What does a CXO in a global OTT streaming powerhouse have in common with a counterpart in a FinTech company? While target audience and market dynamics maybe different for every category there is a common factor: we all have to craft business strategies in a digital world. However, are all enterprises on a level playground when it comes to making the most of human capital and digital technologies?

According to PwC’s Consumer Intelligence Series, while Industry 4.0 or the Fourth Industrial Revolution (commonly known as 4IR) ‘may be everywhere, not everyone is yet fully on board’ to thrive in this digital revolution. We may never achieve a situation where all enterprises are equally adept at crafting delightful digital experiences by effectively using emerging technologies such as artificial intelligence, data analytics, blockchain and more.

In my interactions with CXOs across various industries, I have observed three common challenges which all enterprises – irrespective of domain, B2B or B2C, have to grapple with:

1. Human insight as compliment to technology 

Is technology everything? Is effective use of code, blockchain or voice technology a true long-term advantage? In my view, no. Nothing can replace the intuitive nature of human interaction and insight gathered from such. HBR defines an insight as ‘an imaginative understanding of an internal or external opportunity that can be tapped to improve efficiency, generate revenue, or boost engagement’.

In my experience as a student of Design Thinking, what has created the most impact in outcomes is empathizing with end consumers – what makes a person tick, what brings a smile and what gives a satisfyingly delightful experience – making a person feel productive and empowered. Such insights, when married with the right technology have the power to drive loyalty and thus impact a business financially. The fields of epistemology, ontology and psychology (the science of knowledge, being and behavior respectively) play a key role in gaining user insights. These sciences help us understand:

• How the emotional and rational brains work
• How the sub-conscious mind works
• How humans make decisions
• The power of strangers, reviews, ratings and public commitment
• The bystander effect
• The ‘give to get more’ principle
• How to harness a refusal for sale
• How to tap into the reptilian brain for snap decisions
• How to keep the user entertained through gamification
• How to balance color, motion, images, premium slots, information, etc. online
• Usage of powerful words in English dictionary

2. Digital expertise as competitive advantage 

Back in 2018, many industry leaders declared ‘all companies are technology companies now’.  BCG described it as ‘a capacity to capture and capitalize on vast lakes of customer and other data and ultimately the capability to create digitally enabled market-leading goods and services.’ It made sense as what powers diverse businesses such as food delivery, vacation rooms, e-commerce, media or banking was technology. Technology was utilized to understand consumer behavior and help craft product or service offerings. Over the last couple of years a few macro trends have added new dimensions to this state of affairs.

• Firstly, genuine service or product differentiation has become even more difficult to achieve. Customer experience – the catch-all phrase covering digital and human interactions often ends up being the differentiator.

• Today’s consumers are brutally unforgiving. A poor website experience, a service issue unattended or a malfunctioning app is enough to lose a customer forever. Retention is the new growth. Understanding user psychology and analyzing user data during their online engagement is key.

In this context, for most businesses, digital expertise – the ability to apply machine learning and design thinking principles together becomes a key competitive advantage.

3. Purpose for profit

Brand purpose has become a buzz phrase over the last few years – with varying degrees of success. In my view, enterprises need to define a higher order benefit or a value which they stand for. However, such a goal has to be genuine, hard wired to the business the enterprise is in and matched by real, on-ground efforts. Doordash is not just a delivery company – it defines itself as ‘technology company that connects people with the best in their cities. We do this by empowering local businesses and in turn, generate new ways for people to earn, work and live’. They back this intent with initiatives like Project DASH (DoorDash Acts for Sustainability and Hunger), focused on tackling the problems of hunger and food waste in the local communities they serve. At Robosoft we have defined our higher purpose as “Simplifying lives” of billions of citizens globally through technology and human-centered design. Our engineers, designers and product analysts wake up every morning motivated to make a difference and simplify lives of users of the apps we build; simplifying the way citizens buy, sell, transact, bank, pay, get entertained, get insured, consume, order, travel and what not.

Design Thinking principles and understanding consumer insights can also help enterprises craft their higher order purpose and bake that larger idea into not only the products & services they craft but also in the way their employees deal with customers – becoming second nature to the company itself.

This article was originally published at Linkedin Pulse under my LinkedIn handle – Ravi Teja Bommireddipalli

Digitization has enabled industries to accelerate growth by providing solutions to target a wider audience, reach it faster, and deliver their services more efficiently.

Consumers today are increasingly comfortable with no human interaction in categories like hospitality & tourism – which not too long ago preferred human interaction.

The hospitality and tourism industry has seen a massive movement towards digitized services in the last few years. Research suggests that 48% of smartphone users in the U.S. were comfortable researching, planning, and booking an entire trip using a mobile device.

What started with basic services like online booking and registration has since grown to apps facilitating shared economy like Airbnb and Uber, and mobile check-ins like from the Apple Watch.

What is Driving Digitization in the Hospitality & Tourism Industry?

The growth of an enterprise in the hospitality and tourism domain relies predominantly on the customer experience. Customer experience is about how a customer perceives the brand through all interactions across the various stages of the customer life cycle. Unlike customer service, which focuses on the specific interaction at a given time, customer experience is more of a holistic approach that takes into account the overall customer journey.

