If you ask many business leaders what kind of outcomes they want for their customers, you’re likely to hear a litany of wishes: for as many people as possible to love and buy as many of the company’s products and services as possible; have the highest possible rates of satisfaction; and tell everyone they know how terrific the brand is.
As nice as this sounds, such a broad take can actually be a recipe for failure. According to research from McKinsey, companies do better when they narrow down the customer outcomes they’re after, and then use personalization techniques to try to achieve those specific outcomes for as many people as possible.
“Rather than letting a ‘thousand flowers bloom,’ personalization leaders target a specific set of customer outcomes and use cases that support them,” McKinsey explains. “They align organizational resources around these use cases and work back from the desired outcomes to build the data and martech road map and identify the enablers and investments needed to deliver.”
How Chatbots Can Deliver
When companies do this, they beat the competition, with average revenue increases up to 15%. And interestingly, while the online experience may feel inherently less personal than brick and mortar shopping, McKinsey found that digitally native companies often use personalization strategies to drive even greater customer outcomes. The companies “leading the charge” on this find that their “focus on the relationship and long-term value leads to better upward migration, retention, and loyalty.”
How can your business tap into this opportunity? The first step for a B2C business — of any size, in any industry — is to make choices about which customer outcomes it’s seeking. As marketing professors Marco Bertini of Esade – Ramon Llull University and Oded Koenigsberg of London Business School explained in MIT Sloan Management Review, “meaningful outcomes” for customers are not the products or services. Instead, they are “a particular sensation, a tangible benefit, or some combination of the two.”
I tell business leaders that the most powerful outcome lies in how a customer feels about the experience they had interacting with the company. Today’s customers don’t just compare companies to each other; they compare experiences with the company to the best experiences they’ve ever had. So in choosing which customer outcomes to pursue, I highly recommend focusing on the “sensation” of having had an exceptional experience.
And there’s good news for the more than four-in-ten B2C organizations that now have chatbots play a role in these interactions. When used right, these AI-powered tools can deliver that outcome just as well as humans.
Three researchers from California State University, Northridge, and the University of Maine, Orono, published a study investigating the impact of chatbots on customer outcomes. Dongling Huang, Dmitri G. Markovitch, and Rusty A. Stough found that while customers still prefer human service in some contexts, there is another way to achieve just as good results: an approach that combines chatbot service “with a light touch human intervention.”
This speaks to the “traffic light” system I wrote about recently, in which humans are alerted when it’s time to jump in and improve a chatbot’s interaction with a customer. Businesses are steadily embracing this kind of a hybrid model.
The study, published in the Journal of Retailing and Consumer Services earlier this year, also suggests that in time, people will become more used to chatbots, which could improve customer outcomes even more. “Customer outcomes following chatbot service provision and, hence, chatbot acceptance, are influenced by one’s propensity to trust service technologies, generalized learned trust in chatbots, and particularized situational trust in one’s chatbot service-giver,” the researchers wrote. (There’s every reason to believe that in the coming years, customers will develop more “generalized learned trust” in them.)
For businesses, focusing on specific customer outcomes is not just a competitive advantage; it’s a necessity. Increasingly, organizations are realizing that new tools can help them achieve this, and they’re aiming to outdo each other.
The nonprofit Massachusetts Technology Leadership Council, for example, has been hosting events about it, to help regional businesses learn how to improve results. One focused on “best practices on the methodology and technology to measure and achieve the best possible customer outcomes.”
Across the pond in the United Kingdom, the government’s Financial Conduct Authority has even established new rules requiring firms to “act to deliver good outcomes for retail customers.” Businesses are making changes as a result, the Financial Times reports.
In an era of global business, in which customers in the United States have businesses everywhere at their fingertips, U.S. corporations need to act quickly to compete on this front. The faster they determine the customer outcomes they seek and implement tools to help drive them, the further ahead of the pack they’ll be.
