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Customer Experience Trends for 2012 – Part 2

2012 is fast approaching. To make sure your customer experience resolutions are more practical this time around, we are providing you with our thoughts on some customer trends in 2012.

Trendwatching.com have put together “12 Crucial Consumer Trends for 2012”. This provided a brief overview of 12 “must-know” consumer trends to assist companies in exploring creative and innovation opportunities to meet the changing needs of the consumer.

Last week we brought to your attention, the customer trend of ‘red carpet’ – where businesses personalises their service offerings to make customers believe they are individually valued by the company. The next consumer trend of great value to service design is ‘Dealer Chic’.

Dealer Chic is a consumer trend which suggests that customers are becoming conditioned to expect deals for everything.

Remember the time you waxed lyrical to a friend about your gastronomic experience at Kobe Jones. Your colleagues’ jealousy made you feel proud and superior… right up until the time your mate agreed on how good it was and added in the fact that he used a voucher, which brought his bill down to half the embarrassing total you paid.

Securing the best deal is becoming a ‘way of life’ and a way in which customers gain pride and status. There is no longer the need to hide one’s Chinatown-style haggling abilities; rather it is becoming a source of status and perceived smartness.

The ‘deal ecosystem’ has grown exponentially over the past few years. But you also know that deal hunting has become a more mundane exercise when you and your friends are no longer religiously ‘jumping on it’, looking for the best ‘Ouffer’ and anticipating your daily scoop—‘scoopon’.

What this trend is indicating is that the deal-driven market is now maturing before our eyes, the excitement over the daily deal is quieting down and consumers can very conveniently access most organisation’s prices and reviews online. For this reason most customers are only interested in genuine deals where the price is not only ridiculously discounted BUT also provides superior merchandise and a high quality service experience.

In 2012, more than ever before, customers will become more deal-savvy. “Over 40% of coupon ‘enthusiasts’ now have a household income of over USD $70,000 (Source: Neilsen, April 2010)”— people who are seeking deals are savvy, sophisticated and experienced. So trying to use a deal to trick or mislead customers to come through your doors will remain a short and destructive business strategy.

Why? Because both first- time and experienced customers are merciless and willing to exercise their deadly weapon of word-of-mouth upon any company who fails to deliver the entire experience – products + service. At the same time these deal-savvy customers generate a large volume of negative reviews: a ratings nose-dive and limited referrals if the experience isn’t up to scratch.

Another problem that arises here is that whilst organisations and brands attempt to leverage the “deal a day” strategy to create new business – they are unable to convert first time customers into long term, loyal repeat customers which ultimately is the main goal of providing a deal.  This means not only you lose your opportunity to drive revenue by providing the deal, but it also costs the organisation even more by having potentially loyal customers crowded out by the volume of first-time-and-last-time customers.

What this trend really means for those in the customer experience businesses is that, gone are the days where a great deal amounts to just having a no-frills customer experience or where a large discount excuses an awful customer experience. In 2012, great deals will not only need to give customers a “great” deal, but the ‘great deal’ will need to provide customers with an “even-greater experience” to realistically turn a deal into a longer term customer and hence profit opportunity.

Organisations that rely on one major customer touchpoint to provide this “even- greater” experience will find themselves coming up short. In order for the experience to be “even-greater”, customers will expect all points of contact with the organisation to be delivered in an “outstanding” way. This will require organisations to surpass the customer expectations at key touchpoints on either side of the transaction itself.

By way of example, the discounted package of home and car insurance provides the basis for a positive customer experience. However what will create loyal and raving fans won’t be the agreeing to terms of the contract rather it will be; the ten-second wait on the phone to the operator, the warm greeting from a customer service representative, the correct information when requested and a valuable follow-up phone call. That’s what makes the “even-greater experience”.

The next trend that we will be talking about is ‘flawsome’ where customers appreciate brands which are honest about their flaws.

In the meantime, below is an excerpt from the trendwatching article

3. DEALER-CHIC

For consumers, securing the best deals is fast becoming a way of life, if not a source of pride and status.

Image courtesy of thinkcvox

Deal hunting has become an integral part of daily life for millions of consumers. Yes, there are many new

and innovative ways in which brands are using promotions and offers, but consumer attitudes to discounts

and deals are what’s really changing.

