A compelling story is unfolding in the rapidly changing world of the automotive industry —one that goes beyond data and trends. Amidst the pandemic, I, like many others, revamped my shopping routine, shifting from in-store experiences to the online platforms that have reshaped how products reach our doorsteps.
The unsung heroes of this transformation? Delivery vans.
The European light commercial vehicle (LCV) sector has seen almost a decade of consistent growth. This trend is set to continue, fuelled by the continuing surge in delivery demands from e-commerce, the expanding online grocery sector, and the recreational-van market’s reliance on LCVs.
Speeding towards a new era of eco-friendly delivery
The transition from internal combustion engines (ICE) to electric vehicles (EVs) has been nothing short of remarkable. In less than a decade, EVs have evolved from niche products to the inevitable future of automotive, and commercial vehicles are no exception. As the UK and Europe commit to ending ICE sales by 2035, the message for fleet managers and business owners is crystal clear: adapt or risk falling behind.
Yet, this shift isn’t without its challenges. Our research reveals concerns among UK fleet managers and LCV drivers about transitioning from ICE to EV. Issues such as high initial costs, insufficient charging infrastructure, ongoing operational expenses, and limited EV range are reasons for apprehension.
“The cost at the moment is high and I could not afford to replace the vehicle I have. I do not have any electric points, places where I can re-charge a vehicle and I do not know how much it would cost to re-charge a vehicle. Do not know how reliable it would be or if anyone could service it.”
“Available charging points may be an issue. The cost to run will probably be better but the initial costs to install charging points at the office would be difficult and the guys take the vans home in the evenings and won’t have access to charging stations.”
“They are more expensive, only the wealthy can afford them. Also, they are stressful to re-charge at times, you do worry about running out in the middle of nowhere.”
Despite these concerns, 52% claim that environmental sustainability will influence their next van purchase. This creates a gap in the market, with SMEs and larger fleets struggling to obtain affordable electric commercial vehicles (ECVs) due to high demand, and limited supply from traditional automakers.
New players are leading the charge
The void left by established automakers in Europe has paved the way for new entrants, particularly those from Asia. ECVs from innovative brands are already hitting the streets at breakneck speed – these players have spotted the opening and are wasting no time in seizing the opportunity.
Take Maxus, from China’s SAIC Motor Corp., as an example: with the eDELIVER3 priced at £34,000 (ex VAT), Maxus has already made substantial sales in Western Europe and Scandinavia and is planning further expansion across Central Europe. In 2022, Maxus already held around 6% of Europe’s new ECV market, surpassing Ford, Nissan, and Fiat.
Maxus isn’t the only brand with eyes on Europe: Geely’s Farizon aims to enter the market by 2024 and B-ON (which acquired the StreetScooter ECV brand) is expanding German production. Meanwhile, in the United States, General Motors’ BrightDrop brand is following suit with its own expansion plans.
The road ahead is long, but the time for action is now
In this evolving landscape, LCV incumbents must prioritise EV adoption to meet customer needs and maintain market share. Every day of delay risks ceding ground to new competitors, as they gain momentum, build brand awareness and acquire customers. The electric van revolution is underway, and the question is whether traditional brands can catch up or risk being left in the fossil fuel past.
The presence of these newcomers also prompts important considerations for commercial van owners and fleet managers. Are they contemplating these new brands for future purchases, potentially disrupting the dominance of traditional van makers? It’s a critical moment in the industry, demanding careful consideration of options.
In concluding my journey from traditional shopping to the heart of the ECV revolution, the path forward appears promisingly electrifying. E-commerce continues to surge, driving demand for last-mile deliveries and cleaner, more sustainable transportation options.
Amidst this transformation, my personal shift from traditional to online retail is a small part of a larger narrative emphasising innovation, adaptability, and the evolving nature of urban logistics. ECVs are no longer a futuristic concept; they are today’s reality, reshaping how we receive online purchases and paving the way for a greener, more eco-friendly future.
What lies ahead for the European van market? The future of electric vans shines brightly, but for traditional brands, clarity remains elusive. One thing is certain: the road ahead is filled with opportunities for those ready to embrace it.
Learn how we can help seize the opportunity:
Not just a bit – a lot.
Twice as much, in fact.
This was the headline finding from our multi-award winning research for Channel 4 around Contextual Moments – Channel 4’s new AI driven TV advertising technology that enables the broadcaster to place a brand’s ads next to relevant scenes in a linear TV show.
It could be a potential game changer at a time when the estimated number of ad messages people are subjected to daily ranges from 500 to 5,000. What’s more, it seems most people remember relatively few of them (explicitly, at least). How many ads that you saw yesterday can you name? See what I mean?
When we designed the research – which involved force-exposing 1,800 respondents to one of three 30 minute C4/E4 programmes and testing nine adverts contextually and non-contextually against control groups – Channel 4 and BVA BDRC instinctively knew that relevant context would be beneficial to advertisers, but we didn’t know in what way or by how much.
Specifically what we found was 62.4% of those exposed to the TV spot recalled the ad (when prompted with screenshots) if it had been previously been shown to them alongside an adjacent contextual moment, whilst only 31.1% recalled it if they’d seen the ad next to programming that was not contextual.
For example, 57% remembered an ad for Samsung tablets if it was shown in a break close to when Sheldon brandished a tablet at Leonard in The Big Bang Theory (his notorious ‘roommate agreement’ which you’ll know if you’re a viewer); but this drops to a mere 30% amongst those exposed to the same ad during Catastrophe (a UK Comedy) or Tried and Tasted (a food programme) where no tablets were shown.
A whopping 67% remembered an ad for NHS Smokefree during Catastrophe shown near a scene where characters discussed quitting smoking, but dropped to a mere 34% amongst those who saw it during The Big Bang Theory or Tried and Tasted where quitting smoking was not mentioned…
The significantly higher recall for the ‘contextual ad’ held true for all nine ads tested.
But why does context have such a dramatic effect? Durham University helped us make sense of the findings, and hypothesised that it relates to semantic priming, which works by making recently accepted content more accessible; activated neural networks effectively just need reactivating – a lesser chore for our brains – which makes memory encoding significantly easier.
