Which Industries Suffer From Poor CX Management (and How to Change)?
By Megan Wells
Every company should strive to continually improve their customer experience, as customer expectations are continually changing.
Focusing on customer experience is more than creating a warm and fuzzy feeling for your patrons. There are direct correlations between consumer happiness and their loyalty and purchasing patterns with a brand, too. Specifically, McKinsey research suggests that improving customer experience can bring in up to 15% higher revenues, and an increase in customer satisfaction also correlates to 15-20% lower costs for an organization.
Still, certain industries like airlines, healthcare, and telecom historically struggle to meet customer expectations. Luckily, there are a number of tactics each organization can deploy to reimagine their existing strategy, and create new experiences that delight their customers.
Three Industries that Struggle with CX
Companies that neglect to collect accurate and timely data, listen to their customers, analyze the pitfalls along their customer journey, and don't remain agile, will struggle to maintain customer satisfaction over the long haul. Airlines, healthcare, and telecommunications rank among the top three industries that have the most difficulty organizing a CX strategy for ongoing customer satisfaction.
ASCI scores for the airline industry have hovered between 65 and 73 over the past decade, which are some of the lowest ratings across all industries. Research shows that nearly 1 in 10 passengers reported a bad experience with an airline between 2019 and 2020, and with more than 800 million domestic flights every year, that means roughly 80,000,000 frustrated passengers.
One of the biggest points of friction between airline companies and its customers is the trend of pricing services based on what’s called “calculated misery.”
This is the process of rolling back airfare prices, but then charging extra for anything above the basic service (like baggage, overhead bins, seat selection, etc.) The basic offerings on an airline have degraded to a point where customers will pay to escape them, but often to their chagrin.
How can the airline industry improve its customer experience?
Changes warranted by the pandemic in 2020 almost automatically led to an increase in customer satisfaction for the industry as a whole.
More lenient trip change policies, better communication (despite excessive travel delays and cancellations) and better leg room all contributed to the largest increase in customer satisfaction for the industry since 1994.
But, these changes aren’t enough. Airlines collect a great deal of data, like credit cards used, flight frequency, typical destinations and spending behaviors, from its customers. With this information, airlines have the ability to create more personalized experiences for its passengers.
For example, Singapore Airlines (rated among one of the top airlines for customer experience) leverages an app that can track customer data from check-in to baggage retrieval. The app monitors micro conversions throughout a traveler’s experience, so passengers can receive a more personalized experience.
In one example, Singapore Airlines talks about passengers on connecting flights. If a passenger orders a gin and tonic on their first flight, the flight attendants on the next flight will see this information, and ask the same passenger if they would like another gin and tonic for their second flight.
Airlines are in a great position to leverage their existing customer data, adopt new measures, and begin improving their CX standings as an entire industry.
Arguably one of the most important industries and yet the most frustrating for consumers, healthcare in general suffers from subpar CX ratings. In fact, healthcare ranked #3 as “a most hated industry” based on a recent Gallup poll, because:
- Customers complain that plans don’t offer what they need
- Plans seem to be created for the benefit of the provider rather than the customer
- Confusing plan configurations with little supporting education add to uncertainty about the industry
The general anxiety surrounding one’s health adds a layer of complexity and emotional turmoil to customers dealing with companies in this arena. So it’s likely that customers enter into a dialogue already pained. Add to that the fact that customers are usually put on long holds or need to jump through several hoops to get answers, and it’s clear this industry is ripe for innovation.
How can the health insurance model improve?
As consumers become more and more frustrated with the existing healthcare system, new players are beginning to emerge to capture this massive disaffected market segment.
- Honeybee Health, an online pharmacy, seeks to cut costs for underinsured patients by selling directly with drug manufacturers. Since its inception, Honeybee Health has experienced tremendous growth. In just a four month span, Honeybee Health increased its revenue by 2554%.
- OneMedical, a concierge care company, simplifies plan configurations, and has grown in popularity because of its streamlined focus to improve the patient experience. Their innovation is quickly getting noticed by consumers, too. At the end of 2019, OneMedical had 422,000 members, and the organization expects to have 680,000 members by the end of 2021.
The competition is putting pressure on other healthcare providers to prioritize CX, and shift to changing market demands. Strategies like customer journey mapping, paying more attention to customer satisfaction data, and working to educate and add value with plans rather than dizzy customers with complicated, irrelevant options.
TV and internet service providers
Of 46 industries measured in a recent ASCI Telecommunications Report, TV and Internet providers rated lowest in customer satisfaction, with a score of 62 out of 100. A recent study found that 17% of customers in this industry had endured a bad customer experience in the last 6 months - far more than the top 2 and 3 industries.
Why the friction?
TV and internet, which was once considered a luxury service, is now a necessity. The digital era has spiked customer expectations above what ISPs have historically delivered. And, as billions of people now depend on these services for work and entertainment, the demand for reliable, uninterrupted service is stronger than ever. On the ISP side, although TV service is waning due to the near-ubiquity of media streaming services, competition for internet access is still generally low. This has resulted in behaviors that seek to cut costs rather than improve service.
Despite these measures being taken across companies in the space, one player shines in the CX realm: Comcast.
How Comcast is changing CX in telecommunications
After creating a dedicated Customer Experience Personalization (CXP) team to revamp their strategy, the team turned 30,000,000 customer relationships into a detailed customer journey map. The resource gave their 40,000 support agents and various business teams across the company better tools to help customers along every step of their service.
That wasn’t enough however: to decipher trends across their customer interactions, they sought a continuous intelligence solution that could pick up disparate datasets and make sense of their connections in real-time. The results: a better NPS score, and 1.3 million costly support calls eliminated due to proactive responses to service interruptions.
See how they were able to accomplish this by putting all their data under one roof and processing it in real-time with Scuba Analytics.
Improving customer experience is hard, but not impossible
If you're looking for a full breakdown of how to improve your customer experience strategy, consider our blog on 'How to Build a Customer Experience Strategy.' If you already have a strategy in mind, see what a great continuous intelligence platform can do to help you analyze your critical data, and turn your CX frustrations into an opportunity.
Recent Blog Posts
Popular Blog Posts
- It's Time to Stop Being “Data-Driven” (And Start Being Data-Informed)
- 48 Analytics Quotes from the Experts
- 27 Amazing Tech and Product Blogs: Theory, Tactics, Frameworks
- Understanding the Value of Your Data
- 6 Essential Mental Models for Product Managers
- 6 Common Types of Behavioral Segmentation for Understanding Your Customers