Are business investments in improving customer experience going waste?

Most large enterprises today have a chief experience officer at the top leadership level. This is especially seen in sectors like financial services, automobiles, aviation, hospitality and healthcare.

Air India, for example, has an entire CX department led by a chief customer experience officer; MakeMyTrip has the role of director, customer experience, and Kotak Mahindra Bank has a chief of customer experience. And many others have roles that combine CX with operations and/or marketing at the leadership level.

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To meet growing client needs, most management consulting firms now offer a full-fledged practice in customer experience. In India, PwC, BCG, EY, Bain and McKinsey have all established customer experience practices.

Journey analytics, CX analytics, CX strategy development, customer-centric culture and real-time customer feedback are the new kids on the corporate strategy block. According to Persistence Market Research, India’s CX market size (software, consulting, tools and hardware) is currently worth about $1 billion and is projected to reach $3 billion by 2031.

One should assume that all these investments and developments would have yielded positive outcomes for businesses in terms of higher customer satisfaction and retention. Hailed as either King or Queen, the customer, however, still seems to be quite dissatisfied: the expectation-perception gap remains high.

A recent report by ServiceNow titled Customer Experience Intelligence Report 2024 revealed that the average consumer in India spent close to 30 hours on hold each year just to get an issue or complaint addressed.

The report also highlighted that more than 50% of the survey’s respondents believed that their time waiting on hold has increased from the past year and 66% said they would consider switching to another company if their issue was not resolved within three working days.

Anecdotal examples are also evident from social media, which is awash with unresolved complaints of having to repeat their story to 4-5 people before getting someone to really listen, and frustration in being made to engage with chatbots.

Many customers complain that with interactive voice response mechanisms and bots at the other end of the line, it’s difficult getting to a point when they can speak to a human.

The banking and insurance sectors have advanced in digital and technology-driven customer experiences, but service quality remains a challenge. A 2022 Forrester report noted that despite Indian banks enhancing their digital capabilities, overall, customer experience had stagnated.

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Similarly, there are some reports that the insurance sector saw net promoter score (NPS) improvements until 2023, but these have plateaued since. Elsewhere, a recent Hansa Research study found that 30% of customers cited lack of communication as a reason for switching from one brand or company to another.

Again, earlier this year, Kotak Mahindra Bank faced Reserve Bank of India’s (RBI) ire due to system glitches, disrupted cash withdrawals and digital transactions, prompting the central bank to bar Kotak from adding new customers through its digital channels and issuing fresh credit cards.

Similar challenges were highlighted at ICICI Bank when its app exposed the data of about 17,000 new credit card customers. Both the above instances were resolved.

In the aviation sector, the fight for market share and Tata Group’s purchase of Air India upped the game on experience. In the two years since its acquisition by Tata, Air India has undergone a massive transformation, with its investments in technology, artificial intelligence and CX, besides new planes, reaching nearly $3 billion. Yet, the customer feedback has been mixed.

While there have been good experiences with the air carrier, media and social media have covered some bad experiences too: unexplained delays, lack of announcements and sub-par refreshments, especially on international flights.

All this has contributed to a degree of customer disappointment with Air India, whose CEO Campbell Wilson has acknowledged shortcomings in managing recent delays, cancellations and technical issues. He recently said, “Our people need to be able to handle that better…. There are things that we can learn to do better."

What now? The CX Trends 2024 report by ZenDesk shone a light on some defining elements of today’s era of intelligent CX: Chatbots as advanced digital agents, Generative AI, personalized, instant and interactive experiences, conversational commerce, live streaming and voice engagement.

Technology-led CX is clearly the need of the times. Yet, many of the above instances of customer discontent suggest that companies are taking time to meld technology with the human touch. This needs to be overcome.

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Additionally, hygiene factors need to be taken care of, for which improving cross-functional collaboration, feedback integration across channels and ownership of CX at the leadership level remain critical. Only then will all the investments in CX lead to happier customers on whose ‘life-time value’ the investing organization can count on.

Sapna Popli and George Skaria are, respectively, professor of marketing at IMT Ghaziabad, and a senior journalist and columnist.