Transforming the Customer Experience
Providing excellent Customer Experience should translate directly into extra money in your bottom line, and don't let anyone tell you otherwise
If you have been paying attention, you have probably noticed plenty of reports about Customer Experience initiatives not producing the expected results. According to Gartner, 95% of companies collect customer feedback, but only 10% of those act on that information in a meaningful way1. And those studies are probably focused on large companies with large budgets devoted to Customer Experience. From what I’ve seen on Small and Medium Businesses, the numbers are worse. And even those who act, are probably just recording “happy faces vs sad faces” in a satisfaction survey, Net Promoter Score surveys, etc. It’s not surprising that the results are underwhelming, usually not justifying the money spent.
The problem is that Customer Experience (and its Management) isn’t what most people thinks. This leads to wrong expectations, cancelled projects and organizational dissatisfaction. Once its true nature is understood, and which objectives can be achieved through it, it becomes easier for the organization to reap its benefits.
Also, contrary to common belief, Customer Experience initiatives should not be exclusive of companies with big budgets or dedicated departments. Organizations of any size can design its own Customer Experience implementation project, according to its own capabilities, and then keep refining its operation over time. All it takes is having the knowledge, the commitment, and some technology support.
So, in this article we will explore:
What should be the tangible results to expect for any organization implementing Customer Experience Management as part of its culture.
Why to expect those results: understand what means to have a Customer Experience culture.
An overview of the kind of techniques that, once implemented, help achieve the expected objectives.
A general recommendation on how to get started.
Customer Experience should provide tangible results
Customer Experience Management is a relatively new business discipline. This means everyone is still learning how to make the most of it, and what works and what not. A recent similar example is the initial misuse of Social Media Influencers in Marketing: large sums were spent paying influencers, without a clear way to measure ROI (even today, almost 33% of businesses using influencers don’t measure it2). Eventually, the industry learned how to do it (as we can see in this MIT Sloan Management Review article3, and many others).
In the same way, most Customer Experience initiatives are restricted to collecting customer data, satisfaction levels, intentions of purchase and recommendation, etc. But as a Gartner study shows, just 10% of the businesses that collect data actually do something with it, much less get some tangible business result and apply metrics to it.
So, if Customer Experience Management is not only happy/sad face surveys and NPS reports, what should you expect from it?
Happy faces and willingness to recommend are just one part of the equation. It’s what we call Customer Satisfaction. It’s the emotional, subjective part of a product/service well delivered. It’s a perception (and there are decades of studies on perception and customer satisfaction, for those curious enough). The other important part, often neglected, is called Customer Success. It not only means the customer being happy with the product, but being successful in whatever he was trying to accomplish by buying it. It goes one step beyond.
Customer Success is often embodied in everything a business do so the customer has a smooth experience with the product: Customer Support, Customer Training, Guarantees, etc. So, Customer Success means for you, as a business, that you embrace the idea that your mission with your customer doesn’t end when he walks away with your product. You go all the way to ensure he is successful with it. And that he becomes knowledgeable about it, so he can make good use of all the bells and whistles your product have and the competition doesn’t. So, next time he’ll buy you again not because of price, but because of features that are useful to him.
This, of course, produces happiness and willingness to recommend (Customer Satisfaction) and that is measurable. It creates goodwill and good Word of Mouth for your products and your business. Now you have evangelists. But it also increases your bottom line by reducing you costs. And that is probably a much more tangible result than the wishful word of mouth. How so? Each customer has something called a “Customer Lifetime Value”. It is how much money he gives you (revenue) less what costs you to acquire him as a customer, and all the costs associated at providing him with products and services. This means that fewer support cases, fewer returned products, fewer complaints, etc. from a specific customer increase the lifetime profit he produces for the business. He becomes less costly to maintain.
As you can see, it is of absolute interest for the business to make sure he has a smooth experience, because an angry customer is a costly one (and I’m not even talking about bad rep). But, it is also of absolute interest for the business to achieve that smooth experience at the lowest cost possible. And here the same principle as in healthcare applies: prevention is far cheaper than remediation. So, if you apply proper Customer Experience strategies, aimed at preventing the Customer issues, and solving quickly and cheaply the ones that occur, this will be reflected in a measurable increase in the average Customer Lifetime Value, and the business’ bottom line.
To recap, you can improve your business results with proper Customer Satisfaction strategies, but those will probably pale in comparison to what you can achieve through proper Customer Success strategies. And those Customer Success strategies are more effective on the prevention side than the remediation side. And not only because solving an unforeseen emergency will always be more costly than preventing something, but also because Good Customer Service is not equal to Good Customer Experience. Let that sink in for a minute. When you receive Customer Support because something went bad, even if the response is stellar and solves the issue at the first try, you already had a bad experience. And in some cases, even some non remediable damage (your cable service just going down the day you wanted to watch some sports event with your friends, for example). No remediation will fix the embarrassment of that day.
