INTELLIGENCE ISSN 2834-6238, Report #9 Published: Thursday, March 7, 8:00 AM Eastern
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Addressing demographic shifts with customer experience management.
Technological evolution, shifting demographics, and evolving consumer demands are reshaping the marketplace. Small firms, known for their agility and innovation, are particularly affected by these changes. In our research this month, we found that many studies show that in 2024, small firm CEOs need to pay special attention to technology adoption, talent acquisition, and customer experience management to stay competitive in the evolving marketplace.
Section I – Report Format
Getting to the CORE is about a digging process. Our goal is to uncover pertinent business problems investigated in academic, practitioner, and industry research that provide guidance, sources, and opportunities for small business leaders to employ in their strategic planning and execution.
Our objective is to address important questions through research and real-world applications. Our CORE investigation aims to deliver compelling insights on essential business questions related to operations, systems, strategy, and marketability.
To generate questions, you are our most valued contributor! We want our community to grow via open discussion and engagement.
Each issue will have a question, findings, and a list of sources. Each quarter, we hold a live discussion to analyze the findings and give ways to apply them to your business.
I hope you’re ready to push yourself, move yourself, and achieve great things. We’re ready to assist you in excavating your Red Diamond Business!
Section II – CORE Question
Considering the resource constraints faced by small firms, it’s crucial to focus on one area at a time to maximize impact. This month let’s prioritize customer experience management, specifically in addressing the demographic shifts that can affect operational efficiencies. The business question this month: “How can we adapt our customer experience strategy to cater to the changing demographics and evolving customer demands?”
Section III – CORE Findings
We found plenty to unpack!
Academic studies have shown that understanding and accommodating changing demographics can significantly impact customer satisfaction and loyalty. And, after reviewing the industry research, many key findings have emerged that can guide you in addressing demographic shifts through customer experience management.
Academic Findings
[1] Research Article: Verhoef, P. (2021). Customer experience creation in today’s digital world.
Pieter Verhoef’s article “Customer Experience Creation in Today’s Digital World” focuses on the problems and opportunities that digital innovations bring to customer experience management in the modern business landscape. The primary goal of this article is to investigate how B2B companies might change their customer experience strategies to handle demographic shifts and use digital technology to improve customer engagement. Verhoef emphasizes the necessity of understanding the cognitive and emotional elements of customer experience, the role of trust and commitment in B2B partnerships, and incorporating digital innovations such as IoT into service delivery procedures. The article attempts to help B2B companies handle demographic transitions and improve customer experience in the digital age.
Their findings: B2B companies can use the ideas in this article to handle demographic transitions for customer experience management in the following ways:
- Understanding the Cognitive and Emotional CX Dimensions: Recognize that, while B2B clients are believed to be more rational decision-makers, they are nonetheless impacted by psychological processes and emotional elements. To meet the different needs of their clients, B2B companies should address both cognitive and emotional components of customer experience (Bolton et al., 2008).
- Recognize the value of trust and commitment in B2B interactions. Relationship marketing theory emphasizes the need of trust in developing long-term relationships. B2B companies should prioritize client trust to improve customer experience and loyalty (Morgan & Hunt, 1994).
- Digital’s Impact on B2B Markets: Recognize the impact of digital innovations like IoT on B2B marketplaces. Understand how technologies such as IoT can revolutionize service delivery in B2B environments and adjust tactics accordingly. Keep track of the influence of digital innovations on B2B client interactions (Bolton et al., 2018).
- Segmentation and Personalization: Customize customer experience strategies depending on demographic changes in the B2B customer base. Recognize that different client segments may place varying values on the cognitive or emotional aspects of CX. Implement individualized techniques to address the unique demands and preferences of different B2B clients (Herhausen et al., 2019).
- Evaluation of CX Investments: Look at the returns on investments in the customer experience to make sure they have a good effect on CX, getting new customers, keeping old ones, and equity. B2B companies should evaluate the efficacy of CX initiatives and adapt tactics accordingly. Consider how demographic fluctuations affect the ROI of CX investments (Verhoef et al., 2009).
- Incorporating Digital Developments: Incorporate digital breakthroughs into service delivery procedures while taking into account the potential impact on customer experience. Consider how technologies such as AI, machine learning, and IoT might improve CX for various demographic groups. Be careful of the balance between convenience and the potential negative effects of digitalization, such as robotization (Verhoef, 2019).
