Customer Experience

A decade ago, companies differentiated themselves from their competitors using products and pricing. The internet has changed all that. Customers can quickly search for products online and even compare. They can easily choose to purchase from the company with the lowest price.

Change is Constant

Today, companies should be looking at the customer experience as a differentiator. How customers interact with your company is a process – one that needs some attention.

A customer experience consists of the customer’s perceptions of their interaction with your company. It is how the customer ‘feels’ about doing business with your company. It is the customer’s reaction to how they interacted with your employees.

Deliver a great experience for your customer throughout their ‘customer’ lifecycle and the results will improve your bottom line.

We are in the midst of change.

The internet has had a big impact on how companies do business. Companies are just now exploring the impact of social media. Mobile is next – companies are still trying to determine the impact. Then there is the cloud and ‘what does that mean to me?’

The Takeaway

Improve your customer’s experience to attract more customers, to retain more customers and to increase revenue. If you doubt this, look at what Amazon has accomplished – or Apple.

UNDERSTANDING PROCESS IMPROVEMENT OPPORTUNITIES

Process improvement is aimed at identifying the waste in your processes and eliminating it. It is about understanding what parameters in your processes are important, monitoring those in real time to make sure they are always on target, and then improving them if they are not.

Improving your process means eliminating the bottlenecks in your process that throttle the smooth flow of work from one process participant to the other. The process participant can be a person or a system. Improving your process means reducing your cycle times, so that you can process more orders or can serve more customers with the same resources. Improving your process means reducing the cost of processing each order, resolving customer disputes faster and, thereby, increasing customer satisfaction. Improving your process means identifying redundant process steps that can be eliminated.

In order to improve the process you need to understand what the measures for the process are. These can be referred to by various names like “process metrics,” “KPIs” (key performance indicators), “performance objectives,” etc. The idea is that in order to improve the process you should be able to describe what your process is and measure the process for its performance. Only then you can improve the process. The metrics for the processes are determined by your business goals. If quick processing of orders is important to you and your customers, then the cycle time of your order management solutions needs to be the key metric. If reducing order management cost is the business objective, then you may want to reduce the number of orders that need special processing because it is more costly.

Business people are most suited to identify the process metrics or KPIs as they are the ones who manage the business and are responsible for its performance. Business managers, whether they are responsible for order management, fraud detection, or product delivery, have certain performance targets that they strive to achieve. Because business results directly affect their performance evaluation, they want to know at all times how they and their teams are performing—so that they know if they are meeting their targets or their plan needs a course correction. That is why it is important that the business managers have the ability to define the metrics, monitor them and do something about them when they fall short of expectations. They need to do all these without needing to wait for lengthy, time consuming and costly IT projects.

 

Marketing Communications Designed to Increase Customer Loyalty

The purpose of marketing communications has traditionally been the acquisition of customers, not the retention of customers. We discussed earlier that while traditional marketing communications influence brand image and thereby influence loyalty among customers, this is an unintended effect, as those advertisements are usually designed to acquire customers. But this suggests a question: should some marketing communications be designed specifically to increase the loyalty of existing customers?

In some business-to- business industries, this has been done for many years. Indeed, communications vehicles (company magazines, newsletters, and company videos) aimed at current customers have been developed especially for this purpose.

But this idea is new in many business-to- consumer categories. It would seem to warrant consideration, at least. One reason is that research has found that customers of a given brand tend to be more attentive to that brand’s advertisements than noncustomers.

This raises the question of what the content of such communications should be. Should it be the same as that for noncustomers? Certainly, the communications should support the image of the brand the company is trying to maintain. That said, one of the reasons for customers’ greater attentiveness to the company’s marketing communications is that they are unconsciously trying to obtain confirmation that they made the “right” choice.
Given that, perhaps a company should use its marketing communications to meet this desire. Such marketing communications would need to focus on the rational or functional benefits of the product/service.