We also developed an innovative Erroneous Recollection research technique based on an experiment into schematic processing conducted by psychologists W.F. Brewer and J.C. Treyens whose test found that a significant number of subjects ‘recalled’ seeing books in a room that they had been told was a professor’s study, even though there were actually no books.
Our hypothesis was that the placement of an advert near a strong enough Contextual Moment could trigger incorrect ‘recall’ of the advertised brand appearing in the programme.
Those exposed to a Contextual Moments spot ad were indeed – on average – significantly more likely to erroneously ‘recall’ seeing the brand in the programme, so we were able to accept our hypothesis.
OK, so it works – but does recall actually matter?
It’s rare that ad recall in and of itself is a core campaign objective, and there will doubtless be behavioural economists who will say explicit recall of an ad doesn’t necessarily relate to its success.
However just looking at campaign normative data we hold it’s clear that there is a correlation between ad recall and impact: when recall is above average, we see 46% greater positivity towards the advertiser amongst the exposed sample than when it’s below. Similarly consideration is 97% higher amongst those with above average recall and top-of-mind brand awareness is a whopping 214% higher.
This was also evident in our study. We found that adverts placed with a corresponding Contextual Moment also proved more effective on branding measures, with Contextual ads enjoying:
The painter Kenneth Noland once said, “For me context is the key – from that comes the understanding of everything.” We like to think he’d have approved of our work.
In 2017 two customer service assistants at the world-famous London Underground changed the wording on a station whiteboard that directed passengers to a Craig David concert in a move that would one day bring them to the attention of Michelle Obama.
They replaced the words “Keep Right” with a poem they had written instructing people how to get to the concert. The poem used lyrics from the artist’s songs.
Their simple action had a monumental outcome. The whiteboard poems went viral and the two employees became Sunday Times bestselling authors. They have more than a million followers on Instagram, including the former US first lady.
This story encapsulates everything about our North Star for CX: harnessing the power of emotion to influence human behaviour.
Getting emotional: CX in the digital age
While traditional customer experience has focused on the functional, nuts and bolts side of CX for a smoother customer journey, the digital age requires so much more.
The internet has saturated the market with products and services that are often indistinguishable from the next. To stand out, businesses need to connect to the humans buying their goods and make their experience as memorable as possible.
Numerous studies in behavioural science have also shown that it’s the customer experience, and more specifically, the memory of the experience, that creates attachment to a brand.
Human connection therefore requires CX to be built around human traits like emotions and feelings – attributes not generally associated with corporate conditions! When engineered in the right way, however, as the Transport for London whiteboard example proves, emotion can connect with people in a truly powerful way.
XPASS gets to the heart of human connection
In the world of business, human connection provides the foundations for profitable relationships and maximises return on CX investment.
But achieving it is no easy task.
Drawing on behavioural science can boost your chance of success. Our Emotional Activation Model, XPASS, helps keep emotion at the core of CX every step of the way.
Learn more in our eBook
This free eBook looks at how XPASS can be put to work for better customer experience outcomes in any sector. You will learn how:
A trip to a visitor attraction is a chance to get out and enjoy everything from historic UK landmarks to theme parks – with massive potential for memorable experiences.
We have developed a valuable tool which can help visitor attractions design unforgettable customer experiences and strengthen customer relationships.
Behavioural economics brings a new vision of how humans make decisions in real life. We are not rational ‘bots’ making optimal decisions, but humans subject to external influences and prone to making mistakes (some of them systematic). The theory of EPIC framework is that people judge an experience based on how they felt at its peak moments (the most intense points) rather than the sum or average of every moment of the experience.
Benefits of using the EPIC framework for visitor attractions:
Our research look at whether UK visitor attractions deliver EPIC experiences and, more specifically, which key moments are driving these experiences. In general they have exceeded expectations by delivering elevated experiences far beyond other sectors. What does that actually mean in practice, though?
Elevation is the act of going beyond the routine and the expected, something that pleasantly surprised you. Such experiences are likely to influence word of mouth awareness, where people share their elevated experience with friends and family, and in turn drive repeat visits.
Pride is generated when visitors feel recognised and valued. This can be through a particularly special experience, or simply by receiving the care and patience of staff. Value should be conveyed through the experience and at each ‘transition moment’ to help form a deeper connection to the brand. These transition moments happen when visitors are the most open to an emotional response and can occur during booking, arrival, entry and exit from exhibitions, using the café or shop and leaving the building.
Insight relates to enabling visitors to discover something new or find new inspiration which is an important value-add to the overall experience. The ability to gain a deeper understanding of a topic of interest adds to the excitement, and can even trigger a sense of adventure when inspired to get involved.
Creating an emotional connection with visitors can be difficult, but behavioural science can maximise the chances of success. Enabling visitors to be surrounded by people with shared interests, and feel a sense of belonging during the experience can help forge a deeper connection. This increases the likelihood of visitors sharing their experience with friends and family and thus generate additional visits through recommendations.
Delivering memorable customer experience goes beyond delivering the basics – it’s about going the extra mile in key moments of the experience that really matter. In short, it’s about being EPIC!
For many leisure hotel guests, the creation of a meaningful and memorable experiences is particularly important, with holidays representing a significant opportunity to reconnect and recharge. A way in which we can judge the success of an experience is through the EPIC framework.
So just how important is EPIC for hoteliers, and how can it generate a positive guest experience? Responses to one of our surveys provide an interesting view of which brands perform best at delivering memorable experiences.