By leveraging the right technologies, travel enterprises can enhance the customer experience while maximizing customer acquisition, engagement & retention. The Atlantis in Dubai, for example, has a Virtual Tour video on YouTube that allows users to experience the hotel even before stepping out of their house.

Another major contributor in the shift towards digitization in the hospitality and tourism sector is the concept of the shared economy. Shared Economy is a peer-to-peer service made accessible over technology, for instance, Airbnb and Uber. In both cases, a consumer with a need and a peer with a solution are brought together via an application. Such P2P services have simplified the travel experience by making basic necessities like accomodation and commute more easily accessible, and have contributed towards attracting a greater percentage of consumers.

Technologies that Businesses in the Hospitality & Tourism Domain are Leveraging for Better CX

1. Chatbots, Artificial Intelligence & Machine Learning

Hotels, airlines, and other divisions in the hospitality and tourism domain are leveraging chatbots for better customer service and communication round the clock. Today customers prefer contacting a company via chat rather than on a call; according to a report by Outgrow, 56% of people are more comfortable texting over a chat window than calling customer service, making chatbots an ideal solution. The reason for an aggressive adoption of chatbots is obvious: it saves manpower costs, eliminates wait time, minimizes errors, and maximizes efficiency with automation.

Powered by AI and Machine Learning, chatbot solutions today are capable of performing more than just basic conversations. The entire process can be automated to be triggered based on keywords entered by a customer.

In collaboration with the Government of India, we created a digital platform for Indian air travelers. We designed and developed a web portal and a mobile app that gives users realtime flight status and domestic & international flights schedule. The platform offers chatbot support for faster resolution of queries and also provides a personalized travel experience.

Another great example is FCM Travel Solutions’ Smart Assistant for Mobile, or SAM. Unlike Expedia, which is built on Facebook Messenger, SAM is a travel assistant mobile app that can be used to book flights, hotel rooms, gauge the weather at a destination, and more through a simple chat interface.

Image source

2. Smart Rooms & Voice Assistants

Voice search and assistants have become the norm today. According to a report by Quoracreative, Google sold over 8 million Google Home models in the year 2019, and Amazon had sold over 4.1 million Echo devices in the year 2018 by Quarter 2. And, according to a report by 99firms, approximately 65% of Amazon Echo and Google Home owners state they wouldn’t go back to using keyboard input unless necessary.

A brilliant example of using Voice-enabled smart rooms for improved customer experience is Amazon’s Alexa for Hospitality by hotel giant Marriott. All smart rooms are equipped with an Alexa device that is configured for the hotel. It allows guests to control appliances within the room, ask questions about the hotel, book services like reservations, order items from the hotel, place requests with the staff, and also perform general search inquiries.

Another instance for smart rooms in hotels is Hub Hotels by Premier Inn. They provide a mobile app with which visitors can control appliances like the television and settings like the room temperature directly from the device.

3. Virtual Reality

VR technology gives potential customers an experience of their services and attractions to help them make a decision through 360-degree videos, VR hotel tours, virtual maps, etc. Another instance of VR in hospitality and tourism is the Pullman Brisbane King George Square Hotel VR Tour. The VR tour provides a complete view of the hotel from the outside, the lobby, individual rooms, services, the indoor restaurant, etc., all through a single video accessible for free on YouTube. This enables consumers to avail the ‘try before you use’ option that was, not an option previously.

4. Augmented Reality

The tourism and hospitality industry is leveraging AR to improve the customer experience through interactive hotel elements, pop up facts and information at tourist destinations, fun games like treasure hunts within resorts, etc. Here’s an instance of – AR wall map in Hub Hotels by Premier Inn, where room visitors point their AR-enabled devices to the map, and popular attractions around the city pop up on their device screen.

5. Internet of Things (IoT)

IoT goes beyond a single room or hotel and covers a tourist’s experience throughout their tour. It is enabling smart cities and is fostering smart tourism ecosystems. Airplane can install sensors that sync with flyers’ devices to track heart rate and anxiety to improve their flight experience; hotels can leverage IoT to provide visitors with Smart Room features, local businesses can provide more personalized services by learning a user’s likes and dislikes from past purchases, etc.

Some of the top applications of IoT in the tourism and hospitality sector include:

1. Smart rooms
2. Airplane sensors for mood monitoring
3. Location tracking for safety
4. Personalized marketing
5. Easy public transportation and better connectivity
6. Better customer service

The customer trends and growing need for personalization in the tourism and hospitality industry demand platforms and technologies that can simplify the customer experience. And technologies like Voice, Alexa Skills, AI & ML are facilitating this process exceptionally. With most industries switching to technology-based solutions, the disruption of technologies in the travel and hospitality domain will continue at a steady pace, and travel brands will continue to transform and embrace technologies that elevate the customer experience.

Part 2 of this article will outline some of the top UX Design best practices that travel brands can emulate to increase customer engagement, acquisition and retention.

From Uber to Amazon to Airbnb, two-sided marketplaces have disrupted multiple industries. The workforce or labor industry is now going through disruption that retail, hospitality and automotive industries have gone through due to the emergence of such marketplaces. The ‘freelance economy’  currently makes up 36% of the U.S. workforce and is projected to reach 50.9% by 2027. Labor marketplaces have been key players in shaping the freelance ecosystem. In this article, we explore how two-sided marketplaces will impact the future of work and how these models could augment in the future.

