In many ways, digital technologies have had polar-opposite impacts for consumers and companies: For consumers, life has been simplified and empowered by devices such as smartphones and innovations such as social media. For companies, on the other hand, business has been made more complex by the need to manage many more channels and points of interaction—in-store, on the phone, online, e-mail, social media, and mobile apps, to name a few.

With so many channels, platforms, and devices to get right, companies frequently struggle to craft effective customer pathways and make the most of customer interactions. Worse yet, they have difficulty defining the right metrics to measure success.

Customers spread the word about their experiences—whether positive or negative—far and wide among friends and family. Social media extends and magnifies the impact of each advocate—and critic. Conversations about the customer experience boost financial performance.

Research by The Boston Consulting Group, which most recently assessed the experiences of more than 227,000 customers with 650 brands in eight countries and seven industries, shows definitively that brands with high levels of advocacy significantly outperform those that are heavily criticized.

In our sample, the top-line growth of the highest- and lowest-scoring brands differed by 27 percentage points on average.In addition to assessing how advocacy fuels growth, we have identified the precise rational and emotional factors that shape the customer experience: value for money, customer service, product satisfaction, and emotional connection. The mix of the four factors varies by company and industry, but in industries that involve ongoing interaction between consumers and companies (as opposed to the simple purchase and use or consumption of a product), the customer service component ranks high in importance; between 24% and 30% of customers in retail banking, car insurance, and telecommunications, for example, consider it important.

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Getting the service component right is critical. Not only does service have a big impact on loyalty, but service operations are an excellent laboratory for the wider organization. As customers’ expectations are increasingly set by innovative “native” digital players such as Amazon and Uber, and as competitors raise their digital games, companies are forced to adopt new technologies at an unprecedented pace, in service and beyond. With digital channels and tools constantly emerging, companies must become (to borrow a term from the world of software development) more agile, iterating much more quickly to adapt to rapidly changing conditions.

Companies need to develop both the infrastructure and the in-depth customer understanding to manage this transition.

Getting service right is far easier said than done, and many companies struggle. For example, research done for this report by BCG and NICE Systems—surveying 1,704 consumers, ages 18 through 65, in five markets (Australia, France, the Netherlands, the UK, and the US)—found that overall satisfaction ratings for self-service channels, including all-important digital channels, declined by ten points, from 65% reporting satisfaction in the previous survey, in 2013, to 55%.

The addition of digital channels to a company’s service mix brings new challenges for traditional organizations: each additional channel creates new customer experiences that must be carefully considered and managed. Complexity has become a fact of life and a source of barriers of many kinds. Consumer data is scattered across the different channels and touch points, and it is often difficult for a company to gain a consolidated view of a customer’s interactions. Worse still, the data is typically highly disparate and unstructured, including, for example, text information in cookies and voice recordings from call centers.

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All of this makes it hard to turn data into operational actions. And companies have to balance security requirements and regulatory limitations with the speed, simplicity, and reliability that customers expect from a digital experience.Our research examined the state of customer service in three industries—retail banking, insurance, and telecommunications—and shines a light on the main challenges that companies face in managing customer service pathways in an increasingly omnichannel world.

Read more at : bcg.perspectives – Digital Technologies Raise the Stakes in Customer Service