Elevation refers to positive experiences which are out of the ordinary and unexpected. Brands that successfully differentiate themselves from competitors often have a unique offering that surprises and entices guests. A few brands that performed particularly well on this pillar in our research are Shangri-La, Four Seasons, Sofitel and Hotel du Vin. These are some examples of where hotels deliver elevation:
Pride refers to making guests feel valued, and staff play a key role in achieving this. This is where hotels have a significant opportunity to excel as taking good care of guests is at the core of the hospitality industry. Our ClearSight data shows that this pillar is, by far, the strongest for hotels. Brands that performed well include Malmaison, Mercure, DoubleTree by Hilton and Marriott. Here are some examples of where hotels are creating a sense of pride:
Insight refers to discovering something new or gaining inspiration from your experiences. In a hotel this could be discovering more about your destination or learning more about the hotel itself. Our data shows that brands that performed best at this were: The Ritz-Carlton, ibis Styles, Four Seasons and Village. These are some examples of how hotels are giving guests insight:
Connection refers to a sense of belonging and being surrounded by like-minded people. In the hotel setting, this generally refers to the sense of being at ‘home’. Our research found brands that performed best at creating this connection were The Ritz-Carlton, Macdonald, Ramada, and Hilton. Here are some examples of where hotels are delivering this:
Often quick and simple gestures can make a memorable impact on someone’s hotel stay. Personalised and caring service can make guests feel special and valued, contributing to building trust and encouraging repeat visits. This even was reflected in a LinkedIn conversation where we discussed the topic of memorable hotel stays!
I’ve always loved adverts so evaluating the performance of adverts is something of a dream job for me. Having undertaken hundreds of campaign evaluations over the last two decades, I thought I’d share a few things I have learned over the years that consistently make advertising effective.
When I was a kid getting sent to bed after my TV programme finished, it was a running joke in my household that I would beg to watch the ad break before I went. Today I get a real sense of nostalgia looking at ads in magazines I read as a child. When there’s a scene in a UK film from the 80s, I am constantly peering at poster ads in the background, seeing if I recognise any of them.
I brought the products too – at least the ones I was allowed to at the time (and a few I wasn’t).
To this day, I know which toilet roll is soft, strong and very long. I know what beanz meanz. I know which lager refreshes the parts other beers cannot reach. And, I remember the cough I used to get whilst exploring whether happiness was indeed a cigar.
But what makes advertising work – or work harder?
1. The impact of a multi-media campaign can be greater than the sum of its parts
I suspect most of us have those moments where you see a poster ad, and before you know it, you’re humming a jingle in your head from another ad for the same product.
A print ad for an insurance brand featuring a meerkat becomes significantly more effective once you have been exposed to the long-running TV campaign with a meerkat saying “simples” a lot.
This is the beauty of ad media working together.
When we’ve quantified the impact of including multiple media touchpoints in our research, we often see a truly dramatic incremental impact that far exceeds that of any single ad media in isolation.
One such example comes from a study where we evaluated a number of campaigns for Newsworks. Some respondents were only exposed to the print ads, some only to the digital ads (mobile, tablet and/or PC), and a third group were exposed to both.
The results were incredible:
Clearly, something fundamental happens to our perceptions of a brand when we recognise a message we have already seen repeated in a new way or a new context.
2. A face can launch a thousand brand perceptions
We’ve seen George Clooney drinking coffee, Gary Lineker stealing crisps and Nicole Scherzinger getting yoghurt on her nose. A well-known face can be familiar, aspirational and trusted. For advertisers, the power of a celebrity endorsement is nothing new.
When there is an obvious link between the advocate and the product, the effect can be particularly powerful.
I remember a product placement campaign we evaluated where Jamie Oliver had used Uncle Ben’s microwaveable rice in one of his Fifteen Minute Meals.
At the pre-stage, Jamie’s viewers had distinct reservations about microwaveable rice – after all, this audience tended to enjoy cooking and “that’s just microwaving stuff”.
After Jamie used it, though, we saw significant uplifts – not just on the brand KPIs but on perceptions of the whole microwavable rice category. There were significant increases in the view that it always comes out right, it tastes as good as home-cooked rice, and it’s good quality.
If it’s good enough for Jamie, it seems it’s good enough for his viewers too.
3. Targeting is enormously powerful…
We were fortunate enough to start evaluating addressable TV ad campaigns when Sky’s AdSmart product launched.
This proved an interesting and challenging format to evaluate because we wanted to measure both the effectiveness of the ad itself and AdSmart’s ability to target extremely precisely (it can target viewers by postcode, amongst other things).
The solution was to use two control groups – one matched on the same targeted criteria (but not exposed) and one deliberately unmatched.
Measures would typically go up in increments: targeted respondents tended to score higher than untargeted ones on advertiser metrics, despite not being exposed to any advertising, simply because the brand was more relevant to them and they were more likely to be in-market. Exposed respondents scored higher still because they benefitted from the same targeted advantages and were exposed to the advertising on top of that.
Ultimately, we found that, on average, we could attribute 56% of overall campaign impact to targeting vs 44% to actual exposure to the campaign itself.
4. So is context
Channel 4 felt so strongly that context was beneficial to TV advertising they developed a product called Contextual Moments. It uses artificial intelligence techniques to automatically identify a specific moment in a TV programme as being contextually ‘valuable’ for advertisers, who can then place their ad in an adjacent break to ‘match’ this moment.
We undertook a large force exposed study to test whether the product worked as well as expected.
The results proved fascinating, and in some cases, surprising. Compared to the same ad being placed in a non-contextual setting, a spot ad placed in context achieved
To further explore why context works, we developed ‘Erroneous Recollection’, a technique based on an experiment into schematic processing conducted by psychologists W.F. Brewer and J.C. Treyens. Their original experiment found that a significant number of subjects ‘recalled’ seeing books in a room that they had been told was a professor’s study, even though there were actually no books. This demonstrated that the expectation of the presence of an object was sometimes sufficient to trigger its erroneous recollection.
Our test found that those exposed to a Contextual Moments spot ad were indeed – on average – significantly more likely to erroneously “recall” having seen the brand in the programme. Consequently, they attributed the brand with similar positive perceptions they held for the programme.
When it comes to advertising, context is indeed king.
5. Experience drives impact
We have evaluated well over 50 experiential campaigns over the years – these have included branded bars at music festivals, installations at shopping centres and train stations and even an exhibition at the Science Museum.
These are challenging to evaluate because the events are usually so immersive it would be faintly ridiculous to ask brand KPIs at the time of exposure. Instead, we collect respondent’s contact details at the event and do a telephone survey with them two weeks later.
The results to date from these types of campaigns have been truly remarkable.
One such campaign was for Nivea, which undertook a roadshow in shopping centres across the country. Individual skincare consultations were given to determine which products within the Nivea Visage range would be most suitable for the customer and complimentary gift bags were given out.
