Your customer experience is more than just what happens in customer service or the connections you have with the customer. The initial interactions, fostered relationships, and ongoing engagement your customers have with your service or product all go into customer experience. Essentially, customer experience best practices include the totality of the emotions, decisions, interactions, and experiences a consumer has with your product or service. Customer experience is the glue that makes the consumer stick with your product or, conversely, the reason they seek a new connection with a competitor. At TSI, we have quite a bit of customer experience consulting expertise; we have seen what work and what doesn’t. Please read below and we will break it down for you quickly and help you understand how to evaluate and improve your customer experience strategy.
Why Does it Matter?
Developing a positive customer experience ensures that your consumers remember your product and service and increases the chances for retention or repeat business. Why is this important? Because even a small increase in retention results can result in a disproportionately larger increase in profits. This is a factor of 2 key drivers on profit:
- Repeat customers are likely to spend more with a business that they have become comfortable and familiar with. While they may view their first or even second investment as risky and thus limit spending, they are likely to change these habits as they become more comfortable. This leads to revenue growth, while the cost of customer acquisition stays flat or even decreases.
- Loyal customers (as defined by those that repeatedly purchase goods and services from you) are more likely to tell and refer others about your company. Studies show this correlation when a customer makes more purchases with a particular organization, they often refer your organization to an increasing number of potential consumers. Again, but with greater velocity, this drives down acquisition costs and increases overall revenue with little to no additional investment.
Customer Experience Strategy
In 2016, Gartner expected that 89% of companies planned to compete primarily on the basis of customer experience. Given the current state of the world, the rapid availability of information creating a more discerning consumer, and the power of social media to give a public voice to anyone that wants it, this number may be even higher. Is your organization in the majority or the minority? If you are in the majority or planning to be, do you have a customer experience strategy in place? In this article we will share a few thoughts on how to develop this strategy, some tools that might be useful, and some success we’ve had in helping firms develop such a strategy.
Keys to Success
While we know that the vast majority of organizations are focusing on improving customer experience strategy, our relationships with these groups indicate some may take an approach that won’t ultimately yield the results they are looking form.
Sound familiar? Then let’s use this opportunity to help guide your efforts. Simply speaking, your strategy is shaped by the answers to 4 questions:
- What types of “customers” are most important for you to hear from?
- What do you need to know?
- How are you going to acquire this knowledge?
- How to Evaluate Customer Feedback and Drive Change??
We’ll dive deeper into each of these questions in the remainder of this article, but first, let’s define what ‘customer experience’ means.
Who to Focus On
As you embark on your customer experience strategy journey, the first step is determining who you want to hear from. One obvious answer is your largest and happiest customers. But, consider that limiting the involvement to a specific subset of customers will not provide a complete or accurate picture of the customer experience. For example, if you only talk to those customers that had pleasant previous experiences you’ll learn what works well for that type of customer.
However, you won’t find what ISN’T working or why customers are not returning. Consider this metaphor – air force repair reinforces the sections of a plane that are shot on planes that return from combat. This damage isn’t the only area that should be reinforced. Attention needs to be placed on the areas of the fighter plane that causes that plane not to return. After all, this is the damage that is causing the biggest issue, right?
In the same way, it is vitally important to talk to former customers who left your product or service as it is to talk to those that are loyal to your brand. Those loyal customers may share what they don’t like, but their dislikes have not yet been strong enough to cause them to leave your product, but know that this segment is at risk.
In order to improve your customer’s experience, you need to know what’s causing potential customers to turn away and past customer’s to choose not to return. We call these the “moments that matter”, that you can use to create or reinforce YOUR “unfair advantage”.
What Do You Need to Know?
After identifying the ‘who’, the ‘what’ you need to know becomes the key piece of your customer experience strategy. And while this may seem like either an obvious answer or the most difficult question in the universe, there is a way to ensure you are answering it correctly. At TSI, we like to leverage one of Steven Covey’s habits – “begin with the end in mind”, a statement that is extremely applicable in this scenario.
