Prominent Australian brands like Qantas, Coles and Woolworths have recently faced a storm of criticism with consumers questioning their priorities. While these companies rake in substantial profits, many Australians grapple with the burden of soaring living costs. Do Australian corporations genuinely care about customer experience, or are they more focused on maximising their gains at the expense of customers’ wallets?
It’s true that a number of large corporations prioritise short-term profits, which can lead to neglecting customer experience. However, many companies recognise the long-term benefits of positive customer experiences, such as increased customer loyalty, repeat business, and positive word-of-mouth marketing. They understand that customer satisfaction is crucial for sustainable profitability.
Sharon Melamed, Managing Director of Matchboard, points out, “It’s hard to be successful in business without caring about customers, as they are your lifeblood. If you mistreat them, they will leave you and your revenues and share price will suffer. That’s not to say companies are getting it right always – even with a leadership that genuinely cares, and with all the best intentions and frameworks, large organisations are complex and there are always gaps and issues”.
The vast majority of Australia’s largest companies, according to Jason Bradshaw, Global CX Thought Leader, CEO – Bradshaw, Koh & Co, grasp the strategic significance of consistently delivering outstanding customer experiences. He says, ”Fundamentally, it is my belief that the vast majority of Australia’s largest companies understand strategically the importance of consistently delivering great customer experiences and many of them have established CX Divisions and programs with noble goals. The challenge however is that not every company has the voice of the customer ‘in the room’ as part of their decision-making”.
Melamed adds, “If we look at the meteoric rise in CX and customer insights roles, as well as the deployment of analytics solutions to better understand and be able to action customer feedback, you would have to say that companies are investing in customer experience which is surely a signal they care. But there’s so much work to do, clearly with some companies more than others.”
Profit is the reward for good customer experience!
There is a demonstrable link between customer experience and profit. Research from McKinsey highlights how improving the customer experience has increased sales revenues by 2 to 7 percent and profitability by 1 to 2 percent.
Companies that invest in understanding their customers’ needs, providing top-notch support, and consistently delivering quality are the ones that reap the financial benefits. Bradshaw comments, “Companies should be rewarded for consistently delivering compelling, great experiences to their customers. If companies are charging a premium and not delivering the premium experience the customer thinks the price demands, then I highly encourage them to shop elsewhere. The key in the above though is companies should consistently deliver a compelling experience worthy of reward, ie greater market share, increased customer loyalty, increased profits”.
In a market where competition is fierce and consumer choices abound, profit isn’t just about the bottom line; it’s a reflection of how well a company has connected with its customer. “Perhaps the current market conditions in particular industries are creating a perfect opportunity for a new entrant or existing player in any industry to double down on being famous for delivering consistently on their promises (the customer and employee experience promises) and rightfully earning market share away from their competitors”, says Bradshaw.
Coping with the impact of bad press
Companies that have received plenty of negative press face several customer experience challenges, which can have significant impacts on their reputation, customer loyalty, and bottom line. These challenges are:
- Rebuilding trust: Negative press can erode trust in a company. Rebuilding trust with customers who may have lost faith in the organisation can be a lengthy and challenging process.
- Damage Control: Corporations must engage in effective damage control to mitigate the impact of negative press. This might involve addressing customer concerns, apologising for mistakes, and taking corrective actions.
- Customer retention: Negative press can lead to customer attrition. Retaining existing customers and preventing them from switching to competitors becomes a priority.
- Employee morale: Negative press can also affect employee morale, which in turn can impact the quality of customer service provided by the company’s staff.
Paul Stevenson, Chief Experience Officer for V2 Digital, who used to work for Qantas. advises, “When you are in those organisations it’s important to not get drowned or overwhelmed by all the noise that’s happening in the marketplace. I’m not saying don’t listen or respond to it, but it can be hugely demotivating. I don’t know anybody in any of those businesses mentioned that isn’t trying to get the best outcome for their customers.”
In responding to negative press Stevenson recommends a proactive plan to respond to the damage by focusing on two or three things that are of top priority to most of your customers. He says, “My advice to all of those organisations, and remember they could have hundreds of projects that are going at any one time, is to focus on the two or three things that really matter most to your customers. In any sector, whether that’s airlines or retail, there’s always two or three things that matter more than anything else. If you focus on those two or three things and communicate that to your customers and let them know why you are priotising those things, you will have a material impact on the public’s perception of you.”
Alternatively, Stevenson warns, “When businesses ignore customer backlash, they risk damaging their reputation and losing market share to competitors. Today’s informed consumers expect high standards from the brands they support and won’t tolerate mistreatment or having their concerns swept under the rug. Skillfully managing a media crisis can even enhance brand trust and customer loyalty. While challenging, these crisis moments also offer valuable opportunities. A brand’s identity is shaped not by its mistakes, but by its actions.”
The question of whether profit is more important to large public corporations than positive customer experiences, varies from company to company. Most if not all successful companies, however, recognise the long-term benefits of positive customer experiences, such as increased customer loyalty, repeat business, and positive word-of-mouth marketing. They understand that customer satisfaction is crucial for sustainable profitability.