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Your customers' digital experiences define you

Your customers' digital experiences define you

...or why Netflix, Bank of New Zealand and AA Insurance are New Zealand’s top performing large brands in providing digital experiences.

The brands that did well were not completely born digital, they are 'reborn digital'.

Netflix, Bank of New Zealand and AA Insurance are New Zealand’s top performing large brands in providing digital experiences.

This is according to the inaugural New Zealand Digital Experience Report by SAP.

The study interviewed 2500 consumers on their experiences with brands in eight industries, says Graeme Riley, managing director, SAP New Zealand.

Riley says the respondents rated more than 6500 digital interactions against 14 digital experience attributes.

In Australia, where the survey has been held for the second year, Netflix also came out on top, followed by Suncorp and Coles.

Graeme Riley - Managing Director, SAP New Zealand
Graeme Riley - Managing Director, SAP New Zealand

The survey covered eight industries: Banking, government, utilities, telco, media and entertainment, retail (consumer), retail (grocery) and insurance.

Over a third (37 per cent) of consumers are not satisfied with the digital experiences delivered by some of New Zealand’s largest and best known brands.

In contrast, barely a third (31 per cent) of respondents were pleased with the digital experiences being provided.

The report shows Kiwis who comprise the above group above are four and a half times more likely to remain loyal to a brand than those who are unsatisfied with their digital experiences.

“These findings demonstrate the strong connection between the digital experience and business outcomes in New Zealand,” says Riley.

“Consumers will pay a premium for a better digital experience,” he says.

In the research, the digital experience is defined as how a brand digitally interacts with its customers during the discovery, transaction, delivery and support of a product or service.

SAP asked consumers about their propensity to recommend the brand to a friend (applying Net Promoter Score [NPS] methodology) and their loyalty to the brand.

The research found just 17 per cent of consumers that are unsatisfied with the digital experience would remain loyal, while the NPS score for this segment is a staggering negative (-)54 per cent.

The link between the digital experience and business outcomes was also apparent when the report examined the respondents’ views on data privacy, and personalisation preferences.

The respondents who said they are delighted with the digital experience, are more willing to share their data than those who are unsatisfied.

The results, however, varied across different types of data.

The report notes of the delighted consumers, 40 per cent would disclose their buying preferences; 28 per cent their social media usage; 25 per cent their health records; and 21 per cent their web browsing history.

With unsatisfied customers, the figures decline for these four areas: 13 per cent; eight per cent; four per cent; and four per cent respectively.

“This suggests that as a company you can take that data [from the satisfied customers], personalise it even more and have a better experience and lock them in,” says Riley. “It is almost self-fulfilling; the better you do, the more they share, the better it gets.”

The survey notes ‘safe and secure’ was the most important digital experience attributed to consumers, with 72 per cent of respondents ranking it as one of the most important components of a delightful digital experience.

The next most important attributes were ‘services that are available anytime on my terms'; (42 per cent), and ‘cohesive, integrated, and simple’ (42 per cent).

“The technology the CIO chooses to deploy or the framework they set up, is often what enables or limits the digital experience that can be provided

Perry Manross, SAP

Lessons for the C-suite

Riley says there are valuable learnings on the role played by the executive team in ensuring the organisation provides the best digital experience.

“Often companies almost work on the principle that it is so hard to move, I just won't bother,” says Riley. “That is not the consumer of today. They will move for a cheaper bank loan or an interest rate, or a better experience. Anything you could do to improve that loyalty is going to be valuable to you.

“If you can give them a better digital experience, you can lower the churn."

He notes how three retail consumer brands got a negative rating, as they are caught in the dilemma of brick and mortar versus online strategies.

''Hopefully, this gives them an idea how important digital transformation can be. Those who want to shop digitally will go to where the best digital experience is.”

He says those who are doing well have the commitment to actually embark on digital.

The brands that did well in the study “were not completely born digital, they are 'reborn digital',” notes Perry Manross, head of global corporate affairs, SAP Australia and New Zealand. “They completely rethink their process in the context of the digital environment.”

“The process is across the entire organisation, not one department,” says Manross.

“It is not just 'let us whack up a good website', but [consider] what is the whole digital process across all elements of the business? What is it that you are genuinely trying to do? It is also about the top down culture of the company,” Manross says.

Riley, meanwhile, says it is incumbent on CIOs to raise the message to the executive that customers will go to competitors who will provide a better digital experience, says Riley.

For a lot of companies, the appointment of a chief digital officer “is a statement of intent, commitment and focus to say, ‘We are serious about this and we are going to do it’,” says Riley.

The CIO is an enabler to the CDO, adds Manross. “The technology the CIO chooses to deploy or the framework they set up, is often what enables or limits the digital experience that can be provided.”

Across industries

The survey covered eight industries: Banking, government, utilities, telco, media and entertainment, retail (consumer), retail (grocery) and insurance.

Of these eight industries ranked in the report, banking was the top performer. The sector leads the way in fostering digital engagements among New Zealand consumers, with 92 per cent of consumers interacting with banks online.

Banking is closely followed by insurance. Both sectors returned positive digital experience scores, with more delighted than unsatisfied customers.

Retail groceries was the next best performing industry with a score of zero, meaning they have an equal amount of both delighted and unsatisfied customers.

Government, telecommunications, and consumer goods retail were the three lowest scoring sectors.

The utilities industry was the only sector where an individual brand did not post a positive score.

At an individual brand level, 13 of the 38 organisations ranked by consumers delivered positive digital experience scores. The banking industry provided four of these brands, with two each from the insurance, and media and entertainment sectors.

“Banking leads the way in fostering digital engagement among New Zealand consumers, with 92 per cent of consumers interacting with banks online,” the study states.

“New Zealand banks have made significant investments in placing the customer at the centre of everything they do. They appreciate customers want rich experiences in branch, online and via mobile and are building strategies aligned to this.”

The utilities industry was the only sector where an individual brand did not post a positive score.

The utilities sector is ripe for innovation, it adds. Launching new mobile, interactive and other services that allow customers to manage their energy consumption, and extend simply beyond paying bills, can help the traditional brands can combat the threat of new online players.

The report concludes that the digital experience is a lot more than a website or an app.

“As the findings indicate, organisations that perform best are those who unite their people and processes on a single system to deliver on their customers’ relentlessly increasing demands.”

The digital experience is a lot more than a website or an app.
The digital experience is a lot more than a website or an app.

Send news tips and comments to divina_paredes@idg.co.nz

Follow CIO New Zealand on Twitter:@cio_nz

Follow Divina Paredes on Twitter: @divinap

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