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DIGITAL CUSTOMER:

2013 Global Consumer Pulse Research

It’s time to play to win and stop playing not to lose

Digital customer: It’s time to play to win

Most sports fans have seen their favorite team “play not to lose” at some point, whether the team is protecting a lead or taking a defensive strategy from the outset of the season. For sports teams, playing not to lose involves making carefully calculated moves to maintain parity and minimize the risk of a big play happening by the other team. Small rewards, but if all goes as planned, a minimal number of losses as well.

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Though companies are facing profound consumer changes largely driven by the digital shift, Accenture’s ninth annual Global Consumer Pulse Research reveals that most companies across industries have been playing not to lose. That customer strategy comes with stiff consequences in a world where consumers are more dynamic and empowered. At a global level, Accenture estimates that consumer switching puts a potential of up to $5.9 trillion of revenues at play, with $1.4 trillion in North America alone (see The Switching Economy).

It is not that expenditures haven’t been made. On the contrary, most executives could identify numerous customer strategy investments their companies are making in areas such as social, mobile, analytics, and cloud. Yet, despite these investments, our survey shows no material change in consumer attitude or perception. Key customer experience metrics have not moved. It’s time to play to win.

This report is the first in a series providing insights gained from Accenture’s 2013 Global Consumer Pulse Research and offering guidance on ways companies can maximize their return on investment in a world where every customer is a digital customer.

Playing not to loseA portfolio of customer experience indicators shows that companies haven’t moved the needle dramatically on any one. Whether the metric is overall customer satisfaction, a feeling of loyalty toward providers, willingness to recommend, or extent to which consumers intend to purchase more from current providers, no metric in any industry has consistently improved in five years; even worse, they all lost ground in 2013 (Figure 1). Also interesting to note is that despite significantly different market and consumer dynamics at play in each industry, none of the ten industries stands out from the others.

Given the flat-to-falling customer measures, it’s not surprising that switching due to poor customer service increased relative to 2012. Sixty-six percent of consumers switched companies in the


During the past five years of global uncertainty and volatility, many companies understandably focused on cost cutting versus growth. This often hindered advancing the end-to-end customer experience, including companies’ online and digital capabilities. Contrast that with consumers who, during that same time, rapidly adopted digital devices and online channels. The resulting new dynamics of “the digital customer” require different responses from providers. However, our survey of more than 13,100 consumers in 33 countries tells us companies’ efforts are falling short.

past year in at least one of the industries covered by the survey (Figure 2). Consumers in emerging markets are more inclined to switch providers due to poor service across all industries, especially within the retail, banking, Internet service provider and wireless phone industries. In addition, it appears that companies are not working hard enough to keep customers. Most consumers (82 percent) agree that their service provider could have done something differently to prevent them from switching due to poor service.

The lack of movement in key customer indicators is a strong sign that a play not to lose strategy has run its course. To play to win, companies need to understand that every customer is a digital customer, recognize that consumer dynamics have changed, and adjust their customer models in response.

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Accenture estimates that there is up to $5.9 trillion in revenue “at play” globally in 2013 as consumers choose to switch their product and service providers (Figure 3).

This “Switching Economy” potential is estimated based on Accenture’s analysis of customer switching rates from the 2013 Global Consumer Pulse Research as well as consumer spending forecasts across utilities, communications, financial services, insurance, consumer

goods, consumer electronics and hotels and lodging in 33 countries.

Our analysis found that, as consumers change the providers with whom they do business, companies have the potential to capture as much as $1.7 trillion among consumers in China and India, $1.4 trillion in North America, $1.0 trillion in Western Europe, $0.8 trillion in the rest of Asia-Pacific, $0.5 trillion in Central and South America and just over

$0.5 trillion in Eastern Europe, the Middle East and South Africa.

Source: Accenture analysis, 2013 based on Consumer Spending and Market Sizing forecast data (Euromonitor International, August 2013 and other sources) for countries and industries in scope of the 2013 GCPR.

Countries included: Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, Norway, Philippines, Poland, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Turkey, UAE, United Kingdom and USA.

The Switching Economy

Figure 1 Five-year trend in key customer experience metrics

* Hotels and Lodging replaced Travel & Tourism in 2013

** Property and Casualty (P&C) Insurance replaced Life Insurance Providers in 2013

Charts reflect percentage of respondents who answered “very much” to respective questions.

