The 10 Most Influential Customer Experience Milestones of 2013

Customer Retention
Customer Experience
Whether it's the airlines embracing mobile to assist customers, a bad-boy company promising to make over its service standards, or the launch of new technology that will change how consumers pay for everyday retail goods, these 10 customer experience incidents will change the course of how organizations deliver customer experiences.

Whether it's the airlines embracing mobile to assist customers, a bad-boy company promising to make over its service standards, or the launch of new technology that will change how consumers pay for everyday retail goods, these 10 customer experience incidents will change the course of how organizations deliver customer experiences.

1. The Affordable Care Act Puts Customer Centricity at the Heart of Healthcare

The Affordable Care Act may be wrought with political gaffes and website glitches, leading to media frenzy around the bill, however, there's one positive takeaway: the increased focus on the customer experience by insurers.

The open market place means greater B2C competition and increased focus on the end customer. Therefore, the new competitive environment will require insurers to adopt customer-centric business models, rethink their enterprise strategies, employ customer listening tools, and be proactive across all patient and customer touchpoints, providing relevant information that meets customers' individual health needs.

For instance, Assurant Health has been working to prepare its contact center for the influx of questions about to flood its telephone lines. Prior to the impending ACA concerns, Assurant Health struggled to glean data from random customer phone calls, as it couldn't quantify each issue's impact on the situation at hand. However, as part of the company's dedication to providing quality customer care, Assurant Health made an effort to improve the customer experience and call center effectiveness simultaneously.
With an emphasis on serving the unique health insurance needs of individuals and small businesses, Assurant Health implemented an array of customer-centric listening tools that allow the brand to incorporate the voice of the customer into its operations so the company may identify trends that are helpful to the business as a whole. By understanding the volume and frequency of customer concerns, Assurant Health's customer service representatives will be better armed with the tools necessary for delivering continuously consistent service and guidance during this confusing time.
While the pundits have their turn debating the drawbacks of the bill, insurers are putting the tools in place to become trusted advisors to patients, which will pave the way for additional investments in creating an omnichannel customer experience.

2. Retailers Embrace, Not Shun, Showrooming

Showrooming has become a common industry buzzword that spells doom and gloom for retailers. However retailers like Target and Best Buy are embracing the trend. In September, Casey Carl, Target's president of multichannel, stated that showrooming is "the greatest opportunity" for retailers. Target's efforts to enhance both its physical stores and digital channels reflect Carl's statement. For example, the company made free WiFi available in its stores and rolled out a new website called "Cartwheel," which allows bargain hunters to interact and shop via Facebook.

Best Buy also combated showrooming this year by investing in mobile, pushing promotions and discounts, giving people more incentives to come into the stores, and electing strategies from price matching to customer-service improvements that will convert more shoppers into buyers. The strategy is giving showrooming a knockdown punch. Last year Best Buy's stock was in the single digits and at the start of November it soared to $43.

That goes to show that providing a platform for customers to browse online is a win-win strategy.

3. Netflix Makes a Comeback

The Internet TV and movie subscription service rebounded this year from its fall from grace in 2011 when the company announced that it was splitting its DVD business from its streaming business. At that time, the new DVD-only business, Qwikster, would have a separate queue from the streaming-only Netflix. The Qwikster strategy was soon scrapped after outraged customers began dumping their subscriptions.

Recognizing that its audience had alternative streaming channels to choose from,
Netflix concentrated on its core customers and calculated their lifetime value to the company, designing treatment strategies around how to find them and keep them happy. The company set itself apart again with the development of original content like "House of Cards" and "Orange is the New Black." Now, with its soaring stocks and subscriber gain by the millions, Netflix is the corporate comeback kid of 2013.

4. ISIS Changes the Game for Mobile Wallet

It's been a long time coming, but in November, ISIS, the mobile payment initiative run by AT&T, T-Mobile, and Verizon Wireless was finally made available to 40 different select Android phones (access to the iPhone is promised for a future date). Isis, which employs near-field communications, is appealing to companies because it not only enables customers to shop and pay with their phones, but they can also receive special offers and loyalty discounts. And more than 100 million card holders in the U.S. alone are eligible.

The app will require customers to install a free SIM card from their wireless carrier. With the launch, customers can now use the Isis mobile wallet at any merchant that accepts contactless payments.

Isis is a game-changer because it's one of only a few independent wallets that isn't tied to a specific financial institution, merchant, or online marketing scheme. Therefore, the national rollout is an important step toward making mobile payments and automatic loyalty point redemptions a part of everyday retail experiences--a step further down the path of creating richer customer experiences.