Obviously, consumers have always loved getting good deals or exclusive rewards, but rather than having to

hide one’s haggling, securing the best deal is now accepted, if not admired by one’s fellow consumers. In

fact, it’s now about more than just saving money: it’s the thrill, the pursuit, the control, and the perceived

smartness, and thus a source of status too. Just three reasons why DEALER-CHIC is set to get bigger and

bigger in 2012:

•          MORE FOR LESS: While many people in developed economies may have less money to spend right now, consumers everywhere will forever look to experience more.

•          THE MEDIUM IS THE MOTIVATION: Consumers are now being alerted to, using, reusing and sharing offers and deals via new (and therefore infinitely more exciting and attractive) technologies.

•          BEST OF THE BEST: With instant mobile or online access to not only deals but reviews as well, consumers can now be confident they’re getting the best price for the best product or service.

If you would like to read more about ‘Dealer-Chic’ as a trend for 2012, please press

http://trendwatching.com/trends/12trends2012/?dealerchic One of the world’s leading trend firms, trendwatching.com sends out its free, monthly Trend Briefings to more than 160,000 subscribers worldwide in 9 languages.

Customer Experience Trends for 2012

It’s that time of the year when you start to draft your New Year resolutions and you want to have a glimpse of what’s ahead to make sure that this time around the resolutions are achievable.

Trendwatching.com have put together “12 Crucial Consumer Trends for 2012”. They provided a brief overview of 12 “must-know” consumer trends to assist companies in exploring creative and innovation opportunities to meet the changing needs of the consumer.

The top 5 consumer trends that we found most relevant to the customer experience are:

  1. Red Carpet
  2. Dealer-Chic
  3. Flawsome
  4. Emerging Maturialism
  5. Point & Know

One of the first consumer trends we thought relevant was— ‘red carpet’

Red carpet as a trend is explained as when businesses tailor their services and perks to pamper customers with (an individual-level of) attention and respect.

I think what they are trying to say is that the customer experience is a highly subjective experience. The customer touchpoints that offers this experience can be identified and staged but the human element at each touchpoint puts a ‘one-size-fits-all’ design out of the question.

If it’s not ‘one-size-fits-all’, then there must be some sort of customisation? So, the key to providing an engaging and memorable moment is through…personalisation. Personal connections can be established when you treat customers like humans and be human when you are serving them as well.

To roll out the ‘red carpet’, you will need to provide your service with personality.

The customer experience is ultimately the ‘sum-totality of how customers engage with your company…throughout the entire arc of being a customer’.

I think what this trend really means is that all customers enjoy being greeted by the ‘red carpet’ and in competitive times, customers, more than ever before; take pleasure in receiving individual attention from you. Customisation and personalisation drives individual customer satisfaction, consequently enhancing the customer experience quality.

You need to help customers feel that they are receiving individual attention, without compromising your productivity goals. The logic of this is described in the concept of ‘mass customisation’ (introduced by Pine 1993) where firms need to strike a balance between standardisation (for productivity reasons) and customisation (for customer satisfaction reasons).

Your job is to make customers believe that the ‘red carpet’ is a unique arrangement for them to individually enjoy, whilst you can safely report to your boss that the carpet is simply a welcome mat resting at the entrance of the company.

Or another way of saying it is to appear as though you are only killing one bird with one stone.

In our next blog post we will be discussing the consumer trend of ‘Dealer-Chic’ where the consumers’ desire for discounts and deals has become a way of life, consequently playing a key role in the customer experience.

In the mean time, here is an excerpt from the trendwatching article.

1. RED CARPET

In 2012, businesses around the world will shower Chinese customers and visitors with even more tailored services and perks, and in general, lavish attention and respect.

China is the new emperor, and outpaced companies, flailing nations and even broke monetary unions are looking to the Chinese to bail them out. No wonder red carpets are being rolled out wherever Chinese politicians and CEOs currently set foot. In 2012’s global consumption arena we see a similar picture: department stores, airlines, hotels, theme parks and museums, if not entire cities, around the world are going out of their way to shower Chinese customers with tailored services and perks, and in general, lavish them with attention and respect.

