This session addressed the importance of engaging and responding to changing customer behaviour in response to COVID-19 and what it means for organisations and government as we move into recovery post pandemic.
This is an edited transcript of a discussion led by Diane Rutter, Partner and Brett Fairbank, Director in PwC’s Customer Experience team.
The pandemic presents an opportunity to rebuild trust
Successful recovery requires not only health and government strategy but customers’ engagement and adherence to the strategy
As customer behaviour and expectations change and organisations adapt service delivery models, it is important to maintain the human connection and use data and analytics to tailor the experience
Consumers are becoming more cautious, local and digital; these shifts in behaviour can be incentivised and sustained
Opportunities exist to refresh channel strategies and review investments in digital capabilities, automation and artificial intelligence
Organisations need to be prepared to navigate and respond to increasing volatility and uncertainty in the market.
The pandemic presents an opportunity to rebuild trust. Critical to this is demonstrating dependability and accountability, while focusing on social and economic outcomes. Trust is critical during crisis and recovery and can accelerate recovery. Prior to COVID-19, citizen trust with government and businesses was diminishing, falling to record lows in 2018, while customers expectations continue to rise.
Now is a crucial time for rebuilding trust - it is a moment of truth for customers. Doing so will require a series of intentional actions, interventions and symbolic activities tailored to improve trust. How we respond, lead, communicate and support during this time will either reduce or enhance the trust deficit that existed previously.
We have found there are two levels of trust:
At the macro-level, trust relates to the degree to which individuals share common values, align with the social purpose of the organisation and identify with the way organisations conduct themselves and deliver overall economic value for the country. This is typically driven by transparency, honesty and fairness
At the micro-level, trust is driven by the competence of organisations and the experience of interacting with the organisation - what we call ‘experience trust’. It is shaped by the ability of individuals to rely on organisations to be responsive to their needs, resolve issues in a timely and efficient manner and to use personal data responsibly
As we recover from the pandemic, increasing ‘experience trust’ requires designing and delivering the customer experience with a focus on dependability and responsiveness. Examples include:
Effortless access - Making it easy for customers to engage as they prefer (e.g. easy to use mobile apps, after hours phone services for business support during COVID-19). To achieve this requires a deep understanding of how customers want to engage and adopting a continuous improvement mindset to service operations
Connected services - Public and private sector organisations working together to solve customer pain points by improving the overall experience end-to-end; not just the component parts (e.g. Banks and government for small businesses loans and rebates)
Responsiveness - Trust cues should be designed and hardwired into the customer experience, for example accelerated pathways for urgent cases. Keeping customers informed of progress is critical and employees should be empowered to resolve customer issues end to end, rather than just their part of the process.
Increasing ‘Values’ trust requires a focus on decisions and conduct, both experienced and perceived. Integrity, fairness and honesty are assessed broadly and have many tangible and intangible influences. Examples include:
Behaviours - Work in true partnership with customers; co-design and collaborate with them in the development of policy and services and ask their feedback to continuously improve
Mindset - Put customers at the heart of business cases; focussing on how every dollar spent will bring value back to taxpayers and improve the lives of citizens more tangibly
Communication - Build customer awareness of what government and businesses are doing to improve trust and translate into what it will mean for them. Provide progress updates to ensure expectations are aligned with reality; be honest about what is working, what hasn’t worked and what is going to change.
As Australia moves into recovery phase, where measures and strategies are being pulled back or relaxed in various ways to stabilise or increase economic growth whilst managing infection rates - success will depend not only on the health and government strategy but on citizens’ engagement and compliance with strategy - to maximise economic outcomes and minimise health risks.
Engagement and adherence is driven by citizens not only understanding what they need to do (as an individual and/or a business) but also a will to follow the strategy. In this context, simple and effective communications that hit the mark in directing citizen behaviour are essential.
Understanding current and future behaviour and motivations, impacts of changes in strategy and interventions on future behaviour; and messaging that will be most/least effective in supporting the success of a strategy and initiative is critical.