What are the factors for emergence of two-sided marketplaces

There are various macro-trends that have led to the emergence of such marketplaces:

• Everything is moving online: This trend started with eCommerce portals like eBay and Amazon, which were among the first industries to move online. But as the internet and economies matured a lot of industries followed and the internet became the entry point of work.

• Increasing cost of living: The other macro trend that has contributed to the emergence of two-sided marketplaces is the increasing cost of living and people across the globe are looking for ways to supplement their income.

• Rise of remote workers: In today’s gig economy people are looking for flexible lifestyles. They do not want to spend a lot of time commuting to their workplaces. Even companies spend substantially to shuttle employees to offices.

What is unique here is, two-sided marketplaces are not just restricted to traditional gig-economy workers, limited to one category like graphic designers. Such type of work has always been outsourced to freelancers, but now we see other categories of work going online too.

• Rising skills gap: The demand-side of the marketplace is facing a skills gap. Organizations are increasingly finding it very difficult to identify the right resources at the right time. In the Bay Area, it takes an average of 3 months to find the right resource, which may be too long a waiting period for many enterprises.

Traditional Managed Service Providers vs two-sided freelancers’ marketplaces

A Managed Service Provider (MSP) is an entity that large enterprises could engage with to manage their contingent workforce. MSPs help enterprises in the complete cycle from hiring contingent workers to paying them and ensuring that it is done efficiently. Such services drive a lot of efficiency and value for large enterprises.

Gig-economy or freelancers’ marketplaces like Upwork provide a different way of engaging with the worker. In most MSPs, the operators are staffing companies, and they continue to operate with their traditional models. They call hundreds of potential candidates each day to fill the on-site vacancies. The drawback is these companies have a very large footprint.

The challenge most organizations are facing today is the skills gap, especially in emerging technologies like AI, ML, RPA (Robotic Process Automation), and Blockchain. Additionally, considering that MSPs are under pressure to deliver cost-savings, it becomes difficult for them to balance the equation because of the overheads.

Two-sided marketplaces bring technology as a solution to the cost and skill gap problem. They replace the traditional overhead in recruiting with a global marketplace platform that essentially flattens the world. Once you take the location out of the picture, the skills gap is not so wide.

Also, these platforms enable hiring managers to self-source candidates and allows them to hire candidates faster, and at a much lower cost. In the case of MSPs, the process takes much longer – from submitting a requisition, waiting for it to come back from the suppliers, reviewing the resumes and so on.

The gig economy marketplaces deliver on the speed, cost, quality equation really well – just like Uber and Lyft have done in the taxi aggregator space.

Gig economy sector-level distinctions

Broadly speaking, the gig economy can be broken down into four sectors based on services provided to the customers.

Source: Mastercard Gig Economy Industry Outlook and Needs Assessment

Asset-Sharing Services: When we talk about Airbnb, Tripadvisor rentals, many of these services are located in areas such as the USA and Europe where the cost of living is high. Even though the volume of bookings for these services are much lesser than transportation-based services, they compensate with higher ticket size per home rental.

Transportation-Based Services: The universality of ride-sharing economy across the globe has shot up transportation-based services and caught the imagination of the world like anything. From major platforms in North America such as Uber or Lyft to those in Asia Pacific such as Grab, Go-jek, Ola; everyone has thrived in this economy. And despite having low ticket value per customer, the sheer volume of bookings more than compensate for the revenue generation.

Professional Services: This sector of the gig economy brings the lowest of revenues when compared to others. This may be due to the transactional nature of the services. While many of the consumers of these services are present in developed markets, the access to high speed internet in developing nations has enabled businesses to outsource their services to gig economy workers present in these countries. The cost per work or “gig” is significantly lower in the developing countries to add to the abundance of choices available.

Handmade Goods Household & Miscellaneous Services (HGHM): It is the fastest growing and diverse of all the gig economy sectors. It features many niche platforms that are still working towards brand awareness. Currently, there is a heavy concentration of these platforms in North America and Western Europe when compared to the rest of the world. It is expected to start reaching for a global base once it starts approaching the saturation limit of customer base in the current regions. These companies seek to fill a specialized gap in the service market such as on-demand message services to in-home tech support.

Key challenges for Corporate and Corporate Real Estate (CRE) to support gig economy

The rise of the gig economy has instilled a sense of freedom and empowerment in workers today. It has increased the expectations of gig economy workers from corporate and CREs in terms of facilities and benefits. Today corporate and CRE groups are expected to do more than just provide a desk to every worker and maintain space. They are expected to create an environment of harmony and support that contributes to company goals.

Some of the key challenges are mentioned below:

1. Building corporate culture and work harmony

The most difficult aspect of working with gig economy workers is incorporating a corporate culture among them and creating an ideal work environment for them to work. The fact that 30 to 50 percent of your workplace are not your employees makes it difficult to build that corporate culture. It directly affects the worker attitudes and their commitment to long term needs of the company.

