HELSINKI, April 1, 2015 (Press Release) -Several industries are adopting more and more digital channels for customer service. Research conducted by Tieto shows that most of European forest and paper industry companies do not take this change seriously and have exaggerated their expertise know-how in this area.
Digital customer experience management is not at the heart of European forest and paper industry: a mere 24% of all respondents believed that this could bring added value to business operations. Developing customer loyalty and production efficiency were considered to be most important in the recent Tieto study.
Self-evaluation shows that the forest and paper industry does not see itself as lagging behind. The respondents were asked to classify their company either as an innovator, a forerunner, a follower or as lagging behind; a clear majority (61%) saw themselves in the first two groups.
According to the research, forest and paper industry invests a mere 10-19% of the budget into developing digital customer experience. This is significantly less when compared to retail or finance industries. Diverse placement of investments is also problematic: more than half of the respondents were unable to say, which budget line covers customer experience-related projects in their own company.
Customer Experience is perceived to be better than it is
According to the research, a significant share (71%) of forest and paper industry companies has already invested in customer experience management.
Active customer experience-related projects deal with optimising adaptability in the distribution chain, customer service personnel training for service culture and sales, and predicting customer needs according to behavioural models and analytics.
When asked about their own companies' investment for customer experience development, Swedish ventures have larger expectations for success as compared to other countries. 80% of Swedish respondents considered their venture to be an innovator or forerunner. This opinion was shared by 60% of Norwegian, German and Austrian respondents. Finnish respondents placed clearly lower (52%), despite the fact that Finland has most likely invested more into customer experience development than the counterparts.
"Forest and paper industry is not in the forefront of customer experience development, thus the research responses paint an overly rosy picture. This might be due to the fact that comparisons are drawn with the respondents' own industry or another industry, instead of comparing with retail, for example, where development has progressed further", explains Tieto sales director Jaakko Vilén.
Leaders Need to Understand the Need for Change
The same research also shows that the importance of customer experience is not understood in top management: a clear majority of management-level respondents (62%) did not consider customer experience to be important for business operations.
"The forest and paper industry has traditionally focussed on developing high-end production, logistics and supply chain; service has not been viewed as a competitive advantage. Customer loyalty is high on the management's list of priorities according to this research, but its relation to customer service and experience is either not seen or is dismissed. Companies do not take advantage of digitalisation potential; however, competitive advantage on global markets is gained through innovative methods. The industry desperately needs brave frontrunners ", explains Vilén.
Jaakko Vilén does note that change is in the air, as the development projects highlighted in the research do focus on the right issues. Promising examples are online services that are offered to forest owners by larger forest and paper industry companies, the use of analytics for customer data processing, and initial experiments with online shop applications for pulp and paper sales. Various solutions learned from online trading ease transactions and provide customers of the forest and paper industry opportunities for monitoring delivery.
104 decision makers from Finland, Sweden, Norway, Germany and Austria were interviewed for this research conducted by Tieto Marketvisio.
Tieto is the largest IT services company in the Nordics providing full lifecycle IT services. We also provide global product development services for companies in the communications and embedded technologies arena. Through industry insight, technology vision and innovative thinking, Tieto proactively strives to inspire and engage its customers in finding new ways of accelerating their business.
Building on a strong Nordic heritage, Tieto combines global capabilities with local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000 experts in more than 20 countries. Turnover is approximately €1.5 billion. Tieto's shares are listed on NASDAQ in Helsinki and Stockholm.