ServiceNow study examines declining brand loyalty among the Swiss

A study by ServiceNow shows that investments in long-term customer retention strategies and in a better customer and employee experience will become much more important in the future with regard to the economic situation.

Macroeconomic influences and inflation are actively affecting the purchasing behavior and brand awareness of private households. The latest ServiceNow study, conducted jointly with Opinium Research in March 2023, shows that two-thirds of Swiss consumers are less brand-loyal than they were two years ago, for example because they are switching to cheaper offers due to rising costs.

Since 60 percent of consumers state that they also have fundamentally higher expenses as a result of price increases, their attitude toward price developments has changed. Customers expect companies to recognize and meet their needs. To ensure long-term loyalty, it is important to personalize the customer experience, for example by offering individual discounts, product samples and proactive service. And that pays off: Around four-fifths (84 %) of consumers in Switzerland would be more loyal to companies where they feel they are understood as customers.

"Companies face the acute threat that consumers' previous brand loyalty will fall victim to rising inflation and a subdued economic outlook," said Armgard Eichhoff (pictured), solution consulting director at ServiceNow. "Although customers across industries are becoming more price-sensitive, now is not the time to cut corners on customer experience. Rather, it is currently more important than ever for companies to show their value and invest in a better as well as sustainable customer and employee experience to avoid the risk of price dumping."

Two-fifths of Swiss consumers (41 %) say they are spending more this year than they did twelve months ago, and this is particularly evident among the younger generation of 18- to 34-year-olds (58 %). In comparison, only 25 percent are spending less now and 33 % have seen no change in their spending.

Consumers become aware of the importance of their data

In a time characterized by innovative technologies, consumers are more security- and data-conscious than ever. Companies that do not take security measures run the risk of falling behind in the race for consumer loyalty - across all industries.

The survey found that the security of personal data is now considered one of the most important factors (92 %) when dealing with companies. In fact, data security is on a par with the key factors of problem-solving customer service staff (93 %), customer service response times (92 %) and seamless service (91 %). A look at the age structure of the consumers surveyed reveals that the protection of personal data is extremely important for all age groups. Both the group aged between 35 and 54 with 92% and the over-55s with 93 % are equally security-conscious. With 92 %, this also applies to the group of 18-34 year old consumers.

"Companies must continue to invest in technology to sustainably improve customer satisfaction. Data transparency is crucial here so that consumers can be sure that their personal data is treated with the highest priority and sensitivity. Because without trust in security, the customer experience suffers significantly and thus jeopardizes the important brand loyalty," warns Eichhoff.

Offer omni-channel service for consumers

The survey also shows how important it is for companies to offer an omni-channel service in order to cover the preferences of all customers and thus ensure an optimal customer experience. While traditional e-mail is still the preferred communication channel, chatbots, for example, which are currently rated as "very important" by only 18 percent, offer a good opportunity to use new technologies in a holistic approach. And the trend is rising, because almost two-thirds of consumers (63 %) say they would be more loyal to companies that invest in technologies that offer better customer service.

If we now look directly at individual sectors, we can see slight differences in characteristics despite the uniform choice of communication tools - e-mail, call centers and apps. When it comes to the general customer experience, a good third (39 %) of respondents believe that retail offers the best experience compared to all other industries. Rounding out the top three are healthcare (39%) and consumer technology (26%). For government communications, 16% prefers e-mail. E-mail communication is followed by call center services except for fintech and traditional banking for which apps are in second place.

Focusing specifically on chatbots, solving the problem is considered most important (42 %), followed by understanding questions (36 %), being able to talk to a real person, and fast response times (both 33 %). Ease of use (26 %), security (26 %), and being clearly labeled as a chatbot service (20 %) are also considered important.

"Companies need to understand that a good customer experience should be equally available on all channels. To ensure this, they should rely on networked platforms. This goes hand in hand with a good understanding of the customer and investment in technology. Automated processes in customer service, such as chatbot services, can become a game changer in the future. Although they are not yet being used sufficiently by consumers, the potential is undisputed. Companies are currently investing heavily in this area - and advances in AI mean that their capabilities will continue to grow. There is a big opportunity to promote chatbots within an omni-channel service approach," says Armgard Eichhoff.

Employee experience can influence consumer brand loyalty

An important point that is often neglected in the consideration of the customer experience: the employee experience (EX) also has an impact on the customer experience (CX) and thus on brand loyalty. 90 % of consumers state that when choosing the right company, it is important for them that the employees are treated well. And about two-thirds (70 %) agree that they would be more likely not to work with a company if they knew employees were unhappy.

But how do companies achieve high employee satisfaction? Salary (52 %) is still the top priority. Other important aspects include flexible, hybrid working, training and development, employee benefits and good HR support, as well as optimal technical devices and technical support. In general, brands that deliver on their value proposition maintain their position even in times of uncertainty.

"The results of our study show that consumers and employees alike have high expectations of companies. In order to remain competitive, build strong customer and employee loyalty and ultimately increase brand loyalty, it is crucial to address the needs of employees (EX) as representatives of the company and offer a pleasant working environment. A strategically set up Total Experience is mandatory," concludes Armgard Eichhoff.

The Study was commissioned by ServiceNow and conducted by Opinium Research in March 2023. The survey asked 13,000 adults aged 18 and over in nine EMEA countries - Germany, Switzerland, the United Kingdom, Ireland, France, Italy, the Netherlands, Sweden and the United Arab Emirates - including 1,000 respondents in Switzerland, about their attitudes towards customer and employee experience.

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