Two weeks after the event, attendees were 92% more likely to purchase Nivea Visage in future and 47% less likely to purchase Olay – the nearest competitor.
We saw similarly spectacular results with other interactive ad formats, such as TV ads where viewers could interact by pressing the red button (remember those?) and campaigns that encourage dual screening (for example, playing along with the Million Pound Drop on a mobile device and being served an ad).
There is something about interacting with a brand that deeply affects a person, driving consistently strong shifts across the whole purchase funnel.
I’d love to tell you more – such as our findings around how overt a brand should be when undertaking branded content, how takeover ad breaks are not just great fun but also highly effective and how in-game advertising is a great way to engage younger, hard to reach consumers, but I’m limited both by time and confidentiality. If you do have any campaigns that need evaluating, though, feel free to get in touch.
During the pandemic, the residents of Venice found they were happier looking out on dolphins in the Lagoon than cruise ships when the sudden reduction in travel had an immediate impact on the environment around them.
Venice had been one of several global focal points for concerns about over-tourism, and this summer, the city submitted plans to control the number of visitors, in particular day trippers. The proposals were intended to encourage more permanent residents, limit the stock of private apartment rentals and bring in a reservation system with an access fee to manage day visitors. In July, it banned all cruise ships from sailing through the city centre. Good news for the dolphins.
Prior to the pandemic, proposals for charges to visit destinations such as Venice were met with objections over elitism – surely, it’s everyone’s right to visit St Mark’s Square? – but has the pandemic shifted that mindset?
We live in an age where there are more causes than room for badges on a jacket, but our research on brand purpose has found that messaging on environmental issues has broader support than other causes and much less distinction across demographic groups. Political issues may polarise us, but we’re united in our concerns for the environment.
That doesn’t mean that it is without its issues. Consumers have fears over greenwashing and whether brands are selling a message they’re not backing up with action.
And while concern for the environment is high, we have found that it is not the main motivator of leisure travel choices with the weather and price ranking at one and two, respectively. Sustainability trails far behind at 25.
While sustainable standards are not a key motivator of leisure choices, they are becoming a hygiene factor. If sustainable standards are clearly not being met at a leisure organisation, people may start to avoid it – now or in the future.
The good news is that people are happy to undertake a range of different sustainable practices, from recycling their rubbish to flying with lighter luggage. They also showed a willingness to make small sacrifices, such as limited access to conservation areas and a day without meat on the menu – small changes which have been shown to make a difference. Sacrifices should be re-framed as positive actions, empowering visitors to perceive they are helping, not losing out.
The urge to travel is strong and dreams of far-away places mean that long-haul flights will not fall foul of flight-shaming trends. But we have found that, when framed positively, behaviours can be changed to benefit all.
The National Trust has received much of the attention on the subject of historic links to slavery, however a number of our other clients in the attractions sector have also sought to re-evaluate how they talk about it.
A key concern from our clients is the impact any reinterpretation will have on attraction visitor numbers.
Some worry that by drawing attention to the negative side of a place’s history, there is a danger that the ‘idealistic traditionalist’ may decide not to visit.
But others argue that the public’s understanding of how historic sites relate to slavery has shifted. There is an expectation that interpretation conveys the full history of a venue (warts an’ all). By doing nothing, they will be providing a sanitised version of what happened, which will lead to a less fulfilling visitor experience. This will also mean people will decide not to visit.
As individuals, our team has fairly developed opinions on the subject – the excellent Story of our Times podcast on Penrhyn Castle will give you a clue as to mine.
But as consultants who work in the sector, we seek to understand the objective truth, so we put the question to the general public.
We asked a nationally representative sample of the U.K. public (sample size of 1,750) the following question:
In the last couple of years, organisations such as The National Trust have started to examine the links their properties have with colonialism and historic slavery. In cases where slavery has played a large role in the site’s history, how much do you agree or disagree these organisations should include information about their links to slavery as part of their on-site interpretation?
The key finding was that the majority of the population (55%) supported information about links to slavery being included in the interpretation. Perhaps more importantly, only a small minority of 15% opposed it. 30% had no firm opinion either way.
Notably, although support for this sort of interpretation falls as people get older, it remains significantly higher than opposition for every single age group. Arguments that there is a huge cultural divide by age are largely unfounded.
Perhaps unsurprisingly, there is majority support across all ethnic groups, with agreement increasing to 7 in 10 UK residents of black ethnicity. For sites that champion an inclusive agenda (which is every historic attraction we work with), this figure may be enough motivation to update interpretation in itself.
We tried in vain to find an audience that is more likely to oppose, but such was the support for the suggestion, we were unsuccessful. The closest we came was amongst ‘anti-vaxxers’. But even amongst this ‘counter-cultural’ audience, support was higher than opposition – 39% to 27%.
A few words about the minority
This is a complex subject with many layers and nuances, and we don’t expect this one question to provide meaningful recommendations. But we hope it demonstrates that – despite what some tabloids may say – opposition to including links to slavery is only held amongst a minority of the general public.
However, we mustn’t forget this minority either. Although 15% is relatively small, no venue would want to lose this amount of visitors. With any additional interpretation on slavery, this minority will want to be reassured that their ‘traditional visit’ is protected and that extra interpretation adds depth rather than takes anything away.
Our wider research on brand purpose suggests that one possible objection from these detractors is that places are responding to a ‘woke’ political agenda. So it’s important that interpretation is clearly supported by robust source material too.
The 2022 Hotel Guest Survey found that 80% of leisure guests had already booked a domestic stay, or were highly likely to, with city breaks the most popular choice. The cost pressures being felt by the consumer were also a factor, with value for money driving booking decisions.
Consumers are becoming more comfortable with the idea of booking an international holiday, but while we are seeing those green shoots for outbound travel, nearly twice as many adults booked a UK holiday during January – the highest incidence since the start of tracking.
Comfort with the idea of staying in hotels and other types of paid-for accommodation jumped significantly as Omicron-driven fears receded and the accommodation sector is closing in on the pre-pandemic norm in terms of consumer comfort levels.