5. Telecom Providers and Utilities Get Proactive With Customers

During many of 2013's natural disasters (the February blizzard that dumped three feet of snow on the Northeast, Super Storm Sandy, and myriad tornadoes that struck the Midwest), Telecoms and utilities reached out to customers with alerts, apologies, and procedures in a proactive manner.

In fact, according to a J.D. Power 2013 Hurricane responsiveness study, satisfaction was highest among customers who say they received proactive outbound communications, in which their utility sent emails, text messages, or outbound phone calls.

Optimum, a cable, Internet, and phone company in the North East, sent emails to customers during the February blizzard to apologize for service disruptions and outlined how the company would send updates on service restoration as they became available. Another email apologized for the service disruption and provided links to instructions on how to reset modems and cable boxes.

While alerting customers via email and outbound calls is critical during power outages and storms to predict such events and respond promptly and communicate immediate action for emergency allocation, studies show that 80 percent of utility customers across all demographics prefer receiving outage and payment alerts via text instead of email or calls. According to the J.D. Power study, nearly three-fourths (71 percent) of customers who made contact with their utility during the outage used their mobile phones--all the more reason for utilities to continue to adopt proactive SMS communications approaches.

6. RyanAir Promises to Improve Customer Service

The Irish 'bad boy' of budget airlines, which made headlines in the past for charging passengers to use the toilets, announced that it would begin to transform its culture that has a reputation for treating passengers badly. The airline's CEO Michael O'Leary recently went on Twitter for a live Q&A to learn firsthand about the passenger's problems and complaints. The airline plans to introduce a number of service improvements as a result of this listening. Some of those include:

- The operation of 'quiet flights,' prior to 8 a.m. in the mornings and after 9 p.m. in the evenings.
- Permission for passengers to bring a second small carry-on bag.
- Customers who book directly on the website will be given a 24 hour grace period from the time of their original booking to correct any minor errors (i.e. spelling, names, routings) made in their original bookings.
- Standard airport bag fees will be cut in half at the bag drop desk, bringing them into line with competitor airline standard airport bag fees.

Fortunately for passengers, the airline dropped its plan to charge fees for using onboard toilets. Instead it's pushing ahead with a new plan to remove two of the three bathrooms on board to make room for additional seats. At least the other service improvements are a good start. Well wishes to RyanAir as it attempts to adopt customer-focused practices.

7. Airlines Take Mobile to the Skies

Despite the U.S., Federal Communications Commission and Federal Aviation Administration regulations that prohibit the use of mobile phones aboard aircraft in flight, many airlines are starting to put mobile devices in the hands of their flight attendants.
Delta's 19,000 flight attendants, for example, will soon be using the Windows Phone 8 smartphones to handle on-board purchases, as well as other functions, such as processing customer purchases like seating upgrades, retrieving connecting gate updates, and accessing passenger manifestos.

Low-cost carrier Allegiant Air is also looking to equip its staff with devices to help customers. The airline plans to use Apple iPads to support its buy-on-board program. The crew can assist customers in a number of areas, including electronic flight bag, in-flight operations (including buy-on-board), and cabin crew automation.

More airlines are recognizing the value of equipping their on-board crews with tablets. British Airways decided to invest in iPads for its entire airborne staff. The company's management wanted to find a way to provide a seamless experience throughout the customer journey, as well as make information available to frontline employees, allowing them to have a personalized dialogue with customers.

The iPads enable the crew to download up-to-the-minute information just before the plane takes off, allowing flight attendants to have access to information about their passengers up until they board the flight.

This initiative is helping the cabin crew be better informed about the passengers on a particular flight and allow for better follow-ups, for example if a passenger encountered a problem on a previous flight, like misplacing his luggage. Further, flight attendants can input additional customer information directly on their iPads, allowing for a 360-degree view of customers. This is leading to a better experience for travelers who are given more personalized service.

8. Companies Amp up Their Social Service Responses

In 2008, when United Airlines passenger David Carroll witnessed baggage handlers tossing his guitar and breaking it, he reached out to customer service for reimbursement with no response. After multiple contacts, he wrote the song, "United Breaks Guitars" that brought him YouTube fame and eventually international acclaim.

When that song went viral via social media, helping to sink United Airlines' stock at that time, it crystallized the importance of responding to customers at the moment when they engage with their brands via social.

