mountain of data to provide business context and other meaningful outputs.
In 2013, big data will continue as a strategic initiative as companies strive to unlock business value from multiple data sources. Specifically, companies will begin to change from an inwardly focused view to a customer or employee engagement approach that leverages social networks and mobile.
8. Make Web-chat work – don’t just talk among yourselves Web chat will form a huge part of any digital customer service strategy in 2013. Interestingly, we’re finding that it’s as much used by older generations as younger ones, but it’s often siloed within an organisation. Contact centres sometimes use specialist organisations for this communication channel which means they become siloed services rather than integrated into customer service, and this actually damages the customer experience. By not opting for a single holistic platform to manage all channels together, agents lose that single view of the customer – back to omnichannel and resolution Number Two.
9. Reverse Workforce Management – helping the customer to help you We’ve talked before about Workforce Management and the importance of planning agent workloads and optimising resources based on staffing. Next year, we expect this to go one step further in terms of customer forecasting, not just employee forecasting.
Customer service agents are able to engage customers on their smartphone and offer them a choice of options for contacting the customer service department, based on availability. So, if the voice side of the contact centre is busy, the customer is given the option to make use of a web chat agent, or even elect for a call back from their preferred agent!
This intelligence gives customers a choice, reduces customer frustration at busy times in the contact centre, and importantly increases efficiency within the contact centre.
So what lies ahead for 2013? Despite a lacklustre economy in 2012, customer service has been seen to dominate business initiatives and will continue to do so in 2013. Technologies such as social media and mobile have pushed innovation, and we’ve seen that companies have begun to realise that customer service is an enterprise-wide issue, not just something limited to the four walls of the contact centre. As companies plan for 2013, these 9 new year resolutions should provide some insight into the key business trends as we look to continually improve customer service and more importantly, customer satisfaction.
Aphrodite Brinsmead, senior analyst at Ovum
“Social media response teams will move into the contact center, driving the need for better social media management tools, and Ovum forecasts high growth (21% CAGR) for social media monitoring within the customer service function in the next five years. Mobile self-service will become more intelligent, customers will have the ability to request a callback from within a mobile application, and it will become easier to transfer a query from a self-service application to voice, chat, or email.
Traditionally siloed applications such as performance management, business intelligence, and customer feedback will be merged into voice-of-the-customer (VOC) analytics suites that help enterprises view and compare data across different stages of the customer lifecycle. Many enterprises will have a mixture of cloud- and premise-based customer service solutions, although, for most companies, core automated call distribution (ACD) functionality is likely to remain on-premise for the foreseeable future because of existing investments and mentality.
“Enterprises need to support today’s customers by providing timely and accurate responses via mobile, web, and voice channels. In order to succeed, they must address customer needs at every stage of the customer lifecycle, and support and integrate data internally. It makes sense for enterprises to create collaborative customer experience teams in order to align technology and data strategies across product, IT, marketing, and customer support.”
David Webber, MD of Intelligent Environments
“Customer loyalty will hinge on digital financial services: With many non-traditional entrants to the banking market emerging in 2012, the issue of customer loyalty to their bank has been a hot topic of discussion. Recent research from YouGov shows that, of Britons with a bank or building society current account, 81 per cent use online banking and 20 per cent use mobile banking at least once a month. These percentages look set to soar in 2013, catching up with traditional internet banking via a PC as ever more people access their bank accounts via smartphones, iPads and other digital devices.
“It is crucial to note that 2013 will not be about ‘internet banking’, or ‘mobile banking’, but digital banking. With the Vickers account switching legislation coming into force in September, it will be the year that bank and customer relationships are tested, and banks cannot afford not to adapt to consumers’ digital demands. An effective digital banking service makes over half (51% of Britons) loyal to their main bank or building society, yet nearly one third (29%) of current account holders online have experienced frustrations with their digital banking services in the last year – highlighting the major work that needs to be done to ensure basic service needs are met. A consolidated cross-channel customer view will be crucial, as customers will not tolerate siloed ‘money to people’ engagements.”
Udayan Goyal, founder of Anthemis Group
“2013 will see a host of digitally native banks start to take market share from traditional retail banking institutions. Unlike vertically-integrated ‘Old Finance’ institutions with high fixed costs, these ‘Digitally Native’ challenger banks are built from the ground combining the philosophies of bank 2.0 and social 2.0.” “Banks such as Fidor Bank, Movenbank and Simple are designed for the digital consumer: they focus on design led user experience, transparency and simplicity. Simple, for instance, offers sophisticated mobile applications giving customers access to a full range of banking services on their iPhones, enabling users to easily track their expenditure, disposable income and saving goals on a single screen.
“Fidor Bank provides banking services for the social generation – interest rates are dictated by its number of Facebook likes and a single interface shows all your holdings from precious metals to virtual currencies like World of Warcraft Gold. Movenbank is the first bank designed to be used on your mobile phone with sophisticated analytics which will allow customers to track their spending against their usual patterns as well allowing them to modify behaviour based on instant feedback.
“Digitally Native banks have extremely streamlined business models. They have very low fixed costs, are not lumbered with legacy IT systems, have few employees and usually no physical branches. Some firms like Movenbank and Simple do not even have risk capital: they use other institutions’ banking licences. They are not real banks as such but offer a banking experience for what is becoming the only part of the consumer banking process that matters – customer interaction.
