Omnichannel

The many reasons why customer needs, expectations are rapidly changing

The definition of a 'good customer experience' today is nowhere as simple or straightforward as it was just a few decades ago.

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February 21, 2023 | Isabelle Romualdez, Marketing Content Manager, Hire Digital

The definition of a 'good customer experience' today is nowhere as simple or straightforward as it was just a few decades ago when assessing customer sentiment was carried out through a few phone surveys for example.

The modern consumer is multifaceted and complex, reacting to a wide range of factors: economic, social, political, and beyond, and they are more demanding than ever before.

Why customers are changing rapidly

An Accenture survey revealed 95% of C-level executives believe customers are changing faster than their businesses can keep up with. They think their digital transformation efforts are just keeping them afloat rather than driving their growth.

So, what exactly drives these consumers to change? Here are some factors causing rapid changes in consumer behavior, according to experience trends tracked by Hire Digital.

#1: Looming inflation and unpredictable markets
72% of consumers state external factors like inflation are impacting them now more than before. Gartner research revealed more than half of consumers feel like they have less disposable income and savings this year.

Thus, their spending behavior has not only changed in such a way that they purchased less, but in finding ways to make smarter purchases. For example, half of millennials and Gen Z are using digital tools to track coupons/discounts as a means to combat inflation.

#2: The hybrid lifestyle
COVID-19 has opened doors for digital transformation. With a lot more products and services available online, people have adapted to the hybrid lifestyle of making purchases both online and in-person. According to Prosper Insights & Analytics, 33% of adults are shopping in stores less.

#3: Social & environmental responsibility
A Harris poll revealed that more than two-thirds of Americans are now more concerned about climate change and that they expect their peers to adjust their purchasing habits accordingly. This is supported by the Accenture research, which indicated 72% of consumers are more impacted now by external forces — climate change being one of them.

Company ethics influences buying decisions

CX Network reported customer experience practitioners observed a higher level of sustainability awareness from consumers. A lot of customers now consider companies' level of environmental sustainability and morals in their purchasing decisions. Aflac research supports this by showing almost eight out of 10 of consumers believe companies that stay true to their ethics/values outperform others in their field.

Meanwhile, 92% of millennials are more likely to buy products from ethical companies, and over four-fifths of these consumers believe ethical brands outperform similar companies that lack a commitment to ethical principles. Thus, they want organizations they engage with to not only answer their needs but also add value to the world overall.

Customers are looking for more meaningful interactions across multiple channels

A Conduent report revealed customers crave more meaningful interactions with brands. Eight out of 10 respondents would likely purchase products from the same brand if they had a great customer experience on a digital channel.

Factors that contribute to a meaningful customer experience

#1: Personalization
Personalization has been a marketing buzzword for a reason. A Gartner study noted that 86% of B2B and 72% of B2C consumers expect companies to know their information during an interaction.

Thus, it's imperative to integrate mass data available for optimal personalization. Some organizations fail to analyze all data sources and mostly rely on customer feedback.

However, strategies for optimization and personalization should be taken from integrated sources of demographics, operational data, financial data, purchase history, and more, to truly understand the multi-dimensional needs of consumers. This also enables an organization's customer experience to evolve and keep up with consumer changes.

#2: Convenience
Gartner research reported consumers' value for convenience is at an all-time high over the past 12 years.

Hyken ACA research shows:

• Three-fourths of customers would pay more for a convenient experience, and would switch companies if they found out a competitor provided more convenience.
• 68% would return to a brand if the customer experience was convenient.
• 80% would likely recommend a brand or product if it provides a convenient customer experience.

#3: Omnichannel
A McKinsey study revealed organizations intend to increase digital engagement by 1.5x in 2024, and one of the top areas for investment is improving omnichannel via tech. In fact, several surveys reported that consumers already expect an omnichannel experience; it's no longer an edge over the competition, but a must-have for organizations.

As consumers are approaching organizations across all touchpoints, companies should ensure that all channels provide a cohesive messaging and seamless experience.

AI augmentation in customer experience

Harvard Business Review discovered that a combined effort from employees and artificial intelligence enables companies to achieve significant improvements.

Likewise, Gartner reported that AI augmentation enables organizations to make smarter data-driven decisions. Gartner predicts that by 2025, organizations will shift 75% of their operational work from production to more strategic activities if they use AI across marketing functions.

Using AI to optimize content and journey mapping leads to better segmentation and personalization. Customer data retrieved from AI can be used to drive more agile responses.