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Fortune Partners Article
The New Brand Battleground
In today’s customer-empowered environment, consumers have never had so much choice and companies have never had so many challenges. It’s no longer enough just to have a great product or service, or even a superior customer service solution. Customer experience — the ongoing interaction with a company – is the new battleground over which the struggle for consumer loyalty is being waged.
“We live in a world of product proliferation,” says Doug Stephens, a retail futurist, author and founder of the consulting firm Retail Prophet. “It’s a given now that not only what you sell, but how you sell it, is what differentiates you.”
No industry is immune. Whether you’re a business-to-consumer company or business-to-business, customer loyalty is driven by the buyer’s feelings about doing business with you.
According to a recent McKinsey report*, successful companies have something in common: Almost every one “recognizes that it is in the business of customer experience.” Not only do customers increasingly dictate the rules of that experience, “they expect high levels of satisfaction from the savviest practitioners and the sleepiest industry participants alike. Companies that work to master this dynamic become superior competitors.”
Where customer experience historically ended with a customer satisfaction survey detailing a good or bad customer service interaction, today it’s all about building an experience to last a lifetime.
Benefits to the Bottom Line
Of course, most companies wouldn’t obsess over customer experience if they didn’t see benefits to the bottom line. While customer feelings may be hard to measure, spending speaks volumes.
A recent Forrester study compared the revenue growth of companies with superior customer experience to that of direct competitors with “a comparatively inferior customer experience.” Customer experience leaders grew revenue by 17 percent compared to three-percent growth for the laggards. In terms of industry growth, a Bain & Company analysis shows companies that excel in customer experience grow revenues four-to-eight percent above their market. The revenue multiplier here involves converting loyal consumers into brand promoters who “buy more and represent a lifetime value that can reach six-to-14 times that of detractors,’’ depending on the industry.
But while the value of a superior customer experience is irrefutable, the way it’s achieved is less clear. There is no one-size-fits-all path to CX success. Rather, good customer experience is a mindset. It’s not just about setting the right expectations on the front end, or delivering superior customer service on the backend, it’s about putting the customer at the center of your business strategy, anticipating their needs, and proactively engaging them in new ways.
Disrupting Industries, Serving Customers
Putting CX at the center of your business strategy can also serve as the strategy for disrupting an industry. For example, when Warby Parker first launched, a single eyewear company controlled 80% of the industry. In order to disrupt this monopoly the eyewear upstart focused on the customer experience, transforming the way people looked at the prescription eyewear buying process from price to post-sale follow up. Combined with a $95 price point, the company launched with a unique CX model, shipping five pairs of glasses to customers who could then try them on at home. After five days, these customers simply shipped back the glasses they didn’t like in prepaid packaging.
The approach proved so popular the company quickly ran out of glasses and even had to broaden their unique approach to include physical storefronts, where the customer continues to be the center of the experience, from being greeted personally at the door to the physical layout of the stores themselves.
As Stephens notes innovative, CX-focused companies transform expectations around the way consumers interact with their product or service. “They realize it may not just be the product that’s broken, it’s the way we use and buy it.”
They also learn how to evolve with changes that impact their industry, especially involving technology and how technology can help better serve their customers. Jeannie Walters, founder of CX consultancy 360Connext, cites Domino’s Pizza as a company that has turned itself around over the last decade by adapting one of its brand hallmarks – your pizza arrives in 30 minutes or you get the next one free – to new technology. The Domino’s Pizza app lets customers order their favorite pie in a click, and then use GPS to track their pizza from the moment it comes out of the oven until it’s delivered at their door.
Today, nearly half of Domino’s orders come from their mobile app. In an industry where competitors are desperately trying to gain share, Domino’s took the lead because of their ability to adapt their signature service to consumer behavior through a technology platform that aligned with that behavior. Their new CX strategy delivered.