IBM Research: Brands Are Missing the Boat on Customer Experience

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IBM has just announced results of research that shows a huge gap between brand marketing and customer experience.

The report, “Listening to the Customer: 7 New Research Findings,” conducted in partnership with eConsultancy, found that while nearly 90 percent of marketers understand the importance of personalization in the customer experience, nearly 80 percent of consumers feel the average brand doesn’t understand them as an individual.

The study projects that by 2017, 80 percent of consumers will collect, track and barter their personal data for cost savings, convenience and customization and IBM sees each of these interactions as opportunities for brand advocacy.

“The fundamental thinking behind digital marketing has shifted,” stated Stefan Tornquist, VP Research for the Americas at eConsultancy. “The goal of providing the right message to the right person at the right time is now just a part of the larger puzzle. The real challenge is providing the right experience for the right person at a time that’s right for them.”

Some of the consumer responses around how understood they feel as individuals—and how effective brands’ messaging efforts are perceived—may alarm marketers:

  • Only 37 percent of respondents believed their preferred retailer understands them as an individual
  • Only 22 percent said the average retailer understands them as an individual
  • Only 21 percent said the communications from their average retailer are “usually relevant”
  • Only 35 percent said the communications from their preferred retailers are “usually relevant”

“At the center of it all is the marriage of marketing and technology and a commitment to innovation that’s driven by individual customer needs,” Tornquist commented.

We asked Jay Henderson, Strategy Director for IBM Commerce, to highlight the big takeaways for brands:

Consumers believe brands don’t understand them. “According to today’s study results, 90 percent of marketers agree that personalizing customer experiences is critical to their success. Despite this, brands still aren’t offering consumers what they want—only 21 percent of consumers said the communications from the average company are usually relevant while only 35 percent said those from their preferred retailers are usually relevant.”

Customer loyalty is not strong. “Here we focused on several service areas known to be inherently sticky, including banking, mobile, internet and satellite/cable. 49 percent of survey respondents changed service providers in the last 12 months, and experience-related factors played a prominent role.”

Poor experiences drive customer churn: “Of those participants who changed providers, 30 percent switched due to provider failure, and 51 percent of those cited customer experience as the number one factor.”

Customer trust brings greater insight: “72 percent of consumers said they would share their geographic data with a brand they trust, an increase of 89 percent over the average brand. And 61 percent would be willing to share their personally identifiable information with a brand they trust, an increase of 65 percent over the average company.”

“The customer is in control but this is not the threat many marketers perceive it to be,” commented Deepak Advani, GM, IBM Commerce. “It’s an opportunity to engage and serve the customer’s needs like never before.”

Advani added, “By increasing investments in marketing innovations, teams can examine consumers at unimaginable depths including specific behavior patterns from one channel to the next. With this level of insight, brands can become customers’ trusted partner rather than an unwanted intrusion.”

IBM asked New Yorkers to share some candid comments about how they perceive customer experience, and the importance of trust and personalization, while IBM’s ExperienceOne unit is highlighted in another recent video:

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