Overall satisfaction with providers (percentage of respondents)

Will recommend providers to others (percentage of respondents)

Feel loyal toward providers (percentage of respondents)

Buy more products / services (percentage of respondents)

Hotels and Lodging *

Property and Casualty (P&C) Insurance **

Consumer Goods Retailers

Consumer Electronics Manufacturers

Retail Banking / Financial Services Providers

Internet Service Providers

Cable / Satellite Service Providers

Landline Phone Service Companies

Wireless Phone Service Companies

Gas and Electric Utilities

50%

0%2009 2010 2011 2012 2013

2009 2010 2011 2012 2013

2009 2010 2011 2012 2013

2009 2010 2011 2012 2013

50%

0%

50%

0%

50%

0%


4

66%

62%

34%Global 2013

2012

2013

2012

2013

2012

Emerging Markets

Mature Markets

38%

81%

78%

19%

22%

54%

49%

46%

51%

Did not switch Switched

Figure 2 Percentage who switched any provider in any industry due to poor customer service

Figure 3 Globally, up to $5.9 trillion in revenue is “at play” in the switching economy


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5.9Global

Asia – China & India

North America

Western Europe

Rest of Asia-Pacific

Central & South America

Eastern Europe, Middle East & South Africa

1.7

1.4

1.0

0.8

0.5

0.5

Source: Accenture analysis, 2013 based on Consumer Spending and Market Sizing forecast data (Euromonitor International, August 2013 and other sources) for countries and industries in scope of the 2013 GCPR.

$ trillion

Every customer is a digital customerInternet penetration continues to grow at the global level, reaching two-thirds or more of the population in mature markets.1 Mobile online access is only accelerating that trend, with 69 percent of all Internet users making use of a smartphone or tablet.2 Our survey shows that 89 percent of consumers now use at least one online channel (company website, review sites, or others) when prospecting, with an average of three digital channels used by consumers across the global sample.

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1 http://www.internetworldstats.com/stats.htm North America, Europe and Oceania/Australia have penetration rates higher than 63%

2 Accenture Mobile Web Watch, 2012

Approximately one in three of these consumers access these sources at least half of the time through their mobile phone or tablet device, much more so in emerging markets. For customer service, only 30 percent of respondents say they do not make use of any online sources (website, text, chat) to obtain customer service and support (Figure 4). While customers move at different speeds and take different paths, every customer is now a digital customer, from the traditional customer to the digital-savvy one. For most businesses this means a new customer model is required.

Enabled by technology, customers expect to easily control and vary their routes within and across channels to suit their needs at any given moment. Pathways can be direct but more often than not are nonlinear, as consumers enter and exit relationships with providers via much less predictable points. The voice of others is increasingly insistent and influential on consideration and purchase decisions. It’s anytime and anywhere, and it can come from or through anyone.

A customer’s path to purchase used to be generally predictable, flowing through stages of awareness, consideration, evaluation, purchase


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Figure 4 Use of digital channels across customer lifecycle

and use. Today the journey is continuous because the touchpoints consumers are exposed to are always on, and customers can constantly re-evaluate their purchase options. In what Accenture calls the “Nonstop Customer Model”, it is easier for customers to compare a provider’s promise versus delivery, and how the overall experience matches up to their own expectations (Figure 5). It is also far more difficult for companies to design or fully control the customer experience. Companies that play to win recognize that today’s customers will define their own experience based on their personal expectations and needs.

Did not use any digital channel

Used at least one digital channel

11%89%

30%70%

2013 global channels used to search and learn about product or service

2013 global channels used to obtain customer service and support

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Figure 5 Accenture Nonstop Customer Model

Brand content & channels Open content & channels

Disc

over

Purchase

Use

Consider

Promise DeliveryEvaluate


Playing to winPlaying to win means taking an offensive strategy, making some bets and taking calculated risks in order to achieve greater rewards, be that competitive differentiation, greater customer retention, or higher customer revenues and value.


Figure 6 Customer-driven blueprint for digital experience

It requires a new model that is relevant to digital behaviors, and investment in customer and enterprise capabilities that have the highest impact. Companies that deliver customer experiences that are noticed and valued base their customer blueprint on

Hyper-relevancePredict their behavior

one step ahead

Relationships at scaleCreate new approach

to intimacy for all

Seamless experienceGlue it all together to

avoid breaking the flow

Inherently mobileGo and surprise them

where they are

Naturally socialEnsure they want you

to be with them

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five core elements (Figure 6): hyper-relevance, relationships at scale, seamless experience, inherently mobile, and naturally social. This is the first in a series of articles about how companies can develop these blueprint elements and play to win.

Know me: Hyper-relevanceStill, in 2013, among the 10 industries in our survey, no industry made noticeable progress in providing consumers with a tailored experience. In the utilities industry, for example, just 14 percent of consumers agreed their providers offer them a tailored experience while 41 percent disagreed. (In 2012 these figures were 16 percent and 37 percent respectively). Even in those industries such as hotels, banking and insurance perceived to be leading in creating more personalized interactions, only 25 percent of consumers acknowledged receiving a tailored experience.

