It’s the future. Do you know where your customer is?

Winning the battle for ever-evolving consumers requires a combination of deep, holistic insight and the willingness to design intentional experiences — and deliver them accordingly

Customer insights and personalization, empathy, winning service and distinctive experiences are far from lofty management ideals, they’re grounded in the cold, hard and increasingly competitive reality of a meaningful commercial prize at stake.


The challenge facing organizations is twofold. Firstly, to recognise that how a customer reaches a decision today has changed from yesterday and will most likely change tomorrow, based on different circumstances, life events and engagement models.

Secondly, in our hyperconnected, transparent and democratized world, where both information and power lie, literally, in the hands of the consumer, the ability to deliver a distinctive, personalized and, critically, intentional experience becomes even more paramount. Moreover, the expectations from those experiences are rising faster than many organizations can keep pace with, as the consumer’s best experience anywhere, in any category or sector, becomes the expectation for all others.


“At one level, you have to deeply understand the customer and what’s important in their lives at a level that many organizations have historically failed to reach,” said David Conway, Director of Experience, KPMG in the UK. “Life events are constantly shifting and changing, and are becoming more pivotal in shaping when, what and how we purchase. Understanding new wants, unmet needs, shifting motivations and new life events is critically important to serving the customer of tomorrow, while at the same time aligning the organization to meet those needs.”

More than a management ideal

Building customer closeness. Designing intentional experiences. This isn’t empty management rhetoric; it’s a commercially grounded imperative.


Analysis from KPMG’s multi-year, global study into customer experience excellence demonstrates the scale of the gap between high-performing organizations and their lower-performing counterparts. From a global perspective, the top performers deliver, on average, twice the shareholder value than their underperforming peer group. They benefit from twice the revenue growth and they build greater customer equity — the propensity of a customer to stay loyal — giving them the potential of an economic premium to price inelastic customers that are less likely to migrate to competitors.


These same companies are also able to invest in those attributes that customers value and rationalize those that they do not, often resulting in better customer economics. In difficult times, organizations falling short of delivering winning and personalized experiences typically see margin erosion five times greater than that of their top-performing peers.


Developing an intimate understanding both of the customer of today, as well as tomorrow, and designing intentional experiences, isn’t just associated with the upsides of growth, loyalty and stronger margins; failure to do so can have existential consequences.


“History is a graveyard filled with organizations that failed to adapt,” added Mr Conway. “But the juxtaposition of the Five Mys — which help to answer the ‘why’ behind consumer behavior — and the six pillars of customer experience excellence — which help answer ‘how’ to respond with the best experience for that consumer — becomes a powerful tool to help put an organization on the front foot.”

[Since becoming pregnant] I’m actually putting a lot of time to save money … I feel that I still have the time and also the physical strength to, for example, buy things on secondhand stores and actually go and get them … when I have the baby I won’t have time for those kind of things, and I’ll just order everything online, and I won’t have time to think a lot about the choices. So, I’m anticipating a change in trade-offs soon.

Megan, 30, New York, US

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Understanding the customer of tomorrow

Understanding a customer’s motivations and expectations, the competition for their attention, how they’re connected to technology and each other, how they balance the constraints of time and money, and how all of these change with different life events and life stages is at the heart of KPMG’s Five Mys framework.


Using this framework is the starting point in identifying why consumer behavior is changing today. It helps us to predict how that behavior may change tomorrow. It provides a granular and very individual perspective, even down to the level of single consumers, that traditional demographic segmentation and market research efforts struggle to deliver.


For some organizations, this deep and intimate understanding of customers can also be used to overcome internal structural impediments to change. USAA, an American company specializing in providing financial services for members of the armed forces and their families, for example, used life events as a basis to structure teams and resources. The firm ensured their staff became intimately familiar with their customers’ lives, even going as far as recruiting customers as employees and encouraging their people to undergo military training to develop a level of empathy and insight that few organizations could match.


For others, it helps drive core service design. A Chinese payments provider, for instance, has used its understanding of the online consumer to develop a specialized interface. Aimed at millennial smartphone users, the interface enables them to buy through their portal, where they can make payments, buy theater tickets, check their investments or buy plane tickets. And much of its design has been based on behavioral observation.


At its heart, the Five Mys enables organizations to prioritize resources and efforts towards the most attractive potential markets and customers. Even more crucially, it arms executives with a depth of insight — the ‘why’ behind consumer behavior — that offers profound potential, if acted upon. It’s this need to act, to respond, to adapt offerings or to design new intentional experiences that the six pillars is powerfully placed to answer, “So how do we do that?” and to help align the whole organization to deliver.

Designing tomorrow’s intentional experience

Our research, across dozens of industries and millions of consumers for almost a decade, helped to identify the key traits of top-performing organizations in intentional experience design through personalization, integrity, expectations, resolution, time and effort, and empathy. These form our six pillars of customer experience excellence and address the ‘how’ that follows understanding the ‘why’.


Few executives would dispute the importance in excelling in these areas and many would point to genuine internal aspirations to do so. But too often such efforts can stumble as they lack the depth or breadth of underpinning insight into the consumer of today, or tomorrow, that we want to design experiences for. Hence the potency in juxtaposing the Five Mys and the six pillars, which can lead to a heat map or road map of priorities for internal change, resource allocation and focus.


But an added complexity of intentional experience design lies in hierarchy. Companies need to meet their consumers’ minimal expectations at each individual pillar before they earn the permission to step up to the next one. Integrity, for instance, is the foundation of the six pillars. If an organization fails to meet its consumers’ expectations for integrity, no amount of effort to differentiate or win in personalization or empathy will
pay off.


“Today’s consumer is a little bit cynical … as consumers, we can all remember experiences that have grated a little or felt a little disingenuous, where a company has tried to win on some level when it just doesn’t feel like they’ve earned the right to or gotten a grasp of the basics,” said Elisa Holland, director of KPMG Innovation Lab, KPMG in the US. “When we understand the ‘why’ behind consumer behavior, we can begin to design better and intentional experiences for today or predictively for tomorrow using the six pillars.


“But we have to recognize a hierarchy exists, that it starts with integrity, and as we consider experience design, we need to ask ourselves as we consider each pillar, ‘have we earned the right to move up the hierarchy?’ That’s what leads to the right intentional experience at the right time.”

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Sum greater than its parts

“When we understand what’s really important to a customer around a given life event — not just stated or presumed importance, but what really leads to the opening and closing of the customer wallet — we can design experiences accordingly,” said Julio Hernandez, customer advisory lead, KPMG in the US. “Understanding the relative importance of time pressures versus budgetary pressures versus expectations of personalization or a premium service allows us to tailor our propositions, our messages and our experiences to match.”


In isolation, KPMG’s Five Mys offer a route to unmatched customer insight and the ability, using data and analytics, to predict where our customers will be, and their unmet needs and desires, tomorrow. Equally, KPMG’s six pillars framework provides leaders with an evidence-based road map to delivering winning customer experiences.


Kes Sampanthar, Managing Director of KPMG Innovation Lab, KPMG in the US, observed: “If you can anticipate when a given generation will hit a new life event, you can start mapping the Five Mys to the six pillars to help ensure you are positioned to catch the generational wave.”


Looking at consumers through these two lenses in concert, therefore, offers a compound opportunity to understand, align and predict — and, ultimately, dramatically increase the relevance of an organization to its changing customer.