We like this study because it shows how B2B firms can embrace customer experience creation in the digital world in several ways. Some include gaining a competitive edge, fostering customer loyalty, driving revenue growth, adapting to digital trends, strengthening relationships, optimizing service delivery, and more! It is also a good study to support strategic decision-making that aligns with evolving customer needs.
[2] Research Article: Ceesay, L. B. (2020). Building a High Customer Experience Management Organization: Toward Customer-Centricity.
The article “Building a High Customer Experience Management Organization: Toward Customer-Centricity” talks about how important it is to include customer experience (CX) management in business plans to make them more customer-focused. The main goal is to look into how companies can use what customers know and have experienced to give them more value, make them happier, and keep them coming back. The study stresses how important it is to understand and meet the needs of customers who have more power in today’s competitive market by using good customer experience (CX) tactics and changing the way businesses are set up.
Their findings: Overall, the study emphasizes the importance of incorporating customer experience management (CX management) into organizational strategies to create and deliver meaningful and long-lasting customer experiences, which will eventually result in higher levels of customer satisfaction and loyalty. It brings up several important points about how CX management should be integrated:
- Integrating CX management is important for businesses that want to get a clear competitive edge by meeting customer needs more quickly than their rivals.
- To handle CX well, businesses need to make sure that their internal business processes and their marketing and communication efforts with other businesses are in sync.
- Adopting a customer-centric strategy entails developing, measuring, and monitoring the entire customer experience to maximize customer happiness and brand equity.
- Five experience moments are emphasized as being important for long-term customer happiness and loyalty. These are promotion, pricing, merchandising and brand, supply chain management, and location experiences.
- The research shows that coordinating actions across departments can help companies provide better customer experiences by using an integrated management approach to customer experience.
It was found that B2B companies can deal with changes in demographics by using several strategies, such as personalization, customer journey mapping, cross-functional teamwork, and more.
We like this research because it provides valuable insights into the strategic importance of integrating CX into organizational practices. And you know, we’re all about strategy!! The study provides a framework illustrating the key components and steps necessary for organizations to enhance their CX strategies and practices. By following this framework, firms can build a customer-centric culture, deliver superior customer experiences, and achieve sustainable competitive advantages in the market.
Practitioner/Industry Findings
[3] Top Customer Experience Trends, as stated in the article Haan, K. wrote in 2024 customer experience trends change all the time, and companies need to keep up to meet their customers’ needs. The customer experience is being shaped by several important trends. Personalization is a big deal, and companies use data and technology to make sure that each person has an experience that fits their needs. This includes personalized suggestions, targeted advertising, and giving products that are just right for you.
Another important trend is that digital experiences are becoming more and more important. Customers expect a smooth transition between digital and physical outlets. This means that businesses need to connect their platforms and give customers the same experience everywhere they interact with them. Also, automation and artificial intelligence are becoming more important in customer service, making exchanges more efficient and personalized.
There is also more of a focus on being open and honestly doing business. More and more, customers want brands that share their beliefs and show that they are real. This includes a promise to be environmentally friendly, care for others, and run a fair company. Businesses need to follow these trends and put the customer experience first if they want to stay competitive and build long-term ties with their customers.
Here are a few of the article’s main points about the trends it discussed:
- Companies use AI to do many things, like writing product descriptions, marketing content, personalization strategies, figuring out what customers want, making the customer journey better, and improving customer service.
- In 2023, consumers were more picky about customer service and technology usage, so businesses had to meet more complex needs than just quality products. For customers to stay loyal, things like brand alignment, flexible payment choices, and real-time updates are very important.
- The overall experience a company gives its customers, the relationships it builds with them, and the quality of the goods or services it provides all play a role in how loyal those customers are. People value the whole experience just as much as the goods or services they buy.
[4] Another article we liked focused on why improving the customer experience is crucial for any business by Forbes, which provides 15 valuable tips to enhance your strategy. The article emphasizes the importance of understanding your customers’ needs and preferences, personalizing their experience, and leveraging technology to streamline interactions. Additionally, it highlights the significance of creating a customer-focused culture within the organization, obtaining feedback to drive improvements, and empowering employees to deliver exceptional service. This article provides several key factors to consider:
- Understand Your Customers: Take the time to truly understand your customers’ needs, preferences, and pain points. This can involve collecting and analyzing data, soliciting feedback, and engaging with customers directly to gain insights into their experiences.
