Maintaining customer loyalty has become increasingly challenging in today’s digital-first environment. According to Stanford Swinton, Executive VP at Bain & Company and Founder at NPSx by Bain in Company, we’re witnessing the dawn of the “Third Wave of CX”. But what does this mean for CX leaders?
In a recent podcast featuring Simon Fraser, VP Insights and Consultancy at InMoment, and Stanford Swinton, key strategies to secure brand loyalty amidst the evolving landscape of customer experience (CX) were discussed. Here are the key highlights:
Understanding the Third Wave of CX
The evolution of customer experience (CX) functions mirrors the changing landscape of customer expectations. The “third wave” of CX represents a paradigm shift in how businesses approach customer experience. Over the past few decades, CX practices have evolved significantly. Initially, the focus was on identifying the most suitable customer experience metrics, such as Net Promoter Score (NPS) or customer satisfaction scores. However, this approach has matured, shifting towards a deeper understanding of customer behaviour and feedback loops. Now, in the third wave, the landscape is changing once again. Best practices from five years ago are no longer sufficient. Personalisation has become paramount, necessitating a move towards customer-centric, predictive machine learning. This shift emphasises understanding customer value and leveraging AI to predict outcomes.
Personalisation and Ethical Differentiation
In the third wave, businesses must combine personalisation with values to stand out. While digital strategies and omnichannel experiences were once differentiators, customers now seek tailored experiences and align themselves with brands that stand for something meaningful. There’s a growing trend for companies to differentiate themselves based on their ethical principles and social missions. By prioritising customer enrichment and ethical practices, brands can establish a deeper connection with consumers, fostering long-term loyalty.
Predictive CX and Value Unlocking
Predictive CX goes beyond traditional surveys; it correlates customer sentiment with financial outcomes, providing actionable insights for business growth. Predictive CX leverages AI and machine learning to understand customer behaviour beyond survey responses and in turn, businesses can design targeted experiences that drive value and loyalty. Understanding who your customers are and categorising their needs, journeys, and drivers of experience is essential. This involves creating a robust customer taxonomy to structure data sets effectively. Both structured and unstructured data play crucial roles in predictive CX. By harnessing predictive analytics, businesses can unlock value from their customers.Â
Challenges and Opportunities for Businesses
Transitioning to the third wave of CX presents both challenges and opportunities for businesses. While legacy CX practices may pose initial hurdles, organisations can leverage existing frameworks and garner support from key stakeholders. By aligning CX initiatives with broader business objectives and demonstrating the potential for top-line growth, CX leaders can drive organisational change effectively.
Embracing the Third Wave
In conclusion, securing brand loyalty in the third wave of CX requires a proactive approach to adaptation and innovation. The shift to the third wave of CX is not just a trend; it’s a necessity for businesses looking to thrive in the digital age. By embracing personalised experiences, ethical differentiation, and predictive analytics, companies can secure brand loyalty and drive positive economic outcomes.
Ready to explore the full discussion on securing brand loyalty in the third wave of CX? Listen to the full podcast below!