The answer to what you need to know lies in your strategic objectives as well in the answer to “what are you trying to solve?” In other words, the information you gather from happy customers, disgruntled customers, and potential customers should align to the reason for your customer experience strategy in the first place. This may be a desire to grow, expand product and service lines, strategically reduce costs, or prevent further customer departure. Improvements in your customer experience will help you accomplish these goals.
How to Conduct Customer Experience Research?
Collecting the information you are seeking becomes the next obstacle in the development and improvement of your customer experience strategy. As with the definition of what you want to know and who from, there are a variety of ways to gather customer input.
These range from the most simple and possibly unstructured one-on-one interviews to robust and quantitative collection methods. Determining the “how” that is right for your organization is determined by your objectives, timeframe, budget, capacity to take on a small or larger project and access to customers.
We frequently see online surveys, in person or conference calls, focus groups, and customer advisory boards as methods to achieve this. Sometimes these are supplemented by a relatively large customer event (annual software customer event, as an example), where key customers are wined and dined and solicited for feedback.
As you consider your “who” and “how” also give some thought to the associated data tracking, trend analysis, purchasing habit analysis so that your project can be ready to take on this task as well.
It is important to remember that the purpose of this information is to improve the customer’s experience, so anything you collect should be focused on learning more about what is working and what is not – from the customer’s perspective. This brings us to our next point, So now what – what should I do with this information?
How to Evaluate Customer Feedback and Drive Change?
This topic is a white paper on its own. The evaluation of the customer feedback is as pivotal as the collection of the data itself. From our consulting experience, we see some organizations struggle with this area. More often than not, organizations, at this point, have some useful information, but then organizational silos, politics, finger pointing and a lack to “own” the feedback causes a large portion of this feedback to come to a natural resting spot where no action is taken.
Keep in mind the following questions and topics when looking at customer feedback:
- What patterns of “what is working” and “what is NOT working” are you seeing?
- What is the root cause of each? How can we reinforce that which is working and address that which is not?
- Who will own and drive the change?
- What authority does he/she have when the process moves outside of one organization to another?
- How will you report back to the customers who have invested their time in this?
- How are you/will you be measuring the performance to see if real change is occurring?
- As you think about key metrics categories such as value, cost, quality and service, are you addressing these in manner that you set out to?
TSI’s Work with Customer Experience
Our work often, if not always, includes a customer experience strategy. Whether it be a process improvement, software selection, or technology assessment, the voice of the customer is an important first step on many of our projects. In addition, these engagements regularly start with strategic executive alignment and planning. Essentially, these are the keys to creating or improving customer experience strategy.
One of our favorite tools to utilize in specific customer experience engagements is the customer journey map. The development of this tool is a collection of all of the customer experience strategy considerations captured in this article. Usually beginning with identifying who you want to hear from, the customer journey map provides guidance for what you need to know. By walking through the different phases of the journey, the map allows you to explore the customer’s activity, thoughts and feelings, their emotions, the key moments, their needs, their experience with all aspects of your organization, and the internal capabilities of your organization to service the customer during each of the phases in consideration.
Additionally, we like to explore the customer’s perception of your brand or service. We feel this ‘score’, coupled with the qualitative data captured in the customer journey map, provides a comprehensive picture of your customer experience, further strengthening the reasoning for your strategy.
Using the Net Promoter Score, we can group past and current customers as those that are promoters, passives, and detractors. Collecting responses, assigning the appropriate score, and determining your organization’s percent of net promoters provides insights into the potential growth of your business. This is a key metric when evaluating how your customer experience has improved over time.
Ultimately, the customer’s journey and your organization’s net promoter score combined to provide a customer experience strategy that is actionable and founded in viable research and data.
Need Help with Your Customer Experience Strategy?
Regardless of your situation, project, and current situation, we’d love to apply what we know about improving customer experience to help your organization thrive. Get in touch with us here to have a deeper conversation about how we can help you.
