Customer experience – more than just another buzzword

November 19, 2018

Maintaining a customer-centric focus helps organisations reach their business objectives

When I started out in marketing, I was taught there are four fundamental pillars; product, price, place and promotion. By manipulating these variables, a marketer could influence sales of a product or service. It’s not that customers were an afterthought, but it’s probably fair to say that many companies took customers for granted. Today that seems incredibly presumptuous. But then, a lot has changed. The power dynamic between business and customers has flipped on its head. Businesses (and indeed, whole industries) that are interested in long-term sustainable growth need to adapt to the new paradigm by reconsidering every aspect of their business from the perspective of the customer. This has led to the emergence of ‘customer experience’, also referred to as CX, becoming a key focus.

I can’t think of a better example of this change than the impact that Uber has had on Melbourne’s taxi industry. Until Uber launched, each cab ride was a lottery. Would it be smelly? Would the driver be rude? Would the fare get refused for being too short? The rapid adoption rates of Uber not only created outcry in the taxi industry (who are currently pursuing a $500 million lawsuit against Uber) but forced taxi companies to address cab cleanliness, upgrade apps, driving standards and driver courteousness. Whether this is enough to stem the tide, remains to be seen as Uber usage is rising whilst taxi usage declines. Roy Morgan reports that as of December 2017 almost as many Melburnians reported using an Uber in the past 3 months (21.8%) as those who used a cab (22.5%).  

What exactly is customer experience?

‘Customer experience’ is about improving the quality of an interaction that a customer has whenever they engage with a brand, online or offline. Today customers expect to be known, understood and valued and businesses that can deeply connect to customers will have a competitive edge.

Why has customer experience emerged as a key focus for businesses?

The ‘digital revolution’ has empowered customers by enabling access to information like never before. Until the middle of the 2000s, if you had a good or bad experience with a company you might tell some friends and acquaintances about it but platforms to share and amplify experiences didn’t exist. Finding information about a product prior to purchase meant relying on your personal network and the company’s advertising. Most of us only carried out extensive research on large purchase decisions like home loans, new cars and maybe holidays. Today, most of us won’t chance upon a café without first checking online to see how other people rate it. A quick check on Amazon reveals extensive customer reviews of toothpicks, cotton buds and even toilet paper. Yes, you no longer have to face the uncertainty of wondering whether your $3 toothpick purchase will meet your expectations of tooth cleaning functionality and flavour. It says a lot about consumers' risk aversion and I’m curious to know who has the time to write toilet paper reviews (which are surprisingly passionate). The point is that in the past many businesses could get by by delivering a mediocre service.  

Toilet paperCustomers will trust testimonials over a brand's marketing collateral 

Today, customers’ expectations are heightened, driven by the transparency & access to information facilitated by the internet. It’s worth remembering that what hasn’t changed is the tendency to get recommendations from family, friends and other consumers. In 2015, Neilsen surveyed people in over 60 countries and 83% responded that they trust the recommendations made by family and friends, and 66% trust other consumer’s reviews, both sources regarded as more trustworthy than web banners, search engine advertising and social media advertising. And let’s not forget, positive word of mouth is free!

So how does your business generate positive word of mouth, be it online or offline? How does your business stand clear of your competitors? By offering a frictionless experience that is superior to your competitors and by exceeding your customer’s expectations. Enter ‘customer experience’.

Great customer experience starts with culture

If you’re thinking ‘CX sounds like just another buzzword’, in some ways you’d be right. There’s consensus that businesses need to become customer-centric to remain competitive but for all the talk, we can all think of examples where we’ve been let down, frustrated or inconvenienced. Why is that? There are many reasons – legacy systems, functional silos and short-term targets to name a few. But in my view the most important ingredient is an organisation’s culture.  