Some stats:

  • Chinese residents made over 30 million overseas trips in the first half of 2011 alone, up 20% since 2010. For comparison, US citizens made only 37 million outbound air travel trips during the whole of 2010 (Source: China Ministry of Public Security, July 2011; Office of Travel and Tourism Industries, September 2011).
  • And that’s just the beginning: The World Tourism Organization has estimated that the total number of outbound tourists from China will reach 100 million by 2020.

Count on Indians and Brazilians to be on the receiving end of the RED (OR ORANGE OR GREEN) CARPET trend too. Some examples:

  • In July 2011, Hilton Hotels Worldwide created a service targeting Chinese travelers. Called “Hilton Huanying” (Mandarin for “welcome”), the program is available at 30 Hilton hotels across the world, and offers tailored assistance for Chinese guests, including check-in in their native language and in-room facilities such as Chinese tea and television channels, as well as slippers and a welcome letter in Mandarin. There’s also a breakfast buffet available, with congee, dim sum and fried noodles on the menu.

If you would like to read more about ‘Red carpet’ as a trend for 2012, please press http://trendwatching.com/trends/12trends2012/?redcarpet  One of the world’s leading trend firms, trendwatching.com sends out its free, monthly Trend Briefings to more than 160,000 subscribers worldwide in 9 languages.

Empathy the missing ingredient to drive experience innovation

Two years ago I read a book by Dev Patnaik called “Wired to Care” which had a profound impact on the way we go about conducting our business and  how we approach getting close to customers to truly understand them. The book is about empathy, about really understanding customers, not just demographics and market research reports. Empathy that places you in your customer’s shoes and enables you to make the right decisions for customers because you really truly understand their life and their emotional drivers.

In light of that, I liked the following article by Jorge Barba, simple lessons but never-the-less, good ones to help turn your most valuable customers into raving fans.

Recently I was in Mexico to have lunch with a friend. I went to pick him up from from a meeting but had to wait a few minutes outside of his offices. As I was waiting for him I parked in front of a pharmacy and it dawned on me that in this particular area there where five pharmacies in about a half mile radius. These pharmacies all looked alike, they were not from the same brand and the only distinction was the color of their walls. I have no doubt they operate the same way. It got me thinking about how I could differentiate one from the others…

Experience innovation is a difference maker

Innovating an experience improves or reinvents the customer experience in the purchase or usage of a product or service. Companies such as Disney stand out as a prime example of what it means to innovate a customer experience. Apple is right there too with their Apple store. The reason both stand out is because they’ve , says Scott Gould.

Another great example of a company that stands out is Umpqua. We all know what a traditional bank looks like, well :

Umpqua’s 15-year track record of growth has little to do with the products it markets, which are virtually identical to the products offered by other banks. What’s distinctive about Umpqua has to do with how it offers those products — its commitment to reimagining the experience of interacting with a bank. Davis puts is this way: “If you took a person, blindfolded them, sent them to a bank, and took the blindfold off, 99% percent of them would say, ‘I’m in some bank somewhere.’ We want our customers to say, ‘I’m in an Umpqua bank.’ We don’t want the experience of banking here to feel like banking anywhere else.”

That’s why Umpqua designs its branches to appeal to all five human senses.

What Umpqua understands it that to be and stay relevant, you have to be different in every sense of the word. Not just ‘be different’ as marketing ploy, but ‘do different’ and make a difference.

The entire article can be accessed here

Is customer focus overrated?

I thought it is always useful to look at alternative points of view regarding customer focus. Below is the first part of a good article by Professor Martin Koschat from IMD in Switzerland. He makes a good case that not every company needs to rely on being customer focused to be successful. Although correct, you need to either be so operationally excellent that you can achieve a price advantage on a sustainable basis or you have an innovation pipeline Steve Jobs would be envious of. For everyone else, being customer centred and using a Service Design approach to understanding, designing and executing a great service experience is a great choice if you wish to keep more customers who spend more with you every year.

There is no shortage of extremely successful companies with business models that critically depend upon a high degree of customer proximity and the ability to generate detailed insights into customers’ needs, wants and behaviors – those buying habits and attitudes pivotal in shaping and directing the whole organization. In other words, companies that are customer centric. Yet, there are also many successful companies that don’t go out of their way for customer proximity. By looking at companies that operate on both ends of the spectrum, it becomes clear that customer centricity is not a virtue.

