Customer Experience Synonymous with Operating Strategy

When you hear the term “customer experience”, what is the first thing you think of? Many think of marketing or sales, but how many think of operating strategy? Others immediately think of the expense of running a customer service department. What is often missed is the growth potential and stability of adopting the customer experience into every operational function and decision.

This story on CRM.com discusses the subtle, but very important differences achieved in giving the customer experience a high profile in your day-to-day operations. Here are a few of the major points:

It is true that the customer experience has a lot to do with sales and marketing, but to limit it to these silos is to miss the larger point. Everyone in your organization is a touch point to the consumer.

It’s also true that the customer experience reflects the emotions or feelings of your consumers. However, there are also tangible elements like contract clarity, financial options, web support, or even something as simple as the ease of transporting your product.

There are those who believe customer experience is a “tradeoff to profitability.” This “necessary evil” attitude is misleading. A healthier viewpoint is to see your operations as a mean to solving your customers’ problems. The better you can do this, the more profitable you will be.

The truth is that there is a grain of truth in every attitude toward the customer experience. The only trouble is that many of these approaches are incomplete. Try thinking of the customers’ need in all phases of your operation.

Making the Promises Real in 2010

Many are seeing 2009 as a breakthrough year for efforts designed to raise the profile of the customer experience. There is growing evidence that the everlasting pledge to put the customer first actually got beyond lip service and into real and actionable tactics. With the progress made last year, even in very tough economic circumstances, 2010 should see the movement gain even more momentum.

An article on retailcustomerexperience.com offers the following advice as brand marketers and retailers continue to travel down this road:

“Drop the executive commitment facade.” Executives need to “put their money where their mouth is” with time, treasure and talent. If it’s a real priority, they will manage customer experience like they do financial results.

“Acknowledge that you don’t know your customers.” The means to truly knowing the customer does not lie in a long and drawn out marketing research project. Establish a “voice of the customer program” for a quick, ongoing and continuous dialogue with your customers.

“Keep from getting too distracted by social media.” Social media should be an important “listening post” in your efforts, not the end all and be all. Other listening posts include surveys and call center calls and other customer touch points.

“Stop squeezing the life out of customer service.” By measuring how well your customer service organization serves the consumer instead of using efficiency metrics, you can turn this necessary evil into a strategic asset.

“Restore the purpose in your brand.” A true brand is more than just your logo. It’s a promise that you make and keep with your customers at every transaction. Your raison d’être should be apparent in everything you do.

“Don’t assume employees will get on board.” When you announce your new customer experience initiatives, expect a good amount of eye rolling from your employees. It’s critical to sell them on why this is so important and engage them to participate in how to make improvements.

“Translate customer experience into business terms.” Develop a model that measures the direct impact of customer experience on brand loyalty. That number can help bridge the understanding gap among employees and engage the accounting department as to a tangible financial impact.

One Size Does Not Fit All

Opinions are being weighed from all over the globe as brand marketers and retailers look forward to the economic upturn in 2010 and beyond. The big question seems to revolve around the customer experience. Is price the driving factor or is there value in truly great service? The answer is that “it depends.”

In his opinion column in the Times of London, Accenture executive Neil Miller say there is no one model that will fit all and that approaches must be targeted to fit individual channels and markets. His company reports that nearly all UK businesses have invested in improving the customer relationship, but either they are missing the mark or the target is moving faster than the aim. Miller says, “Almost two thirds of British respondents in the study reported switching between businesses in the past year as a result of experiencing poor service. Only about a third believed that customer service experiences had improved.”

Less loyal and more demanding customers are setting the pace. It becomes more important to understand differences in customer service needs and channel preferences as they align with your brand proposition and the balance between price and value. Miller explains, “Different sectors have different agendas and demand different services and models, which must be tailored using appropriate digital platforms, processes, data, analytics and skills.”

