Customer-led transformation

Drive customer-led business growth by transforming your marketing, sales, service, product innovation and channel experiences

A core challenge facing most businesses today is how to keep pace with changing and growing consumer expectations, and how to continuously delight consumers in the face of these changes. Companies with strong customer attraction often have a gravitational pull, drawing in a diverse range of customers who are fiercely loyal and advocate for the brand.

This strong attraction arises when a company’s core values firmly align with their customers’ beliefs and the company’s capabilities allow it to deliver a differentiating customer experience.

At PwC, we emphasise the customer experience framework and envision a future where outcome-driven approaches help our clients transform into the ultimate customer attractors.

Our ambition within the customer-led transformation offering is to help our clients change for the better around their customers, so that they can grow responsibly. Our deep industry knowledge, extensive technical capability and business accelerators makes us one of the leading partners across industries. Ensuring our customers take the right approach to their technology transformations is at the heart of our differentiating Business, Experience and Technology (BXT) approach.

Customer-led transformation combines diverse capabilities across experience design, research and insights, business design, solutions, and technology. We bring together our people, experience, sales analytics and technology solutions to accelerate growth and enhance customer delight.

PwC’s customer-led transformation services at a glance

Our customer-focused transformation team guides you from strategy to implementation.

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The Growth Levers

Increase impact and customer delight with deeper, data-driven connections

Increase effectiveness through multiple channels

Drive up retention and lower cost to serve with flexible capabilities

Deliver a return on investment through experience

Maximise commercial potential with insights and understanding

Identify new opportunities with faster and more impactful innovation

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What’s important to CMOs in 2023

Today’s CMOs are on the front lines of business growth strategies. From customer loyalty and data to modern marketing and technology, discover six CMO priorities for 2023.

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Six topics shaping the marketing agenda

As the company’s foremost brand steward, the CMO is entrusted with discerning the nuances of customer behavior — which can be mercurial in the best of times. In the wake of a global pandemic, however, closely followed by inflation, it’s evident why CMOs say their responsibilities have become more complex over the past two years. They anticipate an evolution of their responsibilities, prioritising collaboration with their C-suite peers on strategy decisions to expand the scope of the brand in the minds of customers — and ultimately, to grow the business. Technology is essential to this mandate, as is the need for timely, detailed customer data. When CMOs combine their front-line experience with their deep understanding of the business, they can deliver essential insights for continued corporate growth and resilience.

As choices for products and services proliferate, marketing leaders should consider finding new ways to create more immersive tech-enabled personalised experiences that can deliver targeted preferences. Often, this means exploring the new possibilities offered by the metaverse. For CMOs, this entails collaborating with CIOs and COOs to analyse operating models for gaps in efficiency, then making strategic investments in the most tech-forward capabilities. From AI to machine learning, these technologies deliver the dynamic experiences and ultra-relevant content that can differentiate the brand — and forge deeper connections with current customers while attracting new ones. At the core is a laser focus on what matters to customers enough to keep them coming back.

Why it matters

Long-term growth and loyalty hinge on balancing values with capabilities. While consumer companies have long used loyalty programs, a similar approach in business-to-business (B2B) relationships is relatively new. CMOs developing these B2B relationships can start with their clients’ strategic goals, then transform client interactions into dynamic partnerships that promote mutual success.

Technology underpins every aspect of marketing today. The right martech and adtech investments can enhance customer experience, generate predictive analytics, increase output and galvanise business growth. Demonstrating these results is more critical than ever for a CMO, especially in a budget-scarce environment. Our research shows that less than half of CMOs plan tech investments in 2023. That might well be because they haven’t fully realised the be.nefits of current tech investments or because their staff isn’t fully upskilled; in fact, only 53% of CMOs say they currently provide tech training. CMOs will certainly want to wring all the utility they can from their existing technologies, including by training their teams. Without upskilled teams, success can be elusive.

After two years of leading their teams through a collision of turbulent conditions, it’s time for CMOs to reaffirm their strategic roles as business partners in the C-suite. This shift is essential for them to obtain the resources necessary to provide the customer experience essential to keep customers coming back, attract new customers — and ultimately, to drive growth. Satisfaction requires choreographing the delicate balance of what matters most to customers, from purpose and price to sustainability and value — while also charting outcomes internally to illustrate progress. CMOs are well-positioned to push the boundaries of innovation by exploring the potential of immersive virtual experiences in the evolving metaverse.