Addressing these concerns starts with treating all workers the same, whether they are gig workers or permanent employees. Companies need to understand the brand equity and future opportunities gig economy workers bring. The gig economy workers may return in a new role later to the company. Now if they had a good experience in your company, then they’ll be the advocates of your company even after they have moved on from their job.
CRE can go a long way toward supporting this mindset, by providing environments that encourage all workers in the gig economy to feel like part of the team.

2. Supporting mobility at work

The convenience of technology has increasingly made all the workers mobile and flexible to work from anywhere without any drop in work quality. People are working from home, in coffee shops and on the road as suits their responsibilities, schedule and lifestyle. Gig economy workers may not have the say in the matter since they don’t have a permanent desk job.

Corporate and CRE can support gig economy workers by providing access to required technology that helps them stay connected from anywhere. Moreover, if you provide agile work spaces that accommodate more people with fewer spaces, more and more contingent workers may desire to work from the office.

3. Supporting and adapting to rapid pace of business change

The biggest benefit of the gig economy for corporations is the ability to scale the workforce up and down as required by the immediate business goals. It helps the business to become more agile and adaptable to any changes in the business economy. It’s also easier to move gig workers with a particular skill set between business teams for short-term work.

Corporates must be always ready to respond to any rapidly changing structure of business teams in the gig economy. It means being ready to move and rearrange office space or implement work from anywhere settings at the drop of a hat. The recent pandemic has shown those businesses who always had a contingency plan were the first ones to recover and resume normal services in the gig economy.

4. Inclusive workspaces

Collaboration in the workspace is what runs the business machine smoothly. Having half your workforce as gig economy workers would always pose a collaboration challenge. The teams are in constant flux and the people don’t know each other well to build some sort of rapport. This in result hampers teamwork and stops the influx of better ideas, leading to fewer innovations than needed to be competitive in the global economy.

Corporates and CRE groups can encourage more impromptu collaborations by providing collaborative workspaces based on the understanding of spaces required. If your office has workspaces for different sets of groups like groups of 2 or 3 or 10 people to work together, office mingle areas such as cafeterias, gym, team huddle areas then it’s already half the work done.

5. HR management of gig economy workers

The HR department is the frontier for any gig economy worker. Traditionally HR departments in corporate culture have been reduced to hiring individual talents based on requirements and reactive risk mitigation. But with gig economy workers being reactive to risks isn’t going to cut it.

The HR department must always plan ahead when it comes to gig economy workers. It will be like assembling a crew for a special task and each crew member has to be thoroughly checked and tested for business requirements.

How the two-sided marketplace is redefining the future of traditional HR in enterprises

Traditionally, HR’s role in most organizations has largely been of risk mitigation – coming into effect when employees are not performing well, resources need to be reduced or during employee onboarding. All these can be labeled as fairly reactive.

But HR has also to be at the front center when it comes to the macro-trends with skills gap – how an organization’s talent pool is in comparison to other organizations, how to retain, grow and re-skill resources and so on. As these macro trends evolve HRs role now has become much more strategic. The two-sided marketplaces are giving HR an incredible tool for strategic workforce planning.

Traditionally strategic workforce planning was about the talent inside the four walls of an enterprise. But the workforce of the future is going to look like construction crews or movie production – where experts come together to build something and then disperse.

As HR starts playing a strategic role, there is an opportunity to include these gig marketplaces into their workforce planning and beyond winning the talent war, delivering strong outcomes for their stakeholders. This is one of the things that is redefining HR from managing risk to playing a more strategic role to deliver real quantifiable results for businesses.

With online marketplaces, HR teams can deliver on speed and cost – both of which are quantifiable and can be a game-changer in the domain. This will impact the traditional roles of HR in terms of background checks, training, etc. as most candidates will be self-trained. Some gig workers can also act as mentors or trainers going forward. For instance, Everwise connects resources to mentors, and LinkedIn matches mentors to profiles. Further, e-learning is becoming increasingly popular. A growing trend suggested that large enterprises will soon use online marketplaces such as these to help their employees experiment. This is something that Google already does. Enterprises can allow workers to enroll on these platforms, interact and share their skills, and get real experience. This benefits the employee as they can get trained and paid for the project at hand, as well as the enterprise as they get a skilled resource.

• The chicken before the egg problem: Marketplaces should have good jobs that are matched to the right resource. So they have to be really good at profiling and matching freelancers with opportunities based on their skill sets. Marketplaces struggle with the ‘chicken before the egg’ issue of whether they should get the supplier or the demand first. In an ideal labor marketplace, we need to find both. For instance, Uber started with both, they seeded demand and also had drivers.

• Making payment structure easier: Make payments easier is one of the biggest pain points for freelancers. On an average, payouts take 30 to 90 days, which can prove to be inconvenient for freelancers who rely on this income to pay their daily bills. It is important to create a marketplace that makes it easier for them to get paid soon after the completion of the project. This gives rise to another important marketplace – the responsibility of collecting payments from clients.

• Ease of use for hiring managers: It is imperative to design an easy request creation process for resources, much like Amazon. Additionally one can bring value to them by curating relevant talent and building trust through reviews, ratings, etc.

