In the first half of 2020, we have conducted research into the non-food wholesale market in the Netherlands, studying the effect Customer Experience has. This study pointed out that Customer Experience becomes more and more important for many businesses in this market. Other disciplines as product leadership and operational excellence should not be forgotten, as they have proven to be differentiators in the past, but it has become an absolute ‘must’ to provide customers the right experience when they interact with a wholesale organisation.
Market research supports this statement. The majority of customers find experiences more important than the products themselves, nowadays. So, whenever any disappointment occurs due to an issue with the product, the most important part is how you deal with the disappointment and timely agree with your customer about a solution.
Overlooking these researches, it becomes clear that companies of all industries find the topic of Customer Experience (CX) more and more important. The general argument states that providing the right CX will result in a competitive advantage and improved customer loyalty. One can even argue that investing in CX can lead to cost reductions. At the same time, we often see that the topic of CX is not properly represented at management level and a lot of companies still do not believe that they deliver a powerful customer experience themselves. We can conclude that there is much difference between what companies think and how they currently act.
Not surprisingly, true customer experience will result in customer satisfaction, retention and loyalty and finally increased turnover and margins. Acorel has followed up by studying the factors which have a significant effect on customer experience into the non-food wholesale market.
After both qualitative and quantitative research, clustering methods have pointed out five main factors influencing customer experience. The full report (in Dutch) can be downloaded from our website, but these main factors will be discussed in the remainder of this blog.
Driving the chain
The first factor addresses the need in this market to easily share and capture data in the whole value chain in order to add value for suppliers and customers. A wholesale organisation often feels the pressure to protect its place in the value chain. In a more and more demanding market, their customers are better informed and have more opportunities to compare the competitors. At the same time, their suppliers are also looking how to increase their turnover and protect their margins. Suppliers might even try to skip a step in this trade chain by directly addressing your customers.
The study clearly shows that the wholesale organisations feel this pressure and are looking for new ways to drive the value chain. The traditional role of logistical provider or distributor is no longer enough. They will need to add value to the chain in another way.
Moving to a more service excellence oriented approach seems to be the logical direction. Our study shows that 65% of the respondents feel that they will stay future proof by providing services to unburden their customers. Over 55% of them are already investing in building knowledge and advisory skills within their organisation to be able to provide these services. We see that more and more wholesale organisations offer product experts, advisors, service centres, training, configuration, customisation of products, marketplaces, etc.
Finally, Wholesale organisations themselves can skip a step in their trade chain. Getting in contact with the customer of your customer (B2B2B or B2B2C) gives the wholesaler a stronger position. Directly selling to the customer of the customer might lead to channel conflicts and quite some logistical challenges, but building an indirect relation to the end customer using sales and marketing effort can be very beneficial. Better understanding and even creating the demand from the market throughout the chain will certainly help a wholesale organisation to finetune its product portfolio and its services around this portfolio.
Personalization has become a buzz word into our markets. We define personalization as the way a wholesale organisation is able to provide personalized content and experiences. Examples include personalized content in e-commerce environments such as customer specific prices, assortments and content, personalized marketing communications with relevant offers and recommendations but also consistent offline experiences such as an appointment with an account manager who truly knows his customers.
The study shows that the importance of personalization is well understood. A personalized customer journey is key. The customer needs to feel that we know and understand him at every touchpoint in this journey. For the more traditional, off-line channels, this is usually already implemented within the account- or relation management teams. But personalization is often still a challenge for the online channels like the website, webshop, portal and online marketing campaigns. The study shows that only 25% of the respondents is fully convinced that they can deliver relevant, personalized content, assortment or offers in their online channels at this point of time.
Also, omni-channel has become a buzz word as it is utilized in several ways. What is important for companies is to be (or become) as consistent as possible across all channels which are preferred by their customers. New channels arise rapidly. The key issue is to deliver consistent and relevant experiences across all channels provided, so that a customer always feels understood and supported. That asks for a holistic approach while defining the customer journey and will have its consequences for the internal organisation. The existing silo’s between sales, service and marketing are often an issue when it comes to bringing a true omni-channel experience.
The study shows that the wholesale market understands the need for omni-channel or at least multi-channel sales and support within their organisation. And launching new sales- and support channels is usually not the issue. But consistency is! The launch of business support via Whatsapp might be up and running in days, incorporating it in the existing service processes and providing the same level of support is the true challenge and will take longer. Looking at the results from our study, less than half of the respondents were convinced that they could provide a consistent customer experience across all their channels.
It is pointed out that also product information has a great impact on customer experience as it is a fundamental aspect for channels and experiences. Think about the (online) product catalogues or even the web shop, the quality of the product information defines the overall customer experience. Therefore, the whole value chain demand higher accuracy of real-time product information, even demanding certain market standards.
The study shows that product information management is obviously not a new challenge, but still a relevant and urgent topic for a lot of wholesale organisations. Direct online presentation of the product catalogue combined with the fact of an ever-growing number of products, suppliers and content leads to a struggle to retain a high product data quality standard. Guiding the suppliers to move to a more standardized way of delivering product data or even demanding them to adhere to market standards (2BA, GS1, …) will certainly help in controlling the incoming data streams. Combined with a centralized PIM (Product Information Management) solution, a wholesale organisation is able to provide consistent product information across the channels while retaining the possibility to differentiate between the product information needs per channel.
More and more companies, across all industries, possess lots of data. This includes product data, but also customer data, logistic data, stock levels, etc. The amount of data is enormous. However, the extent companies are able to make critical business decisions based on data insight is quite low. Converting data into actionable insight remains one of the biggest challenges in many markets. Besides, since the role of the customer becomes more significant, experience data such as customer satisfaction rates, NPS scores or journey sentiments needs to be combined with the operational data, which is definitely the next challenge for many organisations in order to become more customer centric.
The study also reflects this point of view. Many of the respondents have already invested in business analytics tooling and the capability to gather data from various systems. Still, 43% of them feel that they can further improve by integrating and combining data from within their organisation and over 60% see that they will need to improve in sharing data across the value chain.
The full study can be downloaded from our website. If you would like to check the full story and discuss our solutions to these challenges for your organisation, do not hesitate to contact us!