Starting from something like buying your daily groceries to something as long-term as choosing the right life insurance plan, the average consumer in the 21st century has no dearth of choices as products and services are getting commoditized.
The other day I was scrolling through a website, I noticed a digital ad for an online delivery service. A few minutes later, another full-size digital advertisement for a different online delivery partner popped up. One service. Many providers. That got me thinking. These days, there is no limit to the number of choices laid out before us as consumers.Starting from something like buying your daily groceries to something as long-term as choosing the right life insurance plan, the average consumer in the 21st century has no dearth of choices as products and services are getting commoditized. Plus, the continuous stream of advertising and information adds further clutter to the decision-making process.
We do have examples where providers such as online marketplaces are constantly venturing into newer areas to provide a “one-stop shop” experience across the areas of merchandising, household essentials, durables, and payments, along with corollary services like banking, insurance, etc.
The constant addition of “sticky” services to backward/forward integrate the ecosystem or to form alliances with related categories is the need of the hour for most service providers to ensure a seamless and long-term tie-in with consumers today. This is the real proposition for building true lifetime value from each consumer account and from his/ her circle of influence.
A study by Ovum-Amdocs revealed that in the Asia Pacific region, around 64% of Indians use bundled services on their telecom subscriptions. Indians also showed the strongest retention from being offered bundling services, around 44% of Indians responded that bundled media service was the main reason why they were willing to spend more on mobile/fixed-line telecom subscriptions. Furthermore 47% of the respondents admitted that having access to bundled media services made them less likely to switch to another service provider. Clearly, sticky services like discounts, free services and bundled services enhance the Customer Lifetime Value factor. And this effect exists across sectors, including the BFSI space. This is just one of the many ways in which providers can enhance customer experience. Here are some more.
The comfort of familiarity
It’s nice to have multiple choices. However, the dilemma of choice causes more confusion than convenience for customers. This is because they often lose out on the advantage of familiarity in the bargain. When one remains a repeat consumer of a reputed provider’s services, the service provider will have enough data points, over time, to create a comprehensive individual profile and extend more value-added offers and personalized services.
Banks, insurers, wallets, online shopping, retail, and hospitality chains do this well. Offers and rewards are tailored to individual choices and behaviours. With multiple service providers, the consumer continues to remain a stranger and a “one-off account” to many of them.
Whether an individual or an institution, working with multiple service providers can be cumbersome over the long run. The time consumed to manage all aspects of the relationship can be better utilised.
Choosing the option to rely on one experienced provider makes things smoother and more seamless. This is the reason services like banks, telecom, internet providers, and durable manufacturers offer bulk discounts, at-home services, and billing waivers, as economies of scale kick in with a larger number buyers.
When one relies on one reputed provider they enjoy perks like swifter and more direct communication, easier management of administrative activities, and multifaceted savings with regard to time, effort and costs.
The power of affinity
When consumers choose to rely on a single trusted service provider, it not only gives them the advantage of familiarity, but it also enables greater affinity.
Increased affinity gives the consumer more access to next-generation offerings for present and future consumption choices. A good example would be retail and technology service providers who do preview sales and beta group testing for select users. This gives consumers a peek into the future and at the same time, it allows the service providers to take their feedback seriously on what needs to improve before the product or service is launched. Providers will also value the relationship, and more often than not, even reward such consumers with offers on bundled services.
Higher quality of products, services and future investments
A combination of sustainable, user-orientated offerings implies that the service provider is willing to direct more resources towards improving products, services, processes and their quality of people, so they are in tune with the needs of the end user. A great example in this case would be large hospitality and retail chains, which are constantly offering newer designs, menus, and services, as consumers are more exposed to global experiences and practices.
Service providers who are financially stronger and well-reputed tend to make decisions in favour of their loyalists, as they have the liberty to sometimes function outside the documented processes. This translates to better customer support and a constantly upgraded portfolio of benefits, ultimately paying off for the long-term consumer of these offerings.
Smart consumers will continue to choose repute and quality over mere marketing and promises. To remain on the consumers’ radar, service providers must up their game, improve the quality, affordability and sustainability of their products and services and focus on building lasting relationships with consumers. Those who are quick to adapt to evolving customer expectations will emerge the winners in the next normal.
(By Kayzad Hiramanek, Chief-Operations & Customer Experience, Bajaj Allianz Life)