It is well known that BMW delivers superb engineering. Perhaps less well known is the fact that BMW tightly controls the supply chain downstream by owning most wholesale operations and many of its retail outlets. By doing this, BMW enforces, and ensures, the uniformly high level of service befitting a top luxury brand. At the same time, this proximity to the consumer provides direct and timely insights into consumers’ shifting perceptions and tastes.

Nordstrom, a US department store chain, consistently ranks at the top in terms of customer satisfaction surveys. Shopping is made to be a rewarding experience. Nordstrom’s personnel is carefully selected and trained to help customers along the path of finding what they want or need and, in the process, identify and present new products they never knew they needed. Invariably, customers often leave a Nordstrom store with more than what they had planned on buying. The level of Nordstrom’s customer engagement is in line with the retailer’s sales strategy.

For the balance of the article, please click here.

Raising expectations (and then dashing them) via Seth Godin

I lose count how many sensible things Seth Godin says every month. Here is another, which makes load of customer and business sense. Ponder it next time you are involved in signing off on a new round of advertising that you know is promising a customer experience you have little chance of keeping.

Several years ago in a previous life, I worked with the CEO of a large Australian company that wanted to communicate to their customers that their service solution was “one touch”. The only problem was, it was actually ten touches. Imagine his customers disappointment when they bought the idea of “one touch” only to find out it was actually ten times more diffcult.

In a Service Design world, we believe Branding is the promise you make; Customer Experience is the promise you keep. By understanding what customers really value, you can help organisations keep their customer promises and maximise financial profitability….and at the end of the day, that is what we should all be about when developing world class Service Designed experiences.

Have you noticed how upbeat the ads for airlines and banks are?

Judging from the billboards and the newspaper ads, you might be led to believe that Delta is actually a better airline, one that cares. Or that your bank has flexible people eager to bend the rules to help you succeed.

At one level, this is good advertising, because it tells a story that resonates. We want Delta to be the airline it says it is, and so we give them a try.

The problem is this: ads like this actually decrease user satisfaction. If the ad leads to expect one thing and we don’t get it, we’re more disappointed than if we had gone in with no real expectations at all. Why this matters: if word of mouth is the real advertising, then what you’ve done is use old-school ad techniques to actually undercut any chance you have to generate new-school results.

So much better to invest that same money in delighting and embracing the customers you already have.

How to turn Leavers into Lovers…baby

When American Express decides it’s time to stop treating customer complaints as a cost centre and start using the opportunity to get closer to their customers and build a stronger relationship with them, it’s time to sit up and take notice!

Over the past 12 months, the Chief Marketing Officer of American Express came out and said in effect they had been ignoring one of the strongest and most important branding tools at their disposal…the telephone. This isn’t an article about Amex, it is a guide to assist those sitting in organisations on how to turn a customer who is on the verge of leaving you and how to turn them around to becoming your most loyal advocate.

Taking a Service Design approach and getting closer to your existing customers so you can find out how to better serve them has to be one of the smartest investments for service providers. It sure beats spending millions on TV making more promises you are not structured to deliver upon(that is is another post altogether).

From Inc. Magazine, they have compiled eight expert tips for dealing with the toughest customers. Here’s how it’s done right.

Want some old advice? The customer is always right. Okay, now you can stick that in your pocket. Today’s best service entrepreneurs are looking beyond old axioms in relating to customers. That’s because today’s best customer service isn’t something that can be faked: it’s personalized and it has a personality. Do you have the certainty you can harness all the feedback customers will give your company, act on it, and keep your best customers coming back for more? We’ve compiled highlights of new expert tips from articles in Inc. and guides on Inc.com to help you take a fresh look at making your customers happier and your business better.

1. Ditch the formalities and break the rules.
The last thing unsatisfied customers want to hear is a recitation of your company’s return policies, Tali Yahalom writes on Inc.com. “Today’s customer expects to be treated as an individual, not as just another number who’s complaining,” Ann Thomas, a senior consultant at Performance Research Associates, a Minnesota consulting firm, says. Consider the case of a department store with a 90-day deadline for returning an item. If there’s a customer who just got married, returned from her honeymoon and, at day 100, realized that a gravy plate adorned with doves is actually not her style, it’s worth looking into alternative options rather than sending her home right away. Your company should know that occasionally bending the rules will ultimately cost less it than it would to lose the customer or, worse, if the customer leaves and relays a negative story about your company. Read more.