In the end it comes down to differentiate and deliver. The upturn offers an opportunity to reach out and engage your customers. But one blanket approach will not work for all markets as it has in the past.

Customer Service is the New Marketing

The end of the current year and the beginning of the new always bring many different kinds of lists: wish lists, shopping lists, resolutions, top stories of the year lists, etc. This story in Small Business Trends offers up a list of things to look forward to in 2010. It calls the customer experience the, “new marketing,” and the, “only truly sustainable competitive advantage.” Here are a few items from the story:

The coming year will be a good one for marketers to imprint upon their employees who interact with customers. Why? High unemployment levels will encourage employees to hold onto their jobs by being good at them. They will try harder.

Service will become your identity, not the product you are selling. Companies will learn from the online model of Amazon and Zappos who show that you can build a business based on service.
Along the same line, successful internet companies have trained consumers to look for highly personalized service. Internet sites greet us by knowing our names, habits, likes and dislikes. This expectation will transfer to face-to-face transactions and thus the bar will be raised.

Facebook, Twitter, and YouTube will force higher service levels due to the consumers’ ability to transmit satisfaction or dissatisfaction to a large audience. Brand marketers will have to react quickly and completely to avoid reputation damage. Brands are working quickly to increase their capability in the social networking medium.

This is only part of the list, but you get the picture. Almost every single factor for going to market is changing. Companies are finding out through experience and analysis that the common denominator is providing a great customer experience at every turn.

How Fresh and Easy Listened to the Customer

Tesco’s Fresh and Easy concept in the U.S. provides a vivid example of a company listening to the customer and making almost immediate adjustments based on that feedback. It has been almost two years since the stores started to appear on the West Coast. In that time, the company has, “done a lot of listening to customers.” This interview with Steve Ryder, Store Design & Planning Director at Fresh & Easy Tesco’s US operation, outlines some of the activity.

Based on customer feedback, 60 stores engaged in a re-fresh program in which stores were made more inviting and informative. Additional banners, more messages and more color was used to address what the customers were calling a “sterile” environment that made the stores appear to be “too discount” for the U.S. shopper.

After 18 month in operation, 120 stores were remodeled this year to take advantage of the learning accumulated over that time. Frozen food space was increased and 600 skus were added by increasing aisle height by 10 inches. Store décor was changed yet again.

Change is never easy, but it appears that Fresh and Easy has broken through the anxiety by creating a culture that listens, and more importantly, responds to the customer. Look for this chain to continue to enhance its presence in the U.S.

Raised Stakes for Customer Service

A survey conducted in the UK found that the younger the consumer, the more likely they are to leave a brand or company due to poor customer service. Research by Genesys Telecommunications Laboratories along with Datamonitor and Ovum found that each generation of consumers has a different and heightened idea about what good customer service is and should be. In business, it’s said that if you aren’t growing, you’re dying. Based on this research, the same can be said for how you interact with your consumers, both now and in the future..

An article found on callcentrehelper.com discusses research that found consumers from age 27 to 43 are 60 percent more likely than those over 44 to abandon your brand, store or offering due to poor customer service. Clearly businesses need to not only continuously raise their service levels to meet the heightened standards, but they must also increase and augment their understanding of what the consumer identifies as a poor, reasonable and excellent customer experience. When customers are walking away from sales, failure to understand and manage the expectations can cost millions in lost revenue, repeat sales and diminished brand equity.

The research cites several current expectations. Among them were proactive engagement when using contact channels and better integration of those channels to allow for flexibility and personalization. Whether it’s in the UK , the USA or the rest of the world, the bar is rising on customer service expectations. Do you know what your customers are thinking?

The Sin of Omission

The customer experience is a multi-faceted and sometimes complicated opportunity for brand marketers and retailers. But in many respects, it is remarkably simple. A survey was introduced today that reports more than 25 percent of the time, customers feel ignored. If true, this is a call to action for all involved. We must train store and service personnel to proactively see service opportunities.