What remains to be seen is whether this recovery will endure, or whether this is one final hurrah before the cost-of-living crisis starts to bite. As we saw from our survey, value is a driver for consumers and there are further factors heading towards us, including the energy price cap increase and possible economic repercussions of Putin’s war on Ukraine.
The domestic leisure market has dominated the sector during the pandemic, with an average of 3.8 leisure trips taken over the past two years, against 1.3 domestic business trips. Beach and resort breaks were popular, as more exotic climes were unavailable.
Jane Pendlebury, CEO, HOSPA, said: “The pandemic drove a rise in domestic holidays caused by necessity – we needed a break but we couldn’t leave the country. In the event we rediscovered what we knew before the growth of budget airlines, which was that the UK is full of wonderful destinations with hotels, restaurants and pubs which offer unique and welcoming experiences.
“Many guests have realised that the UK is not a second-choice destination, but somewhere to explore and be inspired by.”
Ben Harper, group managing director, Watergate Bay Hotel, Another Place and Beach Retreats, added: “The domestic market isn’t a new one, we had been booming before the pandemic. I’m confident of the short term, but I feel even more confident about the medium to long term. There is such an inconsistent landscape in the UK – and no leading brand – which presents a great opportunity.
“Domestic leisure markets across Europe have seen growth in interest from investors, who are looking to build platforms and brands which will bring them healthy returns, but also keep pace with the demands of the mass-affluent travellers who want exceptional design and memorable experiences. These businesses successfully reduce seasonality and create lifestyle through brand.”
Our study found that confidence was growing, with 47% of UK consumers happy to book a domestic trip to be taken in a few months and 32% to go now. As guests have become more comfortable with staying in hotels, they have also started to return to the cities. Looking at future intent for the next 12 months, 47% were planning a city break, while 34% wanted to visit a local area or attraction and 32% were aiming to visit friends or relatives.
David Orr, CEO, Resident Hotels, said: “Whenever restrictions were loosened during the pandemic, we saw people eager to return to the cities, to meet with friends and family, to reconnect with culture and nights out; looking to rediscover the normality the pandemic and strict lockdowns had denied us all, regardless of age.
“We are delighted to see still seeing life return to the cities, recognising that people seeking those lost experiences more than ever cherish and value those moments, so even more focus on “reputation” when it comes to booking a hotel. Reputation is a fundamental qualitative test that reaches across feeling safe and secure, knowing that the teams are looked after well and that guests are looked after well. Reputation uniquely informs the decision of a guest as well as a team member to put their trust in you. Cities we all hope are returning quickly to being the most desired and dynamic of destinations, yet reputation and trust underpins all judgement guests will make when considering investing in their experiences. It is the team at The Resident which the reputation of the hotel is built upon and which will see it become a much-loved destination for a lifetime as we move forwards.”
The survey found that having had a good experience in the past was behind many bookings.
Kevin Edwards, Alliants, said: “Experience is one of the drivers behind booking, in this case experiences which people have had in the past. This is clear proof that, if you want to create those lifelong connections with guests, which will see them return as well as recommend your hotel to friends and family, then you need to focus on experience.
“The hotel sector had become convinced that memorable experiences can only be delivered by a vast team, but the pandemic has persuaded a growing number of hotels that technology can be used intelligently to both free team members to give better service and, with messaging, help create those important bonds. This becomes even more relevant when you see that guests are conscious of value: no-one wants to pay for swarms of staff hovering ‘round reception.”
Many in the sector felt that, once international travel had become more certain, consumers would revert to old patterns and return to their search for summer sun. Instead we can see that the domestic market has outlasted the pandemic and, with the added influence of concerns over price and the impact of travel on climate change, may remain buoyant.
To continue to attract guests, hotels must appreciate that they no longer have a captive market, but must compete, if not on the weather, then value and experience, as consumers look to make the most of their time and money.
Learn more about Hotel Guest Survey.
This is a controversial question – especially for me, having worked with hoteliers for the last seven years – but it’s one I’m willing to put out there to share learnings in the customer experience (CX) arena. After all, we learn from the best.
Hotels were known for providing and leading the way in customer experience, well before we even knew that it was a thing. Hotels are hospitality, and hospitality is CX.
Let’s compare retail CX to hotel CX for a moment. How many shops have you walked into and the assistant tries not to make eye contact with you by looking busy? Or the banks with their vacant counters and building queues while the only visible staff carry out their paperwork? Compare and contrast these experiences with the hotel receptionist trained to drop everything to greet you, or the general managers patrolling their lobbies welcoming guests. Which one of these elevates the customer?
It can be argued, of course, that the likes of John Lewis are much better at CX than the average retail outlet, and Metro bank provides more opening hours than other high street banks. And not all hotels are perfect – some fall a long way short. But, in my opinion, an ‘average’ hotel still trumps even the very best from other sectors.
So why am I putting it out there that homestay may be leading the way in CX?
I’ve recently returned from a trip to Porto. I booked a 2-bedroom, 2-bathroom apartment with a mezzanine and three balconies. I paid around £140 a night for this beautiful apartment, centrally located and immaculately kept. Yes, it was off-peak, but when I looked for a hotel bedroom for £140 a night during the same weekend, I didn’t get a suite, kitchen and three balconies.
However, astounding as they were, it wasn’t the facilities that elevated my experience; it was the hosts.
Before arrival, the hosts contacted me to tell me they were ‘excited’ about our visit and asked what they could do to provide us with ‘the perfect stay’. They gave us local recommendations, a virtual Porto brochure and offers of help to get from the airport. I noticed on the Airbnb app that it tells the booker how quickly hosts reply to their guests, and mine said ‘less than one hour’- that’s impressive!
On arrival, they allowed us to check-in hours before for no extra cost. They waited for us to arrive and provided a guided tour of every facility. Along with this, an honesty bar was available with a personalised wine selection, a local’s manual, a complimentary bottle of port, a message each morning to check we slept well, and whether they could do anything to assist – the list goes on! How many hotels are doing this at £140 a night?