Consumers are in control —they want relevant offers online, on the go and at the store. They expect their provider to know them and, as a result, provide more valuable interactions with them. They reward relevance but punish irrelevance by clicking away, disengaging and broadcasting their dissatisfaction through social media or word of mouth. In the past year, 26 percent of respondents posted negative comments about a bad customer service or support experience.

Hyper-relevance implies that companies are able to be a step ahead of the customer: predicting consumer behavior and, using knowledge of their needs and interests, customizing the interaction with the consumer at any point in time in any channel. This requires companies to efficiently utilize “big data”—including information mined from social media and other channels—and deploy advanced analytics to generate the insights needed to take actions to stay one step ahead of customers. Amazon represents a classic example of hyper-relevance, offering consumers automated recommendations for individual purchase intents.

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26%of respondents posted a negative comment about a bad customer service or support experience in the past year.

Show me you know me: Relationships at scale

Technology is finally at a point where buyers can be treated like individuals again. It gives businesses rich channels through which to communicate with consumers in much more personal ways, enabling them to manage relationships with consumers at scale. Digital brings the intimacy of the corner store relationship to all customers, and gives them more convenient access, more effective communication, and more tailored services that matter.

While many consumers are willing to be transparent with personal information, they are also quick to punish what they perceive to be a breach of trust. Our survey shows that companies setting false


Just a few generations ago, consumers often personally knew their providers, whether that was the local grocer or anyone else providing the products and services they needed. But that model changed. More and more face-to-face interactions were replaced by global call centers and web pages, leaving many consumers feeling they were treated with indifference and a lack of personal attention.

expectations while marketing and selling to them is frustrating for 79 percent of consumers, more so than any other issue. Realizing that a company cannot be trusted with personal information during the sales and marketing process is extremely frustrating for 54 percent of consumers. Forty-four percent of respondents who do not use online sources to learn about products and services would agree to use them, if they would get some form of guarantee that they will not be spammed afterwards.

A new level of intimacy with consumers is now possible, but it requires companies to redefine how they create trusting relationships with customers, not just online but offline as well. Digital becomes the glue for all types of interactions (face-to-face, online or offline) enabling companies to develop trusted relationships. It necessitates new capabilities to listen, learn and mass personalize customer interactions. It warrants an investment in technology and capabilities that achieve intimacy while effectively addressing privacy and security concerns.

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79%of respondents get very frustrated when providers promise one thing but deliver another one.

Delight me: Seamless experience

Our research found that, across industries, consumers on average use up to six different channels for prospecting, with a majority relying on both digital and traditional channels. Most companies understand they need several channels to interact with customers. Nonetheless, many providers embarked on a multi-channel model by “bolting on” new channels to their traditional channel model, failing to create a truly integrated view of the customer.

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The result falls short of offering the customer a seamless multi-channel experience.

With respect to the prospecting and buying experience, 79 percent of consumers find it frustrating having a company ask the same questions or market the same offers again and again; 65 percent find it frustrating being presented with inconsistent offers, experiences or treatment through different channels when shopping for the same product or service. Only half of consumers are satisfied with their ability to access customer service and support using multiple channels.

To create seamless experiences based on the changing dynamics of the nonstop customer, companies cannot build up digital channels while keeping analog channels and interactions status quo. Focusing solely on increasing digital capabilities is not sufficient. Instead, they should look at the outcomes they want to deliver and reverse engineer to identify what must change in channel mix and capabilities.

As digital channels increase in significance, traditional channels remain important and relevant.


79%of consumers find it frustrating having a company ask the same question or market the same offer again and again.

Enable me: Inherently mobile

3 “Mobile Web Watch 2013: The New Persuaders” http://www.accenture.com/SiteCollectionDocuments/PDF/Technology/ accenture-mobile-web-watch-2013-survey-new-persuaders.pdf


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The mobile channel’s importance to consumers throughout the sales and service relationship with a provider is established and growing. Thirty-eight percent of consumers accessing services through digital channels use their mobile device to do so at least half the time. For more than one-fourth of respondents the provider’s ability to offer customer service and solutions via digital, mobile, and social media interactions is a factor for selecting a new company. Use and importance of mobile interactions is much more important in emerging markets than in mature ones.

The potential customer retention benefit for those companies that create compelling mobile interactions is substantial. Building more availability of mobile service and support capabilities emerges as an area to develop. In our survey, mobile device users perceive companies’ use of the mobile channel for sales and marketing to be more effective than their use of the channel for service and support (46 versus 34 percent). Furthermore, among consumers who indicated their provider could have done something to prevent them from switching, 45 percent said offering better service and support options via their mobile device would have made a difference in their decision to switch.

The mobile channel offers providers the opportunity to bring hyper-relevance to customers where they are. Consider the way a retailer interacts with a customer: a discount delivered in an e-mail is often considered “spam,” while that same discount delivered as a consumer scans a product QR code is seen as good service. Accenture research shows that location-based advertising that is relevant and timely is well received. More than 70 percent of mobile Internet users who have received information on special offers and promotions on their mobile device while in a store find it informative.3 Farsighted businesses are building a variety of new mobile capabilities to engage consumers in ways perhaps not yet imagined.

