“Businesses can’t miss the chance to create experiences nowadays. To successfully design experiences means to go the extra mile - to facilitate meaningful and personalized customer encounters that create added value, emotions and long-term memories.” Dr. Barbara Neuhofer, Professor and Head of Experience Design at Salzburg University of Applied Sciences, Austria.
The importance of customer experience management, a built-in feature
In business, customer experience is often presented as a differentiator, something a company chooses to focus on in order to outperform its competitors. Yet, a company will inevitably interact with its customers at some point, and those customers' opinions about these touchpoints will affect their future behavior, including possible repeat purchases and word-of-mouth.
Consequently, customer experience is not like an extra feature added to a product to make it more attractive, it is ‘built in’ and represents a compulsory aspect of doing business. So if creating customer experiences is unavoidable by default, what exactly does it mean, and what do businesses need to understand about it to successfully leverage it as a competitive advantage?
In order to answer this question, the Institute of Customer Experience Management at EHL interviewed eleven experts in the field of customer experience for the first season of its podcast. Here are five things we learned from taking a closer look at these interviews and how these expert insights converge.
1. Meticulously designed customer touchpoints and a solid infrastructure: The building blocks of great customer experience
Customer experience is a broad term and covers a myriad of interactions a customer has with a product or service before, during, and after consumption. Therefore, customer experience falls under the responsibility of multiple departments, and adequately managing it requires the combination of several information silos. An additional complication is that these various sources of information, due to their location in different departments, often stay entirely separate and thus stand in the way of a more holistic improvement of customer experience.
Consequently, a centrally coordinated effort is necessary to effectively combine information scattered across the organization, and equally crucial to keep an overview of all the different points at which a customer interacts with the company. Furthermore, although more communication channels and touchpoints give more opportunities to create an outstanding customer experience, these also come at a cost that increases the more complex the infrastructure that allows for their delivery.
2. Positive customer perceptions brings long-term value in customer experience
Although providing an outstanding customer experience can be very costly, especially for larger and hard-to-coordinate organizations, it can also create value. One way is to save costs, as coordination and centralization reduce redundancies. Indeed, having a clear overview of customer experience can allow companies to spot touchpoints that do not create value or do not serve a purpose.
However, the principal value created by customer experience relies on creating positive long-term impressions on customers and consistently refreshing and reinforcing those customer perceptions. The effect of such impressions is threefold. Firstly, a positive and ‘sticky’ impression fosters loyalty. Indeed, a company that has impressed a customer will be top of mind the next time their service is desired or required. Secondly, such impressive customer experiences are likelier to be shared with more people and for a longer time after they have taken place, which contributes to building a solid reputation. Lastly, such impressions create a history with the client, which is not constructed overnight, making it hard to imitate by competitors and thus a potent differentiator.
3. Not all of customer experience factors are predictable, and some cannot be controlled
Although there is a need for customer experience to be meticulously designed when creating long-term value for the company and the customer alike, executing such a strategy is not always straightforward. Indeed, a critical element of an organization's customer experience strategy is knowing what can and cannot be controlled.
For instance, it is possible for a service provider to inherit customer emotions that have not been caused by the former. An airline, for example, may have trouble satisfying a customer that had a horrendous experience at their hotel checkout or when going through customs. In such a case, the service personnel of the airline is fighting an uphill battle when trying to satisfy the customer, and such a fact is important to recognize and account for.
4. Wow experience: The importance of consistency in creating lasting impressions
There is a bit of a dichotomy in the field of customer experience. On the one hand, there is a lot of talk about satisfying the top of Maslow's hierarchy of needs, transformational experiences, and exceeding customer expectations. On the other hand, there are a few caveats to this view of the future of customer experience.
First, companies often perceive such experiences as needing to be, in a way, grandiose by default. Such a mindset can lead to less attention being paid to more simple and, at first glance, mundane touchpoints with the customer. Yet, experiences come in all shapes and sizes, and their effect on the customer also depends on the context in which they are experienced, regardless of their scale. Second, the value of customer experience is not just measured by isolated ‘wow’ moments, but also by consistently meeting expectations over time. Indeed, a cumulation of more minor but repeated positive interactions can also have a powerful beneficial effect on customer perception and loyalty. And finally, the big transformational wow moments that companies strive for need to be underpinned by a consistent and well-executed basic service.
After all, customers who feel that a company can be trusted are more willing to engage further, and their expectations can only be exceeded after they are met. In short, a cherry has much more impact on top of a cake than it does on an otherwise empty plate.
5. How humans and technology should work together to create value for the customer
Much of the current debate in customer experience centers around how humans and technology should work together to create value for the customer and service provider alike. Technology has many advantages when it comes to customer experience. After all, personalization is an integral part of satisfying a customer. That personalization requires in-depth knowledge of the customer, which in itself relies on data that is most efficiently collected, organized, and analyzed by technology.
However, there is a danger of going too far with technology. Although technology can make processes faster and more efficient, there is a risk of removing human touchpoints that may not be the most efficient but are valued by customers, nonetheless. Furthermore, it is vital for a company to also invest in employees and not just the latest technological gadget. Indeed, happy and empowered employees provide better customer experiences. Therefore, supporting employees with technology, autonomy and organizational backing represents a good base for creating more wow moments for customers.
Customer connection: Focus on what can be controlled and understood
If there is anything to take away from these insights, it is, first and foremost, that customer experience is not a mysterious event that simply happens, but that it is a science, an art and a significant field with its own experts. Granted, customer experience does deal with sometimes unpredictable and uncontrollable effects, and the long-term nature of the value it creates makes the payoff more challenging to quantify and, thus, investments more difficult to justify.
Nevertheless, businesses nowadays have no choice but to compete on customer experience, so the answer is not to disregard customer experience on the basis of its blurrier aspects but to focus on what can be controlled and invest in improving the overall understanding of the field.