PwC ran a proof of concept recently to demonstrate the value of having these insights. The use case looked to forecast the impacts of different strategies and messaging on compliance with COVID-19 lockdown restrictions. Some interesting insights emerged including:
The need to make money, fatigue (i.e. tired of staying home) and emergencies are the most common motivators for noncompliance with restrictions
Confusion about the rules is growing in importance as a motivator for future non-compliance, signifying the importance of messaging and driving behaviour change
To maintain high compliance, Australians would be motivated by incentives, clear end dates and reducing restrictions on family visits
Messaging that is positive, personal, unambiguous and inclusive is likely to be more effective in motivating behaviour e.g. 'staying home to keep your mum/dad/nan safe' or 'restrictions lifted when there are no new cases.'
While this was just an example use case, having these insights available in real time for future planning on any strategies and to inform messaging in both understanding current and future motivations as well as how this might change in response to different strategies and messaging is helpful. Different scenarios and options can be tested quickly and optimised based on findings rapidly.
This is also useful to consider when communicating return to work strategies with employees, testing what messaging and strategies are likely to drive the right behaviours from staff in this context - something we are exploring as we consider our own return to workplace pathway.
There are also use cases to demonstrate benefit of capitalising on customer activation e.g. Our recent Health Research Institute (HRI) survey of over 2,000 adults in the USA found that 84% of respondents said they would be at least or somewhat willing to share data with their doctors to help discover new treatments or new ways of delivering care.
This suggests that the pharmaceutical and life sciences sector should move quickly to capitalise on consumer activation. Traditionally the doctor has been the intermediary between drug companies and patients, but HRI found that 50% of consumers would share their data directly with a drug company if it meant helping to discover new ways of delivering care.
As we're seeing, customer behavior and expectations have rapidly changed in the last six to eight weeks and continue to change. Organisations are looking to reform the traditional ways services are delivered.
We know that all relationships have an emotional component and that holds true for the connection between people and brands. A business’s relationship with customers is built over time, nourished by experiences along many online and physical touchpoints in their journey, grounded in expectations, and confirmed through repeated interactions.
As a result, what customers care about most right now might be changing. Brands with the best price, coolest product, or most memorable marketing campaign might not have an advantage compared with those that exhibit emotional intelligence and communicate with care, honesty, and empathy, and build trust as a result.
In times of crisis, people want to be seen and understood, and they are extremely sensitive to tone and motive. Are you reaching out to help them — or to sell them something? Does your outreach feel authentic and caring — or does it appear self-serving?
Connection during the time of COVID-19 and into recovery matters now more than ever. Prior to the pandemic, PwC’s customer intelligence series found that 59% of people believe that companies have lost touch with the human element by focusing too much on technology. This indicates that organisations need to find ways to humanise the digital experience.
Until now, businesses have prioritised efficiency - transitioning human interactions where possible to digital or automated ones through artificial intelligence, robotic process automation and messaging. However as simple interactions are automated, complex customer interactions remain, and a focus on effectiveness is required.
Businesses must now consider how to make those interactions more human. For example, a customer who contacts a call centre might be delighted to have the option of a video call with a real person who’s also working from home and is willing to take as much time as needed to address their question.
We’ve also seen the service proposition change in physical locations, such as offering:
Appointment based service, to limit the number of visitors at a time to maintain social distancing
Curb-side assist to prevent the need for customers to enter the physical location and
An increase in click and collect, to reduce time spent at a location.
The same PwC Health Research Institute survey found that 5% of American consumers reported that they or a family member used telehealth for the first time during the pandemic. Applied to the broader US population, this could mean about 16.5 million Americans have started using telehealth in the past couple of months alone. Some 88% of these new users said they would use it again.
This provides an indication of the scale of the modernised service offers we're seeing organisations having to consider. We also know that better use of data and analytics as part of a service delivery model can be very useful right now, especially moving into recovery.