• Mitigating risk: For buyers, HR, procurement and legal teams it is important that these online marketplaces mitigate risk. For example, through classifications like the 1099 forms for freelancers as in the US. If you are engaging someone from a gig economy it is important to ensure that all relevant documents are in place – from registration to insurance.

• Incentivization: It is also important that these marketplaces provide incentives to both sides to get them on the platform. They have to kickstart liquidity (transaction) through tactics like lowering transaction fees, offering referral codes and making some transactions free. While it is not difficult to get freelancers on such platforms, demand-side is the tougher nut to crack, especially with large enterprises.

Key challenges in successful onboarding of both parties to a two-sided marketplace

Some things play an important role and should be considered while creating a two-sided marketplaces:

For freelancers:

• Easy profile creation that can be matched to their skillsets
• Fast and frictionless payment process
• Finding quality demand and quality projects

For hiring managers:

• Fast and easy search of relevant resources
• The right collaboration tool
• Imbuing a sense of trust with the platform and those registered
• Protection from below-par delivery or non-performance

Additionally, these are some points to consider in the case of legal and procurement teams:

• Visibility on spends
• Usage pattern of the platform by hiring teams
• Proof of value for the organization
• Protection against misclassification

How two-sided marketplaces can build trust on their platforms

The data provided by freelancers is usually not validated, much like how resumes work in the traditional recruitment world. It is important for marketplaces to validate the information to build trust. For instance, it is highly essential to verify a creative freelancer’s portfolio. Hiring managers should also be able to verify their work portfolio by way of displaying renowned client logos. For engineers, Github is a great platform to validate their skills. They could complete skill-based tests and get rated in order to get verified on the platform, thereby mimicking a storefront where one can make a decision to purchase after careful consideration of the quality of the product and its reviews. Evidently, this means the marketplace has to use elbow grease in verifying the recruiter/freelance profile in the initial stages.

Marketplaces need to evoke trust in freelancers, especially for SMEs by using Escrow as a way of protecting freelancers’ work, holding money in a trust and releasing it only when the work is completed to satisfaction.

Few learnings for HR based two-sided marketplaces from counterparts in other industries

One of the biggest learnings from a platform like Uber is how they match buyers and suppliers. Similarly, Airbnb curates suppliers by identifying them on behavioral metrics and highlight things like – ‘This host is known for being friendly’. Uber suggests features like ‘This driver is known for great conversations.’ Labor marketplaces can take a cue from this and up their curating game by classifying freelancers beyond their listed skill sets. It can make a difference between a good digital experience and a great one.

Impact of technologies and business models in such marketplaces

 From a technology perspective, AI, ML, and Blockchain will play a huge role in how the marketplaces establish trust, resource profiling, getting matched, and getting paid quickly.

Blockchain will play an important role in building trust because of it’s shared ledger model. It is a great opportunity in labor marketplaces to make it more transparent versus the current models that are siloed and closed.

In terms of business models, the prevalent business model is a transaction fee or percentage fee that is taken from the freelancers and buyers. This model will probably stick for a while. However, over time these marketplaces could have difficulty commanding higher prices.

New models such as retainer-based SaaS models where you pay a certain amount and get services on a monthly fee, may emerge. In such models, both freelancers and the marketplaces get paid on a revenue-based recurring model. One such example Legalzoom – an online legal technology company that helps its customers in creating an array of legal documents without having to necessarily hire a lawyer.

Unequivocally, the freelancer economy is on the rise, and the two-sided marketplace is sure to transform the future of work into a more flexible, efficient and cost-effective systems.

A few years ago, the customer experience was how a customer was treated when they were at a store, a restaurant or a hotel. It perhaps began when the customer entered and ended when they left the premises. In that context, enterprises, especially in consumer goods, placed a lot of emphasis on in-store experiences right from point of sale material, shelf display and packaging. Service brands laid emphasis on people-driven customer service.

Procter & Gamble, coined the phrase ‘First Moment of Truth’ to an in-store experience, especially when the customer is interacting with the packaging or POS material. It is believed that it occurs within the first 3-7 seconds of a consumer encountering the product and it is during this time that marketers have the capability of turning a browser into a buyer. The actual product experience was the ‘second moment of truth’ – as it was about the product living up to the claim. As the world became more digital, enterprises realized that the web played a big role in influencing brand choice even before they entered a retail store or went to an e-commerce portal. Google called it Zero Moment of Truth – as the web, especially search results, expert & customer reviews influenced the consideration set before the final brand purchase. So what the consumer saw in the digital world influenced the sale. In a way, it paved the way for Customer Experience – heavily influenced by digital, as we know it today.

Customer Experience (CX) today goes beyond the product or service a customer is looking to buy (or has already bought). Technology has made communication quick and easy, and customer experience today is a continuous, on-going process. When Amazon, for example, receives an order, they follow a process to ensure the customer is happy and informed throughout the journey. Constant email and message communications inform the customer where their product is, and when it will arrive. Once it is delivered, they ask for feedback and offer a return-back window. They have a 24×7 service line that customers can use to express issues. They send periodic emails about other products that a customer could be interested in. All of this culminates in ‘Customer Experience’. It may begin with a web search and include an app experience, interactions with customer service or the website. CX today is associated not just with the product, service, store or salesman, but with the entire brand that is delivering the experience.

