Olivia Parker
Aug 2, 2018

'Experimental' Asia leads world in uptake of customer-experience tools

Faced with an increasingly large array of customer-experience tools, companies can learn from APAC, which is way ahead on adoption, according to a new study by Bain & Company.

A JD.com drone delivering a package in Sichuan, China
A JD.com drone delivering a package in Sichuan, China

Asia-Pacific is ‘well ahead’ of more developed markets in adopting customer experience tools, finds the first survey of its kind by management consultants Bain & Company.

The survey, conducted in collaboration with Research Now, asked executives at 700 companies around the world about 20 tools ‘used to enhance the customer experience’. These included ‘sensing’ tools like face and voice recognition or sentiment analysis; ‘acting’ tools such as augmented reality and delivery drones; and ‘managing’ tools like blockchain, episode management or Net Promoter System (NPS), Bain’s own loyalty assessment tool. 

Asia-Pacific firms, typically more open to experimentation and less hampered by data privacy issues than those in more established markets, have the highest overall tool adoption rate and have focused the majority of their efforts on tools that ‘sense customer needs and that automate and simplify decision-making processes’, finds the study.

Predictive analytics are the most widely used set of tools across most industries globally, in both B2B and B2C companies. As an example of Asia-Pacific brands streaking ahead of their counterparts in Europe and North America in terms of tool adoption, the report highlights the way predictive analytics are used by DiDi Chuxing, the Chinese ride-sharing company. DiDi compares the data it collects on 25 million daily rides with passengers’ end-of-ride ratings. The brand then uses this to detect patterns and can now predict, with 80% accuracy, whether a passenger has a good or bad experience in its cars, and react accordingly.

The two next most-used tools worldwide, expected to maintain high adoption rates in the next three years, are:

  • Sensors in products and operations, which have become widely used in many different industries in everything from supply chains to the Internet of Things.
  • Personalised experiences, a collection of tools such as ‘recommendation engines’, that, the report predicts, will become more refined as AI continues to develop, as long as companies can navigate increasingly significant data privacy hurdles. The report found that 70% of companies will expand their use of personalisation tools over the next three years.

Even though they are not widely in use yet, new tools like delivery drones, already adopted by the likes of JD.com in China and Domino’s in New Zealand, had some of the high satisfaction rates, while those most broadly adopted had the lowest satisfaction rates. “As tools become established, users expect more of them,” the report explains. “The longer a tool is in place, the more a company relies on it to deliver better results, but eventually users will run up against the tool’s limitations. In addition, as competitors begin using the same tools, they lose their distinctiveness.”

‘Episode management’, the process of charting all the activities involved in helping one customer with a particular interaction, also scored fairly low on adoption but is reported by firms ranked as ‘leading’ in the study to be the most effective tool of all.

The study also found that channeling major investment and effort into fewer tools and seeding these throughout operations paid off more significantly than taking a scattergun approach to many. “Embedding it is the only way to change behavior in the organization,” said Richard Hatherall, head of Bain & Company’s customer strategy and marketing practice in Asia-Pacific.

What to expect in 2025

The executives were also questioned on how optimistic they felt about whether 25 customer experience trend predictions would come to fruition by 2025. The 25 options included statements like ‘AI will handle more than 75% of customer service tasks and processes’; ‘Traditional advertising will become obsolete, as personalized experience becomes the primary means for companies to engage consumers’; and ‘Machines will become consumers, as people delegate low-involvement decisions to their own bots’.

None of the above was deemed the most likely to happen by 2025, with this accolade falling to the statement: ‘Geolocation devices will notify retailers when a shopper arrives at a store, so they can better serve the customer’s needs.’ Almost three-quarters of the executives surveyed said that they’d expect to see this happening in seven years’ time.

A similar percentage also thought that by 2025, retailers will automatically know when a customer finishes a product and will deliver them a new one; and that cash transactions will decline by 80% due to the rise of mobile and biometric payments.

The latter development, according to a report released this week by TNS, which assessed consumers in Australia, the UK and the US, is set to grow, with 68% of adults believing that biometric payments will become more commonplace in the next two to five years, but roughly two thirds of consumers are still concerned about the associated risks to their personal information. 

Asia-Pacific executives have more faith in this melding of digital and human than their counterparts elsewhere in the world, finds Bain’s study. 66% agreed that biological sensors detecting human emotions would ‘transform customer sentiment’, compared to 48% in Europe and 34% in North America. And 60% in Asia-Pacific said they thought nanoscale biotechnology (devices implanted in the body) would help prevent the majority of deaths and improve disease management, compared to 39% in Europe and just 34% in North America. “Compared with other regions, many customers in Asia-Pacific are relatively tech savvy, and also more comfortable with the prospect of technology entering their lives and even their bodies,” the report states.

Globally, executives placed the least faith in the idea that drones will deliver most small packages by 2025, and that automated comparison engines will handle all shopping decisions.

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