2. Don’t give customers too much choice.
What happens when you give customers too much say in how you make what they buy? “Quite simply, overly-demanding customers can undercut your ability to grow a valuable business,” writes John Warrillow, serial entrepreneur, author, and Inc. contributor. He explains that when trying to scale up a subscription research offering similar to a Bloomberg or Forrester research program using a model by which a customer subscribes to a pre-set number of reports provided to all, things started to derail. His company was customizing each report for the 17 subscribers, meaning an annual 102 reports based on six studies, which was untenable for the company’s 20 employees. Warrillow shut down the program. The lesson? “In hindsight, I realize a big part of the problem was my involvement in the selling. I’m just too tempted to make a sale at just about any cost. Next time, I’ll know better than to let my sales instincts undermine my entire business model.” Read more.

3. Monitor your reputation online. All the time.
“Facebook, Twitter, and Yelp have become essential components of many companies’ online marketing strategies, but there are countless other sites on which customers rant and rave about their experiences,” writes Inc. reporter April Joyner. When customers rant online, it has the potential to tarnish a company’s brand—and scare away prospective buyers.  There is a host of new tools to monitor what’s been said about them online. “Eighty percent of companies do fine with Google Alerts,” says Andy Beal, founder of Trackur, an online monitoring software company. “But once you have 30 different keywords to monitor, you’ll outgrow it very quickly.” Companies such as Trackur, Radian6, and Viralheat offer Web-based dashboards specifically designed to monitor multiple brands. Though the most expensive of these can cost more than $6,000 a year to use, many services offer less expensive packages for small businesses, Joyner reports. Read more. 

4. Shut up and listen.
It sounds simple, and it sounds easy, but it’s often not. When a customer starts ranting, just listen.  Tali Yahalom writes on Inc.com: “Often customers feel the needs to vent frustration with a product or service before even considering a proactive solution.” And Thomas told her: “Acknowledge the customer’s emotional state,” Thomas says. And don’t get defensive. Remember that a good empathy statement does not imply ownership of the problem. Another key communication tip involves asking open-ended questions that involve the customer, Thomas says. This technique will not only divert focus from emotional frustration but also generate copious information about the problem at hand and help you arrive at the appropriate solution. “Rather than getting defensive … I need to simply listen to the customer, accept the feedback, thank the person, and then decide what to do,” she adds. As a bonus, the customer might feel appreciated and cared about, alleviating some of their emotional frustration. Read more.

5. Collect lots and lots of customer feedback.
Several companies offer tools that let customers submit feedback and vote on suggestions. Although all of these services offer some basic features for free, they typically require business owners to pony up for paid versions in order to moderate customer comments and integrate the tools into their company websites. With Get Satisfaction, customers can report problems, ask questions, submit ideas, and offer compliments. The most popular package for small businesses, priced at $89 a month, includes design customization and an analytics dashboard. Other options, such as IdeaScale, UserVoice, and UserEcho, are priced from $15 to $589 a month. Read more.

For all 8 tips click here

Is keeping your customers reliably satisfied a good strategy?

Your “average” performance may look pretty good on paper, but to clients’ eyes, consistency is the only measure that matters.

I found this this article off Business Week, (original here) from 2005 and although 5 years old, it still has good advice for anyone in an organisation that is working towards providing their own customers a great service experience.
I heard Jack Welch speak recently when he came to town to promote his new book, Winning. The former CEO of General Electric (GE) said something I’ve been chewing on all week. He told us that customers prefer a consistent experience, vs. an occasionally great one. Frankly, I had never given this idea much thought before.

Welch gave the example of a company shipping parts to a customer. Their packages arrived on Day 5, Day 10, and Day 15. Logically, you could say that the parts arrived in an average of 10 days. In reality, after 15 days, the customer is furious, regardless of the previous quicker deliveries. The pleasure from Day 5′s arrival did not cancel out the anger of Day 15′s.

THE EUREKA MOMENT.  His point is that customers don’t care about your averages. They want less variation and more reliability. Variation, Welch says, leads to “unpleasant surprises and broken promises.”

