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by Jack Miller on 10 Aug 2016

Why in the modern world companies that don’t do Customer Experience well will be eaten alive by those that do.

Customer Experience Focused Companies Profits
Customer Experience Focused Companies Profits

Someone once said to me “Whenever someone says they’re alright once you get to know them. It means they’re an idiot, but you get used to it.” Historically the sentiment behind this statement could have applied to many businesses too. Customers were used to putting up with the way things were and there was little disruption. Even if some companies did elements of the overall experience better (customer care for example) there was a general acceptance that this didn’t apply in other sectors.

This is changing and just like the beginning of a zombie apocalypse movie, at first the signs that something is wrong are almost imperceptible. Maybe some of the leading indicators are not looking that good, marketing spend isn’t quite delivering the same results as in previous years, customer growth is remaining static or a little more market share is being lost to the discounters…or those online specialists…or that new thing that everyone is talking about and people just seem to want to try…

…and just like in the movies, for companies that don’t keep up the reality of the situation is rather grim. And if this sounds dramatic just think, when was the last time you bought a holiday from a travel agent on your local high street?

So why is CX changing?

As companies like Amazon raise the bar in terms of what people expect, whether for delivery, faulty product returns or mistakes on an order, customers’ expectations are raised. Once the new bar has been set it is then no longer acceptable to the customer if another company doesn’t meet these standards.

If it’s possible to painlessly search and book flights via my mobile phone, why wouldn’t it be possible to book anything else that way? Someone must allow me to do that!

And of course at some point somebody else will…

But customer service and ease of use are only one part of it, at it’s core Customer Experience comes down to how interacting with all facets of a company or product makes a customer feel. And this raising of the bar is happening across all elements of the customer experience, whether service, ease of use, using 100% recyclable packaging or any other aspect of the way interacting with a company makes a customer feel.

It makes me feel good because:

…it saves me time

…I can just return it if I don’t like it

…it makes me feel sophisticated

…it doesn’t make me angry!

A new playing field

As people’s expectations of how a company makes them feel are continuously being raised the companies that are being successful are those that are tapping into this and actively working to generate a positive customer experience. They are changing the rules of the game.

Thinking about those statements above for a second, now that there are organisations focused on doing all of these things well — what about organisations that make their customers feel the opposite? What does their future look like?

The effect of this shift is that, increasingly, even neutral sentiment towards a brand is no longer sufficient to retain customers in the face of competition who are actively working to generate positive sentiment. Making customers feel good not only secures their loyalty, it also turns them into, often surprisingly passionate, ambassadors for a brand. These well satisfied customers promote the virtues of the organisation that responds to their needs and via this word of of mouth acquisition these businesses eat into the customer base of those organisations whose customers hold neutral (or heaven forbid negative) opinions towards their brand.

Word of Mouth Growth

Whilst some people might question the relevance of customer experience to their sector or even the likelihood of these mini evangelists extolling the virtues of their company of choice down the pub (talking about the best varnish to use isn’t exactly thrilling conversation and anyway what’s in it for them?). It is worth bearing in mind that when people want to find out about something they ask people they know. Furthermore these people are not deliberately promoting a company or product as such, but rather they are simply engaging in that most normal part of conversation, offering their opinion on a subject as and when it comes up. It is the fact that their experience has been positive that means the opinion they offer is overwhelmingly positive as well.

If you add to this the fact that, the opinion of friends or family is comfortably the most trusted source for customers, as well as the massive amplification effect of Social Media, you have a method for market share acquisition that even the biggest marketing budget cannot compete with.

But this isn’t relevant to our business or what we do…

It’s tempting to think “but hey we’re an established player, the #2 in the market, a brand that everyone has an account with, right?” But the reality is there is no longer anywhere to hide whilst offering bad customer experience. Whilst in the near future there will be a need to offer great customer experience just to stay in the game.

Disruption is perhaps a word that is overused but if you think about the most successful disruptors over the last 10 years (Airbnb is a pretty good example), it usually turns out they’re masters of Customer Experience. It used to be that to enter a market an entrant needed to compete on price, or quality, or outspend their competitors comprehensively. Customer experience expectations and the capacity to acquire customers from competitors through WoM acquisition now means it is much easier to disrupt a market purely by offering a better experience to customers.

Perhaps the most scary thing about this is that for the majority of businesses certain elements of what they do are significantly more profitable than others. As people become more comfortable using a combination of different apps, companies and services to meet their needs, customers are happy to use the best service for each task (I can easily login to multiple systems with a single click using my Facebook or Google account anyway).

It is therefore possible for disrupters to cherry pick the elements of a business that provide these profitable revenues streams, doing what it takes from a customer experience point of view to rapidly acquire a customer base. The Fintech sector is perhaps the most obvious example of this, as new agile firms identify areas of profitability that banks have traditionally owned and simply set about serving the customer better. Transferwise is a great example, their website carries a simple message:

“Banks charge a lot for overseas transfers. We don’t. Transfer money abroad easily and quickly with our low cost money transfers.”

The stark truth is that if you’re profitable (or in today’s data driven world have an attractive customer base in any way, shape or form) and your customers don’t love you, then you’re ripe for someone to start taking them.

It may be tempting to think we’re ok we’re already doing it well, we know our customers. We’ve got a great help desk and our reviews are nearly all 5 star. But the people who contact the helpdesk by definition represent only a subset of your customer base (those that had an issue) and those that leave a review only represent a minority of the wider base as well. Would you still be a viable business if the 60% silent majority of your customers left to go to a competitor?

Here’s a quick exercise to understand whether you know your customers at what would now be classified as a basic level:

  • What are the top 3 reasons your customers would recommend you to their friends this month?
  • What are the 3 most important reasons they wouldn’t?
  • How has that changed from last month? Last year?*

*If it hasn’t changed since last year — WHY?!

On the plus side, for organisations already within a market place the same opportunities to use Customer Experience still exist. And those organisations that do it the best will succeed at the expense of their competitors, whether disrupters or established players. I read the other day that “Customer loyalty is outperforming your competitors on those things you’ve taught your customers are important” and I think this sums it up perfectly. But one thing is certain, those businesses that believe that the way it’s always been done is good enough are in for a painful surprise. To borrow from the movies again, maybe not today, maybe not tomorrow, but soon…

So what’s the game plan?

So if you’ve read this far you’re probably expecting there to be a simple answer to this problem (or a way to capitalise on this incredible opportunity depending on your point of view).

Fortunately there’s no secret to delivering great customer experience. It’s just a question of understanding what’s important to your customers all of the time and to do that all you need to do is:

Ask them what they think, often

Make it exceptionally easy for them to tell you

Let them tell you in their own words

Note: to really understand your customers you need to hear from as many of them as possible, if it’s not quick and easy the majority of people simply won’t participate. A good way to look at it is this — could your business survive and grow if your customer base only included the 5% of people who are prepared to give you 8 minutes of their time to complete a survey? Assuming it couldn’t, why would you only care what’s important to them?

Once you’ve asked all you then have to do is listen, understand and act upon what you’ve heard. Then simply rinse and repeat.

One things for sure, the really great thing about CX is that for those who do it well the rewards are huge.

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    Jack Miller

    As a CX Analyst, I work with companies designing their customer journeys to ensure they are both comprehensive and accurate. Applying cross sector best practices and an understanding of each business’s unique relationship with their customer base, I focus on identifying what elements need to be put in place to take each organisation from their current level of customer understanding to a best in class understanding of all customers.