Industry news

Good CX saves money and makes money. A 2% increase in customer retention has the same effect as decreasing costs by 10%, while 86% of buyers will pay more for good customer experience.

That’s why we hosted a CX Event with the Global Sourcing Association on Excellence in Customer Experience. The event focused on how to measure and improve CX, introducing revolutionary new products such as CX Score and instigating a workshop which got the audience rating mobile web CX for major automotive brands.

The real revelations came in the panel discussion, which saw leading experts in the industry debate the new technologies driving improvements in customer experience. It covered everything from new channels for brands to interact with customers, to understanding customers’ omni-channel journey.

And through this, the overriding message for providing good CX was clear: don’t overcomplicate what customers want as an outcome.

Keep it simple, stupid

The scope of customer experience is changing with the increasing impact of AI. Not only do customers expect more from their brand experience – whether that’s through innovative tech or tailored personalisation – customers are actually choosing products because of their AI.

But with brands keen to jump on the AI bandwagon there’s a danger of overloading the consumer with information. With so many opportunities to overcomplicate the customer journey – through different channels, targeting, tagging, and interaction points – brands need to focus on simplicity.

A shining light here is Aviva, whose simplistic layout and intelligent architecture make sure the user doesn’t get lost. Their ‘Shape My Future’ tool guides you to a personalised page which feels unique but doesn’t demand any superfluous information. It really doesn’t matter if brands do deliver slightly less if they’re doing so in a better way.

Put down the scattergun

Tired of being fed the same ads over and over again, even though you bought the product they’re selling you 3 months ago? That’s poor CX – and there’s no excuse for it. The solutions for clever retargeting are out there, and brands need to use them.

Highly specialised retargeting tools mean brands can easily avoid the ‘send to all’ approach. Instead they can map each individual to send them a personalised message, and use that first party data to feed back out into wider ecosystem.

It’s those brands who capture people at the right moment and keep them satisfied before delivering the content they need that will make the customer journey more seamless.

Tech for tech’s sake

Keeping CX simple means using AI in the right way to get a focused, personalised outcome. It also means using AI in the right places, to keep the customer journey as simple as possible.

Unnecessary AI actually has a negative impact on CX. One panellist spoke of an instance where chatbot features are only available once you’re through to your basket. At this point in the journey, your questions have probably already been answered, so it’s annoying and unhelpful that the chatbot wasn’t delivered at better point in their journey – say on the FAQs page.

Sounds obvious? It is. If brands are investing in innovative tech, they need to learn where and when to place it in order to get the best results.

Robots have feelings too

Using AI to fine tune your customer experience is risky in more ways than one. While customers are constantly searching for the quickest, most efficient brand interactions, they still crave the human factor. How often are we left frustrated by a non-responsive robot at the other end of the phone?

The human factor makes AI empathetic, intelligent, and nuanced – which is exactly what you’re looking for when you’re interacting with customer services, for example, and getting a reply to a complaint. The ‘humanity’ in AI also makes an experience memorable and special as it conveys a brand’s personality – essential for good CX. Netflix are doing it well, with their IBM Watson ‘Papal Artificial Intelligence’ trolling Twitter users with quotes from the Bible to promote the new season of Young Pope – and more brands need to follow suit.

Outcome beats output

You’d be forgiven for thinking that good CX demands a lot of contradictions: simple but intelligent, efficient but personal, multi-faceted but specialised. But it all makes sense when brands remember to put the customer outcome first.

Keeping the customer journey simple, tailoring personalised messages, using AI only where it’s wanted and making it feel human are all ways of putting the human experience front and centre. That doesn’t just mean their journey to purchase, it also means their experience with the product once they’ve bought it.

So how do brands show that the outcome is the most important factor in customer experience? It can sometimes take a bold move. Lloyds was one brand mentioned by the panel for their moving, stereotype-inverting campaign which puts the focus on the customer end point. We recognise that good banking has played a part in the outcomes they’ve achieved, but the focus is on the achievement itself: a same-sex marriage, a child’s first day at school, a first kiss.

Brands who recognise what consumers want at the end of their journey will find it easier to create an experience which will get their customers where they want to be.

By Imogen Lees, Content Editor at Partners Andrews Aldridge

Lloyds Banking Group plans to move about 1,900 staff to IBM in a restructuring plan aimed at reducing costs but which could see the bank's security weakened, according to a trade union. Chief Executive Officer Antonio Horta-Osório is looking to shed thousands of jobs to streamline the business, support dividend payments and boost the share price as the government prepares to sell down its remaining stake in the bank this year. You can read more here.

US chipmaker Intel is taking a big bet on driverless cars with a $15.3bn (£12.5bn) takeover of specialist Mobileye. Mobileye and Intel are already working together, along with German carmaker BMW, to put 40 test vehicles on the road in the second half of this year. Intel expects the driverless market to be worth as much as $70bn by 2030. Announcing the deal, Intel said that as cars "progress from assisted driving to fully autonomous, they are increasingly becoming data centres on wheels". You can read more here.

Hounslow Council has announced its intention to award a Corporate Services Contract to Liberata. The contract will see Liberata deliver a range of services including revenues and benefits assessments, transactional finance, HR administration, and payroll services on behalf of the Council. The initial contract is for seven years, with the option to extend it for a further three years, and is potentially worth up to £75 million. Click here to read the full story.

The GSA is hosting a public sector sourcing event in March, click here to learn more.

