Traditionally, the main aim of customer service has been to build loyalty. However, as digital disruption transforms how we interact with services, the old model of customer loyalty is under pressure. Digital customers do not move linearly from...
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Utility loyalty
1. Utility Loyalty: A New Model for Customer Engagement in the Digital Age
Accenture Analytics
Part of Accenture Digital
Utility Loyalty
A New Model for Customer Engagement in the Digital Age
Authors:
Ray Eitel-Porter, Managing Director, UKI Accenture Analytics
Anthony Levesanos, Senior Manager, Accenture Analytics
2. Utility Loyalty: A New Model for Customer Engagement in the Digital Age
Traditionally, the main aim of customer service
has been to build loyalty. Loyalty, after all, is the
root of repeat custom: the least expensive way
for businesses to make sales.
However, as digital disruption transforms how
we interact with services, the old model of
customer loyalty is under pressure. Digital
touchpoints, such as social and mobile, have
already changed the way consumers buy
products. The traditional marketing funnel is a
relic. Digital customers do not move linearly
from awareness to loyalty, they move back and
forth across digital touchpoints based on their
needs at the moment.
Today new drivers, such as wearables and the
Internet of Things, are accelerating this trend.
These technologies are raising the bar for
customer experiences and as a result, customer
expectations. Indeed, 65 percent of consumers
admit to having switched at least one provider
in the past year due to poor experiences1
.
Today’s consumers aren’t loyal and they care
less and less about personalisation. Increasingly
they want to see more clearly what’s in it for
them when they interact with a brand.
What’s needed is a new model that goes further
than personalisation and looks instead to the
utility to the customer of her brand
relationships. This new concept of Utility Loyalty
will redefine customer relationship
management for the digital age and enable
brands to once again proactively drive value
through customer relationships.
1
Accenture: 2014 Global Consumer Pulse Research.
Accenture: Is Digital Killing Loyalty?, 2014
3. Utility Loyalty: A New Model for Customer Engagement in the Digital Age
The Data-Centric Customer
So what does today’s customer look like? The
first thing to note is that they have more power
than ever – particularly when it comes to control
of their data. Over the past 20 years, consumers
have shared increasing volumes of data with
brands; first over laptops and smartphones and
now over wearables and IoT devices.
Significantly, people are taking more of an
interest in what happens to their data, and
increasingly want to know ‘what’s in it for me’
before agreeing to share. This trend is being
accelerated by two drivers: a greater awareness
of data privacy issues, and the emergence of
new companies that aim to give people greater
control of their data, such as Allfiled’s Energy
Savings Club2
.
Personalisation has for the past few years been
identified as a major goal for customer
relationship management; that the better
brands understand customers and market to
their specific needs the more success they will
have. But this is not enough. At Accenture we
believe consumers increasingly expect
personalisation as a bare minimum when it
comes to online experiences. Today they want
more: they want utility.
The new model for customer loyalty
Accenture has developed a four pillar model
which brings customer loyalty into the 21st
century and offers customer tools that extend
well beyond personalisation. The model is
structured to evolve interactive experiences that
build trust and loyalty. The four pillars of Utility
Loyalty are:
Transparency: Building trust through
transparency is the vital first step.
Companies should clearly show how
customer data is being used and by whom.
Information that was held exclusively by the
company should be offered to the
customer, and customers should be helped
to understand the utility of sharing their
data before they provide consent.
Customer Dialogue: To have a productive
dialogue, firms need to understand each
customer and not simply their relevant
segment. For example, in-depth customer
sentiment analysis can enable businesses to
identify what individuals really think of the
brand and its services. Other examples
include enhanced complaints management
and better tailoring of customer offerings.
Customer Expression: Once the brand has
engaged with the customer, he or she is
now informed and clear to express their
intent. Customer experience will be positive
or negative based on whether the company
is delivering against these expressions.
