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Consumer Markets

The Importance of Customer Experience to Your Business Today

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7/30/2014 Clare Buxton

Why has customer experience improvement become such a hot topic today?   Consumer expectations are higher.  Word of mouth travels faster. Consumers are empowered like never before.  And great customer experience drives loyalty and revenue. Downplaying the importance of the customer experience is no longer an option as the voice of the customer continues to get louder.

Why now?

Technology advancements have introduced customers to new experiences such as multi-channel shopping, digital customer service tools and digital/social media. These new capabilities have elevated expectations and truly shifted the balance of power from the marketer to the customer. Directly tied to increased customer loyalty and a proven driver of top- and bottom-line revenue, it’s no surprise that the majority of executives state that customer experience is critical to their business strategies.

Not only can great customer experience be a differentiator, but poor customer experience can truly damage a brand. Experience that was once acceptable is now considered mediocre. In this age of digital and social media, examples of poor customer experience spread quickly, loudly and widely, and can destroy years of investment in brand-building.

Senior leadership interest has escalated as studies have shown that improving Customer Experience can increase annual revenues by more than $1B for large companies in industries such as wireless service, airlines and hotels and that, in any industry,  Customer Experience is highly correlated with loyalty.  Walt Disney stated his vision of Customer Experience clearly: “Do what you do so well that they want to see it again and bring their friends.”

With so much focus, why have so few companies received excellent ratings by firms such as Temkin and Forrester? They have begun to realize that it takes more than improved customer service to create consistent levels of customer satisfaction and lasting differentiation. While many companies measure customer satisfaction and Net Promoter scores, Customer Experience is not core to their brand promise. Attributes that are consistently present in those companies, such as USAA and FedEx, which are broadly recognized for having market differentiating Customer Experience include:

  • Commitment from and active participation at the very top
  • Employee engagement and culture evolution
  • A holistic, 360-degree view of customers and how they interact directly and indirectly with the company
  • A clearly defined  brand promise
  • Digital expertise, and a completely integrated multi-channel experience
  • A relentless desire to improve and innovate, in a customer-centric way

Each of these attributes requires strong organizational and, often, financial commitment. But research consistently proves the value outweighs the expense and, in many cases, will be the distinction between being a market leader and not being in the market at all.

So what does this mean for businesses?

  • Bring in a customer experience champion.  Since the path to customer experience transformation is a new one, many companies lack some core expertise as they begin the multiyear journey
  • Great customer experiences require active leadership and must have the support from the Board and across the senior management team
  • Promote, develop and build a team who will instil a culture of excellent customer experience at all levels of the organisation

Next up: We’ll take a look at the winners in this race and how they did it.

Clare Buxton Principal +44 20 70754000

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