And What Their Competitors Don’t Understand
Delivering outstanding customer experiences (CX) continues to be the standard for most businesses competing in the digital economy. It’s easy to understand why. Businesses have long known that satisfied customers buy more often, in higher volumes, leading to long term value and loyalty.
On one hand, much of this is obvious and widely known. But on the other, there are still so many companies that aren’t focused, or properly executing, on customer experience.
If you aren’t yet, here are 5 reasons your company should quickly become absorbed by delivering outstanding customer-experiences:
1. The Financial Impact
We’ll start with the obvious just in case you needed immediate convincing… the financial incentives to adopt this strategy are undeniable. The brands pushing wide scale initiatives to become “customer-obsessed” like Adidas, for example, are outperforming their counterparts. In fact, a study by Forrester Research found that these customer experience-driven firms outperformed the S&P 500 by more than 25% over a six-year time frame. Likewise, Bain and Company found that businesses obsessed with customer experiences grew revenues at a 4% to 8% higher rate than their competitors in a given market space.
As if these incentives weren’t enough, the downside of not pursuing this type of strategy is also notable. In the study cited above, Forrester also found that companies that did not improve their customer experiences fell more than 30% during the same six-year sample.
2. A Good Plan Today Beats a Perfect Plan Tomorrow
Customer experience expectations are on a fixed one-way trajectory. Just as the pace of innovation and creation of new technologies shaping the global digital economy are accelerating, so too are consumer expectations. Thinking of your business in terms of channels is a remnat of a soon-to-be bygone era. Consumers no longer care whether they’re online, offline, in-store, or mobile; they don’t differentiate. Personalization and customization have become table stakes. Poor mobile web experiences are immediate non-starters. Likewise, disconnected call center interactions without immediately accessible product information and customer purchase histories.
So even if you feel that your CX is currently “good enough,” the feeling could be short lived. Consumers frequently hold the top companies as the yardstick to which they compare all other experiences. All of this—from the inexorable pace of change to the new technology and channels, to constantly inflating consumer expectations—may seem daunting. As if you’ll never be able to keep up.
But that’s okay. The truth might very well be that you technically can’t—a study commissioned by Accenture concluded that only 7% of firms, including those that Accenture rated as “leaders” in this area, believed they were currently exceeding their customers’ expectations for a digital experience.
The important thing is to take action now to affect outcomes where you can. What expectations will tomorrow bring? No one knows, but the customer-obsessed companies care less than those that are paralyzed by analysis. They understand that expectations will continue to rise regardless, so they spend positive time and energy pulling the levers available to them in order to make each customer interaction better than the last.
In this regard, customer obsession is as much a corporate mindset as it is a technical or operational outcome.
3. The Changing Consumer Value Equation
Consumers are increasingly loyal to the companies that provide the best service and experience. They are also signaling that they are willing to pay a premium for it—one survey found that 86% of consumers said they would pay more to a company that provides a better overall customer experience. Further, customer experience is becoming so important that half of the same businesses surveyed said “CX” would be their most important differentiator by 2020, surpassing both products and price.
So if you’re planning a five-year strategy, how might you need to shift your investments to ensure you meet that standard? It’s not that product and price are no longer important, it’s that the businesses thriving in the digital economy are laser-focused on CX first and foremost.
Take Amazon, for example. While not every company can match their scale and long-term commitment to experimental projects, anyone can emulate their mindset, if they so choose. They’ve recently simplified their entire corporate mission statement to, “We seek to be Earth’s most customer-centric company.”
4. Technology is a Tool, Not an Outcome
To paraphrase Abraham Maslow, “to a man with a hammer, everything looks like a nail.” Yet a hammer isn’t always the best tool for the job at hand. Businesses that are obsessed with their customers see technology as a means to the end, and not the end itself.
This can be a tricky one, as businesses are not immune from “keeping up with the Jones’.” There is a subtle distinction between spending on a large digital transformation project because that’s what everyone else in the neighborhood appears to be doing, and doing so with a vision of very specific outcomes. Once again, mindset and planning makes all the difference.
So before you decide that your company simply can’t compete without the latest machine learning capabilities or customer chat bots, seek first to construct a multidisciplinary (business, IT, etc.) view of the big picture to understand the business outcomes they’ll reinforce.
5. Data Drives CX Differentiation
The most customer-obsessed companies understand that data is one of their biggest assets; it’s the fuel that drives differentiated customer experiences. But all companies have data. However, not all of them are pushing the envelope to delight their customers at each and every turn.
It’s not what data these companies have, but what they do with it. How they go about governing, managing, enriching and maintaining it. How they operationalize it throughout their business. What insights they draw from their analytics, and so on. After all, data is the new oil.
The top performing CX companies put great effort into properly refining their commodity in order to ensure that it reaps maximum value downstream.