Intelligent, simple, thoughtful digital experiences will persuade more customers in vulnerable or complex circumstances to embrace digital transactions.
We know that 1 in 23 Australians will experience deep and persistent vulnerability in their lifetimes – and the reality is that closer to one in six of us will experience some form of vulnerability in our lifetime - this is further exasperated given current circumstances. At the same time, trust in many services catering to the vulnerable is decreasing leading people to seek help later, when they have reached a crisis point.
Smarter use of data and analytics, combined with predictive modelling methods, can provide a more comprehensive and accurate picture of customer needs, vulnerabilities and expectations. It can also identify customers with ‘exceptional needs’ that organisations would otherwise be unaware of – and tailor an approach to ensure these customers are included and supported early and up front e.g. social services, identify and detect likelihood of falling into financial hardship.
Consumer behaviour has dramatically changed over the past few months as we’ve been confined to our homes, away from friends and family.
During the initial stages of the pandemic, uncertainty drove consumer behaviour to physiological needs, as people clung to the safety that only toilet paper could provide. But as humans are wired to respond to threats, so many of the decisions that were initially made were reactionary.
Whilst discretionary spend has temporarily slumped, we have seen, and will continue to see, changes in consumption behaviour such as:
the growth of express and next-day delivery
increased usage of buy now pay later schemes and
a flight towards value due to lower income and higher unemployment.
However there are two shifts in consumer behaviour that were accelerated during COVID-19. Firstly, the pandemic is incentivising consumption of locally produced goods as consumers seek safety. Australia already has one of the highest levels of association between quality and local products, ranking second only to Japan.
This trend is being accelerated by several factors including:
A patriotic sense of wanting to boost our local economy and strive to help fellow Australians
Disruptions of global supply chains, making access to foreign produced goods more difficult to obtain and
Insecurity about products, in particular perishable food that is imported may exist for some time while the pandemic continues throughout the world. Visibility and traceability of products through the supply chain may become more relevant to Australians through this period.
Secondly, the growth of online sales and services has dramatically accelerated. This varies across categories but in particular for groceries and everyday purchases, fitness and personal training, remote learning, and Telehealth. All these categories have grown in users by over 30% in the past months. However retaining this digital growth post the pandemic is where businesses need to shift their focus to lock in value.
Take the online grocery shopping category as an example, which was already forecast to grow by 32%. Government restrictions on social distancing and the fear of exposure has accelerated the growth to a reforecast of 56% this year. Many were first-time users. Customer research indicates that there is a high intent to continue to use digital, with more than half of users stating their intent to continue post the pandemic.
Woolworths is a good case study for responding well. They saw the buying demographics for this category change slightly, as older and vulnerable Australians increasingly take up online grocery shopping to reduce exposure risks. Whilst demand was overwhelming for online delivery, they prioritised access for this segment and offered care packages to vulnerable Australians during the height of the pandemic. They offered a permanent discount for online delivery subscription as an incentive to retain the change in customer behaviour and growth in the vulnerable segment beyond the crisis.
We’re seeing many clients use the current changes in consumption behaviour and market dynamics as a once-in-a-generation opportunity to consider bold shifts in their channel strategy. We’ve seen sales and service channels significantly impacted in terms of the service levels offered due to increases in interaction volumes.
Contact centres closures due to foreign government restrictions have impacted providers in the Philippines and India, where work from home capability is less prevalent. Given the impact on business continuity, organisations are taking a second look at contact centres and seeking to reduce reliance on global suppliers.
A recent study indicated that contact centres are the most persuasive and engaging channel for customer experience. A further study by Commonwealth Bank indicated that 9 in 10 Australians prefer local call centres.
Some organisations that have temporarily stood up virtual contact centres locally, with staff working from home, to manage the increase in call demand - are taking stock to determine the feasibility of repatriating them onshore to improve customer experience longer-term.
Stores and branches have closed due to social distancing requirements, needing to protect the safety of their staff or needing staff to support other locations or channels.