“Some of these Digitally Native banks are already successful. Simple only recently launched but has on-boarded 50,000 customers and has another 250,000 on its waiting list. Fidor Bank has 250,000 live customers but operates on just over 30 employees. This spectacular growth is set only to continue In 2013 and traditional institutions will need to keep a continuous look over their shoulder, if they are to keep pace. In particular, the ability of these new institutions to acquire customers at the fraction of the cost of their larger competitors is likely to be a seriously disruptive force in the industry.”
Frans Labuschagne, general manager for FICO in EMEA
“When we queried credit risk professionals from 27 countries in September and October, 61% of respondents said cross-selling products to existing customers will be a priority in 2013, and 54% said they will analyze Big Data to better understand customers’ needs and risk.
“In this risk-averse period, banks are looking for credit growth primarily from existing customers, on whom they have more data.
“But customers are risk-averse too, so banks need to really dig into customer needs to identify offers that might work. That’s where Big Data comes in — it’s a new resource that, if used wisely, can guide much more customer-centric offers and services.”
Oliver Tarbert, CTO at QuestBack
In 2013 organisations will need to continue their focus on the customer relationship. To do this a successful strategy must allow a multi-channel approach to feedback and encourage customer interaction on any device, at any time and from anywhere.
By identifying key trends driven by both the customer and business, 2013 will see the evolution of enterprise feedback management (EFM). Organisations will become more transparent in order to remain compliant and interact with the customer through an increased number of touch points to ensure customer loyalty.
1. Doing less with more – upping the ROI: The empowered customer now interacts with organisations more than ever before. As such, organisations must encourage employees to derive deeper insight from current feedback opportunities – both in terms of enterprise feedback and social CRM. Organisations must focus on driving internal operational efficiencies without becoming a burden on external business operations.
Social media will grow in prominence and importance as a real-time feedback channel. Organisations will increasingly use technology to measure customer satisfaction while remaining transparent, both internally and externally. For this reason, feedback and research tools should be integrated into a company’s overall feedback strategy. All data can then be collated together and analysed effectively and importantly very cost efficiently.
2. Where and when, your call: Mobile experiences are surpassing the desktop experience. There is an increasing need to support any device running on any operating system. According to Gartner, mobile devices will become the most common Web access tools in 2013.
Traditional CRM has run its course and people now expect a seamless experience across all touch points. Therefore market research teams need to support access on the move and provide surveys that can be completed on a smartphone or tablet.
To do this, organisations must embrace the functionality of mobile devices and develop more mobile friendly surveys such as ‘slider scale’ responses, rather than traditional ‘tick box’ responses. The questions must be succinct, because of reduced screen space, and ensure that it is easy for the customer to give feedback.
1. Survey-tainment: Leading brands are already leveraging social to engage their most valuable customers, gather insights, deliver relevant offers, and nurture customer satisfaction. However, as customers become bombarded with feedback surveys, there is an increasing need to make them more interesting for the end user. Organisations must ensure that they differentiate from a competitive market and become winners of the ‘experience economy.’
One area that has grown in standing is ‘survey-tainment.’ This is a revision of the traditional online survey approach and offers enhancements in both layout and methodological approach. It gives customers a more engaging and interactive brand experience and is a clever tactic in encouraging increased response rates. ‘Survey-tainment’ is by no means a revolution of the online research, but an evolution in the way that important feedback is collected.
2. Listening to the voice of the customer: As the voice of the customer gets louder and louder, we are seeing the rise of the chief experience officer (CXO). Holistic feedback is imperative in a competitive business environment and provides organisations with an opportunity to differentiate from their competitors.
Traditionally businesses have experienced fragmented feedback. In some cases, feedback is not effectively shared across an organisation, and important information can be lost in the ‘data deluge.’ Organisations are already conducting market research using voice recording, video, and geo-location techniques. Although this is still in the experimental stage, it is a sign that the voice of the customer will continue to get louder, clearer and more targeted.
3. Measuring performance: Customer satisfaction is becoming a key parameter for employee performance. The quality of customer service is directly affected by the levels of employee engagement and motivation. By bridging the gap in the feedback model, customer satisfaction indexes can be measured in conjunction with employee engagement.
Organisations are integrating both internal and external feedback to give a more detailed overview of company performance and tracking against key KPIs from the front line to the boardroom. These organisations will find themselves at an advantage as they increasingly operate in real-time with complete transparency. This does not need to be difficult or heavy on resources now that the technology exists to support the business.
Ramyani Basu, senior manager at global strategy consultancy, A.T. Kearney
“In 2013, we expect to see a growth in traffic for social media channels and internet sales. Organisations will focus on how to monetise social media as a channel to market and hence drive revenue generation. Mega players in the social media space will require further innovation to use the platform to do so.
“Cloud as a commercial and technology delivery model is expected to flourish. In 2012, organisations explored packaged private cloud and custom packaged cloud for hardware, software and datacentres. Going forward, we expect businesses to demand more of managed service models from the cloud providers. We believe that Cloud will become a more acceptable mode with a true commercial model for Big Data. Cloud brokerage role, which is about aggregation, governance and provisioning between cloud providers and consumers, will act as the key role to get the maximum benefit from the cloud ecosystem.”
“We believe that the success of 2013 will depend on how corporates, businesses and service providers develop a true consumer centric strategy and meld different technology trends to maximise the impact in the market; hence convergence of existing technologies with mobility solutions will become a necessity to meet consumer centricity.”