insights! episode #46: every touchpoint matters: the customer journey from information need to purchase

Joubin Rahimi:

Great to have you back for a new episode of insights. My name is Joubin Rahimi and today it's about making brands and products tangible. Via the customer journey, via the customer experience. We back this up with figures, data and facts. Stay tuned. 

As you already picked up in previous episode, customer journey is essential for great customer experience. Customers increasingly consider how they can generate good and positive customer experience at each individual touchpoint, as much as possible. Why is that important again? We're all significantly more connected, information flows much faster, and it's always better to offer good experience than having to deal with bad one. If we return to topic of customer experience and work on these individual points, there are two or three interesting studies that prove this and also prove the ROI of this work, which isn't always directly measurable in monetary terms. Temkin Group conducted research among companies achieving annual revenue of over 1 billion US dollars. 

Companies that genuinely implemented a good customer experience within three years, yet at a moderate cost level, generated revenue of 823 million US dollars a year. The source follows below. Almost doubled within three years. Astonishing, whether or not you actually believe the figures. Or you can simply look at another study. We've prepared something here too. According to Forrester, companies that offer a good customer experience see growth of nearly 5.1%. Those offering a poor customer experience lose more than 9% of their revenue on average year after year, instead of growing. As you've already noticed, the figures vary considerably. But the trend is clear: companies that invest in customer experience and make larger investments grow, while all the others shrink. And now I can already hear the little bird chirping in your heads. You're saying, well, Germany is the land of discounters. Tight is right. Yet there's a study here too, stating that more than 50% of customers are willing to pay a little more for a good customer experience. And if you now go into the discounters and perhaps have the good fortune to visit the newly refurbished branches of Aldi or Lidl, you'll also notice that the stores have become considerably more attractive, and Lidl, with its app, is also contributing further to the customer experience. All of this costs money, of course, but it will certainly pay off. That's essentially the direct positive influence. The negative influence, however, is even greater, particularly where a poor experience occurs and is then talked about too. That doesn't just affect one's own purchase, as PwC found in the study. Over 30% of customers stated that after a poor experience, they were not only disappointed themselves and switched to another provider, but also told others about it, which is likely to mean these people no longer buy the product either.  
A small anecdote on this: recently many people have tried to buy or lease a car. Prices have risen drastically and delivery times have lengthened significantly, while customer service wasn't really the focus. At many dealers it felt more like a tile showroom, regardless of whether it was German, Asian or North American dealers - everywhere there was the same problem. We all know it. But the question is how customers were treated. Those who carried out a rip-off and generated bad profits have certainly lost more customers than those who, despite the difficult circumstances, made an effort to delight customers with a positive customer experience. That's not easy, but it's possible. We don't see that in today's figures yet. But I believe those who sat on a very high horse will feel it, because customers will then really turn to other providers. And my bet is that it's precisely the smaller and new electric manufacturers, such as Rivian or also Lotus with its new products. The niche providers will flourish and the big dealers will lose market share. And the fact that this anecdote didn't just happen to us as a company, but was also widespread across the entire market, was already established relatively early, back in 2018. 68% of all buyers had recently had a bad experience, and over 80% of them then dropped off. This affects all of us regularly and frequently in terms of purchase volume. This is where we can also make a difference, because if we're better than our competitors, we have the chance to close the deal and win and satisfy the customer in the long term.  
 
In summary, it's extremely important that the customer experience is genuinely good and positive at every single touchpoint, and that no negative vibes or inside-out thinking from the company get passed on to the customer. For every one of these touchpoints we really need to take a holistic approach and always look at it from the customer's perspective. Not from our own silos, which may still exist, not from our KPIs and financial figures, but exactly what is the customer experience like in this area? And it's not just about the product itself being good, but also about the business initiation, the marketing, the corresponding fulfilment, the whitepapers and other additional information materials. Everything has to be consistent, because customers notice inconsistencies across these channels very quickly. The silos within companies mostly don't look at things holistically. On the other hand, we're telling you: also consider developing digital services that offer added value beyond that and move you forward in importance as a product, brand or retailer. To achieve that, you definitely need to keep the following points in mind and work through them one by one, so that ultimately you also quickly get the results you need to take the first step forward in the customer journey and customer experience. First carry out customer journey mapping, where there are various approaches and methods. I'll present a short variant here that's typically essential for you.