Organisations have been slowly downsizing physical footprint to fewer locations and repositioning the role of the physical channel as experience destinations, for complex issue resolution.
In light of temporary closures, many organisations are reassessing which stores will remain closed permanently to lock in the shift in demand. It’s certainly not the death of stores and branches, but we’d expect to see store and branch consolidation accelerate off the back of recent events.
As a result of impacts to other channels, much of this demand has been serviced by digital channels. Messaging (both human and virtual) is accelerating on top of already strong growth. For example, even prior to the crisis, in the first half of this year NAB saw a 55% increase in live chat and 35% increase in virtual assistant interactions over the prior 6 months.
However online growth has also caught some major retailers off-guard, testing the reliability of digital platforms unable to keep up with demand. Some retailers, both locally and globally, resorted to putting in place virtual queues to control the number of users able to access their website at a time, enforcing a wait for several minutes and in some cases an hour before loading the website. Hopefully this is a trend we won’t see continue, but underscores the importance of optimising digital platforms and delivery capabilities.
New ways of working and organisational agility are critical to deliver a reimagined customer experience.
HR leaders are busy helping CEOs oversee their (remote) workforces and preparing return-to-work strategies. During this crisis, HR should have a strong voice in the boardroom to manoeuvre through the daily challenges and to create the blueprint for what the future workforce should look like.
We’ve seen two key trends through the current crisis. Firstly, the workplace is being redefined. Ten years ago we had around 6% of the workforce working from home. During COVID we’ve seen this increase to 30-40%. Once restrictions ease, studies suggest we could see this could easily settle back to 10-20%. There will be mixed opinions as to whether this shift has been positive or not. Most organisations have never tested their remote working capabilities at this scale before, but employers have realised that productivity remains strong without compromising the customer experience.
Secondly, the workforce is more flexible than we realised. Organisations have quickly responded to the change in customer demand with employees not constrained to the channels in which they work, but instead leveraged for the capabilities they have. We’ve seen product managers and marketing specialists taking customer calls in contact centres and retail workers supporting back of house processing. This will provide them tremendous insight on some of the decisions they make in their day-to-day roles and seeing the downstream impacts.
In response to recent trends, we’re seeing more organisations explore new ways of working as a way to prepare their workforce for greater uncertainty, volatility and complexity in what their people are facing everyday. Many organisations are applying agile principles to the way they shape their organisation, coach their leaders and run the business.
They are aligning capability in the business directly to deliver elements of their strategy, by designing leaner, more nimble, self-empowered teams that don’t require layers of management overhead - resulting in faster decisions, and the ability to respond more quickly to changes in the market.
Employees prefer working in this environment too, as it creates more empowerment and inspires innovation.
One organisation that we’ve worked with locally has improved the productivity of its workforce by 30% whilst simultaneously improving its people engagement scores by 20%.
It’s intuitive, reducing the effort to drive change in the business reduces cost, makes it a more enjoyable place to work and delivers better customer outcomes. The challenge for leaders is understanding what sacrifices you’re willing to make, and a willingness to give up fundamental parts of your current way of working.
Referencing my earlier example, that organisation had to give up traditional hierarchy, formal meetings, a culture of overengineering and detailed planning…. in exchange for empowered teams, informal networks, and “outcome steering.” But their prize was an organisation ready to face any challenge.
It's always important to maintain a learning mindset in terms of where to start and how to stay ahead and looking at other industries for inspiration. I also think it's learning from your own customer, and maintaining that connection. Also having in place a good strong measurement program or customer listening program really supports pride in the management team and/or the teams in the business that are delivering change. Bringing the voice of the customer into the boardroom is really important.
Even if we were not dealing with a pandemic, trying to push customers into a future that doesn’t exist is always a challenge. The way that we typically tackle that is to codesign what those questions would be with customers themselves. Instead of hypothesising what might be front of mind to customers we would run qualitative discussions with customers to tease out what are some of the rational and irrational behaviours that may be emerging. We would use that to design what questions we would then ask customers.