In many cases today, the digital experience is perhaps the most dominant factor in customer experience. [click to tweet]

However, this is not to say that a great customer experience in digital can be a substitute for a poor product or service experience. It is said that good advertising can kill a bad product faster. Similarly, today’s savvy consumers will see through ‘all style and no substance’.

Why Customer Experience is Important

The sheer variety of options that are available to consumers today, makes CX the primary differentiating factor. Consider the e-wallet market, for example. Customers looking to perform the simple task of making quick transactions have over 100 options, as listed in this blog alone. In terms of functionality, there’s not much these apps can do differently. The only factor setting them apart is how customer-centric the brand is, and that encapsulates the app, the support team, the customer-facing representatives, etc.

 13% of customers will share with 15 or more people about a bad experience with a company, and 72% of consumers will tell 6 or more people about a happy experience.

It’s quite evident that in 2020 and for the foreseeable future, customer experience is going to play a vital role in the growth of sales and customer retention. Here are 3 factors that sum up the importance of CX:

1. Customer Experience Enforces Customer Retention

More often than not, customers return to a brand because of their experience than only due to the product or service itself. ‘Build it and they will come’ is simply not true. A product or service with great functionality needs the expertise of customer experience design too. In today’s world of product parity, this is even more important. There is very little that separates one bank’s services from another and hence the primary interface – in many cases, the mobile app becomes crucial for customer retention. According to Forbes, 96% of customers pledge loyalty to a brand based on customer experience. Acquiring new customers is important, but retaining customers and getting repeat orders can propel a business.

2. Consumers Decide Based on the Experience, Not the Product

Yes, having a great product is important, but it does not ensure a sale. Research shows that CX plays an important role in consumer decision making. In fact, consumers who have a good experience with a brand tend to spend more, return and refer. According to GrooveHQ, a customer that is highly engaged is 6 times more likely to return to try a new product or service. The report also states that customers who have had a pleasant experience with a brand spend 140% more compared to the customers who have had a bad experience in the past and 69% of these happy users would recommend the brand to others.

Here’s how McDonald’s was able to scale their CX with a user-friendly mobile app. McDonald’s India had a vision to make its mobile app the preferred medium for ordering. The goal was to bring the emotions of joy and delight from the in-store experience to the new McDelivery app. By analyzing the pain points in their current user journey and crafting a strong intent for the desired experience, McDonald’s was able to simplify the process of discovery, personalization, decision making and create delightful interactions. With the best UI in place, they increased orders by 103% with the new app, redirecting traffic from web-based ordering.

3. CX Gives Brands the Information Needed to Make Their Product or Service Customer-Centric

Customer experience involves customer engagement, which gives businesses the data needed to improve products, services or the experience itself. According to this article on Hubspot, 70% of dissatisfied customers are willing to shop with the same brand again if their issues are promptly resolved by customer care. Enabling customer feedback channels through store forms, online chat windows, email, and telephone is a great way to initiate communication between the brand and a customer, and also seek feedback that allows brands to improve.

However, customers do not think about these things as much as enterprises do. They do not segregate an ‘offline’ and an ‘online’ experience in their minds. They simply want to get things done irrespective of the channel or technology.

Customer Experience Strategies That Brands Should Adopt to Scale Acquisition, Engagement & Retention

1. Collect Data & Infer Results

Collecting customer feedback is quite easy with numerous options available. A simple NPS survey or customer effort score (CES) survey can give brands valuable information about their product/service and CX. Advanced technological solutions like AI and Machine Learning enabled bots that can interpret a customer’s mood through Natural Language Processing allows brands to take proactive measures in solving a customer’s problem. There are many solutions at a brand’s disposal, and it is important to collect consumer experience data to derive useful insights.

2. Find a Balance Between Automation and Human Intervention 

Anyone who has dealt with customer service calls (and the hold timings) can say how frustrating it can be. Chatbots, powered by Artificial Intelligence was meant to be the solution to resolve customer issues. However, we can safely surmise that neither of the routes have reached perfection. It’s vital for brands to implement a smart mix of technology and human intervention. The first step is to identify roles that are best addressed by humans. AI can play the role of enhancement by analyzing interactions, the context of queries and automating several processes. An often neglected aspect of human intervention is the role of strategy and the role of design thinking prior to crafting or solving a customer experience issue.

3. Implement Immersive Technologies

During the launch of their SUV XC90, Nissan rolled out a VR enabled application that allows customers to take a test drive, virtually. Advertising and marketing methods have changed with the changing technological landscape. Technology like AR, VR, 3D Images/Videos, etc present customers with an immersive shopping experience that helps them better understand the product, in turn improving customer experience and satisfaction.

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4. Deliver Hyper-Personal Services

An article by Accenture stated that 75% of customers are more likely to purchase from a brand that knows their name, purchase history and/or recommends products based on past purchases. This forms a part of several design thinking principles that can help in customer retention and help prevent churn. With smart feedback systems and CTAs in place at customer exit locations (in-store or on a website/app), it’s not difficult to gather relevant customer information. Brands should then segment their marketing campaigns based on customers’ data, which increases the chances of engagement and purchase.

