It is very refreshing and encouraging to see so many organizations with mission statements indicating their focus on the customer and their mission to deliver the best customer experience. Over the past few years, organizations have begun taking it a step further than just stating this customer focus, but have started establishing teams or divisions who are dedicated to the customer and their experience. Today, we hear more and more about firms with a CCO (Chief Customer Officer) or VP of Customer Experience.
These are all great news for the customer; knowing that the company from which they purchase goods or services makes an explicit effort to show that the customer is important and cared for. However, many customers still experience countless unpleasant interactions with these providers, where they are left feeling unimportant, uncared for, and disappointed. Some of these interactions are “disappointing” to the customer, because it was truly a bad experience delivered by the provider. Others are “disappointing”, based on customers’ perceptions due to the expectation built by other experiences. Whether it is truly the provider’s fault or not, it is what the customer perceives and thinks that will determine how they will (or will not) spend future money with a provider.
Moreover, the firms with new CCO titles and CX divisions are among those that “cause” these disappointing experiences for customers. How is that possible? Didn’t these firms just spend a lot of money and resources to create a whole new division, hire their best to be responsible for customers’ experiences, and spend months to put systems in place to see how they’re doing with that experience?
Addressing the Root Cause of Customer Dissatisfaction
Bingo, there may lie the problem. Firms, and specifically CX organizations, are more focused on the symptoms (the metric to represent CX, such as NPS, OSAT, Effort, etc.) than the diagnosis around the customer’s experience and what determines their evaluation and perception of that experience. At the highest levels, one specific metric, such as NPS, may be tracked, placing pressure on levels below. As a result, everyone’s attention is distracted from diagnosing the problems or exploring the needs of customers. Rather, the focus is on getting the next wave of metric reporting out there (and it better be higher than the previous wave). But how can customer satisfaction metrics improve if no one is accountable for fixing the root-cause?
There are a number of activities organizations need to perform in order to understand the customer, their needs, expectations, their challenges, and memorable moments, to be able to design and deliver the best experiences. These activities involve researching the customer, the market, and the processes before setting up goals to meet with a high-level metric. In addition, ongoing investigation of the customer, the market, and the processes is needed to keep adjusting metric goals accordingly. The following activities will help organizations better understand, and therefore better design best customer experiences:
Who is my Customer?
Many organizations have a general idea of their customer base and their characteristics, but mostly the tangible, demographic (or firmographic) characteristics that can be quantitatively measured are captured in forms. While some of these demographic characteristics can help make assumptions about what customers may want, prefer, and feel, these generalizations may vary from category to category. The best way to understand the customer base is to explore the customer. And the most common methods to do this are segmentation studies, customer observations (such as shop-alongs and ethnographic studies), and other qualitative methods that ask customers to explain more about themselves.
Interestingly, these methods are frequently used and are very popular among marketing organizations. But why is the use of “understanding my customer” limited to marketing (sales and advertisement, specifically) efforts of selling and acquiring more business only? Why can’t it also be a valuable source of information for satisfying and retaining existing customers?
A great example of this phenomenon is segmentation research. What comes to mind when we hear the word segmentation is the Marketing department, the typical buyer of this kind of research. However, more and more CX organizations are acknowledging the differences in the customer groups they’re trying to serve, therefore, we’re starting to see more segmentation studies done for CX purposes. It is very helpful to understand not only the tangible (e.g., demographic) differences that separate customers into unique groups with varying needs and expectations, but also tremendously beneficial to understand those unique needs, preferences, and attitudes toward the types of experiences we are striving to deliver. By segmenting the current customer base and understanding the differences across these segments while identifying the key segments that the company wants to prioritize, it is possible to determine key investment allocations for necessary improvements or innovation for better customer experience.
What is my Customer’s Experience?
This particular step is not going to come as a surprise to many of you: journey mapping. This has been a rather popular activity desired by many companies to better understand how their customers experience their organization. I won’t spend too much time explaining and persuading why this is an essential step in getting to a place where we can build better experiences. Nonetheless, I will emphasize that some companies skip this step or narrow down the focus and instead jump into building a short and simple CX measurement tool. This leaves them with a metric measured without any additional insights to act on, potentially not even measuring the real experience to fix what really matters to the customer. Make the investment of time, money, effort, attention, and conduct the appropriate levels of journey mapping to understand your customers’ experiences holistically through all touch points. This will then help determine the key areas to focus for improvement as well as key areas to measure and monitor to ensure continuously improving CX and business outcomes.
What is the Base for my Customer’s Expectation vs. What I Deliver?
Not only is it important to understand how the customer experiences our company, but it is equally important to understand what is going on around the customer outside of the experiences with your company. To that end, it is essential to explore customers’ other interactions and experiences. After all, those experiences usually form the base of their expectations for your company’s delivery. If a customer has limited experiences elsewhere in a related category, their expectations will be lower (or more in line with what we determine as appropriate experience for them). As a result, they will likely be more satisfied with the experiences we deliver. On the other hand, if a customer has a wide variety of experiences, within the related category or even with other industries that deliver similar types of experiences, then their expectations will be much higher based on “better” such interactions. As a result, they may not be likely to be satisfied with a company’s delivery, unless they provide that “better” experience.
To understand the base for customers’ expectations and perceptions, and to focus attention on improvement or investments for innovation accordingly, competitive studies can be conducted to ask the customer about not only your company, but also other companies they have similar experiences with. This will help you understand where your organization stands compared to other experiences the customer has. With this information, objectives can be set on areas to focus and surpass competitors or other providers with similar types of experiences. Without having this competitive framework, though, organizations are only measuring themselves, not understanding the customer’s frame of mind in which they evaluate us, and are merely chasing their own tail.
Why am I Losing Customers?
Last but not least, another frequently omitted type of study of customers is exploration of those who leave or become inactive. CX organizations usually focus on measuring the current customer base. While organizations are typically able to detect “at risk” customers with this measurement, as well as those who “indicated” they may leave or not purchase again, usually they don’t know enough about those customers who actually leave. There may have been aspects of the customer experience that triggered them to finally make the choice to not continue their business with your company. Unless those customers are contacted, a company wouldn’t know those specific experiences and reasons for leaving. This is a golden opportunity missed! After all, those who actually left did so because of a very particular reason! To identify these problems and areas of focus, CX organizations should invest in periodic Attrition/Defector/Lost Customer studies.
There is so much more that can be done besides the examples I provided above, to better understand the customer, and to help design the best experiences. It’s time to think beyond the short customer surveys and one CX metric. Build CX expedition plans that include more than just the ongoing CX survey and NPS reporting, but make the upfront understanding of customers, their needs, their expectations and perceptions a part of this system. Update this gained knowledge every so often, for example, when the marketplace changes dramatically, or when the customer base changes dramatically due to generational shifts. Leverage this knowledge not only in designing your ongoing CX monitoring metrics, tools, and targets, but also to inform your product, operations, marketing, and even HR and IT departments to build the best customer experiences together.