In a recent survey of 362 firms, 80 percent of businesses believed they delivered a “superior experience” to their customers. But when their customers were asked, only eight percent of them were rated as truly delivering a “superior experience.”
So how does a company get into the “superior” eight percent? The survey found that these companies place a distinct importance on customer experience design and optimization.
What is Customer Experience Optimization?
Customer experience optimization is the process of designing and optimizing the experience a customer or potential customer has with your business. Every interaction with your business creates an emotional response from a potential or current customer. This includes visits to your website, customer service calls and retail purchases. Create the right emotion, and you make a sale. Create the wrong emotion, and you may lose a sale—or even a customer.
Much has been written about optimizing customers’ online experiences while on a company’s website, but this is only a small part of customer experience optimization. Every interaction a potential customer has with your business must be designed. As a recent ad for Apple stated, “This is it. This is what matters. The experience of a product. How it makes someone feel. Will it make life better? Does it deserve to exist?”
What Experience Do Your Customers Have?
Consider all the points of contact, or touchpoints, a potential customer has with your business. These could include:
- radio, TV or print advertising
- sales staff
- logo, colors and branding
- website and online marketing
- opinions from others through word of mouth and social media
- your own social media the physical decor of your business.
Now consider all the touchpoints that current customers have with your company.
- ongoing use of your product or service
- your store or office: decor, staff, lighting, music, etc.
- customer service (by phone, email or chat), i.e. how a complaint is handled
- your advertising.
Designing an optimal customer experience that creates positive emotions at each point of contact should be the focus. Remember the survey of 362 companies? Unlike most companies, which respond reactively when problems arise, the top eight percent—with high customer satisfaction ratings—follow these rules:
- The experience that potential and current customers have with the business is designed.
- Employees “live the brand” and implement customer experience optimization across all areas of the business.
- Employees themselves feel empowered and have optimal experiences working for the company.
- Customer feedback—not sales alone—is the true metric of business success.
- Successful companies develop the ability to please customers on a repeat basis.
Brand = Experience
Your brand’s image is not just your logo, website or colors. In fact, your brand isn’t entirely your own. Why? Because all brands exist in the minds of current and potential customers. Your brand’s image is directly based on the entire experience your customers, potential customers and the public have with your business. Customer experience design needs to be more than a slogan—it’s an actual strategic process.
Do you know the answers to these questions for your business?
- What is the cost of a lost customer?
- How much money is saved by selling to existing customers vs. attracting new ones?
- How much of your marketing budget can be saved by having your customers be brand ambassadors for you versus spending money to attract new customers?
Duane Francis, CEO of the Mid-Columbia Medical Center in Oregon, sums it up this way: “In the commoditized economy we are now faced with, the customer experience is the only differentiator. Products, prices, people and technology are all so similar. The meaningful things that customers remember, over and over above your product, such as the feel and perception of your organization and your brand, are delivered through the customer experience. It is, therefore, the customer experience that makes you different.”
Mohan Kharbanda, vice president of customer experience at Dell adds, “Our industry has not done a good job of delighting… customers. In the consumer market, up to 50 percent of customers are vulnerable to competing propositions. Because it is such a commodity product… the next time customers buy a PC, they focus on price, and the lowest deal available. The first company that builds loyalty could change the game, by not having the customers consider just the first-time acquisition cost, but recognize, focus on and value the long-term relational and emotional components.”
Sell to the Heart
Donna Sturgess, global head of innovation at GlaxoSmithKline, is among those championing a stronger articulation of emotional considerations as an element of brand strategy. Her research estimates that 85 percent of purchase decisions are emotional, while 15 percent are rational. She also points out that 85 percent of brand strategies typically focus on rational factors.
That’s not to say there should be a total disregard for rational strategies, but the rational alone is not enough. It may get you the sale, but ultimately, it is likely to commoditize your product by emphasizing “what’s on sale,” with cost as the deciding factor. There is little to differentiate companies when this approach is taken.
Rational marketing often talks “at” consumers. A strategy that focuses on the customer, includes emotional elements, talks with them in a conversation, and engages them will ultimately be more successful. The former connects with the mind, while the latter connects with the heart.
Not only are positive emotions necessary for the buying decision, but they should be created, planned and optimized into the customer experience.
The Return on Investment
Forrester Research tracked the five-year stock performance of companies on its Customer Experience Index. Those that were leaders in customer experience optimization averaged a double-digit gain in stock performance, beating those that did not by a large margin. The firm also reports that when companies improve their customer experience from “below average” to “above average,” they could experience a growth in revenue through activities such as customer churn reduction, additional purchases and positive word of mouth.
In his book, The Ultimate Question 2.0, business guru Fred Reichheld reports that a five-percent improvement in customer retention can yield between a 20- and 100-percent increase in profits in many industries. In addition, according to the 2012 American Express Global Customer Service Barometer, 75 percent of consumers say they have spent more with a company because of a history of positive experiences, while two-thirds would be willing to spend more with a company—up to 13 percent more—after an excellent experience. Conversely, 55 percent of customers would no longer buy from a company that offers poor service in their eyes.
Until now, customer experience design and optimization has mainly been the domain of larger companies. However, more small and medium-sized businesses are beginning to leverage the strategic advantages of customer experience design, as this is a largely untapped area for business differentiation. iBi