Digitalization has changed the way manufacturers design and deliver their products. In recent years, the lines between physical and digital goods have become increasingly blurred. Products are no longer independent assets, but they have become essential parts of connected ecosystems of services. Manufacturers have now traded product design for service design, and one of the main reasons behind this paradigm shift is the need for increased customer lifetime value (CLV).
To increase CLV, manufacturers are undertaking significant e-commerce efforts and focusing on delivering a superior customer experience (CX)—the smoother the CX, the higher the CLV. Delivering superior CX has become increasingly important for manufacturers. Especially over the past two years, CX has been climbing higher on the priority list of customer-centric organizations for several reasons.
Superior CX has become a gold standard in the industry and it is essential in differentiating from competitors, meeting business objectives, improving customer loyalty, and decreasing customer acquisition costs. Most importantly, CX is the key to unlocking new revenue streams in the digital-first reality that is currently settling in.
The customer’s experience with value-added services
According to The State of Customer Experience and Engagement Within Manufacturing, up to 55% of organizations investing in CX are driven mainly by an intent to maximize the revenue stream from existing customers through value-added services, far surpassing the nearly 16% of organizations that are focusing their CX efforts on acquiring new clients.
As the same survey report states: “Retaining customer loyalty is vital and it is well known that it’s much more cost and time-efficient to ensure current customers are satisfied than to focus all efforts on winning new ones.”
Digitalization creates a huge opportunity for manufacturers to expand their offerings and leverage the potential of connected ecosystems to deliver added value for their existing customer base. With CX in mind, organizations are able to create digital services that augment their products through software platforms, connected sensors, digitally mature capabilities, online access, remote service, top-quality support, and more.
Although from the manufacturer’s perspective the benefits of added value are clear, it is not always the same from the customer’s perspective. Communicating newly added value offerings can still be challenging today, but difficulty decreases as the customer base also matures digitally. Now, the more pressing issue seems to be the experiences a customer may have with value-added services at different touchpoints such as an e-commerce platform, a mobile app, or a user interface.
For example, an intricate interface or lack of support when it is most needed disrupts the customer experience, poking holes in what is supposed to be a smooth, cohesive, and consistent interaction. As such, it is of utmost importance to look at CX as an omnichannel and structured journey for the customer that consistently delivers seamless interactions.
The direct impact of CX on business growth
As the survey report shows, manufacturers are pursuing a vast increase in their business value via CX transformation. And according to survey respondents, this endeavor makes them more aware of customer needs which enables them to boost innovation. It also enables them to identify opportunities for additional revenue streams such as e-commerce.
To fully leverage those opportunities, manufacturers plan to form trustworthy partnerships with their customers, as having closer connections with them not only deepens their understanding of customer needs and behaviors but also enables them to anticipate shifts in preferences. Many industry leaders recognize the importance of treating customers as partners for an increased value that benefits both sides.
Having a stronger relationship based on trust and communication allows manufacturers to access accurate customer insights that would otherwise be left for speculation. And knowing with certainty what customers experience is what helps them drive positive change and create a first-class CX, ultimately positioning themselves as relevant and outstanding value providers.
Manufacturers that are focused on delivering a first-class CX consider that transparency and easy access to services are the way to satisfy a buyer’s need for seamless interactions. Furthermore, those who are now shifting to the service economy are noticing that the overall CX can be significantly improved by timely, relevant, and value-added service offerings.
Some are focusing on streamlining service interactions and accelerating response times to exceed customer expectations while others are focusing more on optimizing their e-commerce platforms for smoother experiences. Eventually, all such efforts result in a positive CX—which, in turn, boosts customer satisfaction, loyalty, and retention.
Many of the manufacturers surveyed for the report have revealed that having more satisfied, loyal, and committed customers will make it easier to increase profits and business value moving forward. Additionally, this will help them differentiate from competitors and position themselves as best-in-class in an increasingly competitive environment.
Highly Targeted Cross-Selling with Connected Products
|The revolution in connected assets, the so-called Internet of Things, continues apace. Collecting real-time data from customer locations allows the manufacturer to gain deep insights into how their products are being used in the real world. Savvy businesses are finding ways to present this information back to their customers and to make recommendations about how they might realise greater value from their investment. This can, of course, include recommendations for additional services such as refurbishment or training, or for supplementary products.|
Aligning CX with new revenue streams
As customer expectations evolve, manufacturers continue to expand their offerings and integrate their products within digital ecosystems. This means that CX is constantly gaining new dimensions, making room for additional revenue streams that have a direct impact on business growth and competitive differentiation.
Moving forward, an alignment between value-added offerings and CX strategy needs to happen. Otherwise, manufacturers will miss out on a unique opportunity to increase the bottom line. Aligning CX strategies and value-added offerings drives customer satisfaction and fosters customer loyalty, often leading to an increase in customer recommendations and brand growth.
The key to achieving such outcomes as part of your CX program is to emphasize customer engagement. Map out the customer journey and explore the best ways to optimize it. Ensure that customers receive the support they expect on their preferred channels, facilitate self-service, and expedite responsiveness.
Alongside the insights curated for this article, the survey report by Columbus and Copperberg provides a deeper understanding of the current state of CX in manufacturing and why industry players are perceiving it as an opportunity for creating new revenue streams. Download it today and access the actionable insights you need to align your strategies for CX excellence and profitable growth.