5. Have a Relevant Omnichannel Presence

Customers will not articulate that they choose a brand because of its omnichannel presence. But a relevant usage of platforms and experiences adds to a brand’s aura and helps in creating a ‘big brand’ feel. It can lead to brand affinity – a key differentiator in a parity world.  The modes of communication consumers prefer, depend on demographics, location, age, gender, lifestyle etc, making it vital for a brand to be active and reachable on multiple channels today.

An omnichannel service does not simply mean having a token presence across channels of communication, but a one that is relevant and adds value to the consumer [Click to Tweet]

Success Stories Resulting from Exceptional Customer Experience (CX)

Hewlett Packard’s Virtual Agent for Customer Service

HP Inc sells over 50 million PCs every year, and with every PC they acquire a new customer who will in some time in their journey be in need of service and support. In fact, HP Inc handles over 600 million technical support contacts every year. Working with Microsoft, HP rolled out an AI-enabled virtual assistant that interacts with customers and helps them solve issues they face with a product. It guides users through a troubleshooting process and provides solutions. If a solution isn’t available, it transfers the customer to a human representative. Here’s a brief overview of the key benefits:

• Prior to implementing the virtual assistant, HP would address 15 % – 20% issues digitally. Now, they address close to 80% issues successfully.
• The bot helps customers navigate over 50,000 pages of product information by understanding their needs.
• All of this resulted in increased customer satisfaction.

Mercedes-Benz Leveraged Predictive Analysis and AI to Better Serve Customers

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Mercedes-Benz was looking for a solution to better serve its customers in Brazil, which has the second-largest plant followed by Germany. They invested in a Microsoft Azure cloud solution coupled with Power BI and Cortana Intelligence to map their sales processes, and analyze decades worth of data like license plate records, macroeconomic indicators, regulations, sales information, and statistics by each region of the country. Through this change in data analysis and interpretation model, Mercedes-Benz was able to:

• Provide 180 service locations around Brazil with consistent, actionable information to ensure each location could provide accurate proposals to their clients.
• Assist sales reps to engage with consumers proactively before a need is even expressed with the help of predictive analysis.
• Support employees in engaging and serving customers better, and in improving overall customer experience and satisfaction.

Thomas Cook’s Nurture Program

Thomas Cook was looking to establish a better and direct relationship with their existing customers, and prospects. They wanted to influence customers to be able to recommend their travel packages. Thomas Cook ran a CX improvement program a few years ago and collated data to study their customers’ interests and ran campaigns to request for personal recommendations based on past interactions and through display re-targeting. Through these hyper-personal campaigns, they were able to:

• Receive over 15,000 leads.
• Increased ROI, as high as 7.5 : 1 in a span of 3 months.

Hotel THE PIG Revamped their Online CX Experience to Boost Revenue

Kitchen garden hotel THE PIG wanted to increase their customer acquisition through online channels. They revamped their online booking process to make it more customer-centric and easy to use. In collaboration with Etch and Micros, the hotel implemented Opera Reservation System (ORS) in order to put in place a customized booking system that is customer-centric. By simplifying the customer’s booking journey, they achieved a 250% growth in online revenues over a two year period.

Improving customer experience is a seemingly simple two-step process: understand the needs of the customers, and implement effective methods to satisfy those needs. However, it is a lot more complex to accomplish and calls for collaboration with experienced partners who understand customer journeys, the role of digital experiences and the technologies that help craft them. There are also a plethora of tools available that help to collate consumer feedback, analyze customer satisfaction levels, and serve customers better. With the right strategy and tools in place, brands will be able to scale their customer experience alongside brand reputation, sales, and customer retention.

There has been a surge in preferences for temporary ownership over permanent ones. People want the benefits of owning without having to buy. Uber, Lyft, Curb and other on-demand ride services are cited to have a drastic impact on automobile sales due to the ease of use without having to buy. There’s a drastic shift in the customer mindset that has urged companies to manage a direct, responsive, multi-channel relationship with their users, giving rise to a complex subscription-based economy.

The intent here is to break down these complex structures into user-friendly designs, which can be easily comprehensible.

Since businesses capture data of their current users, it helps to create personalized offers through target marketing and build custom communication and pricing models. This increases the LTV (lifetime value) of a user or consumer.

A subscription model provides predictable and recurring revenue for a long-term engaged user base. Click to Tweet

The business can concentrate on the retention of users overspending on acquiring new ones. Similarly, subscription strategies allow for price diversification, accommodating a broader, diversified income group of users over a fixed ‘one-price-for-all’ model.

Subscription plans are also psychologically attractive to users as they don’t have to make long-term commitments nor do they have to pay a large amount at a single go. It’s thereby no surprise that a lot of industry giants as well as mid-size companies are using subscription models as the basis for their business.

These strategies can be broadly categorized into 3 types:

1. Traditional Models

The simple relationship of regular exchange of certain goods or services at a fixed price for a certain period that creates a long-term understanding between brands and it’s users. These can be broadly divided into:

a. Unlimited use: Set price for unlimited use of product or service for a fixed amount of time.

b. Pay as you go: Pay for usage as and when needed at a fixed price per-use.

c. Premium: Additional/Upgraded services or features for an additional fee.

d. Pay per unit/user: Based on the number of people using product or service.