Successful customer expression strategies
will involve delivering new tools into the
hands of consumers that allow them to
manage their data and the relationship with
the company. This is a move from ‘Customer
Relationship Management’ tools towards
‘Company Relationship Management’ tools
and represents a fundamental rethinking of
the relationship between customer and
brand.
Customer Experience: The previous steps
will lead to an improved customer
experience where personalisation is key. If
these steps are followed correctly the
improved customer experience will lead to
Utility Loyalty, where customers reward
beneficial experiences with continued
custom.
2
Forbes: Data Disruption – Putting Control of
Information in the Hands of Consumers, Trevor
Clawson, 2014
5. Utility Loyalty: A New Model for Customer Engagement in the Digital Age
Delivering on Utility Loyalty
In order to deliver on this new model for
customer loyalty, companies need to put in
place several core transformational
technologies.
These technologies must include advanced
descriptive and predictive analytics
technologies that can draw on a wide variety of
data sources such as channels data, customer
profiles and behaviour, demographics and
complaints history and other, unstructured
data sources to enable new customer-centred
applications. The analysis of customer data is
key to understanding what they want from the
brand relationship – sentiment analysis is one
of the key insights on which Utility Loyalty
services can be built as it opens a window into
what customers really think.
What would such services look like? As
mentioned, they underpin a complete rethink
of the brand’s relationship with the customer.
Here the customer controls and manages the
interaction through ‘Company Relationship
Management’ tools, replacing the Customer
Relationship Management approach of old.
The focus has shifted but the goal is the same:
to build loyal customers who keep coming
back to the brand.
We are already seeing examples of such tools
emerging in the start-up world, where
differentiation is successfully achieved by
putting the customer at the heart of things.
Trunomi is one example from the financial
services sector: its consent platform puts
ultimate control of consumers’ financial data in
their hands, allowing them to choose how their
banks use their data and with whom they share
it. In the near future we expect to see a range
of other digital tools emerge to empower
customers and allow them to shape their brand
relationships to suit their needs.
Case studies in Utility Loyalty
Utility Loyalty is not just for start-ups,
however, and is already being used by
Accenture clients to achieve tangible results.
For example, we worked with one telecoms
operator to help enhance transparency around
how they use their customers’ data. The
resulting smartphone app literally put power
over their data into the hands of consumers,
allowing them to review who sees their data
and provide consent. It was hugely successful,
with 40 percent of the operator’s customers
downloading the app in the first year.
We have also helped a range of customers
develop Customer Dialogue propositions. For
example, we helped a national bank augment
existing complaints data with unstructured and
semi-structured data sources (e.g. social media
feeds) to enable predictive complaints
handling. The approach enabled the bank to
take corrective actions in time by predicting
the likelihood of churn of a customer based on
his or her complaints history. This is the sort of
individualised approach to customer dialogue
that will resonate in the digital age and build
loyalty.
6. Utility Loyalty: A New Model for Customer Engagement in the Digital Age
We also helped a leading pharma company
understand the root cause of significantly
underperforming sales and to adjust its launch
strategy accordingly. Through sentiment
analysis across all major blogs, Twitter,
Facebook, online news sources and discussion
groups we prioritised all the key issues and
provided strategic recommendations that
enabled the client to increase sales – all within
24 hours
Transforming customer loyalty
The rumours of the death of customer loyalty
have been exaggerated. However, achieving
loyalty has never been harder and it requires a
completely new approach: Utility Loyalty.
Businesses must focus on delivering customer
services that are founded on transparency and
customer experience, tilting the balance of
power firmly in the direction of the consumer.
Brands need to put in place the right analytics
capabilities and provide customers with the
tools they need to decide how their data is
used.
This is a customer value driven framework that
will enable differentiation and will be the
hallmark of the customer service leaders of the
future.
Contact the authors
Ray Eitel-Porter
Managing Director
UKI Accenture Analytics
ray.eitel-porter@accenture.com
Anthony Levesanos
Senior Manager
Accenture Analytics
Anthony.levesanos@accenture.com