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Best practices for customer experience

Research shows that companies with better customer experience win increased consideration, more loyalty and less churn. People talk about these brands--and they're even willing to pay up to 25% more for them.

The question is: What's behind great customer experience? With industry gurus arguing that soon "every company will compete on the basis of customer experience", that's an urgent question for marketers today.

Our latest white paper looks at seven ways brands gain competitive advantage through customer experience:
• Understand What Customer Experience Is--and Isn't
• Define Your Experience Platform
• Put Value on Experience
• Be Omnichannel Like You Mean It
• Listen to Customers (Duh, Right?)
• Own It
• Never Stop Reinventing
You can download the white paper or read it here–and do let me know if you’d like to learn more about how we can partner with brands to build customer experiences that drive competitive advantage.

Best practices for customer experience

  1. 1. Unpacking Customer Experience: 7 Ways Brands Gain Competitive Advantage
  3. 3. One of the most surprising moments at this year’s South by Southwest Interactive conference may have been when Wharton marketing professor Jonah Berger declared, to a room full of technology-obsessed movers and shakers, “We spend far too much time thinking about technology—and not enough time thinking about psychology.” Berger threw out this zinger as part of a presentation on word of mouth in which he argued that we over-emphasize channels of influence without first understanding fundamental drivers of influence. This is also true of customer experience. Customer experience is now recognized as a crucial area of investment for brands today. It’s been said that “Over the next decades, literally every company will compete on the basis of customer experience. In fact, they already do—most just don’t realize what that really means, what’s at stake, or how to do it well.” /3Unpacking Customer Experience Every Company Will Compete on Experience But while a lot of marketers seem to spend a lot of time thinking and talking about customer experience, it often seems we’re jumping to the hows before fully defining the whys. Often that means asking what technology—case in point: silver bullet du jour, Big Data—can do for customer experience, without first understanding what the customer experience should and could be for specific brands. So let’s look at fundamentals first. And let’s take the time to define what we mean by customer experience so that it’s not just an empty buzzword. In that spirit, what follows isn’t everything we need to know about customer experience—but 7 ways brands can gain competitive advantage. Liz Bigham 1 2
  4. 4. Customer experience is generally understood as the sum of a person’s interactions with a brand over time. Let’s be clear: • “Interaction” means connecting with brands in a back-and- forth way. Experience touchpoints aren’t defined by medium but by engagement. • Customer experience is much bigger than customer service; it’s a crucial ingredient of customer experience, but just one piece. • “Over time” means more than an event or moment. It can mean quite a bit of time—from the period of time it takes to fulfill a particular customer need to the entire lifecycle of the customer relationship. • There’s no singular customer experience. It varies from brand to brand and from customer to customer. 1 Understand WhatCustomer Experience Is and Isn t #1 Figure 1: A simplified set of customer experience touchpoints sampled from recent interactions with a “fast fashion” brand, shows the variety of different interactions. /4Unpacking Customer Experience Customer rewards Social Engagement Promotions Research on dotcom Visits to store, staff interactions Product use and feedback 3
  5. 5. At the heart of great customer experience is a clear definition of how the brand should behave—an experience platform (fig. 2). It’s second nature to marketers to ask “What’s the brand platform?” and to use that as the basis for how the brand is expressed in the market. We need to have similar expectations for customer experience: we need to ask “What’s the experience platform?” and use that as the basis for how the brand behaves in the market. The experience platform needs to become core to how we work with brands now—in the age of experience. Every experience platform should be unique not just because it’s core to the brand on a conceptual level but also because it can transform the business in very concrete ways. 1 Figure 2: Experience platform provides the basis for how brands behave /5Unpacking Customer Experience Customer rewards Social Engagement Promotions Research on dotcom Visits to store, staff interactions Product use and feedback DefineYour Experience Platform #2 Experience Platform
  6. 6. Again and again, research shows that companies perceived to have a unique brand experience gain clear competitive advantages: increased consideration, more word of mouth and even a price premium. Our own research has shown the value of experience (fig. 3). We’re not alone: Forrester has correlated superior experience to greater loyalty, increased word of mouth and lower churn; others have argued that people will pay as much as 25% more for a better experience. Better experience brings value to the organization—both through increased revenue and through cost avoidance. Show that to help justify investing in customer experience and to track its impact on an ongoing basis. /6Unpacking Customer Experience Put a Valueon Experience #3 4 5 I’m willing to pay a premium price if I know that I will have a great experience (percent agreeing) US 78.7% Overall 80.4% AUS 74.2% UK 74.9% China 93.8% US 60.6% UK 58.4% AUS 49.5% China 63.7% Overall 58.1% I’m more likely to consider a brand if I know I will have a great experience (percent agreeing) Fig 3 (Source: Best Experience Brands 2013)
  7. 7. According to a Time Inc. study, “people who grew up with mobile technology switch between devices and platforms 27 times per hour”. That in a nutshell is why “omnichannel” is so important these days: because consumers live in a world where they move constantly across channels, they expect brands to be consistently great across them. But while it’s easy to say “omnichannel” (yes, it’s a big buzzword) it’s much harder for brands to actually deliver on it. Consumers expect seamlessness; likely, they only pause during that average of 27 back-and-forths if an isolated touchpoint fails to deliver. At such moments, they probably don’t credit the brand for all the other 26 interactions that were great and recognize the challenge of stitching them all together with likely dozens if not scores of players and partners. They expect the customer experience to be uniformly excellent. They hold the brand accountable. Brands that invest in customer experience will by definition be more truly omnichannel. Two personal favorites: NPR, a media brand that’s perpetually expanding how it brings great content to the public; and vitaminwater, which set out to “make boring brilliant” and has invited its fans to bring a hugely expansive world of new ownable touchpoints to them. 1 /7Unpacking Customer Experience 6 BeOmnichannel LikeYouMeanIt #4
