Good CX does not guarantee loyalty
As a customer, do you take good, service-minded experiences for granted?
If you do, you are not alone. Today, the excellent customer experience is something most of us consider a simple matter of course - a part of a natural progression that started around 100 years ago.
Branded products are the foundation for satisfaction
Then, good standard products, e.g. a black Ford Model T, were enough to ensure a company's success. But as most companies got a handle on basic product quality, the branding of the product, the company and its services increasingly became the main differentiator.
The importance of product quality did not lessen though, but it went from being a differentiation factor to a hygiene factor that should be in place. Good examples of this era are the ad slogans 'Carlsberg - probably the best beer in the world' and 'Gillette - the best a man can get'. In that way, branding takes a starting point in the company and its products and not in the customer.
When customer experience became the new black 10-15 years ago, branding became another hygiene factor. A good example is Starbucks that, through good customer experiences, created a unique differentiation based coffee as a core product that is an over 500 years old commodity.
Customer experience is the key differentiator
However today, we have also come to take good customer experiences for granted. Most companies – according to Gartner Group, almost 90 percent – are trying to differentiate themselves on just that – with greater or lesser success.
Companies have to prepare themselves to the fact that we to a higher degree choose them based on whether all their activities are centred around our universe. This imposes new requirements on the company, which needs to make sure it stays relevant by being the best to make sure customers achieve their goals.
Basically, most customers are indifferent as to who contributes to this. They simply choose the best alternative regardless of what industry or sector they come from. An excellent example is Apple’s successful penetration of the consumer electronics market with their iPods and iPads, the cell phone market with their iPhones, financial market with Apple Pay and (potentially) their forthcoming entry into the car market.
This change regarding what differentiates one company from another will soon have a noticeable impact on the financial sector. With the current liberalisation in this market, the competition will suddenly emerge and with great force from market leaders (such as Apple, Amazon and Google) in other sectors, but also from the most innovative start-ups in the financial sector.
As Bill Gates puts it: ’Banking is necessary, banks are not’. Therefore, if banks don’t stay relevant and to a higher degree help customers realise their particular goals better than new competitors, they will be seriously challenged by new players in the market. They are, as we know, born as digital, global and customer-obsessed companies.
Customer relevance will soon be the differentiator
So, what do you do as a company to stay relevant to customers and help them realise their goals? You work systematically, e.g. by segmenting customers thoroughly based on their jobs to be done and desired outcomes and mapping them systematically their ecosystem. Next step is to develop the offers that truly create customer value based on an outside-in mapping of the customer journey. Hereafter, you test the new solutions in the market before you launch them.
This takes effective and controlled experiments that test new methods to create relevance and value to customers, and, above all, the ability to see the needs that the customers have yet put to words themselves. If you do not have that ability, others are champing at the bit to both discover and cover those needs before you do.
This article was adapted from a piece first published on Borsen.dk.