- Personalization: Tailor your interactions and offerings to individual customers whenever possible. Personalization can enhance the customer experience by making customers feel valued and understood [T13].
- Continuous Improvement: Customer experience is an ongoing process. Regularly review and refine your strategies based on feedback, data analysis, and changing market conditions to ensure that you are meeting customer expectations [T15].
and several more…
By focusing on these key factors, your team can enhance your customer experience strategy and build stronger relationships with your customers.
[5] A sign of the times is illustrated by ‘Elevating Customer-Experience Excellence in the Next Normal’, a blog post written by McKinsey and Company. The article puts forward five ways by which companies can ‘nurture customer-centric strategies and create conditions for growth’. These are defined primarily in terms of the need for companies to harness personalization and omnichannel interactions, with the help of data and analytics to derive insights that improve customer experience. The article outlines how companies can build agile operations for frictionless delivery, as well as how they can develop ‘cross-functional structures to provide seamless experiences that win affinity and loyalty’. It underscores the value of embedding agility into customer-experience processes, using digital channels effectively, and, importantly, the need to revisit manufacturing and distribution operating models to respond to the evolving needs of the next normal marketplace.
When it comes to the next normal, we like McKinsey’s three recommendations for how businesses can prioritize customer experience:
- Improving digital capabilities should be a company’s top priority to keep up with customers’ ever-evolving demands and expectations.
- Businesses in the post-pandemic period should emphasize secure, frictionless consumer engagement.
- To keep up with their customers’ ever-changing habits and tastes, businesses need to use dynamic consumer insights.
To acquire a competitive advantage and position themselves to create excellent client experiences in the future normal, firms should focus on these three areas.
>>Whew!! Lots of great research.
Section IV – CORE Discussion
What do we think, CX Management is critical! The research findings show that changing demographics have a big impact on customer experience management. CEOs of small businesses need to rethink their customer experience strategies to meet the needs of their customers as they grow older. Customer happiness and retention can be enhanced by customizing the customer experience to demographic attributes, which is why customization in customer experience management based on shifting demographics is crucial.
It is also important to adapt technologically since technology plays a pivotal role in adjusting customer experience strategies to account for shifting demographics. Gaining a competitive advantage and driving sustained business growth are both possible outcomes for CEOs who embrace technology adaptation.
How will you adapt your customer experience strategy?
Let’s converse!
We have many more sources and insights on this month’s question. Additional findings will be shared during CORE Webcasts, our LIVE dialogue, and conversations about “the findings” for subscribers. Webcasts are held on the third Thursday of each quarter in January, April, July, and October. If you’re a subscriber, no need to register, set the reminder on your calendar. We’ll send the link to join one week before the event.
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Section V – CORE Sources
Remember: We investigate research from all sources. Your goal is to dig into the findings so that you can create solutions.
Academic Articles
[1] Verhoef, P. (2021). Customer experience creation in today’s digital world. In B. B. Schlegelmilch & R. S. Winer (Eds.), The Routledge companion to strategic marketing (pp. 107-122). Routledge. https://doi.org/10.4324/9781351038669-9
[2] Ceesay, L. B. (2020). Building a High Customer Experience Management Organization: Toward Customer-Centricity. Jindal Journal of Business Research, 9(2), 162-175.
Practitioner/Industry Articles
[3] Haan, K. (Year: 2023, Month Day: September 21) Title: Top Customer Experience Trends In 2024 Source: Forbes Advisor URL: https://www.forbes.com/advisor/business/customer-experience-trends/
[4] Forbes Communications Council. (2021, November 17). 15 Tips For Improving Your Customer Experience Strategy. Forbes. https://www.forbes.com/sites/forbescommunicationscouncil/2021/11/17/15-tips-for-improving-your-customer-experience-strategy
[5] McKinsey. (2020). Elevating customer experience excellence in the next normal. Retrieved from https://www.mckinsey.com/capabilities/operations/our-insights/elevating-customer-experience-excellence-in-the-next-normal
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