Marketers’ intense focus on customer experience shows no sign of abating, but while investment continues to rise, brands are failing to keep up with consumers’ rapidly evolving expectations.
That’s the finding of KPMG Nunwood’s annual Customer Experience Excellence index, which shows a meagre increase of just 0.7% in the average score across the top 100 brands, rising to 7.13 out of 10.
However, this growth is not coming from the brands at the top of the table where scores are relatively flat.
“The top organisations are to some degree becalmed; they’ve got very good experience which they consistently deliver but we’re not seeing the top organisations adding to their scores year on year. They’re also struggling to keep up with the escalation in expectations,” David Conway, director at KPMG Nunwood tells Marketing Week.
Instead it is the brands at the lower end of the table that are pushing up the average. “We’re seeing more companies gravitating towards the middle, so the organisations at the bottom of the top 100 are now beginning to improve slightly, which is moving the average up,” he explains.
First Direct tops the ranking
Banking brands perform particularly well at the higher end of the table this year, with First Direct reclaiming the top spot in the ranking (having dropped to 3rd in 2017), followed by new entrant Metro Bank and John Lewis Finance in fourth (see the full top 100 at the end of the article).
Previous holders of the top spot, Lush (4th) and John Lewis (5th) make up the rest of the top five this year, followed by Ocado, Boden, Marks & Spencer, M&S Food and Emirates in places six to 10. Last year’s winner QVC has dropped back to 19th.
The findings are based on a survey of 10,000 consumers who are asked to rate brands on the six metrics KMPG Nunwood believe drive brand advocacy and loyalty: personalisation, time and effort, resolution, integrity, expectations and empathy. Brands must be referenced by 100 or more respondents to be included in the ranking, which is why Metro enters the ranking for the first time this year.
Unlike most banks, which are open Monday to Friday during working hours, and for a couple of hours on a Saturday, Metro Bank is open seven days a week. It also lets customers walk in without an appointment and walk out with a debit card and an up and running account.
“Metro Bank has largely redefined the experience of banking in the branch and that has turned every branch visit into a mini experience,” says Conway.
Overall, financial services brands score an average of 7.3 out of 10, putting the category third behind grocery retail in first, with an overall score of 7.42, followed by non-grocery retail with 7.36.
Of all the brands in the top 10, Boden has seen the greatest improvement, rising 38 places compared to last year. This dramatic increase is thanks in part to its radical digital transformation strategy, which Conway says has had a “big impact”.
“It has recruited specific roles to manage its digital advancement, focused intensely on getting it right and that’s the reason it has shifted. What makes a difference is the degree to which an organisation is committed, focused and has a very clear intentional target they want to achieve around the customer experience and Boden is a really good example of a business which has done that.”
Other big risers include The Body Shop, up 55 places to 20th; Jet2 (up 54 to 29th), Selfridges (up 52 to 33rd); and Holiday Inn (up 74 to 37th), while brands including insurance firm Royal London Group (47th), Co-op Insurance (48th), Ovo Energy (50th), Direct Line (65th) and Delta Air Lines (87th) have all risen by more than 100 places, respectively.
At the other end of the spectrum, those with the largest decline include restaurant chain Wagamama, which dropped 48 spots to 96th, Travel Republic (down 45 places to 70th) and Virgin Holidays (down 46 to 69th).
New structure needed
Part of the reason growth has slowed is that businesses are not set up internally to respond to the rapidly changing environment they’re operating in.
“There is a bit of a disconnect between what customers expect and brands getting to a point where they can implement those changes,” adds Conway. “It’s all about speed and pace and responsiveness. It’s how quickly these businesses are able to detect a change and react to it that makes a difference.
“Organisations need to get much closer to customers. They need to understand what customers want and anticipate what customers need so they get there first.”
While businesses talk a lot about being customer-centric many are not structured in this way, which makes it extremely difficult to respond to changing consumer demands at the speed required.
Separate research conducted by Marketing Week earlier this year found that while 42.2% of marketers believe a customer-centric model is the right way to organise the marketing department, this structure is only in place at 5.8% of companies. The largest proportion of businesses are still set up around individual products or brands (37.3%) and separate marketing disciplines (19.4%).
Furthermore, these same businesses only score their ability to optimise customer experiences and be driven by customer insight 3.1 out of 5.
“Companies need to have the internal organisation structured to be able to action their customer knowledge very quickly,” says Conway. “Being able to get into the market much more quickly with something that is new and relevant to the customer is going to become one of the distinguishing factors for competition going forward.”
Linking insight with agile models of working will be crucial. The brands that succeed going forward won’t be the ones that wait until they have something 100% figured out before going to market. “Brands should move into the market with something that is directionally correct and see how customers like it and then modify it as customers start to use it,” Conway advises.
The UK Top 100