By Andrew Thornton
Customers have high expectations
It’s no secret that today's customers have very high expectations of the day-to-day experiences they receive from any business they choose to deal with. Customers are more savvy, better educated, and consequently, more demanding.
In recent times, we have seen a greater focus on businesses stating that they are ‘customer centric’ or ‘focused on our customers’. But is this just idealistic, or simply a business fad? Do they genuinely believe in the mutual benefits to be gained from effectively managing their customers’ experiences? Or paying lip service?
There’s little doubt that in today’s fiercely competitive marketplace, effective Customer Experience Management (CEM) can be a critical differentiator for any business. Done well, it will deliver tangible business value through repeat sales and referrals from satisfied customers – resulting in increased revenue (and profit) for your business. Done poorly, it can damage your business.
So, what do I mean by customer experience?
In essence it is all about your customers’ perceptions – both conscious and subconscious – of their relationship with your business. This perception is formed from a culmination of all the interactions with your business over the lifetime of the relationship, which critically starts at day one! These interactions run across 4 dimensions: the Brand experience, the Buying experience, the Product (and Price) experience and the Service experience.
Management of the customer experience involves understanding and reacting to all of your customer interactions to meet or exceed their expectations; the aim is to increase customer satisfaction, loyalty and advocacy. In turn, this results in measurable value to the business and in a win-win for both the customer and the business.
In my experience, small to medium businesses appear better positioned to consistently and effectively manage the customer experience. This is because they are generally closer to their customers, more agile and therefore able to change and adopt a customer experience focus.
I have seen very few examples of businesses – particularly large corporate enterprises – that have fully embraced Customer Experience Management as being integral to their business. Certainly, many large corporates deliver some aspects of CEM well – but then they let themselves (and their customers) down with delivering other aspects poorly. Commonly, corporates focus on the service experience rather than ensuring consistency across all 4 experience dimensions. When it comes to CEM, consistency across the 4 dimensions is critical.
A September 2015 study by The Customer Edge of a sample of Australian business owners/leaders revealed that, whilst 100% of respondents said that a business would be more successful if it consistently met customers’ needs, only 30% stated that the business they ran or worked for actually achieves this. This is a significant gap to overcome. It also begs the question: “how would the customers of these businesses rate their experience?” I suspect the gap may be wider.
Overcoming the gap is a major challenge – but not insurmountable.
Building a customer experience strategy
In my experience, there are three critical essentials that underpin an effective customer experience strategy:
Each of these three essentials adds up to a balanced outcome for the business and the customer:
It’s no secret that today's customers have very high expectations of the day-to-day experiences they receive from any business they choose to deal with. Customers are more savvy, better educated, and consequently, more demanding.
In recent times, we have seen a greater focus on businesses stating that they are ‘customer centric’ or ‘focused on our customers’. But is this just idealistic, or simply a business fad? Do they genuinely believe in the mutual benefits to be gained from effectively managing their customers’ experiences? Or paying lip service?
There’s little doubt that in today’s fiercely competitive marketplace, effective Customer Experience Management (CEM) can be a critical differentiator for any business. Done well, it will deliver tangible business value through repeat sales and referrals from satisfied customers – resulting in increased revenue (and profit) for your business. Done poorly, it can damage your business.
So, what do I mean by customer experience?
In essence it is all about your customers’ perceptions – both conscious and subconscious – of their relationship with your business. This perception is formed from a culmination of all the interactions with your business over the lifetime of the relationship, which critically starts at day one! These interactions run across 4 dimensions: the Brand experience, the Buying experience, the Product (and Price) experience and the Service experience.
Management of the customer experience involves understanding and reacting to all of your customer interactions to meet or exceed their expectations; the aim is to increase customer satisfaction, loyalty and advocacy. In turn, this results in measurable value to the business and in a win-win for both the customer and the business.
In my experience, small to medium businesses appear better positioned to consistently and effectively manage the customer experience. This is because they are generally closer to their customers, more agile and therefore able to change and adopt a customer experience focus.
