Defining customer experience excellence for Technology, Media and Telecoms sector

Across the technology, media and telecoms landscape, providing excellent customer experience (CX) has simply become an expectation. Now, as economic conditions tighten and cost of living pressures bite, the quality of CX becomes even more important. If the experience disappoints the hard-earned money a customer is paying, they are more likely to cancel a service or subscription or move it to another provider.

It was timely therefore to discuss the findings of KPMG’s thirteenth annual Customer Experience Excellence Report in our latest TMT webinar. I was delighted to be joined by Dave Conway, Director in KPMG’s Customer Excellence Centre and author of the report, and Nat Gross, partner in KPMG’s Customer and Digital Consulting practice.

The CEE report is a comprehensive study of customer feedback about their experience with brands across sectors, taking in around 4,000 brands in nearly 50 countries. It has now clocked up some 5.5 million customer evaluations of the service they’ve received. So, what do the key findings show us and how do these apply to the TMT sector?

The first really significant trend is the increasing integration of technology into how services and interactions are delivered. As Dave Conway explained, going back a few years CX excellence used to be all about human-to-human interaction and customer service, but the research saw a “seminal shift” last year (2021) as, on the back of pandemic trends, technologies such as AI and machine learning “moved from a test and learn environment into the mainstream of operational processes.” This has continued and indeed strengthened this year. Indeed, over half (56 per cent) of customer interactions are now conducted entirely through technology. It’s very unlikely this will regress. The technology is improving and becoming more and more sophisticated, while customers are becoming more adept at self-serving and are happy to do so in our time-poor world.

But what the research really brings out is that the leading organisations are those who effectively combine technology and self-service with human support and interaction when needed. The very top brand overall in the research – Pharmacy2U – deploys incredibly sophisticated robotics and automation in its warehousing, for example. But customers can connect to human support through Pharmacy2U’s phone service when needed.

In the TMT sector, a good example here is Vodafone with its AI-based chatbot, Tobi, which has been well-received by customers. Such facilities can probably deal with around 80 per cent of customer enquiries at first base – but will trigger human back-up in the contact centre for the 20 per cent of queries that need more bespoke support. It’s about using technology to make customers’ lives easier and integrating smart intelligence to provide personalised packages and solutions.

If this is all relatively familiar, there’s another standout finding this year that marks something of a watershed. That’s the importance of the sustainability and broader ESG agenda. It’s an area that’s been of growing significance – but we find that it is really beginning to take hold now. Half (49 per cent) of customers this year said that they would be prepared to pay more for services and products with strong ESG credentials. That’s a proportion well in excess of anything we’ve seen before. There’s often a gap, of course, between what customers say they are prepared to do and their actual behaviour – but this now seems to be narrowing in a meaningful way.

This presents a real opportunity for TMT that has strong credentials in this area. Many leading players have taken clear positions – Sky with its focus on plastics, for example, Samsung on recycling. Vodafone recently announced a 1 million phone recycling initiative with the WWF. There’s enormous potential to encourage the circular economy and win customer buy-in and engagement as a result.

There’s a lot for the TMT sector to shout about here. It needs to get itself on the front foot. This is all the more important because the expectation on brands is significantly rising. And there’s more to do because there is a growing customer belief that good behaviour should not have to correlate with higher prices. There’s an expectation that brands will shoulder much of the cost of supporting the shift to greener, more sustainable practices.

But will these good customer intentions be derailed by the cost of living crisis? The research was conducted when cost pressures had already started to rise so that in itself is an encouraging sign. As Nat Gross commented: “There’s heightened awareness and caring in society about ESG. We may see this stalling to some extent due to the cost of living – but the trend is established. There may perhaps be a 12-18 month lag, but I don’t think there’s any doubt we’ll see the sustainability focus growing.”

Another key point Nat made is the importance of customer segmentation. All customers are not the same. Some will be hit hard by cost of living difficulties, but others will ride it out more or less unaffected. Brands must look across their whole customer base, understand how different segments will be impacted, and serve all their customers according to their needs.

For this, data is essential. Accessing and leveraging data for product development and personalisation, maintaining customer trust by guarding data privacy, and making data available across the whole organisation rather than in isolated pockets – all of these are fundamental requirements. Different businesses are at different levels of maturity. Many are investing significantly in creating the infrastructure to utilise data across their organisational layers. We can expect this to develop at pace over the next couple of years.

Overall, the TMT sector is performing well on CX. We see a diverse list at the top of the TMT table - premium and value, global and national - with the top five being: Apple Retail, Smartie, Samsung Retail, Tesco Mobile, and Netflix.

Competitive pressures will rise as many consumers tighten their belts. Streaming services, for example, have already become an intense battleground. How this will pan out remains to be seen. Netflix, for example, had a couple of bad quarters in the first half of this year, but was back to growth again in Q3. The big streamers are introducing new models including advertising tiers, new distribution partnerships/bundling and flexible subscription packages, alongside price increases. And we mustn’t forget the host of smaller niche streaming services – in areas like sport and gaming – who are performing strongly and demonstrate that you can get scale and specialism into your streaming services, and audiences are prepared to pay for this.

It's a complex picture. But one of the lessons coming out of the global financial crisis of 2008 was that those organisations that invested in customer were more likely to accelerate out of it than those that didn’t. We can probably expect the same now. So, there are two questions that I encourage you to ask yourself:

• Are we fully focused on maintaining and indeed investing in the quality of the customer experience?
• Do we really understand the priorities and preferences of our different customer segments, with the data-driven insights to back that up?