Understanding and Delivering Customer Experiences that Count

By Peter Dixon and Rune Gustafson

"Customers don’t always know what they want. The decline in coffee drinking was due to the fact that most of the coffee people bought was stale and they weren’t enjoying it. Once they tasted ours and experienced what we call 'the third place'—a gathering place between home and work where they were treated with respect—they found we were filling a need they didn’t know they had." — Howard Schultz, CEO, Starbucks

"Customer experience" is one of those amorphous terms that is increasingly in the public consciousness nowadays. It's amorphous because it tends to be under-defined, its meaning shifting according to your perspective. Often, it's viewed with merely an operational or product lens rather than an understanding of the nuances of the experience as the sum total of customer interactions and the emotions they evoke.

And its increasingly front-and-center role has been largely a result of the explosion in channels with the digital revolution, which has created many more opportunities to influence, engage, and actually mold and shape what the experience looks and feels like.

For all that, the ability to create and manage the customer experience is something more businesses would like to get right. For every Starbucks, Virgin Atlantic, Zappos, Starwood, or Apple—a handful among the many that do get the nuances and make the most of them—hundreds more only wish they could come close to the bar that's been set.

It is an attainable goal. All it takes is the mindset combined with consistent and thoughtful deployment of various tools that allowing the experiences being provided to be monitored and optimized.

Understanding Its Scope and Importance

Prophet views customer experience through a very wide-angle lens. It's all about making an emotional connection with people—making them "stickier" to you—as a powerful means of shaping behaviors and advocacy and tightening their relationship with your brand.

It's not just about interactions between customers and the people who power your brand, like sales staff or customer service representatives. It's about interactions between the environment and the customer. Between communications materials and customers. And with the product itself—how the car feels when it drives, what it sounds like when it starts up or accelerates, or what it smells like right off the showroom floor.

It all combines to create a feeling in the customer that is integral to how they build their impressions, loyalty, and emotional connection to the brand.

The quality of the customer experience has the potential to hugely impact the business, as several studies in recent years have shown.

One surveyed over 800 executives in companies around the globe that had increased their investment in customer experience management in the prior three years. All reported higher customer referral rates and customer satisfaction. Another surveyed 450 large organizations in Europe on their practices and outcomes. It found that improved performance in the four key business areas of market share, retention, profitability, and customer satisfaction was directly related to their success at managing the customer experience.

Walk In the Customer's Shoes

Tony Hsieh of Zappos realized that to get people to buy his shoes, he and everyone who worked for him would have to always walk in their shoes first. He understood that a key customer touchpoint for any retailer was at the point of sale and point of return. Any breakdown either way would compromise the customer experience and had the potential to damage the relationship. Zappos' resulting practice of free shipping, both ways, and a 365-day return policy has created an unheard of 75 percent rate of repeat business and explosive growth.

Having a visionary leader like Hsieh who establishes the importance of customer-centricity as a key facet of the organization’s culture is a hallmark of businesses that have evolved the customer experience to almost an art form.

Walking in the customer's shoes is a good starting point. Having a visionary leader like Hsieh helps. But it's also important to ensure that mindset is constantly reinforced so it becomes a seamless aspect of the culture.

At the award-winning resort, The Cosmopolitan of Las Vegas, for example, the dedication to creating memorable customer experiences goes way beyond the casino floor. It's evidenced everywhere, from the unexpected wall murals in the parking garage by renowned graffiti artists like Shepard Fairey to Droog, a functional art gallery where mainly hands-on is okay. But employees are coached in keeping it real and fresh. A handbook reminds them of ways to think to ensure they're living this brand promise every day: Have I put myself in my customers' place? Have I looked outside my world for inspiration, pushed myself out of my comfort zone, taken a risk, and considered the impractical? Have I considered the organization as a whole?

Research Provides Insights For Innovation

No matter who's setting the direction or how extensively it becomes absorbed in the business' culture, orienting around the customer experience is extremely challenging. Even in a simpler time of fewer and more direct customer touchpoints, they have never had equal influence and so should not be treated equally. By prioritizing, then leveraging, individual or groups of touchpoints that matter most to target audiences, businesses will not only do a better job of creating an experience that matters, but gain the best returns on investment.

Getting there requires deploying the right tools that help create a deeper understanding of what resonates with customers in creating an experience that either works or doesn't.

Different forms of research, undertaken consistently, are very important in their ability to render insights that spur the most innovative customer experiences. A.G. Lafley of Procter & Gamble, for example, famously demonstrated the power of ethnographic research by personally going into consumers' homes to observe how they went about their household cleaning chores. The ubiquitous Swiffer, which removed the mess from mopping, was one of the outcomes.

Basic tools of customer satisfaction tracking are also important to grow a deep understanding of people's behaviors and impressions as a means of improving the customer experience. The upshot can be insights into revealing moments of truth that occur at the important customer touchpoints in the product or service environment.

Research by the Starwood hotel group has told them that a key moment of truth occurs within the first ten minutes of arrival, defining the entire experience. Thus, the lobby environment has become a key touchpoint throughout its properties. Most recently, the latest evolution of this focus was introduced—LeMeredien Hub—at its Barcelona hotel. The multi-faceted concept includes an entryway with high-impact arrival art and an "interaction zone" with coffeehouse style seating and attitude, with a collection of books on local cultural highlights and cultural events planned.

Customer Experience—Deconstructed

As the Zappos, The Cosmopolitan, and Starwood experiences exemplify, there is no such thing as a singular customer experience. It's really comprised of many interactions, moments of truth, and touchpoints. And the experience is one that is likely to change over time. That makes the task of evaluating all the elements that feed into it a daunting task.

It has led Prophet to develop techniques to better understand the customer experience, apply elements of what the brand strategy should be at different points of interaction, and innovate around them in ways that will engage customers more meaningfully and profitably. We call it Experience Attribute Mapping (EXAMsm), a means to deconstruct, evaluate, and change the very complex customer journey in a manner that is a lot more manageable.

There are various ways to go about this. Typically, it involves the people in the organization who are actually involved in delivering the experience as they know where the bottlenecks are. Applying EXAM along the path to purchase, for example, we would work together in identifying the key touchpoints of the customer’s experience, highlighting their most important elements, and defining their specific objectives (brand or business).

Then we find ways to measure how well the experience is being delivered. Click-throughs on a website, for example, would show how well people are engaged to go to the next level of the transaction.

This is the approach we took to help Emart, South Korea's largest retailer, reinvent the customer experience in three distinct store formats. One, for electronics, had been set up almost like a manufacturer's showroom or a mom-and-pop outlet. Observation showed it created a less-than-optimal experience where customers could basically see but not touch or interact with products at hand. To better deliver, the stores were redesigned to deliver a more tactile experience—fixtures that were more welcoming, products out for more hands-on experimentation, and knowledgeable employees focused on one-on-one information sharing.

The Experience Is the Thing

Creating and delivering a customer experience that wins hearts and minds can be a huge and profitable differentiator. But at a time when touchpoints are proliferating and resources are limited, identifying those that matter most and can best be leveraged for maximum impact is the challenge. Understanding the nuances takes a blend of insights and creativity and focus. And those that get it and act accordingly will be the biggest winners.


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