I have seen very few examples of businesses – particularly large corporate enterprises – that have fully embraced Customer Experience Management as being integral to their business. Certainly, many large corporates deliver some aspects of CEM well – but then they let themselves (and their customers) down with delivering other aspects poorly. Commonly, corporates focus on the service experience rather than ensuring consistency across all 4 experience dimensions. When it comes to CEM, consistency across the 4 dimensions is critical.
A September 2015 study by The Customer Edge of a sample of Australian business owners/leaders revealed that, whilst 100% of respondents said that a business would be more successful if it consistently met customers’ needs, only 30% stated that the business they ran or worked for actually achieves this. This is a significant gap to overcome. It also begs the question: “how would the customers of these businesses rate their experience?” I suspect the gap may be wider.
Overcoming the gap is a major challenge – but not insurmountable.
Building a customer experience strategy
In my experience, there are three critical essentials that underpin an effective customer experience strategy:
- It all starts with the right purpose or mindset: how committed are you to really providing your customers with a consistent and rewarding experience?
- Next, you need to have the right insight: what do you know about your customers? Their preferences, what, when and how often do they deal with you? What are their expectations?
- And finally the right approach: how are you going to manage your business to maximise the impact on your customer? Your culture, people, processes and practices. What are the little things you can do that will make a big difference?
Each of these three essentials adds up to a balanced outcome for the business and the customer:
It should be noted that this is not necessarily a linear process; whilst you need to start with a clear mindset and purpose, aspects of the essentials can develop in parallel. Indeed, building insight and applying this to building CEM capability can establish confidence in CEM as a business strategy and drive enthusiasm within the business by realising the outcomes from incremental steps.
In terms of outcomes, these need to be a ‘win-win’ for both the business and the customer. By that, I mean in a CEM based business, the outcomes are a balance of providing fair value to customers and a sustainable return for the business.
The Customer Experience Manager
As evidence that they are taking CEM ‘seriously’, many businesses (especially corporate businesses) have taken the step of appointing a customer experience manager. Some of these appointments are new roles, whilst many are essentially a change in title. Whilst there is definitely a role for someone within the business to champion CEM, the critical question is: “do they have the ability to really influence change or is this a ‘tick the box’ appointment?”
As stated previously, if the right mindset isn’t in place from the start - and led from the top – then the chance of being successful is limited. Successful CEM based businesses are true to their purpose (that is being committed to delivering a consistent experience across all four dimensions for their customers) and this purpose is embodied throughout the business. Over time, the need for a ‘champion’ disappears as everyone in the business ‘lives and breathes’ the CEM ethic.
Not an IT solution
I am yet to refer to IT or technology in the context of CEM. It does amaze me that many consulting firms still see the concept of CEM as a technology based strategy. It is not. It may be technology enabled or supported, but it should never be driven by technology.
Some of the best examples of successful CEM come from businesses that have made little investment in IT. The hallmarks of these businesses are their mindset and willingness to understand customer needs with the business being structured around meeting or exceeding those needs. They do the little things well, which resonate with, and form a positive impression in the mind of, the customer.
So, is CEM a business fad, or simply good business?
What any business should not do is make a token effort or act on the pretence of being ‘customer centric’ because it is ‘flavour of the month’. CEM needs to be taken seriously. Today’s customers have high expectations and low tolerances; and more importantly they have more choice than ever before.
Any business leader or owner that dismisses CEM does so at their peril. CEM must be adopted as a whole of business strategy and, critically, it all starts with the right mindset – for without that, any business embarking on CEM is likely to fail.
CEM a fad? No - it’s just good business. But it has to be done right!
About the author
 Andrew | Andrew is passionate about the mutual benefits that effective CEM delivers to a business and its customers. He was at the forefront of the Customer Relationship Management (CRM) movement in Australia as a business philosophy and is in demand as a speaker and educator on customer-related strategy. Andrew’s career has spanned senior leadership roles in corporate Australia across the financial services, telecommunications, professional services and infrastructure sectors. He has been and continues to be an adviser to business – in particular to emerging and medium-sized businesses – in market and customer-centric strategy. A hallmark of his advisory work is his approach to coaching and mentoring his clients to deliver successful business outcomes |
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