The survey, reported on by the Chicago Sun-Times, by the SALT & Pepper Group measured 1,027 interactions between customers and salespeople in 73 retail stores over a four month time frame. The study said that electronic and hardware/home improvement stores were slightly better than other channels. Luxury retailers, who you would assume would be at the top of the ranking, fell somewhere in the middle.

The SALT & Pepper Group identified, “the sin of omission,” as a big problem that they encountered when entering a store. In a nutshell, the associates working the registers or aisles simply would not recognize or acknowledge the customer. It seems like a simple thing, but when it comes to training and educating store personnel on customer service, we must not commit, “the sin of omission,” in including this basic concept.

Nice Guys Finish First

According to the old saying, “Nice guys finish last.” Southwest Airlines has defied that axiom for years. In an industry that is the poster child for a bad economy and despicable customer service, Southwest is on track to have its 37th consecutive profitable year.

With other airlines singing the blues and charging for everything from baggage to peanuts, how does Southwest continue their remarkable story? This article in The Motley Fool suggests it’s by sticking to core values and focusing on the customer experience. As the story points out, even the company’s ticker symbol (NYSE:LUV) seems to personify the approach toward travelers..

Having another profitable year doesn’t mean it has been easy. Southwest is faced with all the very real challenges of other carriers. The difference is in the choice to sacrifice short-term profits for long-term brand loyalty. They refuse to charge for bags, have employed a new customer centric boarding system and have embraced an emerging business traveler segment.

Listen to Chairman and CEO Gary Kelly’s message to his shareholders, “Our objectives remain: enhancing the overall Customer Experience; appealing to more business travelers; and generating more revenue per flight.” By putting the discussion of revenue last in the list, this is one nice guy who is finishing first.

Getting it Right in the First Place

When discussing a truly great customer experience, it’s a natural reaction to focus on a specific customer service situation or service recovery. It is true that all organizations have problems to solve at one point or another and the way they solve them goes a long way toward establishing long-term customer relationships. But we should never lose sight of the easiest and least expensive form of service recovery which is getting it right in the first place.

Service recovery only works if it’s the rare exception and not the rule. Such is the case at Walmart stores who are reporting that increased productivity and improved inventory management are resulting in a better customer experience. Having what the customer wants in-stock and on the shelf is the surest way to please a consumer. It’s no surprise that these improvements have resulted in improved third quarter financial performance for this retail force of nature.

Wal-Mart officials are saying that their stores are running better than at any time in history, which is leading to market share and an all time high customer satisfaction level. One could make the case that the success is being driven exclusively by price, but even the best deal in the world isn’t a deal if it’s not available, hard to find or if associates can’t help you out.

This Wal-Mart story is a good example of putting the customer experience first in every step of the go-to-market chain. If you wait to the end of the chain to take care of your customer, it might be too late.

Is it Live? Does it Have to Be?

Everyone uses Google and, because the service is free to the user, no one expects anything more than some FAQ screens and forums for customer support. But it doesn’t stop there for Google. Because it offers Google AdWords and some premium Google Apps, the company is adding live, human contact as part of its customer experience.

An article on CNN examines to what extent those who offer services free to the consumer can rely on the first line of support systems, mostly electronic self help, and not make substantial investment in call center and other live, human interaction. The jumping off point right now seems to be whether a customer actually pays for the service or not. But the author suggests that might change.

The first reason is, because Google is now such a big part of everyday life, many business people and small businesses increasingly rely on it in their personal and professional lives. The second is that Google is offering an increasingly bigger range of paid services. The third reason is that the Google model is driving a number of services, which require a subscription or payment, out of business and is seemingly acquiring those expectations.

It is a very unique challenge and will be interesting to watch how the search service walks the fine line of holding down costs through automated customer service and provides highly personnel service for its segment of customers who need and expect it. Even though it’s hard to foresee any real challenges or compeitive threats emerge for Google, expect the customer service challenge and the solution to evolve through time.