The budget today unveiled new support for disruptive technologies and innovation in the form of £270m of funding to put the UK "at the forefront" of disruptive technology industries. The funds for the hi-tech research come from the National Productivity Investment Fund (NPIF), set up by the government last year. The sums, however, are smaller than those announced by some other countries. For example, the US Department of Transportation proposed a 10-year plan to invest $4bn (£3.3bn) in self-driving cars. It’s good to see that disruptive tech and digital infrastructure is getting some recognition from the government, however actions speak louder than words and the government faces stiff competition on the global market for tech research. Click here to learn more.

According to the Centre for Local Economic Strategies (CLES), Manchester City Council is playing a pioneering role in progressive procurement thanks to key changes it has made over the past 10 years. The new corporate procurement department has led to savings of over £65 million and has focused procurement in Manchester with the proportion of total procurement spend with organisations based in, or with a branch in, Manchester has increased from 51.5% in 2008/09 to 73.6% in 2015/16. To read more about this story, click here.

The GSA is hosting a Northern Conference this May focusing on the value of the Northern sourcing and procurement sectors, click here to find out more.

According to JETRO, a Japanese trade promotion organisation, Sri Lankan labour costs are a bargain when compared to other potential business destinations in the region. Despite good economic growth since 2009, Sri Lankan wages have remained stable. The problem is that much of the labour pool is being pulled into hospitality industries, making it difficult to attract workers to manufacturing. Sri Lanka could see a lot of Foreign Direct Investment (FDI) from Japan in the coming years thanks to its competitive wages. You can read more about the story here.

Sourcingfocus.com investigated Sri Lanka to assess its potential as an outsourcing hub, click here to find out more.

The government digital strategy, pledges to grow the UK’s technology skills and make the country the best place for digital businesses to invest and grow. The strategy is focused upon preparing the UK economy for digital transformation, including upskilling the UK labour force and businesses. Karen Bradley, secretary of state for culture, media and sport, said the strategy “sets a path to make Britain the best place to start and grow a digital business, trial a new technology, or undertake advanced research as part of the government’s plan to build a modern, dynamic and global trading nation”. You can read more here.

The GSA is hosting a Public-Sector Day this March focused on the digital transformation facing the public sector, click here to find out more.

Capita, the outsourcing firm, has announced its Chief Executive, Andy Parker, will be leaving the firm later this year once a replacement is found. The news came as it revealed that annual pre-tax profits had fallen 33% to £74.8m. Capita is under investigation by the BBC for how it collects the TV license fee, after claims it was too aggressive. Earlier this week, BBC Director-General, Tony Hall, wrote an open letter to Mr Parker in reference to Capita’s conduct.

Parker said 2016 had been a "challenging year and Capita delivered a disappointing performance". In addition to these issues, the company will drop out of the UK's FTSE 100 index of leading shares later this month because its share price has fallen sharply.

You can read the letter from the BBC here, or read more about the story here.

In recent years, the global sourcing industry has had to cope with numerous changes to the way it does business. The Internet of Things, more in-depth analytics, compliance with government regulations, and the need for efficiency have all made service providers’ task that much more difficult. In order to still make a profit, they therefore need to get the maximum usage out of the resources available to them.

There’s a long precedent for this approach. Nobel Prize-winning economist Milton Friedman argued that, so long as a business respects the law, it should do all that it can to maximize profits, since this is its primary purpose. Whatever the organisation does, Friedman stated that the business’s only social responsibility is to make use of the resources available to it. Generations of economists have followed this philosophy, and as a result, they have always looked at innovative ways of gaining a competitive advantage over their rivals. However, businesses are increasingly being called upon to follow their social obligations, and use their power to give something back to communities.

Peter Durker, an important figure in the field of management, has more recently argued that rather than being measured in profits, business is more complex. Instead, he says that it is all about behaviours, from productivity and financial activity, to creativity and the use of technology. Durker notes that these all have an impact on society, which gives businesses an enormous amount of responsibility. Michael Porter takes this one step further, stating how many people see corporations as “prospering at the expense of the broader community.” His solution to this problem is that of shared value, which “involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.” Not only does this idea of shared value help businesses prosper in a changing economic climate, but it also ensures public trust- a key component in business-consumer relationships.

Porter notes that given the size of many businesses, they are able to do what individuals alone cannot, and scale up their solutions to a societal problem to have a widespread effect. He further points out that what benefits society in general also benefits the business itself, since it leads to a more prosperous economic climate.

Countless corporations are now rethinking their ethical practises in response to what the public now expects of them, and this should eventually lead to a much more open and honest business sector that consumers feel actually utilizes its power for good. It also means that companies are re-examining their approach to employees (and employers), especially in a world where outsourcing has become so prevalent. Professional bodies like the Global Sourcing Association (GSA) have designed new standards of industry best-practise and acknowledge the power of social responsibility within organisations.

This is before we even take into account the environmental effects of sustainable sourcing, when it comes to physical materials. Countries all over the world are adopting stricter legislation when it comes to environmentalism, to combat the pollution created in methods of production. Again, consumers are becoming more savvy about environmentalism, and businesses are therefore under pressure to conform with what the public expects of them. This means that ethical sourcing of raw materials is becoming standard across most industries.

As we can see, then, the world of business is increasingly looking towards new, more ethical practises that not only boost their own profits, but also have a beneficial effect on society in general. If this trend continues, then we could soon see a world where big companies are seen less as unethical boogeymen, and more as helpful entities that work for the good of society.