Customer Experience is the new buzzword in digital startup communities! A lot is getting written on inculcating it in the company DNA and consultants are advising companies on how they can improve their operations to create customer delight during their interactions. The challenge with CX is often it isn’t as refined as financial metrics in its measurement. I would say it is hard metric to define as it is still building up and wasn’t always as big a priority as it is in today’s world. But whichever way you want to focus on it, the opportunity lost is huge if you don’t focus on it. This survey estimated $62 billion is lost by U.S. businesses each year following bad customer experiences. In the a supply constrained world, there were 2 broad ways of surviving in the market –
- Create innovative products or service that nobody else (or a very few people) are offering and customers will flock to your stores
- Be efficient in operations and absorb good margins from business and thus fight the competition from other innovative companies
But in an overcrowded market for commodities where too many players are competing to meet the demand of a customer, the only way to shine bright in the crowd is by attracting him and then retaining him. Thus, the world saw the rise of marketing teams which were tasked with attracting new customers and maybe keep pulling back the dormant ones as well. However attracting new customers kept getting costly with time and there isn’t an infinite market to keep expanding to. Thus, retention takes over as the priority when acquisition starts showing signs of saturation.
Any effort that creates a positive experience is an effort towards retaining that customer and that’s what I would hold the CX team responsible for. It is my opinion that a lot of teams only expect CX teams to create wow moments for customers to delight them, but what’s actually needed is an audit of the interactions a customer has with the company and make sure there are no negatives. My intention for writing this post is not to reveal a hidden secret or to prove mathematically the ROI you can get over your investments in making your CX better, but to highlight some key philosophies that I believe in regarding CX..
A steady above average CX curve is better than a sine curve that gets a surge from freebies and dips when commitments are not honored
We’re at the inflexion point where the customer expects to see his touch points with the companies digitally as fluidly as he expects his personal touchpoints with his family and friends over a chat app. In the new digital world, the companies which are using technology as a lever to gain efficiency don’t have a very distinct offering for the customer, just that they are able to pocket better margins by playing smartly. I believe it becomes super-important for them to pay attention to customer experience early on as it can become an added value proposition they have at the front end for customers over their traditional once-innovative incumbent competitors. An ideal time series plot of the CX line should be a flat line slightly positive rather than a sine curve. That’s what builds transparency and trust in the system and cements the relationship that ensures the customer comes back again in future to transact.
Use technology to increase transparency in your operations, honor commitments and share updates as often as possible to build trust
However this process needs to be redesigned with a long term vision and integrated deep beneath the layers of processes that govern the day-to-day working of executives. You can not hack into this system by deploying last minute Jugaads. If we go back to CX curve, a momentary hack is only a crest following a trough and the CX curve will come down again due to a systemic fault elsewhere. Not all customers are patient enough to give you multiple chances, not all customer relationships are repaired by offering a freebie following a screw-up. Thus, we need to get out of the hustle mindset that has become ever so ingrained in the way young firms operate under the pretext of the urgency to outgrow competition. The shortlived growth brings upon bigger problems that later become 10x difficult to solve at bigger scale of operations.
Becoming digital is not same as creating an app that mimics the offline operations, redesign processes instead of hacking for short term
The only way to create sustainable business that retains its customer is by being transparent all the time, given the business is offering the right product/service at the right price point. Digitizing the interactions and sharing updates adds to the trust and prevents situations where a enraged customer needs to be pacified by personal assurances, all these last minute rescues can go worthless if a clear plan of action is not shared with the customer or is not adhered to after promising. Taking a specific example, banks today have created phone apps that allow the customers to transact online without having to visit the branches, but they haven’t replaced the old system yet. The internal systems are not tracking the interactions a customer has with the bank and thus the executives which are tasked with handling customer queries are often clueless about the problems of a customer even if all interactions were digital and could have been tracked by the bank. Thus, interactions right now still encounter troughs and crests in terms of experience. Compare this with the CX that Uber app delivers by designing their processes around the interactions and not merely treating it as a database they can refer when a customer calls up for a complaint.
Scale is not an excuse to go down on personalization, and offline retail still wins over big chains when it comes to customer experience.
The streamlined behavior then needs to be retained at the bigger scale as well, scaling up makes things complex – true, but that can’t be an excuse to make things less efficient than how they were previously. Banks today are spread geographically and between the online and offline world, they are a good example of how over-expansion and cold unemphatic control by processes alone can add to frustration when fires are breaking out, no one is willing to take the responsibility and there isn’t a clear system in place to identify non-adherence of processes and customer dissatisfaction. Things get done faster when you can hold someone accountable and blame bureaucracy without pointing fingers, thus digitization needs to be used as a glass pane that allows customers to see you’re working on their case and not as a shield to shy away from accountability in the name of complex processing..
One last note that I’d like to share is that as companies grow up, the interactions it has with its customers become increasingly standardized as processes set-in. In the trade-off of expansion and cost of operations, executives which are the face of the company for the customers are often compromised on quality and their sense ownership as it is expected that the set processes would guide them and situations where exceptional decision making is needed can be forwarded to managers which can specialize in this decision making for multiple locations. While all this makes sense from a financial perspective and companies do it to optimize their costs, but it should not come at a cost of alienating the customers and making them feel as if they dealing with a robotic teller instead of a business partner who understands and reciprocates. I personally am a big fan of unorganized retail segment in India which is a big contrast to the way the US operates in this segment. I think while it is important to optimize on cost, but personal touch can never be replaced. A dedicated small scale entrepreneur whose life is dependent on the sale he makes from his store cares much more about his customers, knows more about his products than any executive working at a big store. And the fact that small retailers still exist means that customers value experience over price. Maybe micro franchise is a model that’s building up because of this as it is a hybrid that has the needed intelligence and processes of a big retailer but the entrepreneurial spirit and personal vested interest for growth of a small retailer.
I’m excited about the digital transformation that’s reshaping a lot of business, especially retail sector, be it shopping stores or banks. The transformation projects can really outgrow expectations when the CX component is seen as an integral part of the central process design and not merely as a coating on the transaction layer between Us and Them..