The same week I heard Welch speak, my friend Georgia Patrick called. She has been an ace marketing consultant for more than 30 years. When I asked her what was new, she laughed as she said, “In your presentations, you talk about the importance of selling as a system. In your conversations with me, you have emphasized that you don’t have a lot of things to remember, but you do need to have a system. You’ve pounded it into me that it’s the ‘sticking to the system’ that works, 100% of the time.” She was so excited about this “eureka” that I took note of it — systems.

Jane Sandlar is a longtime friend who told me something years ago that I have never forgotten. She said a key to success for her award-winning technical-writing company was the power of duplication. That is, she did one thing well and repeated it, vs. doing 50 things one time each. She developed a standard system for selling, creating, and producing the deliverables, and then duplicated it so all customers received a consistent experience and product.

SIXTY-PERCENT SOLUTION.  Consistency. Systems. Duplication. There’s a common denominator from these three experts. If you develop selling and business systems and duplicate what works, you will produce a consistent, reliable customer experience. The result is you’ll have happier customers, more sales, and more referrals. Voila, The payoff from the science of selling!

Now let’s look a little more deeply at consistency. Welch is a huge fan of Six Sigma, the well-respected quality-improvement program. However, he frankly admits just the mention of it makes eyes glaze over, and he even titled a chapter in his book, “Six Sigma: Better than a Trip to the Dentist.”

Welch calls the process “an extremely powerful way to boost a company’s competitiveness.” I’ll spare you the details — he said you’re 60% of the way to becoming a Six Sigma expert if you just understand that “variation is evil.”

WORD OF MOUTH.  Getting 60% of the way there by keeping three words in mind works for me. To see the power of this phrase, just look at how variation is evil in your own buying experiences. When you’re told by the airlines that your flight should arrive at 10:14 a.m. but instead you arrive at 10:44, you may be hopping mad — and you wouldn’t be consoled one bit to hear that last week, this same flight came in a half-hour earlier than scheduled.

Your flight was on time on average, but that’s benefit to you. The next time you’re booking a trip, you’ll probably be more inclined to fly a different airline because of the inconsistent experience you had on the previous flight.

The benefit of consistency shows up very clearly when you consider one of the most profitable sources of sales — referral business. How would you like to have one of your customers recommend you and your outfit and then add: “I’ve bought several of them from Carl, and once I got one that was the best I’d ever experienced. Of course, I also had one from him that was a real dud, and it cost me a lot of downtime and frustration.”

GETTING STICKY.  Or would you rather have her recommend you and say: “I’ve bought several of them from Carl, and every one has worked exactly as I expected. I don’t need any surprises from my vendors. Life has enough surprises. I’ll probably always buy them from Carl.” Just imagine the impact on your sales volume if all your customers spoke this highly of buying from you. That’s the power of consistency on your selling results.

Welch calls this benefit customer stickiness. That is, you want them to stick with you as a vendor and buy from you again and again — and tell their friends about you too. This is much more likely to happen if they can have a reliable, predictable customer experience.

Selling really is part science. Jack taught us the importance of consistent customer experiences. Georgia reminded us to create and follow systems. Jane shared her secret about the power of duplication.

Becoming more consistent, using systems and duplication in all aspects of your selling and business is a good goal. Better yet, as you repeat and improve your systems, you’ll have more customers who are more satisfied, resulting in more sales. Then you’ll blow right through your sales goals and quotas. Happy selling!

Build a Better Business Model – and apply to new Services

A good podcast on building better business models, an increased focus for us at proto partners this coming year. Click here to hear the podcast on the HBR blog. A lot of the Discovery work we undertake is often uncovering new business (service) opportunities by changing the business model for the new proposition. It is clear that the Business Value that accrues to the organisation that is open to investigating new value chains is an opportunity for Service Design to quantitatively demonstrate not only customer, but business value.

Featured Guest: Rita McGrath, Columbia Business School professor and coauthor of Discovery-Driven Growth. Her interview, When Your Business Model Is in Trouble, appears in the January-February issue of HBR.

12 Customer Experience(Profit Improvment) Trends for 2011

It’s nearly the new year and time for some 2011  Trends for designing better services that create improved business value for the organisations that employ them. This was posted by  Omar Zaibak on December 13 on Customer 1. Like all these things it is a good guide and provides some different ways of thinking about how to achieve the much needed balance between creating customer and business value. Enjoy.