This year companies seemed to have gained an understanding of the value of having a real-time response strategy to customer issues via social. Gartner even predicted that failure to respond via social channels can lead to a 15 percent increase in churn rate for existing customers. In response, many brands are mandating that their frontline staffs be proactive via social channels. Delta, for example, offered to repair a passenger's $10,000 vintage Gibson guitar after the passenger posted on Facebook how an elevator service door crushed it. Gibson also proactively contacted the passenger when it caught wind of the story, offering repairs on the damaged 1965 ES-335 as well as a brand-new 50th anniversary reissue of a 1963 Gibson ES-335.

Hotels are also improving their social responses to guests. At the Palms Resort and Casino, all staff, including marketing, monitors social media for mentions and issues concerning guests. All employees, not just frontline staff, are empowered to resolve issues as they occur, alerting parties internally of real-time issues and recognizing employees who guests complement via social.

And airline KLM Royal Dutch Airlines' "KLM surprise" program encourages representatives of the airline to actively 'listen' to the social media activity of its passengers in the hours leading up to selected flights. When a passenger tweets his or her flight number and destination, the airline checks the passenger's social media profile to learn about that person's interests and what he or she looks like. They then select a small, but personal, gift based on the passenger's social media profile, before tracking them down (typically at the boarding gate) and surprising them with the gift.

So what does all of this mean? This isn't just about using the latest and coolest new technology for the sake of it. Everything here is underpinned by a desire to serve the customer better. KLM is showing what is possible when combining the desire to serve the customer better with proactive use of social media. The Palms is demonstrating what happens when an entire employee culture is empowered to respond via social, and Delta and Gibson show the power of social in creating a PR buzz when partaking in a generous act to fix a customer issue.

However, according to an eMarketer study, there's room for improvement, with only 49 percent of brands responding to mentions via social media. Hopefully 2014 will see an increase in companies Tweeting their way through service requests and customer issues.

9. Customer Satisfaction Improves in Laggard Industries

Airlines, restaurants, wireless phones, subscription TVs, and government aren't typically heralded as the poster children for delivering optimal customer service. In 2013 these industries still didn't top any customer experience lists, but they did show modest improvements in customer satisfaction.

According to the American Customer Satisfaction Index, these industries are charting an upward course that began in 2011. In fact, aggregate customer satisfaction rose up 0.4 percent to 76.6 on a 0 to 100 scale, pushed by gains across the Information sector.
Earlier this year, Claes Fornell, ACSI founder and chairman, said, "Because repeat purchases are a big part of total consumer spending, customer satisfaction is essential for spurring consumer demand."

The ACSI's May 2013 report introduced an array of new measures that encompassed key elements of the customer experience specific to individual industries. For each industry, the ACSI measures 8 to 10 customer experience benchmarks, including call center and website satisfaction, service reliability, and factors such as HD picture quality for subscription TV service or battery life for cell phones.

These modest gains are a step in the right direction. As companies strive to provide an integrated customer experience across multiple channels, companies need to continue to meet customer needs and demands across all touchpoints and integrate them along the way.

10. The Notion of Banking Stands to Radically Change

Digital technology and connected devices facilitate customers' experiences throughout the day. Banking not excluded. Today's customers don't need to step foot into a retail banking store nor log onto online banking from their desktops. Unheard of just a couple years ago, customers can manage their routine banking tasks from their handheld devices.

This year, numerous banks launched more user-friendly tablet and mobile apps to allow their customers to conduct quick, secure transactions, view balances, transfer money and locate nearby branches and ATM machines. Users can also monitor investments, holdings and activities as well as get quotes for stocks and mutual funds in real-time. In the MyPrivateBanking report, "Mobile Apps for Banking 2013" the sheer number of banking apps and app features have grown explosively compared to the 2011 edition of the same report. This is accompanied by an improvement in overall quality, with the average rating increasing from 35 to 40 out of 60 points in 2013.

The report examined mobile solutions for retail customers of the world's top 50 banks and found that the quality of mobile banking apps is increasing. Capital One, Singapore-based DBS Bank, and Deutsche Bank, for example, received top marks in the report because of their well thought-out, comprehensive app strategies and they provide more than just basic account information and transaction features.

While the overall quality of mobile apps for banking is increasing, there's still a critical lack of more advanced, user-friendly features and content. The analysis shows a high divergence between the best offerings and those from the mass of the banks analyzed. Banks have to do their homework in respect to mobile apps. First of all, banks must listen to their app users better. App stores, social networks, and other channels provide frequent and instant feedback from users on banking apps.