In the case of consumer services, a company may want to consider using the communications to remind the customer (consciously or unconsciously) of how the company’s service satisfies the human needs we discussed ear-lier (security, self-esteem, justice). I do not know of any companies that have used these strategies in designing marketing communications, but they do seem reasonable.

As mentioned earlier, marketing communications vehicles targeted at current customers have been used in business-to- business for years, but are now sometimes being used in business-to- consumer settings. Some companies that collect their customers’ contact information send them fliers and catalogs.

Brand Image on the Customer’s Experience

To paraphrase a definition by Aaker (1991), a brand is a name, term, or symbol intended to identify the products or services of the seller and to differentiate them from those of competitors.

The definition of brand provided earlier contains the phrase “differentiate them from those of competitors.” More is meant by “differentiation” than simply preventing shoppers from mistaking the product of one company for that of another. A brand also gives the consumer a reason to buy one product instead of another. It does this by adding something intangible
to the purchase, ownership, or use of the product. That “something” may be perceptions about broad functional benefits of the product, such as overall quality, or it may be emotional benefits (for example, security, increased status, or meeting the need to nurture).

These benefits are conveyed by brand image. Brand image has traditionally been thought of as a method for acquiring customers, but it also influences current customers. Consider the following:

  • An image of overall quality will make an owner more satisfied with a product. This effect is even greater if the product is such that its quality cannot be fully evaluated, even by the user. Home heating equipment is one example of this.
  • If a food brand has an image of being healthful, the satisfaction of health-conscious consumers will be increased.
  • In some product categories, if a product has an image of being for a certain type of person(for example, sophisticated or successful people), customers who want to be members of that group will increase their self-esteem by owning that brand.
  • If a restaurant has an image of being family oriented, the satisfaction of some patrons will be increased.
  • In business markets, purchase of a name brand provides the emotional benefit of security, as illustrated by the advertising statement, “No one ever got fired for buying IBM.”
  • In business markets, an image of being technologically advanced is important for industries in which the pace of technological change is rapid.

Traditionally, companies in most product categories have relied primarily on advertising to establish brand images. In the case of an emotional benefit, a common strategy is to have advertisements consistently depict a certain type of person (for example, a financially successful person) enjoying a commensurate lifestyle and using the brand. Because of those advertisements, a person who wants to be a member of this group (financially successful people, in this example) will mentally associate the brand with the group, and owning or using a product of that brand will increase his or her self-esteem.

A company decides which images it should associate with its brand on the basis of a brand positioning study. Formally stated, the purpose of a brand positioning study is to identify a distinct and valued place in the consumer’s mind that is not currently occupied by a brand. After this place and the brand images defining it have been identified, the company designs
its advertising to convey those images, and it designs new products or modifies existing ones so that they are consistent with those images.

Empathy

As is the case in other human endeavors, we sometimes overlook the obvious.
One such instance here is that service employees who have direct contact with customers should empathize with customers. This is especially true of service channels or customer contact points designed to resolve customer complaints. In the context under discussion, empathy has the following ingredients:

  • Being friendly
  • Being aware of the customer’s feelings
  • Caring about the customer’s feelings
  • Caring about the customer and meeting his or her needs
  • Affirming that the customer’s concern or feeling is valid, in the case of problem resolution
  • Owning the problem

This is very different from the common practice of dealing with customers in the same way that a farm worker manages the movement of cattle.
How can the company get its employees to have (and show) empathy? One method is to show employees videos of service experiences (actual or mock) in which empathy is and is not expressed. A video, as opposed to a written description, is needed because a substantial portion of communication (by both employees and customers) is nonverbal: eye contact, tone of voice, facial expressions, and body language.

Notice that this has implications in the hiring process. While it is true that some employees can be trained to exhibit more empathy than they actually have, this is possible only up to a degree, and even that effect may be temporary. Consequently, the company needs to hire people who are predisposed to empathizing with customers. This reminds us of the saying,
“No type or amount of training can get a cat to bark; if you want barking, get a dog.”

The Golden Rule: Do unto others as you would have them do unto you.