Customer experience: It’s a strategy not a complaint reduction programmeby
23rd Jun 2010
Lior Arussy outlines the six milestones of a customer experience strategy, as he attempts to clear up the confusion he believes is blighting customer experience.
At a recent visit in Spain I was introduced to a local bank that describe to me his customer experience challenges. "We are very committed to customer experience," the Spanish bankers declared. "We even commissioned our own scent to be sprayed in all the branches." They reaffirmed the commitment. "So where is your next challenge?" I inquired. "The employees, "they responded, "they are not engaged."
The meeting reminded me a recent array of new customer experience diagrams spreading by different gurus. The latest one, The Customer Experience Continuum, reminded me why some experts still do not get it: customer experience is not a programme to reduce customer complaints; it is a strategy to create differentiation.
The Customer Experience Continuum describes customer experience as a closed loop feedback mechanism that enables listening to customers (through social media, of course) and changing processes to address the identified problems. Such a tactical approach, which is common among many traditional CRM analysts who try to minimise the discipline of customer experience, will ultimately lead an organisation to parity. Organisations that follow this tactical interpretation of customer experience will continue a frustrating journey of addressing customer complaints, reaching parity with customer needs and yet never being able to gain differentiation and loyalty.
In a world where meeting customer expectations is required but no longer sufficient, complaint reduction customer experience programs produce nothing more than cost reduction. Companies reach the parity line and continue to struggle with longer sales cycles and intense price pressure. The reason: reaching parity is catching up with the competitors, but not creating sustainable differentiation.
The customer experience challenge facing organisations is to cross the parity line and produce Excellence that is worthy of premium price. To do so, companies ought to innovate and not just be in a reactive mode of responding to customers complaints. Customer experience is the management of the complete value proposition across all touch points, and as such requires a strategic framework that ask the tough questions: How do we differentiate? How do we create appealing value that supports our target prices?
Customer feedback can only serve as vague clues to answer these questions. It is no longer the science of listening and responding that can address these critical strategic questions. It is now in the art domain. Companies need to reimagine a better world for their customers and translate it into delivered customer experience.
To embark on a customer experience strategy, companies ought to follow the following milestones.
Benchmark and define your differentiating, profitable customer experience. Taking the first step, you must ask the hardest question of them all: Do you have a customer experience that will draw customers to you naturally? The key word in that question is naturally - not because of persuasive salespeople, not because of discounts, not because of snappy advertising - but naturally.
You want the customers to love you, to buy more from you, to be, all said, more loyal to you. But are you really that great? Is what you sell so appealing that customers would be willing to pay more to transact with you? The question isn’t 'How do you make your customer service people nicer folks?' It’s 'What are the customer’s total problems that you can solve with excellence and - yes - greatness that they’ll pay premium prices for?' Brand development must be considered in the context of an organization’s value to its customers. If you aren’t that great, the cost of sales keeps rising.
Here, too, we will examine the economics of customer experience management in detail, including a method for analysing how much revenue you stand to lose if you don’t institute customer experience. We call this the 'Return on Nothing' analysis. Together, we’ll establish the burning platform - why you must engage in this strategy and why you must do it now.
Cultivate a strategy to innovate your customer experience across all touch points. What details will your customer experience feature? Knowing this allows you to live by your experience, not just promise it. The strategy must exist as a method of operational behaviour, and not just as a slogan.
Prepare your organisation to execute the customer experience strategy. Do you have the organisation — in-house or outsourced - that can deliver on what the strategy promises? This involves preparing and executing a performance platform that allows employees to perform at their best. Key to this discussion will be 'What’s holding your employees back from delivering excellence?'
Execute your customer experience strategy. How do you perform at the moment of truth? Do you succeed? If you fail, why? And what will you do differently? Complaint resolution will be a big component of this discussion. This is, by the way, where concepts like the Customer Experience Continuum will play a role. Complaint reduction is important but not the central theme of customer experience discipline.
Measure the progress and the impact of the customer experience strategy on loyalty. What are the right metrics not only for your organisation as a whole, but also for departments and individuals? How do you determine which metrics to pay attention to? You’ll examine which metrics to ignore, and which to highlight, both internally and externally.
Continue an ongoing reinvention process. How do you put continuing experience governance in place and make it effective? Changes in technology and in taste dictate a constantly evolving set of experiences to delight customers.
For companies to succeed in their customer experience journey, it is time to take the strategic path. The time of shortcuts such as complaint resolution or commissioned branded scents are gone. It is time to face the real hard questions. If we have such a great customer experience, why aren’t customers standing in line to purchase our products? If we are not that great, which is the truth most companies discover in the hardest way, then what would make us great again? There are no ways to ignore to bypass these questions and still create differentiation.
We face a brand new world where customers refuse to settle. They demand more value for their money. It is time we will take a chapter from the new customer’s book and respond accordingly to their demand. It is time we demand more from our customer experience. It’s time to venture on the strategic path.
Lior Arussy is the founder and president of Strativity Group, a global customer experience research and consulting firm specialising in design, innovation and deployment of differentiating, profitable customer experiences. His latest book is Customer Experience Strategy: The Complete Guide From Innovation To Execution.
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Great article and I agree entirely about efforts that just create parity. Although in our experience at SynGro we come across many organisations who struggle to achieve this. Closing the loop is still a major challenge for many, although they see the benefits. Moving onwards from this is embedding 'Best Operating Practice' - in other words, once a problem has been fixed, ensuring that everyone within the business is aware of the solution and implements it consistently across all customers, rather than many people developing their own 'fixes'.
In reality most customers expect their problems to be fixed - it's a given, so doing it effectively isn't going to win you too many prizes. Real differentiation and sustainable competitive advantage are only achievable when the complete customer experience and expectations are fully understood and novel, inspirational actions are implemented. Surprise the customer in ways that they never expected - this will make them loyal and tell their friends. This is the SynGro way to break the 'parity' barrier!
I like the posting a lot. It touches on customer experience, stating that it’s a strategy and not a complaint reduction programme. The posting explains how customer service works. When one is engaged in promotional products, the person needs to have good customer service skills.