Importantly though, it's not a case of set and forget. Understanding what matters most to customers last week might have changed next week. So ensuring that we are keeping our finger on the pulse through that approach is critical.
The concept of pushing customers into a future that doesn’t exist, is a reminder of a comment often attributed to Henry Ford “If I had asked people what they wanted, they would have said faster horses.” So there is a role for leadership as well boards in helping to imagine that future.
The trends are equally applicable to the not for profit sector as it is the government and private sector. We are seeing connection and collaboration across not-for-profit, private and government sectors at the moment becoming more critical than ever. The impact is having to solve business and individual's needs and circumstances across sectors.
From the perspective of a board member on a not for profit, one of the areas that we’re anxious about is the dependence on fundraising in a COVID-19 environment where we know households are doing it hard. The ability to engage with those individuals and organisations that have supported our particular organisation is something that's on our minds.
It's about being clear on what the customer need is and then working out how to reduce the barriers or effort involved in driving that change. The example we gave was a price or promotion lever, but it doesn't have to be that. Sometimes it's about removing the friction in supporting that choice for the customer and educating them in the process as well. For example, Westpac’s television ad campaign focuses on educating customers on how to register for online banking and make a transaction. Removing the barriers is one lever to pull that doesn’t have to involve price or promotion.
There are many different examples we’ve seen. In some cases, bringing the voice of the customer into a regular rhythm is part of the board agenda. We’ve seen board members immersing themselves in the customer's environment themselves. And that means spending time, boots on the ground, either observing, chattering, immersing in the environment to observe the behavior of customers themselves. We've seen a few organisations where that has been quite successful.
When we approach a new organisation that we haven't worked with previously, and it will be much the same for a new board member, it's simply doing mystery shopping. As simple as that sounds, putting yourself in the customer's shoes and seeing what some of their experiences are is extremely valuable. Sometimes management teams that spend a lot of time grappling with these issues every day, simply ‘don’t see the wood through the trees’.
They’re all equally applicable to different industries but there's nuances in each of them. In financial services, for example, trust is clearly something the industry as a whole has had to focus on over the last couple of years. Most of the institutions have taken that very seriously and we’ve seen through the bushfire crisis and the recent pandemic they have put trust at the centre of a lot of decisions they've already made.
Another example comes from the transport sector. If you look at some of the behavioral messaging that we talked about, we’re seeing a lot of transport departments coupling their operational planning, the forecast impacts of social distancing and what that means for how many people can sit on a bus or train. The other critical piece, the glue between the operational planning and forecasting, is how do they message those changes to customers and commuters. And this needs to occur in near real time because that's how quickly they need to be communicating some of these changes, especially as for example, schools go back.
This is an important issue, particularly for one of our government clients in social services, which is dealing with particularly aggressive customer behavior at the moment. Sadly, there's not one silver bullet solution from our perspective. The first issue is around the skills, behaviors and training that is provided to support those staff to feel empowered in those situations. That comes down to the protocols, processes, escalation pathways so that they feel supported and safe.
The second area is the importance that data can play in helping staff with early identification or aggressive and in particular repeat aggressive customers, and putting in place proactive strategies to minimise that harm or aggression back onto the staff. Finally, there is the relationship between staff and their leaders to support them and equip them through the culture of the organisation to feel that they can speak up and seek out support when they need it or when they are feeling unsafe or vulnerable.
Part of the response is redesigning the experience for the customer to try and reduce the potential for aggression. It may be an experience lever, or a policy or process change. Sometimes if it's obviously unavoidable or external to the organisation, organisation’s can reconsider the channel. If it doesn’t have to be a face to face which can heighten the anger and aggression, perhaps phone or online service would be more suitable.
Consulting Diversity & Inclusion Lead and Customer Experience Lead, PwC Australia
Tel: +61 431 164 710
Director, PwC Australia
Tel: +61 3 8603 4501