  8. 8. Great customer experience starts with a clearly defined experience platform that’s authentic to the brand and consistent across audiences and touchpoints. But as the name implies, customer experience can’t happen without an outside-in approach that embraces clear channels to elicit input from customers—and an active commitment to listening to what they have to say. Fortunately we have hugely powerful social channels and technologies that are pervasive in our world. As marketers we often think about using them for talking, but they’re even more powerful for listening. Indeed this is one of the ways that Big Data really benefits customer experience: not so much as a way of pushing information to consumers in ways that feel invasive, but as a better way of taking in information from them. /8Unpacking Customer Experience ListenTo Customers (Duh,Right?) #5
  9. 9. Who owns customer experience? In many organizations, there’s not one single person who’s empowered to truly own all of the touchpoints that influence customer interactions (often the complexity and sheer number of factors are big barriers). With ownership comes accountability; the opposite can also be true. That’s beginning to change. As companies have increased their investment in experience, they will look to experts inside their companies (as well as partners outside) to lead experience. The Chief Experience Officer, or CXO, is on the rise. So are CEOs who embrace putting experience at the center: think Howard Schultz of Starbucks, Steve Ells of Chipotle and Tony Hsieh of Zappos. /9Unpacking Customer Experience Own It #6
  10. 10. A brand that isn’t willing to update its customer experience is a brand with a limited future. The experience platform should be unique to the brand and relatively stable, in the same way that other elements of the brand are relatively stable. No brand would confuse its customers by changing its logo from month to month or from year to year, nor should it do so with its experience platform; it’s core. But customer experience has to be dynamic. If it doesn’t keep up with and reflect customer needs, there are going to be problems pretty quickly. Think of how brands struggle when their customer experience lags. RadioShack’s leadership has done a good job of investing in an updated customer experience and made my favorite Super Bowl ad—“The ‘80s called: They want their store back”—poking a bit of fun at themselves for waiting so long to do so. Their stock surged on the huge media that resulted from announcing this change in customer experience; its current struggles reflect the difficulty of actually delivering so much change in customer experience across every channel, in-store and online, when there’s so much catching up to do both externally and internally. 1 /10Unpacking Customer Experience Never Stop Reinventing #7 Customer rewards Social Engagement Promotions Research on dotcom Visits to store, staff interactions Product use and feedback Experience Platform Customer experience is dynamic and changing Experience platform is core and constant Figure 4
  11. 11. Again, now and the near future “literally every company will compete on the basis of customer experience”—so the question isn’t really whether but when to begin making it a priority. What happens when you’ve made it as far as knowing it should be a priority? To my mind, three simple things: 1. Take the time to understand and define how your brand should behave in the marketplace. Do the work to establish an experience platform. 2. With the experience platform in place, invest in educating your people to understand how they should behave to deliver your unique brand experience. Internalize it before you try to externalize it. 3. Audit the touchpoints that make up your current customer experience and work to bring them in line with your experience platform. 4. Last but not least, listen to your customers. If your customer experience is working, they’ll let you know—and they’ll let their friends know, too. Advice for Brands /11Unpacking Customer Experience Berger asked one of the most important marketing questions today: why do some things get shared, go viral, blow up all over the internet—and others things, well, not so much? His recent research as well as the coverage of his talk are worth checking out. Full disclosure: I wasn’t one of the 15,000 people at SXSW. http:// jonahberger.com/wp-content/uploads/2013/02/BzzAgent.pdf ; http://www.inc. com/nicole-carter/jonah-berger-marketing-word-of-mouth.html Outside In: The Power of Putting Customers at the Center of Your Business Interestingly, a customer experience lens is just one more reason for brands to be inclusive of the diversity of their customers’ varied backgrounds and perspectives in how they plan their interactions and work with their marketing partners. Best Experience Brands 2013: A Global Study http://www.slideshare.net/ jackmortonWW/best-experience-brands http://www.newstatesman.com/technology/2010/10/customer-experience-pay Cited in “Most Contagious 2013” http://www.slideshare.net/contagiousmag/ most-contagious-2013 1. 2. 3. 4. 5. 6. Notes
  12. 12. Contact: Liz Bigham E: liz_bigham@jackmorton.com Read our blog at blog.jackmorton.com Follow us on twitter @jackmorton Visit us online at jackmorton.com About Jack Morton We’re an award-winning brand experience agency that turns brands into verbs and transforms customer experience into a competitive asset. We make brilliant things happen for our clients. We do that by bringing together brave, creative people who are true believers in the power of experience to transform brands and businesses. We’re experts in brand experience strategy and activation. Our clients look to us to define and understand how their brands should behave in the marketplace, and create experiences that bring their brands to life. Our portfolio of award-winning work spans 75 years and clients like GM, Subway, Samsung and Verizon in areas like event marketing, retail experience, digital, social, mobile, sponsorship and employee engagement. Our team works together across 22 locations all around the world. We’re also part of one of the world’s leading marketing holding companies, Interpublic (NYSE: IPG), and experienced collaborators with a global network of best-in-class partners. © Jack Morton Worldwide 2014 Talk to Jack To read our earlier white papers, visit our Slideshare channel at slideshare.net/jackmortonww WHITE PAPERS JACK 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.