Why it matters

As marketing continues to evolve, it has transformed from an enabler into a driver of business growth. CMOs are charged with building a foundation of customer centricity, regardless of market conditions.

During the early days of the pandemic, one company unlocked $1 billion by reexamining priorities, optimising marketing investments and reinvesting in growth — despite significant volume disruption. The outcome? Increased market share across key channels and more than double the marketing ROI of its nearest competitor. Collaborating with their C-suite counterparts, CMOs can thus deploy analytics for a reimagined vision of marketing.

Customers want to know what a brand stands for. They connect with — and reward — relatable brands. CMOs are at the forefront of shaping and communicating an authentic narrative that highlights sustainability and purpose, including the company’s environmental, social and governance (ESG) strategy. The CMO is well advised to stay in lockstep with the CEO on the substance and tone of a brand’s purpose. And to partner with the CIO and CFO for credible data that supports the company’s ESG story — as well as for insights into the habits and preferred channels of valued customers. After all, 60% of younger customers rely on social media to learn about a company’s ESG efforts.

Facing record inflation, customers are demanding ever-more value for their money, bringing a new urgency to the decisions surrounding marketing budgets. CMOs have an opportunity to team up with CFOs and CIOs to uncover the appropriate pricing strategy for their industry. By integrating marketing metrics with CRM and financial systems, they can develop a proactive pricing model for revenue growth management, trade promotions and more. A personalised approach — one in which alternative products, pricing and bundles are tailored to customer segments — can help manage costs as well as drive value for both the customer and the company.

Why it matters

Companies are looking to CMOs to shape product demand. From gathering trade promotion data to using advanced revenue management tools to analyse it, CMOs are spearheading the case to bridge departmental silos — further underscoring their growing influence across the enterprise.

Deep knowledge of the customer is the holy grail for CMOs. What channels do our customers prefer? How can we meet them where they want to be? Finding ways to translate that knowledge — via analytics — into insights for the entire organisation affords CMOs the authority to contribute to strategy decisions. Data fuels business decisions, connecting marketing to sales and increasing effectiveness while also bolstering competitive advantage. In the wake of regulatory changes to third-party data collection, a robust first-party data strategy that respects customer privacy can position the company as a leader. Customers provide their data in return for a value-exchange such as personalisation and rebates. An alternative could be partnerships with companies that already aggregate customer data.

Why it matters

To be effective, CMOs should have the ability to uncover actionable insights from customer data. The vast troves of available data make it nearly impossible to do that without analytics, machine learning and iterative test-and-learn techniques. CMOs also need the right metrics to confirm they are delivering business-relevant insights that allow the company to innovate and grow — by delivering a targeted, personalised, differentiated customer experience.

Customer attraction: Values meet capabilities

Companies that aren’t focused on customer attraction face the risk of losing around 55% of their customers tomorrow, our 2022 PwC Customer Loyalty Survey found. Today’s customer is empowered by choice, pressed for time and expects more and more from their interactions with companies. It’s therefore time for businesses to understand customer experience transformation and invest in the elements that help drive customer attraction.

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Creating loyalty in volatile times

PwC Customer Loyalty Survey 2022

Volatility in consumer behavior is at an all-time high. The COVID-19 pandemic fundamentally changed many needs and preferences. Inflation and a turbulent economy are influencing buying decisions. Technology creates unprecedented connectivity and access to goods and services. Consumers know more about where companies stand on environmental, social and governance (ESG) issues and expect businesses to share their beliefs. And let’s be honest: Consumers as a whole are more discerning than ever.

This all leaves companies wondering how they can better shape consumer demand and drive engagement with their brands. Unlocking what drives consumer loyalty has companies asking, “How do I attract and retain my customers?” Along with providing new insights from more than 4,000 consumers in the US, our PwC Customer Loyalty Survey 2022 reveals several opportunities for businesses to strengthen relationships, increase customer lifetime value and reduce the likelihood that they’ll leave.

