Alex is the author of the book, Customer Experience is the Brand and CEO of The Holla Agency, a consulting company specialising in customer experience.
Our overall brand perceptions are invariably shaped by our experiences. And loyal customer relationships can be severed in moments by a negative service interaction.
With customer retention strategy now firmly on marketing’s agenda, improving customer experience is quickly becoming a priority for business growth.
Yet even in the face of global commoditisation, eroding margins, dramatic shifts in purchasing behaviour and customer amplification of complaints, many organisations continue to neglect transforming their frontline and customer service teams, rendering them unable to meet today’s changing customer expectations.
Take my own recent experience: I was at the airport and next in line to check my luggage, when the customer in front states loudly, “I’m her mother, and here’s my driver’s licence”. Heads turn and everyone in the queue is now listening.
Then come those five words meant to appease, “Let me get my supervisor”. This only served to irritate the customer further, who has to recount the problem from the beginning. The tension is palpable, and I can literally feel the customer’s frustration.
In desperation, the customer becomes the solution provider, rattling off a number of proactive solutions only to be stonewalled; the outcome looks inevitable. In a last ditch effort to get her daughter on the flight, another call goes up to the supervisor. Then comes the final customer shutdown: “I’m sorry, the company gives us zero flexibility on this policy.”
Like most organisations today, front-line staff are well trained in dealing with a company’s policy matters; with cheerful smiles and passive, assertive customer negotiation, they stay rigidly fixed on the required customer service outcome.
But this isn’t good enough. Today, losing customers is an expensive business. Dealing with disgruntled customers requires substantial human capital cost, which negatively impacts the bottom line. The cost of marketing required to find and acquire new customers is increasing, too, at 6-7 times the price of retaining existing customers.
At a time when customer relationships with brands are primarily based on service quality and price, more organisations are becoming adept at improving their experience by designing tangible touchpoints to meet customers’ expectations. However, it is increasingly service interactions that cause the most customer frustration and irritation.
If front-line staff are unable to manage customer expectations, the accounts department will need to process a refund. And depending on the seriousness of the problem, the issue could be escalated to a member of the leadership team.
Then there is the cost of negative online reviews and negative recommendation to friends and family, affecting future customer purchasing decisions.
Enter service design
Progressive customer-centric organisations are using service design to innovate their experiences and provide greater customer value.
Service design best practice solves the customer problem from the customer perspective. In this scenario, service improvement is based on satisfying the customer’s unmet needs and creating efficiencies for the business.
Designing great service experiences begins by listening to customers, observing their behaviour and taking the time to understand the problems they’re trying to solve at every step of their journey with the brand.
Companies such as Amazon are well known for customer experience excellence and boast an organisational culture that thinks, feels and lives customer. Amazon CEO, Jeff Bezos’ approach is to innovate from the ‘outside-in’, by determining what the customer needs, and working backwards.
This ‘outside-in’ approach utilises the customer’s point-of-view to inform business decision making, rather than encouraging innovation efforts based on what the company believes a customer wants.
Critical to success is empowering internal stakeholders to work together for a common purpose around the customer and improving their experience. Cultural alignment around what’s best can be initiated by bringing the ‘customer to life’ across the business using customer insights.
When employees ‘buy-in’ and cross-functional work groups collaborate, everyone across the business owns service experience improvement, not just customer-facing departments. Sharing information, insights and efforts creates a positive multiplier effect on the creation of value for the customer.
Utilising co-design disciplines to innovate services also has a positive impact on organisational culture. Co-designing with stakeholders - both customers and employees - shifts the process of innovation from company-centric to customer-centric. This, in turn, generates ideas in a process of joint creation of value and delivers richer, human-centred experiences.
Today, customer experience is the brand. To grow and retain more customers, organisations need to build a customer experience growth engine that is responsive to changing expectations and provides great service experiences that keeps customers returning and talking positively about the brand to their friends and family.