It got me thinking: how can hoteliers compete with this personalised experience? How can they motivate staff to go the extra two miles for their guests (because one is no longer enough)? Is it a matter of ownership? For the most part, your Airbnb host owns the property you’ll be occupying and it is that owner with whom you interact; its reputation as a property and their reputation as a host are one and the same. Every customer experience, because there are relatively few of them, links directly and doubtless very visibly to the likelihood of getting a future booking. The same is less frequently true of a branded hotel and maybe that’s the issue.
A cult-like following
In the Western world, at least, users of Airbnb overwhelmingly become advocates of the concept and the site. I count myself as one; despite hearing about several bad experiences – the sort of experiences you wouldn’t get with a hotel – I have no qualms about booking with Airbnb or recommending it to others.
It seems I’m not alone. Our Hotel Guest Survey records relational Net Promoter Scores amongst recent users of the brands it tracks, and in 2021 Airbnb consistently places ‘on the podium’ throughout Europe and the USA – displaying a level of consistency that most hotel brands would kill for.
So, is homestay a leader in CX? Our research and experience suggest the answer is ‘Yes’, and it’s down to those super hosts who elevate the guest experience with memorable moments.
Learn more about our approach to customer experience and the power of memorable moments.
This might seem like a radical idea, but I’d like to propose that Customer Experience (CX) be put on the Corporate Social Responsibility agenda. But first, let’s start with defining what Corporate Social Responsibility is. According to the Australian Human Rights Commission, “The concept of Corporate Social Responsibility (CSR) is generally understood to mean that corporations have a degree of responsibility not only for the economic consequences of their activities but also for the social and environmental implications. This is sometimes referred to as a ‘triple bottom line’ approach that considers the economic, social and environmental aspects of corporate activity.” The four pillars considered the mainstay of CSR are environmental, ethical, philanthropic and financial.
I’m here to make the case that CX sits firmly amongst a company’s social responsibilities. Now this isn’t to say that it should be the only element of CSR, just that it should have a seat on the table or, if you like, a place on the KPI dashboard.
Why? Because brands can have a significant impact on people’s day-to-day lives. In fact, interactions with brands have the power to make or break a person’s day. Consider the impact of these events on a customer’s sentiment towards a brand measured by the NPS* taken from our Australian Moments of Truth Quarterly Benchmarking Study in Retail Banking based on defined pathways.
*NPS = Net Promoter Score, a rating of how likely a customer is to recommend a brand, therefore a measure of emotional sentiment. The NPS score is comprised of the % of Promoters (rated 9-10) less the % of Detractors (rated 0-6) on a scale of 0-10).
In our latest research, we asked banking customers what particularly positive and negative moments they recall having with a brand. We’ve called these ‘Magic’ and ‘Tragic’ moments. Magic Moments are those which have the power to influence someone’s day positively. Below is an example of how a negative interaction with a brand can be partially overcome with a positive emotional interaction. Operationalising emotions can provide a buffer against suboptimal operational outcomes.
In both examples, there were a series of straightforward rational events. A call was either going well or poorly based on a series of rational actions, which all impacted the customers’ mood and sentiment towards the brand. But the endpoint had a totally different emotional outcome based on their perceptions of the call centre rep’s demeanour, e.g., did they seem friendly and supportive or uncertain and dismissive?
In Australian Banking, our data shows that, fortunately, there are more Magic (30%) than Tragic (13%) experiences, but we’d like to see that gap widen. We can do better as an industry! From a net positive impact point of view, CBA is the best-performing Big4 Bank. Newcomer UP stands out for performing well on both Magic and Tragic. Macquarie has a relatively low Tragic footprint but offers the lowest amount of Magic.
It’s easy to get blasé towards numbers but remember that behind the numbers are people and that the numbers reflect how those people felt about their interactions with the brand. Here are two specific examples of Magic and tragic experiences in banking:
TRAGIC “ANZ were unable to resolve a simple credit card problem I had with my current limit – The branch staff were hostile, unfriendly, unwilling to assist and virtually useless. The problem was not resolved, and I left the branch feeling an overwhelming sense of anger, grief, dissatisfaction and depression.”
ANZ NPS 1
MAGIC “It was about 16 years ago when the bank repossessed my home as I couldn’t sell it. I was SO distraught and SO upset. I remember going into the bank branch, Blackheath. The staff treating me the same [as everyone else] was a tonic I desperately needed and made a HUGE difference to me. I have NEVER felt looked down on over the years and that’s part of the reason that I love the bank so much!”
CBA NPS 10
We analysed 2000+ of these stories and were struck by the strength of the emotion in these examples, “an overwhelming sense of anger, grief, dissatisfaction and depression”! But why does this make it a CSR agenda item? Because there is countless research demonstrating that emotions can impact our overall mental and physical wellbeing. Just think about when you’re stressed; you feel it in your body. It affects your mood. But these emotional experiences also impact the people around us. We all know how our emotions can drive us. If we have a bad day, we share it. Our mood can influence the people around us positively and negatively. If we’ve had someone be rude to us, how does that impact how we treat the next person? And it’s the same with positivity, we share it. When we experience the emotional highs and lows in life, it’s a butterfly effect on the world around us.
I’m certainly not suggesting that companies shouldn’t also look to do good in the world in the other areas of CSR. Still, the conversation about making a positive impact on the world should also include the day-to-day impact on a brand’s own customers. Let’s face it, most of us would rather work for and buy from a brand known for doing the right thing by customers and sparking joy rather than a brand that triggers anxiety and grief in its day-to-day interactions.
The good news is that the emotional impact on customers can be operationalised by any brand and measured and tracked. In our analysis of 2000+ Magic and Tragic moments, we were struck by how often they existed in the everyday. And we were struck by how simple some Magic moments could be to operationalise. Small things like being offered a cup of coffee while waiting in the branch had a huge emotional impact. We’ve captured thousands of points of feedback on CX, and it still surprises me how often comments like “didn’t feel valued” and “was rude” sit amongst that feedback. It would be ambitious for brands to totally eliminate all the Tragic moments, but certainly, it should be a goal to reduce them and eliminate rude behaviour towards customers.
Recent times have seen economic news hit the front page with daily regularity. While oscillating market conditions have dominated the headlines, consumers have seen letters on their doormats from their mortgage providers and energy companies with bad news. A trip to the shops offers little respite.