While PC-based Internet access was the first step to enabling customers, mobile Internet access really brings that enablement to a much higher level. By any measure of mobile device adoption, consumers’ inherent mobility is clear.

46%of respondents perceive companies’ use of the mobile channel for sales and marketing to be effective, but only 34% perceive mobile channel use effective for service and support.

Value me: Naturally social

Instead it’s the “new normal”— just another way for consumers to communicate, collaborate and get information. As such, the power balance has shifted from companies to consumer as they can easily “raise their voice,” control the interaction process, and collaborate and co-create with other customers.

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Sixty-five percent of consumers are using sites like Facebook, Twitter, Pinterest, etc. for personal reasons such as interacting with friends and family. Use of social media is even greater in emerging markets where 83 percent are using various social media sites to interact with friends and family. An astounding 80 percent of consumers globally report using Facebook at least occasionally.

Survey data shows that use of social media in a consumer-to-provider context has stabilized globally. The influence of social media on consumers’ purchase decisions is significant. At least 28 percent of consumers agree that positive or negative comments posted on social media sites contribute to their consideration of buying a given product or service. Almost one-third trust comments about companies

and brands on social media sites posted by people they know. Almost a fourth report they are more likely to do business with a company that they know they can interact with in a social media environment.

General appreciation of social media’s impact has, to date, rarely translated into dynamic strategies that lead to relevance at scale. Social is not just a new channel for pushing information to consumers. It’s about changing the channel’s function to listen, understand what consumers think and want, and use that insight to engage them in valuable interactions. Leading organizations are using the power and reach of social media to harness insights, create relevance, hone relationships and target stakeholders in a more meaningful and trusted way.

Social media has fundamentally changed the ways in which people interact. It is no longer a channel distinctly separated in consumers’ minds.


21%of consumers across all industries agreed their providers offer them a tailored experience, while 26% disagreed.

Changing the game


Companies are recognizing that building these relationships requires agile front office capabilities—from marketing and sales to service, technology, operations and talent —that enable the organization to execute at digital speed. This implies customer-driven investment in process and operational changes, a digital technology foundation, and an action plan that prioritizes the highest impact capabilities. It is about eliminating the complexity inherent in analog processes and channels and building new capabilities based on a digital foundation.

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There is a first-mover advantage waiting for those companies that become the clear choice for connected, digital consumers. The goal is clear: multi-channel, seamless, hyper-relevant customer relationships at scale.

Farsighted organizations are seeing a golden opportunity to fuse social, mobile and digital capabilities to create truly personal relationships with consumers and to leverage those relationships to drive revenue growth. It’s time to step up the game. It’s time to play to win.

Next in the 2013 Global Consumer Pulse Research series: An in-depth look at each of the five customer blueprint elements.

About the research

The Accenture Global Consumer Pulse Survey is an annual research project that assesses consumer attitudes toward marketing, sales and customer service practices and consumers’ behaviors in response to companies’ practices. This year, Accenture surveyed 13,168 end consumers in 33 countries via the Internet between May 28th and June 6th, 2013. Respondents were asked to evaluate 10 industry sectors (up to four companies per respondent).

About Sales & Customer Services (CRM)

Sales & Customer Services (CRM) helps companies acquire, develop and retain more profitable customer relationships. We offer a broad range of innovative capabilities that address every aspect of the customer experience, including pricing strategy and profitability assessment, customer analytics, direct and indirect sales force execution, customer service, field support, customer contact operations, and retail/branch operations. We use these combinations of skills to help our clients accelerate growth, improve sales productivity and reduce customer-care costs—helping increase the value of their customer relationships and enhancing the economic value of their brands.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 275,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

Copyright © 2014 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

This report has been prepared by and is distributed by Accenture. This document is for information purposes. No part of this document may be reproduced in any manner without the written permission of Accenture. While we take precautions to ensure that the source and the information we base our judgments on is reliable, we do not represent that this information is accurate or complete and it should not be relied upon as such. It is provided with the understanding that Accenture is not acting in a fiduciary capacity. Opinions expressed herein are subject to change without notice.

The Authors

Robert Wollan, Senior Managing Director Dawn Palmer, Managing Director Naveen Jain, Managing Director

Contact us

To learn more about the Global Consumer Pulse Research or how Accenture can help you, visit www.accenture.com/GCPR2013 or contact our global managing directors:

Robert Wollan Senior Managing Director - Accenture Strategy Sales & Customer Services Lead [email protected]

Rob Honts Managing Director Service Transformation Lead [email protected]

Jason Angelos Managing Director Sales Transformation Lead [email protected]