Australian Brands Risk Losing Customers over Poor Digital Experience

August 3, 2015 by SAP News 0

Lacklustre digital experiences closely tied to loss of loyalty and advocacy for some of Australia’s largest organisations, SAP research finds. Assessment of nearly 7,000 digital interactions shows 47% of Aussie consumers put off online.

SydneySAP today launched research revealing the extent to which many of Australia’s largest brands are coming up short in delivering the digital experiences[1] their customers want. The research also identifies a link between the digital experience and business outcomes. Consistent across the brands assessed, poor digital experiences can translate to loss of customer loyalty and advocacy, two key metrics with impact on top-line revenue.

SAP’s Australian Digital Experience Report offers detailed insights on Australians’ digital expectations and the ability of brands to meet them. It found almost half of the report’s 3,000 respondents (47 per cent) were unsatisfied with the digital experiences delivered by 34 of the nation’s largest organisations.

Of those consumers identified as unsatisfied with their digital experience, just 17 per cent stated they would remain loyal to the brand. The Net Promoter Score (NPS) for this segment was a staggering -55 per cent[2].

In contrast, if a brand can provide a strong digital experience, the picture is completely different. Of those consumers delighted with their digital experience almost three quarters (73 per cent) would remain loyal, with the NPS a positive 63 per cent.

The 3,000 consumers rated a total of nearly 7,000 digital interactions against 13 core attributes of a delightful digital experience, including engagement, personalisation, responsiveness and simplicity. Based on the research data, SAP has compiled a Digital Experience Index comprising all brands assessed by industry and their digital-experience score[3].

“In today’s digital world, the consumer is in full control,” said John Ruthven, President and Managing Director, SAP Australia and New Zealand. “Brands need a much deeper understanding of their digital-experience performance if they are to keep their customers and stay competitive. With our research, we’re helping Australian organisations not only identify the link between digital experience and business outcomes, but offering a framework that helps them measure and manage their digital-experience performance from their customers’ perspective.”

In the report, industry analysis reveals that the grocery retail industry is the leading performer, yet on the whole still had more unsatisfied consumers than delighted ones. Banking and insurance were the next best performers, with telecommunications and utilities scoring lowest.

What makes a digital experience delightful
The research highlights that to meaningfully improve the digital experiences they deliver, brands need to better engage with consumers and develop deeper insight into the service they expect. From the 13 digital experience attributes respondents rated, three key consumer preferences stand out that brands should focus on to improve their digital experience score:

[1] In the research, the digital experience is defined as how a brand digitally interacts with its customers during the discovery, transaction, delivery and support of a product or service.
[2] SAP asked consumers about their propensity to recommend the brand to a friend (applying Net Promoter Score methodology) and their loyalty to the brand, and if they would remain a customer in the future.
[3] The digital experience gap is quantified by a digital experience score, calculated by subtracting the percentage of customers unsatisfied with the digital experience from the percentage of those who are delighted.

Be who I am: Respondents want experiences that are dedicated to them as individuals, experiences that appeal to or even predict their preferences, but without infringing on their privacy.

Engage me: An engaging digital experience is one that responds to consumers and allows them to interact with and control the experience when needed. An engaging experience triggers an emotional response from the customer, building a stronger connection to the brand.

Simplify my life: Service that’s simple just works, and consumers expect this from the brands they interact with. A digital experience should be cohesive, integrated and easy. It has to fit in with the consumer’s life effortlessly, available anytime, anywhere.

The research also reveals the significance of a brand’s digitally influential customers, those highly engaged and vocal on social media and online commerce. Though making up only 9 per cent of all respondents, these digital influencers delivered an extremely high digital experience score of positive 33 per cent across all industries, underscoring the importance for brands to cultivate the digital competency of their customer base.

“The perfect digital experience depends on how well brands understand and engage relevantly with their individual customers and at the same time how well their processes and people are aligned to deliver,” Ruthven says. “Consistent across the best performing brands in our research is a data-driven approach to the digital experience that brings the front and back office together to delight the customer. This sets them apart from their competition.”

Visit the Australian Digital Experience Report site to access the report and case studies.

Select Brand Scores from SAP’s Australian Digital Experience Report

Suncorp Insurance scored highest for the digital-experience attributes of available anytime on my terms (50 per cent) and respectful and dedicated to my needs (34 per cent). Overall, the organisation scored positively across 11 of the 13 attributes. Suncorp Insurance also had a higher than average percentage of digitally influential customers at 13 per cent. “Our customers are increasingly turning to the convenience of digital. Our focus is to ensure we deliver continuous improvement in the service we offer across all our platforms, with particular emphasis on the continuing rapid growth in mobile,” said Ivan Owide, Head of PI eCommerce & Specialist Brands for Suncorp Insurance.

The findings of the Australian Digital Experience Report reflect Kogan.com’s thorough understanding of what makes a strong digital experience: The organisation scored the highest among consumer-goods retailers, besting eight other large consumer-goods retail players and delivering the third-highest score across industries. Kogan.com has achieved its leadership standing through relentless focus on “simple and beautiful ways to buy tens of thousands of products at the world’s best prices,” according to David Shafer, Executive Director, Kogan.com. Additionally, he notes, the team at Kogan.com continually improve the shopping experience on its Web site, but importantly the systems and processes at the backend that power their operations as well.

About the Survey
To better understand the digital experiences being delivered by Australia’s leading brands and how these compare to consumer expectations, SAP commissioned AMR to poll over 3,000 Australian consumers. 34 brands across six industries (retail – consumer; retail – grocery; telecommunications/ISPs; insurance; banking; utilities) were analysed by respondents, with SAP conducting follow-up interviews with brands recording the best digital experiences to identify the reasons for this.

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 291,000 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com/australia.

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For more information, press only:
Perry Manross, +61 478 303 232, perry.manross@sap.com, AEDT
Simon Gomes, +61 400 422 069, simon.gomes@sap.com, AEDT
Howorth Communications, +61 2 8281 3816, SAP@howorth.com.au, AEDT

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