And consumers are responding accordingly. Our Moments of Truth study tells us that two in three consumers cut household energy usage. A third plan to leave the car at home, with some of that (1 in 7) taken up by public transport.
The OBR anticipates household incomes falling cumulatively 5.7% over ’22 and ‘23, in part due to tax rises, cuts in energy subsidies and guaranteed rises in fixed-rate mortgages for 2m households (costing each mortgaged household £3,000 extra in 2023). The 9.7% increase in the minimum wage and 10.1% rise in welfare benefits and pensions in April 2023 will however soften the blow somewhat for lower-income households.
Meanwhile, the Resolution Foundation for lower-middle-income households describes 2023 as a Groundhog Year – repeating 2022, with another ration of pain on the way.
There is light: according to data from Consensus Economics, aided by falling energy prices and better than anticipated business and consumer sentiment, the UK economic outlook for this year has improved from its most recent darkest days.
But that move towards a brighter outlook has yet to be fully felt in the present. Moments of Truth results show that 75% of consumers felt, either through choice or necessity, the need to be cautious, with discretionary spending largely affected.
Consumer spending on restaurants (51%), entertainment (37%) and holidays (33%) are all being hit, (although the sight of packed bars and restaurants in many towns and cities might give you the opposite impression).
Beyond spending cuts, 25% of consumers expect to dip into their savings this year to tide them over and over one in five have already used their overdraft at least once in the past 12 months.
Regardless of whether these dire predictions pan out as forecast or the economy continues to fluctuate, giving us glimpses of recovery and calming waters, banks simply must invest time and energy into proactively forging strong relationships with their consumers. Moments of Truth tells us that if the attention is given now, they’re in with a good chance of building a lifetime of loyalty.
There is work to do. To date, only 10% of those who claim to be ‘struggling’, expect to discuss their financial situation with their bank in the next three months. If the relationship was sound, we’d expect the trust that comes with it to drive conversations about short- and long-term solutions.
Which banks are getting it right?
first direct is one to watch. According to customer ratings in the Moments of Truth benchmarks, it offers by far the best overdraft customer experience.
first direct also held an impressive lead over its peers for telephone contact throughout 2022. 50% of people contacting the bank got through to a person in just one minute, which is significantly better than the industry average of 20%. On top of that, queries are dealt with swiftly and effectively, without the typical sources of friction or stress. The same cannot be said for some other providers assessed by the study.
Elsewhere, Newcastle Building Society, Coventry Building Society and Monzo offer clear demonstrations of best practice across various offline and online experiences – be that through minimising branch queues, efficient product applications or game-changing app features.
Ultimately, a brand has the power to make or break someone’s day. Operational success or failure can have a huge emotional impact on the end customer, and the shockwaves can be far-reaching when it comes to money – especially if that person is already feeling under pressure.
It is vital that customers enjoy a close relationship with their bank, so that any issues can be resolved before they become crises. Banks and building societies need to be accessible and approachable – just as we are seeing with the top performers in the Moments of Truth results. Recent market volatility placed extra emphasis on the importance of this and we are pleased to see banks and building societies working to create outstanding customer experiences.
The leading players are proof that when customers feel like they have less, they can still experience more.
About the research
Moments of Truth assesses consumer banking experiences through 30,000 online interviews annually, across 80 providers and 16 key customer journeys. Learn more.
Traditionally, banks have acted as the facilitators of finance and transactions, resting on a solid footing of traditional values, trust, and history. These values were built at brick-and-mortar stores through personal relationships and brand loyalty that started when we were children. Fast forward to today, the digitalisation of retail banking means that customers can switch to a more appealing offer more efficiently than ever.
In the digital age, banks are striving to foster customer loyalty by creating value that can replace the in-person elements of banks’ value proposition of years passed. Part of this shift involves streamlining and unlocking data that can create engagement. Engagement is typically conceptualised as having two components: the extent of usage (e.g., frequency, duration) and the subjective experience (e.g., interest, appeal, and attention). When deployed effectively, behavioural science can help increase the stickiness of digital banking tools by strengthening consumers’ habitual use.
Here are four behavioural science principles that are proven to improve customer engagement with digital products.
Hyper personalisation and contextual banking
Successful digital banking products of the future will provide a contextualised banking experience tailored to individual users based on a variety of information like location, time of day, personal preferences, money habits, and behavioural patterns. Contextual banking is based on the behavioural science principle of Just-In-Time-Adaptive-Intervention (JITAI). It delivers pertinent information to customers where and when they need it based on data analytics and intelligent algorithms. For example, an app might send a notification based on the user’s location or the time of day based on their previous behaviours in those contexts.
Goal setting and behavioural monitoring
These are two of the most effective behaviour change techniques (BCTs) for digital tool creators. While it’s common for banks to include some elements of goal setting and behavioural monitoring within Personal Financial Management Tools, this will become increasingly common and sophisticated as part of the new world value that banks create for their customers. Goal setting is strongly linked to increasing motivation but also usage engagement by encouraging users to log in and continually check their progress. In the future, these BCTs will become far more personalised and targeted using open data frameworks. Banks are not yet ready to utilise all the data that is available to them, but many are testing and trying new things.
Refers to the inclusion of game-like elements like point scoring, rewards, and rules in non-game contexts, to promote user engagement with products. In Australia, the CX-focused and digital-only brand Up leans heavily on gamification to encourage a positive emotional connection with customers. Their ‘Save Up 1000 Challenge’ combines gamification, goal setting, and behavioural self-monitoring in a robust and engaging offer.
Key trends in digital banking tend to support customers to self-manage their wealth and money. Therefore, retail banks will grow as agents of empowerment, helping individuals set financial goals (BCT: goal setting), track their progress towards them, and develop positive money habits and financial literacy. This will become a central element of banks’ offers, with new value created for the customer.
How to get started
The first step towards designing a behaviourally informed solution or feature is to define your behavioural challenge. We recommend that clients start with an understanding of the user’s job to be done (JTBD). This involves studying what customers are trying to accomplish rather than what they are saying they want, especially in areas with insufficient solutions, as these often make for great opportunities for innovation that gets to the heart of the job to be done.