What wins — and can lose — a customer’s loyalty

More than one-fourth of survey respondents told us they stopped using or buying from a business in the past year, and bad experiences — with products or services and/or customer service — were the overwhelming reasons why.

As inflation persists, more than half of respondents said getting good value for the price of a product or service is a top reason why they keep using or buying from a business

Personalisation is a priority, too. Four out of five consumers would share some type of personal data for a better experience, with such information as email address, birthday and age, and sex/gender identity topping the list.

In an increasingly automated world, the human touch still matters. At least one-third of respondents said human interaction is important to their loyalty, and for many types of businesses it was more than 50%.

Ignore the digital dimension at your peril. More than half of respondents said they’re less likely to be loyal to a brand if its online shopping experience isn’t as easy or enjoyable as shopping in person.

As you might expect, generations differ significantly when it comes to loyalty. Generation Z (ages 18-25) and Millennials (26-41) are generally more mobile than Generation X (42-57) and Baby Boomers (58 and older), but they’re also more open to personalisation and perks that can build loyalty.

Loyalty in a dramatically different world

The pandemic disrupted a wide range of industries and left businesses scrambling to adapt to shifting customer needs. Nearly three out of ten consumers in our survey say today they’re more likely to try a new brand, and younger generations are even more likely. Those percentages are higher for certain types of businesses, such as restaurants (44% more likely to try a new brand), consumer goods (38%) and supermarkets (36%).

Consumers are not only willing to walk away, they’re actually doing it: 26% of respondents said they stopped buying from a specific business in the past year. That percentage was higher — in some cases much higher — for many types of businesses, including airlines, restaurants, banks and hotels. And again, the younger the consumer, the greater chance he or she left a brand behind.

In addition to COVID-19, consumers are dealing with inflation. Among the many reasons why people regularly patronise a business, getting good value was the top reason at 53%. In addition, 30% said they like the benefits, rewards and privileges — discounts, rebates and special access or offers — they get with a preferred company’s loyalty program. By comparison, only 13% said they don’t consider price.

Customer experience is critical to loyalty

Bad experiences — even just one — can cost you customers. More than half (55%) of respondents said they would stop buying from a company that they otherwise liked after several bad experiences, and 8% said they would stop after just one bad experience. While 8% may not seem like much, it is when you're talking about a market-leading company with millions of customers. Are you willing to lose that many customers because of one bad experience? And it doesn’t just have to be “bad” experiences for some to leave: 32% said they’d drop a company if it provided inconsistent experiences.

And it isn’t just talk either. Among survey respondents who stopped using or buying from a specific business in the past year, a bad experience with products or services and a bad experience with customer service were top reasons. That indicates that service recovery is more important than ever for companies. In addition, younger generations were more likely than older generations to leave a brand because they liked the experience with another brand better.

What could improve those experiences and help retain customers? More humanity would help. In this automated age, consumers still want to talk to a real person. Respondents said human interaction is important or very important for their loyalty to restaurants (58%), financial services (55%), pharmacies (53%) and hotels (52%). In fact, for each type of business, at least one-third of respondents said human interaction is important. Companies also should determine how to balance investments in human interaction with offering an engaging digital experience. More than half (51%) of consumers said they’re less likely to be loyal to a brand if its online shopping experience isn't as easy or enjoyable as shopping in person. That number jumped to 69% for Generation Z and 57% for Millennials.

Capturing customers through subscriptions

More than half (55%) of consumers in our survey said they belong to at least one type of subscription service that allows them to make regular payments for access to a product or service. Benefits of subscriptions also factor in customer loyalty, as discounts, lower prices, faster and/or easier service and automatic renewals were what survey respondents liked most about the services. As expected, participation varies greatly by age: 81% of Generation Z members and 72% of Millennials said they have at least one subscription, compared to only 31% of Baby Boomers. Music, television and entertainment services are most popular overall, with 36% of respondents saying they subscribe. In addition, 17% said they subscribe to a bundled service that provides multiple services, and more than 10% have subscriptions for household goods, personal care items, food or alcohol, or clothing and fashion items.