A Good Customer Experience would be not having the outage in the first place.
Customer Experience Management must be embedded in the culture
The immediate question then should be: How do we get there? What should we do?
The answer is more complicated than that. It’s not just about applying some techniques, implementing some software, or a few coaching sessions. It’s a deep cultural change for the organization. The proper questions are: How should we be? How should we behave? There must be an understanding of all the interactions between the customer and the business. Those are called “Moments of Truth”, and mapped using the now famous Customer Journey. Each of those moments of truth need to be designed to be flawless, have a responsible in the organization, and be constantly measured so they can be improved over time. When the customer makes use of the product (or service) it is also considered a moment of truth. And everything must be set to ensure his success.
Changing the organizational culture, even in a small business, is never easy. Over the years “silo mindset” tends to settle in. That means people gets used to think they are responsible only for the small part of the work they are involved in, and if something else happens along the road and the service or product fails, they just say “it was not my fault”. The organization must shift its mindset into tangible business outcomes, as a team, where everyone is responsible of the final outcome. No partial outcomes. All or nothing. The customer succeeds or not. Without that mindset, no technique, no software will produce the expected results, because even the most polished of products will leave a bad impression if the delivery guy was rude, the invoicing was wrong, or the support team was clueless.
Tools of the trade
Now, how to make it happen? With the proper culture in place, tools and techniques are required to achieve the expected results. And here is where having a well crafted Customer Journey helps a lot. For each moment of truth on the Customer Journey you must ask yourself: What must we do to ensure the customer succeeds? What must we do to ensure a stellar experience? For example, the first interaction your customer has with you through the phone.
Do the person who picks up the call has all the information at hand to be useful? Is he or she trained to be courteous even if the customer is angry for some reason? Or when a customer opens the product package for the first time, and has no idea of how to operate the product. If the product is fragile enough to require some kind of special connection to the electric grid, did we put enough warnings in the box and in the Quick Start sheet? Did we assume that some people won’t read any of that, so did we put a seal in the electric cord plug that has to be removed before use, and has attached a big note with a warning?
As you can see, following our previous discussion, we are trying to avoid the customer to make costly mistakes (for him and for us). The cost we incur in those preventive measures is usually negligible in comparison to support, servicing and replacement costs.
A few examples of those techniques are:
Short Youtube videos (5 minutes long at max) explaining each important feature in the product, in just enough detail to be able to use it, but pointing for any in depth information to a larger tutorial or user manual.
An online Learning Platform with a “product certification course”, with short and precise information about the product features. If you pass the quizzes (optional) you can get some kind of reward, like a discount or some additional benefit related to the product.
Information just at the moment of failure. This one can be very important: by knowing your customer behavior, you can statistically identify the moments where they most commonly have issues with the product, and have already prepared information to help them overcome the issue, which should be placed right at hand at the precise moment (for example, prominently in the packaging of a replacement part that customers tend to install improperly and damage their products).
As you can see, all of these measures can greatly help to avoid customers’ issues, are relatively cheap compared with remediation costs (replacements, support, etc.), are generic (works for everyone, so are cheaper to implement), etc. Customer Success strategies and Customer Satisfaction information gathering working together to produce an excellent Customer Experience, preventing the customer to require Customer Support and Services (costly for the business and a hassle for the customer).
Where to begin
OK, so you have decided to go the Customer Experience way and implement it in your organization. The focus of this publication are Small and Medium Businesses, so I am assuming you not necessarily have a large budget available, nor a lot of extra personnel to dedicate and specialize on this task. Probably you don’t have a large Technology Department either. Where to begin then? Begin with YOURSELF. As I already mentioned, Customer Experience is a strategic initiative, bound to deeply change the culture of the business. You, as part of the Senior Management team (or owner) need to understand well enough the concepts, strategies and techniques so you can properly manage the process, either by hiring external consultants to help you with specific tasks, or training your people to do it. You, as part of the organization’s leadership, cannot and must not extract yourself from the process. The whole organization must be able to see you as committed to the change as you are asking them to be. That’s the only way to make it work flawlessly.
Reading this publication is a good start. I’d also recommend you to subscribe, because I’ll be sharing here more content and helpful recommendations on tools and techniques to apply. And, of course, read, read and read. I’ll also recommend books, articles and authors through the newsletter that are a must for anyone interested in Customer Experience (and that should be all of us). I hope this content have been of help to you. Any comments and suggestions, please let me know at the bottom of the post.
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References
7 Types of Customer Experience Projects
https://www.gartner.com/smarterwithgartner/7-types-of-customer-experience-projects
The State of Influencer Marketing 2021: Benchmark Report
https://influencermarketinghub.com/influencer-marketing-benchmark-report-2021/
Increasing the ROI of Social Media Marketing
https://sloanreview.mit.edu/article/increasing-the-roi-of-social-media-marketing/