“If I had asked people what they wanted, they would have said faster horses.” Henry Ford
JTBD is best reduced to its simplest parts while taking a zoomed-out view. Consider using a sentence framework that considers customers’ JTBD in terms of its verb, object, and context. The job to be done should focus on the end goal, not the task at hand.
“Save $60,000 for a house deposit in a rates driven market” rather than “open a new high interest saving account”
Prioritise opportunities to tackle those JTBD. While many opportunities can be available, it is essential to identify the highest value ones for your brand. What aligns most with your values and current product strengths?
There’s no doubt that COVID-19 accelerated consumer expectations around seamless digital experiences, which has driven banks to invest in furthering their digital capabilities. This is an obvious way forward for both customers and brands. Brands can lower the cost of service, and customers can avoid the annoying telephone and branch queues. While many things can be done online using self-serve, we still gravitate towards human intervention and assistance from time to time. “Chat” is a logical way of bridging these two worlds, and our research shows a growing use of this channel.
But whilst Chat is growing, our Moments of Truth study in Australian Retail Banking has shown that, as yet, there has not been a noticeable drop off in the use of other channels. Our results also show that for those that use it, chat is usually the first port of call to resolve the query and most report that they are likely to continue using it. Customers are using chat almost equally across channels: online banking, the company’s public website, and from within a mobile app, which shows that it’s an appealing way of engaging with brands across a range of situational contexts. Our research shows that at this stage, the customer ‘job to be done’ that drives usage of the chat function over other channels is a general inquiry or problem resolution rather than product research.
Our results tracking the performance of Chat across Australian Retail banking reveal four important operational breakpoints for brands to understand and monitor.
These industry breakpoints are consistent with the types of guardrails we see for interactions in other channels. They consider customers’ expectations around how long it takes to get a response, length of chat, and resolution rates.
Customers expect a response within 5 minutes, and NPS drops off markedly if the chat duration exceeds 10 minutes. These figures also outline that knowledge is power. Customers are more likely to recommend the channel when an organisation can quickly and effectively answer questions.
A key measure that is also highly important is how easy they were to deal with, which is going to be in part influenced by these operational outcomes, but is also a marker for the quality of the interaction on the chat itself. And that’s where brands are still struggling with the purely digital part of chat. Across the industry (and, of course, it varies by brands), the mix of chat conversations across humans (live chat), AI chatbots and both is roughly equal. And whilst the AI chatbot-only conversations outperform on efficiency measures, response time and chat duration, they carry lower resolution rates and lower customer satisfaction with “easy”.
If we equalise the operational elements of the experience across these different use cases, we can see that the Human obtains an overall better score for the SAME outcome than the other two delivery methods. In the hypothetical scenario below, where a chat enquiry is answered in under 5 mins, completed in under 10 mins, and resolved by the end, we can see the difference in NPS across different chat agents.
What does this mean for brands?
To increase perceived humanness, many systems with conversational user interfaces (e.g., AI chatbots) use response delays to simulate the time it would take humans to respond to a message. However, as we can see from the breakpoints above, delayed responses can negatively impact user satisfaction, particularly in situations where fast response times are expected, such as in customer service. Brands who engage in delayed responses to Chat interactions, even if only a few seconds, could be missing the point of this channel! They also look to use Natural Language Processing but have a way to go.
The disparity in NPS results across digital and human poses challenges for brands looking to remove humans from the equation altogether and still maintain positive customer sentiment towards the channel and ultimately, the brand. There is a fine line between technology and human interaction due to the empathy and sense of value a human can provide. These experiences need to be seamlessly connected. At this stage, the technology is not yet able to provide a seamless experience as well as high-resolution rates, so humans still have to get involved. But one thing that Chat does do is remove some of the communication issues that can arise in telephone conversations. This, in part, maybe a way to get around some of the implicit human biases that customers have with offshore call centres that are more formulaic and use more standardised responses.
It’s not so surprising, then, that at this stage of the game, the brands which are performing the best in Chat are the ones that have a higher use of humans in the interaction. Newcomer UP has the highest % of human vs AI chatbot interactions, followed by ING. But UP’s lead amongst the competitive set is also fuelled by market-leading resolution rates; 97% of its Chat interactions are resolved by the end, vs only 75% to 80% of those amongst the big4 banks. Westpac stands out for exceptional response times, with 64% answered within 5 minutes and 87% dealt with in under 10 minutes which far exceeds CBA, ANZ and NAB. But this lineup is ever-changing, and it’s important to keep your finger on the pulse and monitor whether you are within the critical operational guardrails that underpin good performance outcomes.
Digital adoption is not an aged-based play!
Naturally, any conversation involving the digital vs human debate sees our clients speculating that it’s really just older people who hold onto human interactions! Whilst as a general trend, this is partly true, digital has been more readily adopted by younger cohorts; we would be missing a trick if we ignored the wider cohort of customers. Our research shows that across brands 32% of customers aged 50 to 74 think they will use Chat a little, if not a lot more, in the future. At this point, I like to share the experience I have with my 80-year-old mother, who whips out her mobile to check the menus via the QR codes the moment we sit down in a café, vs me a young at heart and I like to think forward-thinking 50 year old, who prefers to go up to the counter and get the real thing. Age is not the only factor and many other contextual and psychosocial drivers of digital adoption play a role.
If brands truly want to drive digital adoption, it’s not a great strategy to sit around and wait for a new generation of customers! Here are three behavioural interventions you can use to help reframe preferences for a real human, highlight the benefits of digital, and drive greater use of your Chat function. These are drawn from BVA Nudge Consulting‘s proprietary Drivers of Influence, summarising 200+ human biases into 21 Drivers of Influence©. We’ve made it simple so you can apply it!
Our Australian Moments of Truth Study in Retail banking benchmarks both the behavioural and operational aspects of Chat experiences and allows brands to set themselves apart from the rest, increase efficiency and, most importantly, customer satisfaction. MOT complements your internal perspective giving a competitive lens and powerful insight into industry breakpoints and acceptable service thresholds for operational performance. Context is king! The market is always moving, and you can guarantee that your competitors are also investing in digital capability.