Why you need to create frictionless customer experiences

Customer management consultancy guru Don Peppers outlines how relationship and authenticity are the drivers of competitive advantage for organisations in the e-social age

Frictionless interaction and extreme trust are the cornerstones of successful customer strategy in the e-social age, according to one of the world’s leading business brains.

For Don Peppers, a founding partner of Peppers and Rogers Group customer management consultancy and leading strategic thinking on business strategy, experience and authenticity are driving today’s era of transparency, and corporations must adhere to these customer-centric rules if they’re to keep a competitive edge.

“Customers remember you whether you remember them or not,” he told attendees at an American Chamber of Commerce event in Sydney. “How you treat them today has everything to do with their value and how you do tomorrow.”

Peppers identified four steps in building a solid relationship with customers: Identify and tag so they are addressable at a personal level; differentiate how you treat the individual; interact in a way that gives customers a reason to stay loyal; and customise content and interaction on an ongoing basis.

While the first two steps can be driven by insights gleaned from an organisation’s internal databases and CRM platforms, the latter two require customer participation and are crucial in creating experience, he said.

“A relationship requires interaction and develops through context, which strengthens over time,” he said. “Successful relationships also generate trust, and that is what organisations must do today.”

Peppers labelled a good customer experience “frictionless”, and one that removes obstacles both for the individual and the business. To achieve this, he stressed the need for reliable products and services, relevant information, value, and extreme trust (“trustability”).

“Trustability is about acting in your customer’s interests,” he explained. One way of achieving extreme trust is to discuss issues internally in the same way you would if your customers were in the room.

“As human beings, we trust someone as long as they are competent and have good intentions. This is about doing things right, as well as doing the right thing,” Peppers claimed. “Extreme trust comes from empathy, which is a deeply human perception. For a company, empathy is ultimately formed through customer insight.”

While taking an experience-led approach helps improve customer loyalty, it also reduces costs for an organisation by removing duplication, improving inventory and better asset utilisation, Peppers said. As an example, he pointed to St George’s decision to provide user preferences on cashout at its ATMs across Australia, which not only benefitted customers, but also allowed the building society to reduce usage times and increase the number of people using machines on a daily basis.

Other brands Peppers highlighted as leading customer experience included the Ritz Carlton, Amazon and Netherlands-based energy supplier, Eneco.

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At the same time, Peppers criticised a range of “previously acceptable marketing models” such as profiting from customer errors, failing to notify them of innovations or changes, and fooling or tricking customers. He claimed all have become untenable thanks to the transparency brought about by digital and social communication.

“You have to put your customer’s interests in front of short-term profit,” he added.

Peppers also predicted the demise of a number business models that are inherently “untrustable”, including those used by mobile telecom operators, retail service agreements, gift cards, credit cards and retail banks.

“Some companies have also been opportunistically untrustable, such as AOL,” he said.

What’s also apparent is that regardless of how automated and standardised an organisation’s customer processes are, employees remain key in driving customer experience. “The real secret to a frictionless customer experience is in your people,” Peppers said.

“There has to be a person somewhere. And if you want staff to solve the problem in the right way, they have to be engaged and enabled to accomplish their tasks. That comes down to good intentions and competencies.

“The future of corporate management is to have self-organising employees that want to work for a trustable company.”

Peppers was ranked one of 50 of the top business brains by the Times of London, and has co-authored several books including Life’s a pitch and Extreme Trust: Honesty as a competitive advantage.

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