First, gather all available data from relevant market research institutes, retail institutes, other institutes that have conducted surveys, as well as data from a sales and marketing team and customer reviews on the relevant social channels. Also ask your non-customers why they didn't buy – that's very interesting too. Bring all this data together. On the other hand, you should know who your target audience is. If not, define that target audience. That can already be a longer process, but most of you already have a picture of your target audience.  
Take it a step further and create persona definitions. This isn't just about the classic demographic traits and drawing up a picture like "Hans" or "Marie". No, it's about truly understanding what these customers' pains, needs and wishes are and how you can meet them. That makes a real difference and is point number two. 
 

Point number three: you have your website and probably digital analytics tools on it already. Have you actually evaluated them? Have you evaluated them in relation to the personas and their needs? Where do people drop off? That's a no-brainer for many companies, but not really used.  
 
The fourth point is: look at the customer journey from outside with your own team, buy something yourselves, go through it. Really invest time in this process too. Do a night-talk, a night-shopping evening for your products? How does it flow from marketing into sales at your company? How well are the processes mapped accordingly? So where is the customer? With what thoughts and what needs? Where do they dock in with you? Do they dock in with different people or different touchpoints in the silos? Or do you have one person who accompanies the customer the whole way?  
You might already have these questions on paper in your process description, but experience them again and you'll quickly find next point is quick wins. You generate these quick wins fast from workshops and topics we just presented, and bring in such customer journey mapping evenings and workshops where you identify quick wins. But ultimately just discussing doesn't help. Time to act. Always time to act, and make sure you implement things quickly one after another. Move with speed and rather take many small steps than big steps that might not work. Cause it's barely possible to plan everything in advance. Market changes, people change, and interaction between what you change and reaction means you always have to adapt or generate new things again and adjust existing planned measures. Important topic in this context.  
 
Now let's move on to an example and a few figures within a customer journey in the consumer electronics sector. Why is consumer electronics interesting to us in the first place, and in my view not only for B2C, which the study and various figures coming up will also prove, but also for the B2B part. Especially larger purchases like an expensive TV aren't made alone but very often decided jointly within the family. It's rarely a pure impulse buy. IFH conducted a study in 2018 which found that 43% of all CE purchases took place in-store. And 73% of these in-store purchases were prepared online beforehand. This actually shows the following, namely that this customer journey, which we've also talked about repeatedly in other episodes, is changing. Because the customer doesn't go into a bricks-and-mortar shop to get advice, but typically because they can take the product away with them directly. So the shop is basically just an external, attractive warehouse for the customer. And it's not the advisory competence that's "unfortunately" in the foreground. "Unfortunately", because in person with staff we also have the most expensive form of advice. But as customers we actually already know where we want to go and what we want to buy. That's a fundamental difference. Let's come back to this consumer electronics study, because where do I prepare online? Over 65% visited Amazon and looked at the reviews there, among other things. And if we look at, for example, Mediamarkt with just over 34%, Saturn with 27%, then we can reach almost a third of customers. In the online preparation phase, Expert is barely present at just 4-5%. So Expert will get much less of the pie going forward too, because they simply aren't relevant to the customer in this market situation or during purchase preparation. Especially these niche players that aren't in that position need to properly get to grips with the whole customer journey and think about what added value they can offer. And to illustrate the whole thing further: a third of all purchases are a direct purchase. That means, especially with Amazon, Mediamarkt and co, I buy directly there without doing any comparison. And then I no longer have this price issue, because I know I'll get a reasonable price. Not the cheapest, but a reasonable price with really good service. And that's decisive in the customer journey. As a customer I don't want to think every single time about whether the price is good, whether the quality is good, whether it'll arrive quickly enough, what returns look like. I want to have experienced these promises already and not go through it all again from scratch with every purchase. Now one might think, if you've already considered that you need to prepare a lot online and digitally because most customers buy directly anyway, then you could do without the shops too. No, not a chance. 

The stores are extremely important for these sales. For one, Mediamarkt states that 46% of online purchases are prepared via its own online store. That's a higher figure than previous competitors. On the one hand.  
But now comes problem: if customers come into shops and find no expert advisors there, they leave again. Good advisors, however, keep customers and bring them back again and again, so they buy again. That's what PwC study says. Over 45% of users or consumers would turn their back on a company if advisor or salesperson isn't knowledgeable. So it's important here too to consider entire journey, and no failure may occur in whole process for you to be successful. But if you have that, if you really design entire journey as experience, without failures, then you have breakthrough. 

I'm still looking forward to comments and likes on all this. I hope the insight gave you a few impulses on how to move forward. Like us, follow us, subscribe to our channel, keep listening and feel free to leave us comments. What's good, what's not so good? Feel free to write it in the comment field or directly to us. We look forward to the exchange, because only together can we simply get better. And that's also our goal with you, over the coming episodes.