Get personal or get lost

Just as loyalty can hinge on a customer’s experience with a business, so can an experience be shaped by how personal it feels to a customer. When asked about getting a personalised experience from a business, 87% of survey respondents named at least one part of that experience that’s most important to them.

In addition, 82% are willing to share some type of personal data for more personalised service. Comfort levels were strongest with personal identifiers, with 48% willing to share their birthday and age, 45% their sex/gender identity and 37% their race/ethnicity. Many consumers also are OK with contact information such as an email address (61%), mailing address (40%) and phone number (35%). Specifics about usage and biometrics are a harder sell. Only 22% said they’re willing to share product usage data, 15% their current location (via mobile phone), 5% facial recognition and 3% a fingerprint.

Consumers also prize flexibility in personalisation, with one of the top preferences being “rewards my way” in a loyalty programme. That priority offers businesses an opportunity to experiment more with experiential loyalty to improve customer retention. Among age groups, Generation Z is more likely than older generations to want easy or fast access to products or services, brands to remember their preferences and to be able to seamlessly switch between mobile, online and in-store experiences.

Expression of loyalty varies across generations

Between longer lifespans and people interacting with brands at younger ages, businesses have more opportunities to connect with consumers and win their loyalty. Our survey found that Millennials and Generation Z show loyalty in more ways than Generation X and especially Baby Boomers.

While getting good value for price and the quality/consistency of products or services are top reasons why younger people keep using a business, those consumers overall don’t feel as strongly as older ones about those factors. By comparison, more Millennials and members of Generation Z value fast service, feeling like they’re part of a community and having a personalised experience. To that end, more Generation Z members (41%) and Millennials (37%) were willing to share their personal interests, preferences or habits with a business to get a more personalised experience.

Generations also differed in why they stopped buying from a business in the past year. Generation Z and Millennials were more likely to cite more than one reason for leaving compared to older generations. But larger percentages of Generation X and Baby Boomers said they left a brand to support or boycott issues they feel are important in society, such as the environment, diversity and charitable giving.

Co-branded credit cards help drive customer loyalty

As companies explore other ways to earn loyalty and consumers seek more benefits, co-branded credit cards — offered by businesses in partnership with a bank or credit card company with rewards such as airline miles and fuel points — have grown in popularity. Three out of five survey respondents have some type of co-branded credit card, with higher percentages of men than women and older consumers than younger ones being cardholders. More than two-thirds of cardholders said they’d likely buy from the brand that issued the card, including more than a third who said very likely. But almost one-fourth said the card doesn’t drive more loyalty — they’re neither likely nor unlikely to buy from the brand on the card. Also, similar to the overall shift in customer loyalty during the pandemic, 30% of co-branded cardholders said the benefits or rewards were more valuable now than before COVID-19, while only 10% said less.

Seven ways to win loyalty

The challenges of winning and keeping a consumer’s business are very real, but so are the opportunities for businesses in many industries. Here are some ways you can better connect with your customers and increase the odds of earning their loyalty.

Recognise the rise of emotional loyalty. Experience is all about how an individual feels when interacting with your brand before, during and after a transaction. The better you understand that, the more ways you can engage with customers — and the more likely they’ll continue engaging with your business.

Invest in customer segmentation. As behaviors and preferences have changed, you should update analytic models that aim to help you better understand your customers and use digital transformation to improve customer experience.

Assess how rigid your loyalty programmes are and reconsider the selection of benefits, including expanding beyond points and discounts to experiential loyalty.

Activate a data-driven personalisation strategy to drive effective engagement and stronger individual connections with customers.

Where feasible, test and learn with subscriptions, maintaining flexibility to quickly adjust in response to subscriber feedback. With existing models, acknowledge the potential for “subscription fatigue” and determine how you can adapt those models to address shifting customer needs.

Develop a balanced approach to physical and digital transformation of customer experience, including creating a consistent omnichannel experience for customers.

Prioritise efforts to better understand younger and more racially and economically diverse groups, as recognising their needs and preferences can provide opportunities to grow their loyalty.

How did PwC India and Tata Hitachi Construction Machinery Ltd. create a B2B commerce platform for products and spares?

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Amit Khanna

Amit Khanna

Leader, Front-office Transformation, PwC India