Culture is that hard to define element that characterises a workplace, it’s ‘the way we do things around here’, the accepted behaviours that eventually impact the customer, for better or worse. Whilst no business sets out to fail its customers, often culture is the culprit for breakdowns in the customer experience. At one end of the scale there are the competitive cultures of financial services institutions including CBA and AMP who knowingly charged deceased customers fees and Flight Centre who structured remuneration in such a way that encouraged staff to dupe the customer in order to achieve aggressive targets. Then there are the cultures defined by bureaucracy, if you’ve ever experienced Centrelink’s average 15 minute call wait times you’ll understand how that plays out.

Conversely, when an organisation’s culture fosters collaboration, personal accountability for outcomes and customer empathy, great customer experiences follow. Ritz Carlton empowers staff brilliantly by allowing employees $2000 a day to ‘make it right or delight’. Airbnb actively support all employees to be hosts and offer a monthly coupon to staff so they can experience Airbnb homes as guests. Zappos takes cultural fit so seriously that all employees spend time working in the call centre and new starters are offered $3000 to leave after their probation period if the employee doesn’t feel it’s a good fit. It’s no coincidence that these companies are renowned for delivering a superlative customer experience.  

Another consistent element of cultures that are conducive to great customer experiences is the ability to truly understand the customer and identify unmet needs. This one sounds obvious. But remember that customers’ needs are constantly evolving and if you keep doing what you’ve always done, you’ll probably see diminishing returns.   A great example of addressing an unmet need is award winning UK car insurance start-up Cuvva that saw an opportunity to alleviate customer frustration in the insurance industry. Traditionally, insurance companies only sell inflexible annual car insurance policies, but Cuvva recognized the reality of life in a big city is that many people choose not to own a car but borrow a friend’s infrequently and when this happens it is a giant hassle to amend or obtain insurance cover. By identifying this single pain point, Cuvva founder Freddy Macnamara developed pay-as-you-go car insurance by the hour, week or month that the customer can purchase on demand via an app.

 

4 tips to start improving customer experience

Today, customers expect more than ever. Few would argue against prioritising customer experience but it can be hard to know where to begin. Here’s some suggested starting points. 

mike-wilson-96168-unsplashDelivering excellent customer experiences promotes positive word of mouth

  1. Assess your organisational culture and values. How do staff incentives reflect the importance of customers? Do you have a defined set of organisational values? Are you focused on transactions or on the customer? If the customer is truly central to everything your company does, half the battle is already won. That means every staff member understands how their role contributes to delivering the desired experience and they are empowered to prioritise the customer, even if it means redesigning processes, products or services.
  2. Review your employee experience. Does your employee experience align with your aspirations for your customer experience? How are you assessing cultural fit during the hiring process?
  3. Humanise your customer so that everyone in the business understands who it is that your product or service is targeted at. One way to do this is by developing personas, which are fictional representations of your target segments. If you’d like to learn more about how to do this, we can help. Take a look at our free ebook on creating customer personas.  
  4. Review your customer journey, examining the entirety of the experience, every interaction from considering your product through to after purchase. Identify issues and investigate what is causing these breakdowns in the experience. It could be staff training, inadequate systems, poorly structured staff incentives and so on. Once identified, develop an action plan that clearly outlines who will be accountable for resolving the issue.

Ultimately, a customer-driven culture is an essential component of future-proofing your business. Brands that put the customer at the centre of every interaction & focus on building human connections will build a long-term competitive advantage. It’s what we call human-centred marketing and it’s what we do. If you’d like to chat to us about how to apply the principles to your business, we’d love to hear from you.

by Helen Stevens

Helen Stevens

Written by Helen Stevens

Helen is a marketing strategy professional who has held senior positions in financial services, higher education and travel sectors in London and Melbourne. With over 18 years working for a diverse range of companies including Visa, ANZ, Intrepid Travel and Deakin University, Helen has a Bachelor degree majoring in marketing and has completed post graduate studies in international relations. Helen enjoys connecting the dots between business strategy and consumer insights and believes long-term sustainable growth comes from championing a customer-first mindset. She is a volunteer with GAP greyhound rescue and has a keen interest in the benefits of exercise to enhance mental health.

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