Customer experience as a business strategy and competitive differentiator continues to gain traction with corporations around the globe. Here are 12 customer experience trends to look out for heading into 2011.

1, Mobile Customer Experience Matures

The mobile channel continues its explosive growth in adoption, with more than 96% of US consumers owning a mobile phone and almost half with a smart phone according to a recent study conducted by Sterling Commerce and Demandware. The study shows 15% of consumers have used mobile to make a purchase, and almost a quarter to compare prices or products.

As mobile adoption grows, organisations are reacting to improve the mobile experience. A successful mobile channel places intuitiveness, simplicity, and usefulness as core guiding principles. In many ways, the necessity of such principles in mobile experience design can help ensure a smoother experience than other channels.

Mobile adoption in the retail and financial sectors is helping drive more streamlined and targeted experiences for users. I took the dive into mobile banking this year and must say I enjoy it more than the web experience. Why? Less clutter, simpler, and fewer steps to accomplish my objectives.

2. Customer Expectations Impact the Experience

The impact of a customer’s expectations on their experience cannot be stressed enough. It is vital that you set their expectations as early and clearly as possible. Otherwise they will set their own expectations, and react negatively if they are not delivered. This drives up support costs while negatively impacting customer satisfaction, a deadly combination.

Ensure all your customers are provided with clear expectations that you exceed. The perception of over-delivering on your promises goes a long way in establishing customer trust and loyalty.

3. Voice of the Customer Adoption

Emotions account for over 50% of an experience, as Colin Shaw points out in The DNA of Customer Experience. Because a customer experience is inherently emotional, qualitative data is the best way to capture and understand it.

This has led to increasing adoption in Voice of the Customer (VOC) programs, which aim to capture customer expectations, preferences, and satisfaction. Bruce Temkin describes VOC as “A systematic approach for incorporating the needs of customers into the design of customer experiences.”

Successful voice of the customer programs provide organizations with the feedback they require to continually develop a better customer experience. Think of them as the data that drives the customer experience modeling process. The necessity of optimizing the customer experience is leading to more of these programs being adopted and embraced.

4. Revenue vs Cost

Organizations that sacrifice customer experience quality in order to save costs are all too common. However, more and more organisations realize that consistently delivering great customer experiences increases revenues AND decreases support costs at the same time.

As a result, smart organizations do not view customer experience and cost as a balancing act where one must be sacrificed at the expense of another. As customer experience maturity grows, these organizations realize that an investment in customer experience can actually lower costs more than budget cutting in the medium and long-term.

5. Interaction Channel Growth

New customer interaction channels are created and evolve each year. This creates both an opportunity and challenge for organizations. Customers have more and more control over how they would like to interact. The more channels an organization offers, the more likely the customer can choose their preferred channel, inherently creating a better experience.

6. Cross-Channel Experience Still a Challenge

The rate of new channels being created and adopted by customers creates a significant challenge for organizations. How to create a consistent, seamless experience across rapidly growing channels? Unfortunately many organisations are plagued by channel silos, each with their own processes and customer data sets. This makes creating an enjoyable, cross-channel experience difficult if not impossible. Organisations must learn to break down these silos and model the experience across them. Channels should share one view of the customer, be modeled on one set of guiding customer experience principles, and allow easy escalation between channels. Only the most advanced customer experience organizations do this presently, as it remains a formidable challenge.

7. Social Media Impacts Experience

Social media continues to disrupt and change the fabric of customer experience. The experience is no longer driven by just the organization and the customer. Because of social media, expectations and experiences are rapidly shared and distributed between peers. This increases the importance and impact of each customer experience.

8. Power Shift: Companies vs Customers

The customer experience is increasingly being shaped by communities and peers. Technologies like peer reviews and ratings are influencing the customer experience. Customer communities now more than ever are positively influencing the experience in many cases. These communities frequently deliver faster and more accurate responses than could have been delivered by the organization alone, contributing to a much greater experience, even if it was not directly delivered by a company’s representative.

