Business as unusual: How do you approach customer experience in the 'new normal'?by
It can be tempting to look externally for solutions to understand the 'new' customer relationship, says Dominic Graveson - when often the knowledge is internal.
I bet I am not the first person today to tell you 'everything is changing'. We hear it all the time, it’s used to alarm, engage into action, and more often to place a gulf between those that know what the change is, and those who don’t. In times of recession and social upheaval behaviours change, and at the sharp end of that change, lies customer behaviour. A good example of an indicator of this is a study Gallup Consulting commissioned recently into customer attitudes. One piece of research asked two questions.
The first asked consumers whether they thought they have been spending more or less money in general over the last few months. The second asked if they thought they would be saving more in the coming months. You can guess the answers: spending less and saving more. However, when these studies have been done in the past, the attitudes tend to be temporary – i.e. 'I will spend less for the next few months, but afterwards it will get better'. This time the results are rather different, when asked if they thought these behaviors of spending less and saving more were temporary, over twice as many people for each question said no they didn’t expect this behavior to change… that this is a 'new normal' for them.
There have been numerous other pieces of research I have seen in the last few months that support this – showing a reduction in spending on the little luxuries as well as the large. This change in behavior is matched by a drop in customers’ perceived loyalty to particular brands. Another study showed a drop in customer loyalty from nearly 50% to closer to 20% in customers’ likelihood to buy again from the market leader in a given sector. This was not as a result in poor performance from that brand, but much more that when their disposable income comes under pressure, people start to question their attachment to certain decisions they have made, and more interestingly start to apply different criteria when making new decisions.
Not all bad news
This isn’t all bad news however, and in fact a drop from 50% to 20% in loyalty to the leading brand is jolly good news if you happen to not be that leading brand! (i.e. a competitor in the market). Also, some will argue that a more level playing field will result in the consumer getting a better deal in the long run as new products emerge and the incumbents have to work harder to keep their trade.
On the other hand, price and features are increasingly quoted by consumers as the main factors for making a purchasing choice as the previous habitual loyalties fade away. This poses a problem for businesses trying to differentiate themselves from the big players, as scale usually results in ability to manufacture and distribute cheaply giving these big organisations a significant price advantage over their smaller counterparts.
Of course, all this makes customer experience all the more important in making your product or service stand out. As well as simple provision of basic service, it’s also what makes people remember you – like I remember the wonderful mother and her two teenage kids who work in a chain hardware store on my local high street. They don’t own or even manage that store, but on Saturdays, because they all work there together, they have made the place theirs. They are chatty and engaging and celebrate the fact they are all from the same family and it’s infectious to customers. They also offer to store your stuff out the back until you pick it up in the car so you don’t have to lug it round town. They have been allowed to own their role and therefore own the relationship with their customers. It brightens my day, and at the same time astonishes me that in most high street stores this basic, relatively easy to address issue, still remains.
Service-price pay off
Here’s a little aside: what about the case of settling for poor service if the product is cheaper? No one can have missed the change on our high streets as smaller boutique stores disappear and are replaced by Poundland and the like. Here, prices are cheap and service is no frills and, to be honest, it works. This shows a deep understanding of the market at this level… anything other than basic customer service isn’t necessary for stores like that to be successful, because they are competing purely on price. If your business is commoditised to this degree, then you are probably already doing this, but only a small sector can survive this way. Customer experience is the distinguishing factor for everyone else.
An understanding of the complete customer journey and developing a strategy to improve it is still new territory for many. A study conducted by econsultancy and Foviance found that 70% of responding companies are only just beginning to consider developing a strategy, and over 80% are finding it ‘quite’ or ‘very difficult’ to develop and implement effectively. When asked what are the main barriers to improving the customer experience, the three most common reasons given were either the organisational structure isn’t set up to facilitate this, the customer experience is too complex (read that as we haven’t yet managed to understand it), which could be explained by the third quoted reason which was a difficulty in unifiying and interpreting the different sources of customer data.
So, wherever you are on the quest to understand your customer behaviour and improve their experience for the benefit of both their delight and your bottom line, there are some positive improvements you can explore to start the journey.
Remember, when you design your research and develop your customer’s experience – there are two critical protagonists in the story, the customer and the representative dealing with them. Try and see it from the point of view of both of them simultaneously – their motivations, experiences, needs, attitudes – not how you are set up as an organisation: many companies make the mistake of measuring and evaluating their customer services functions along the lines of their departmental structure – rather than truly understanding the customers’ individual touchpoints. This is particularly prevalent in the way that some large B2C organisations measure customer satisfaction – by the satisfaction of each individual contact point. You often see that sales, call centre, delivery and installation all report high rates of satisfaction and yet as a whole, the customer is left wanting.
An example of this is a leading mobile operator in the UK, who pride themselves in providing a great experience in the shop, a personal welcome message at the unboxing stage, great call centre service (all scoring highly) and yet overall customer experience is one of the lowest in the sector. Customers are asked for their details several times across different touchpoints, have to speak to several different people and departments, and staff aren’t trained to be able to help across a wide range of common issues. The customer’s overall experience is lost because the organisation is measuring in silos, not from the customers’ point of view.
More engaged customers
It can be tempting to look externally for solutions to understand these journeys, when often the knowledge is already within your organisation. Its been there for years in the minds of your greatest asset for market intelligence – your front line staff. Are there conversations going on in pubs after work about how they would serve customers better but cant due to administration or bureaucracy? Are you investing time in informing them and involving them in consultations to develop the business from the front line upwards?
This problem is powerfully illustrated by another study in the US which recently found that only 21% of frontline staff in the top 100 US companies could clearly articulate what their company does for customers, and what role they play in it strategically. That’s right, only one in five of the staff customers meet in America’s top 100 know why they are there… I haven’t seen research for the UK and Europe, but I bet it’s not much prettier.
Time spent consulting and developing customer contact strategies with people at all levels of the organisation is becoming more and more common in the most successful and forward thinking companies, it empowers and engages employees, allows them to make decisions themselves, builds accountability, and that results in happier more engaged customers.