Examples of traditional subscription models

2. eCommerce

A newer subscription model type based on the supply of fast-moving consumer supplies that are needed regularly to reach repeat users. These can be divided into :

a. Curation subscription: Surprise the user with a curated selection of different products based on their preferences.

b. Refill subscription: Replenish the same or similar items (usually commodities).

Examples of e-commerce subscription models

3. Innovative

Novel subscription models that combine one or more pricing strategies, that offer products and services catering to multiple needs. These can be broadly categorized into:

a. Buy-back subscription: Exchange the used subscribed product for virtual money or other products.

b. Hybrid subscription: Merging two different offerings symbiotically for wholesome user experience.

c. Consumer durable subscription: Use and switch multiple durables (that are usually long term purchases) for a set price and a short term period.

Examples of innovative subscription models

The adoption of these models has helped businesses’ stand apart from the rest. But the question remains, how do we create a holistic blend of pricing strategies, coupled with the best UX practices to give the users exactly what they need.

Let’s explore some of the strategies that can help you build a model conducive for your business as well as the user’s wallet

1. Feature-Add Value

Increase pricing with added features exclusively.

Eg. InVision: Instead of just showing incremental features with pricing, Invision shows the user various kinds of features they can offer and what they are missing out without these. It highlights the most popular package based on user behavior to buy/upgrade prompts the user towards a particular purchase.

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2. Interactive Pricing

A customizable pricing model calculating real-time numbers for B2B services and products.

Eg. SketchApp: Instead of having the users contact the support team for a definite number of users or a large enterprise pricing, Sketchapp allows the user to customize the volume with a slider, keeping the pricing interactive and engaging with real-time costs.

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3. Paywall

Limited access to content to influence subscription.

Eg. Medium: Medium lets users experience featured content, by allowing 3 free stories to read. This helps the user to gauge the quality of content available on the platform that has a greater probability of influencing long-term subscriptions.

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4. Freemium

Unlimited access to the platform with basic features, to get the user glued to the product before adding a fee component with value-added features.

Eg. Spotify: Spotify allows the users to access unlimited music (with ads), playlists and podcasts, but only access the shuffle mode on mobile. Similarly, it allows on-demand content on its web portal and not on mobile. This way the user gets a taste of the content and adopts the platform faster, moving from being a free subscriber to a paid subscriber.

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5. Sell a story

Elaborate the benefits to a user to add value instead of highlighting just the features. This also projects the tone of voice and persona of the brand.

Eg. MailChimp: In the below example, MailChimp has put down the features, in an incremental form, by listing down its features, not merely as bullet points, but as a story to tap into the reptilian brain of the user. This creates a personal association with the brand and builds a connection.

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6. Fair billing

Bill only for the number of people using the product or the number of units used. If it is prepaid, return in the form of credits or discounts in the next billing cycle. This helps in building long-standing relationships.

Eg. Slack: Slack follows a ‘fair billing’ policy, where it provides its subscription fees ‘per active user’ per month. If a user becomes inactive during this period, Slack adjusts the payments for the inactive members in the next billing cycle. This assures the users that the brand cares for them, creating a loyal base of users.

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The above strategies can help you build a model conducive for your business as well as the users’ wallets. Let’s understand the parameters on which these strategies have been built that will help you create a pricing strategy for your own business.

a. Strategic pricing for business objectives: A well planned strategic pricing is the base of a good subscription model. Tiered pricing models that suit all types of users helps to accomplish business goals to scale business, acquire and retain customers as well as increase the lifetime value of the users.

b. Multi-Channel user acquisition: Create a seamless experience for the users to subscribe via multiple channels, viz., mobile, desktop, tablets or via customer support. This helps in adapting diverse pricing strategies while staying flexible to user needs.

c. Monetize long-term relationships: The formula for growth in this subscription economy is monetizing long term relationships rather than just shipping products (Click to Tweet) — that can help you in creating better variations of your products. In turn, you spend less money on marketing and on-boarding.

d. Adapt pricing to user behavior and needs: Understanding the user psychology that comes into play while making a purchase will help increase the conversion rates in subscriptions.(Click to Tweet) For eg., The left digit of a price gives the perceived value, making $2.99 more desirable than $3.00.

f. Aim for consistent, positive interactions with users: Strive to create a long-lasting user relationship even after the transaction has been made. Timely communication with users and personalized recommendations encourage the users to stay subscribed to a particular offering over another.

g. Give user total control & transparency in payments: Strive to make the billing easy and accurate for different pricing models. Keep the invoice easy to understand and informative to develop transparent and honest relationships between users and the brand.

The formula for growth in this subscription economy is monetizing long term relationships and offering value above all;(Click to Tweet) by creating different versions of your products that cover a wider audience that includes different customer personas.

It is imperative for companies to create a symbiotic relationship between the brand and users, by understanding their basic needs and expectations. It is now essential to understand and tap into the user’s emotions and craft experiences, which they can connect with and value. By using a holistic blend of effective information, usability best practices, and design guidelines, a brand can ascertain the purchase decision and retain user loyalty for an extended period.