Modern organizations are highly competitive when it comes to delivering the best customer experiences; but what is the driving factor behind CX Excellence, and how can it be achieved?
In sectors like retail and travel, brands are often pushed harder to deliver great CX with the threat of competitors hogging their market share. But a less talked-about driver of CX excellence is regulation. Regulation can drive artificial competition in public sectors like blue light and utilities that's no less, and at times even more effective than commercial competition.
In a fascinating talk with Content Guru's Co-Founder and Deputy CEO, Martin Taylor, we explored these two competing narratives, shedding light on how regulation works wonders for the public (which can ultimately benefit the private sector, too).
CX: The Modern Business Battleground
The CX technology market has always been an extremely competitive one. The faster-than-light appearance of new technologies maintains constant pressure, now joined by competition on security standards. Under such conditions, CX has emerged as a key battleground, particularly since the pandemic.
"With face-to-face communication almost eliminated, much more investment flowed into that space," Taylor notes.
Customer satisfaction went up accordingly, and customer expectations have carried on rising. However, at some point, the pace of improvement has slowed among organizations, giving rise to a new challenge.
"In recent surveys, 86% of consumers reported they'd leave a brand after only two bad customer experiences, and 49% have actually left after just a single bad experience," he says.
But while the stick is there, there's also a carrot: 61% said they'd pay an additional 5% for better customer experience, and 31% said they'd be willing to pay significantly more if it ensured better service.
This trend has been leading brands to start renewing their pandemic-days investment in CX, aiming to differentiate themselves in their market spaces.
The question is: Is it possible to replicate this type of competitive pressure in a monopoly-type situation, where service tends to be poor?
That's where regulation comes in.
Regulation: The Unsung Hero of CX Excellence
In the utilities sector – including services like water, power, and gas– a market dynamic is often absent due to them being natural monopolies. This results in customer service that's somewhere between mediocre and terrible.
One former monopoly that stands in contrast is telecoms, an industry that lends itself to a market-driven dynamic, with inherent innovation and competition on parameters like service, pricing, and coverage. Others, like water, are at the opposite end of the spectrum.
But there are also organizations occupying the middle ground, which is where things get interesting.
The Energy Sector
Energy is located right in the middle between a natural monopoly and a competitive, commercial-like market:
"There's the distribution part of it, which is a natural monopoly; but the retail aspect lends itself to a market dynamic," Taylor explains.
In the UK, there are six Distribution Network Operators (DNOs), each occupying one or more local monopoly situations. Historically, this meant rather poor customer service. Enter regulator Ofgem, who came up with a brilliant idea to transform the way CX is delivered in this sector.