9. Retailers and Hotels Provide the Best Experiences

The leading industries in Forrester’s Customer Experience Index 2010 were retailers and hotels, receiving scores of 82% and 80% respectively. Customer experience has long been a key differentiator in these industries, and as a result it is an area they continue to invest very heavily in. Years of experience has led to significant customer experience maturity in these industries, and we expect them to continue to lead the pack in 2011.

10. Health Insurers and Service Providers Deliver the Worst Experiences

For one reason or another, health insurance companies and service providers deliver the worst average customer experiences out of any industry based on Forrester’s Customer Experience Index. Here are some theories why:

1. Customer experience is viewed strictly as a cost that would cut into profits
2. Competition’s customer experience is no better, resulting in less pressure to improve it
3. Poor customer experience is not impacting high profit margins

It seems like poor experiences are the status quo in this industry. Until poor customer experience has a more significant impact on the bottom line for these organizations, I expect them to stay on the bottom of the list.

11. Customers Co-Create the Experience

Savvy organisations realize the value strong customer experiences bring. What better way to design an optimal customer experience, than having your own customers contribute to its design? This reduces the level of optimization and tweaking of the experience organizations would have to do later on. Most of the leading customer experience organizations embrace this method today, and as other companies become more mature, look for this trend to increase.

A Vovici Customer Experience IQ study performed in 2009 reveals some of the key benefits companies are getting out of customer experience management programs:

1. Increase customer loyalty
2. Increased customer satisfaction
3. Greater positive word of mouth
4. Excellence in customer service
5. Increase revenue
6. Increased profits
7. Increased staff satisfaction

Getting customers involved in the design of the customer experience is an encouraging trend growing in 2011.

12. Customer Experience A Bigger Priority

As outlined in Bruce Temkin’s “The State of the Customer Experience, 2010″ 90% of North American companies with revenues of $500 million or more view customer experience as critical or very important to their company’s strategy. Organizations are increasingly realizing the benefits of improving the experience they provide, so look for customer experience to grow as a priority for more organizations.

Using Customer Journey Maps to Improve Customer Experience

It appears like customer journey mapping is on the verge of hitting the mainstream if appearing in HBR is anything to go by. Adam Richardson from Frog Design has written a follow up article to his first on defining customer experience. This second installment looks at the first essential step of improving the experience you deliver, which is mapping out your customer journey.

Its a high level look at it, however if you don’t use this tool on a daily basis, it more than suffices for getting a relatively solid grounding. You can read the first five paragraphs here, or click here for the full article from HBR.

If you would like real world experience in using Customer Journey Mapping for your company and your customers, check out our Service Design Masterclasses which start in February, click here for more information.


 

A customer journey map is a very simple idea: a diagram that illustrates the steps your customer(s) go through in engaging with your company, whether it be a product, an online experience, retail experience, or a service, or any combination. The more touchpoints you have, the more complicated — but necessary — such a map becomes. Sometimes customer journey maps are “cradle to grave,” looking at the entire arc of engagement. Here, for example, is a customer journey timeline that includes first engaging with a customer (perhaps with advertising or in a store), buying the product or service, using it, sharing about the experience with others (in person or online), and then finishing the journey by upgrading, replacing, or choosing a competitor (re-starting the journey with another company):
At other times, journey maps are used to look at very specific customer-company interactions. By way of example, let’s look at a customer journey that doesn’t work well: home theater.

Anyone who has attempted to research, buy, set up, and use a home theater system knows that this is one of the most frustratingly complicated customer experiences in the consumer electronics realm. It makes buying a car seem trivially easy. Here’s a real sample of some questions asked by a prospective purchaser on a home theater forum:

“For HD and Blue Ray DVD HDMI audio I do not understand if any post processing is done on the 5.1 Lossless PCM channels from these players. Will DD PLIIx or THX 7.1 apply to these? What are the limitations?”

Don’t worry if you have no idea what this means — you shouldn’t have to. There is no good reason why a layperson just wanting to watch movies at home should be exposed to such complexity and jargon. Yet in home theater, such confusion is rampant. It’s a bad sign when there are numerous forums for customers to help each other out, as is the case in home theater, since it means that the manufacturers have utterly failed in creating a comprehensive customer experience. But it’s also an opportunity for smart companies: retailer Best Buy bought service start-up Geek Squad to solve exactly this type of problem.

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