Customer Experience
Gain an understanding of the evolving nature of customer experience and its transformations
Customer experience (CX) serves as the foundation for the relationship between a business and its customers. Traditionally, discussions surrounding CX encompass the various touchpoints in the customer journey, such as helpful store employees in appealing physical locations or intuitive and visually pleasing digital platforms. Historically, well-executed CX investments have yielded positive outcomes, including improved customer retention and acquisition, increased sales, and stronger customer loyalty.
However, the world has undergone significant changes, extending beyond the impact of the COVID-19 pandemic. A multitude of external factors, including economic shifts, social movements, political developments, and more, continually influence people's daily decision-making in unavoidable ways. In fact, according to research, 72% of consumers assert that external factors such as inflation, social movements, and climate change have a more significant impact on their lives compared to the past. In the midst of such widespread upheaval, individuals are reassessing their values and priorities, with 61% of consumers acknowledging that their priorities constantly shift due to global events. Consequently, their interactions with brands are evolving, necessitating a reevaluation of the concept of customer experience.
In this context, we will explore the essence of customer experience, its evolving nature, and the potential benefits that a new customer experience strategy can bring to your business.
Customer Experience
Customer experience encompasses a multitude of aspects, but at its core, it refers to the perception that both customers and companies have of a brand. It permeates every interaction, presenting an opportunity to strengthen or weaken the bond between the company and the customer.
A positive customer experience involves fostering a relationship by understanding and addressing the wants, needs, and values of individuals. It extends beyond the mere utilization of a product or service. The complete experience encompasses pre-purchase engagements with the brand, such as marketing and awareness efforts, the process of researching and making a purchase, whether in-store or online, as well as post-purchase interactions, including services, repairs, and other additional aspects. The objective is to establish seamless and efficient connections between the brand and the customer.
It is crucial for brands to recognize that every interaction, whether with individuals or other businesses, evokes some form of emotion. These emotions, whether positive or negative, happy or sad, become associated with the brand. Consequently, customers are prompted to ask critical questions: Should they make a purchase or not? Will they develop a fondness for the brand or not? Will they continue their relationship with the brand or not?
Furthermore, it is essential to acknowledge that people's needs, desires, and emotions fluctuate in response to external influences. A simplistic understanding of customers' emotional responses falls short. Brands need to perceive their customers as more than just sources of revenue and respond to the complexities that shape their lives.
Why is Great Customer Experience Important?
Great customer experience holds significant importance for several reasons. In today's competitive landscape, where numerous brands vie for consumer attention and an abundance of options are readily available, customer experience serves as a crucial differentiator. It allows businesses to distinguish themselves and place their products and brand at the forefront of the market.
To illustrate this, let's consider a scenario where a business is seeking to install beverage vending machines in its offices. The customer experience encompasses more than just the satisfaction derived from using the machine. It encompasses the entire process, from engaging with the brand, making the purchase, to ongoing interactions for service, support, or future upgrades. While a beverage retailer could offer a standard, one-size-fits-all experience by simply displaying pictures of various products, a superior approach would involve leveraging technologies like augmented reality (AR) or virtual reality (VR) to create a bespoke, personalized, and customized experience. This would allow customers to visualize how each type of machine would look in their office space. As a result of this exceptional customer experience, both the business and its colleagues would be satisfied, leading them to choose the same retailer for their future vending machine needs.
Brands that aspire to enhance customer acquisition, foster customer loyalty, drive customer engagement, and fuel business growth must prioritize the delivery of outstanding experiences. This entails going beyond conventional approaches and connecting with customers in dynamic and innovative ways. By continually striving to provide exceptional customer experiences, businesses can forge stronger relationships, earn customer trust and loyalty, and ultimately gain a competitive edge in the market.
Given the high stakes involved, it is imperative for brands to question whether delivering great customer experience alone is sufficient to evoke positive emotions and effectively address the evolving needs of customers.
What are the transformations in customer experience?
The concept of customer experience is undergoing significant changes in recent times. Two decades ago, a great customer experience would have involved optimizing touchpoints, mapping out customer journeys, and designing desirable products. However, the way we interact with brands and our expectations from them have evolved exponentially.
In today's dynamic market, where individuals navigate constant change influenced by external economic, social, environmental, and political forces, consumer behaviour has become increasingly inconsistent. People are comfortable making paradoxical choices, weighing trade-offs between their wants, needs, and the available options.
Adapting customer experience to these changes poses challenges. Oversimplifying customer segmentation and underestimating the impact of external forces has created a disconnect. To bridge this gap, a life-centric approach to customer experience is necessary.
A life-centric approach acknowledges that individuals are multifaceted and complex, constantly adapting to unpredictable life circumstances. Businesses that embrace this perspective can better understand and meet customers' evolving needs. By adopting a life-centric approach, companies can effectively engage with customers at various critical moments and establish connections that withstand the constant flux and disruptions of life.
Interestingly, consumer expectations align with this shift. Research shows that 64% of consumers desire faster responses from companies to address their changing needs, while 88% of executives believe that their customers are changing at a pace faster than their business can keep up.
Customer experience is changing to embrace a life-centric approach that recognizes the complexities and evolving nature of individuals. By embracing this shift, companies can create meaningful connections with customers, catering to their dynamic needs and navigating the ever-changing landscape successfully.
Who bears the responsibility for customer experience strategies?
In the past, customer experience (CX) strategies were typically within the domain of the Chief Marketing Officer (CMO) or the Chief Operating Officer (COO). Different functions within the organization operated independently, focusing on their respective priorities and working in silos.
Traditionally, leaders and functions within an organization approached their customer experience strategies based on traditional CX thinking:
- CEO: Prioritized maximizing profitability.
- Marketing and brand: Focused on creating desire for products.
- Sales: Concentrated on selling the company's products.
- Product development: Developed products based on market research and ease of use.
- Talent: Utilized traditional metrics for employee performance within individual functions.
- Tech and IT: Focused on enabling business processes at a larger scale.
- Operations: Emphasized providing efficiency for the company, often at the expense of growth.
- Supply chain: Focused on the movement of products to consumers.
As evident from the above, each department and function had its own priorities, targets, and metrics. Operating in isolation, they executed specific customer experience strategies without considering the bigger picture. However, in order to remain relevant and competitive in today's rapidly changing world, customer experience strategies need to be a concern for every stakeholder within a business.
From management to marketing, sales, and service, everyone across front- and back-office functions must be invested in delivering a life-centric customer experience. Rather than working in isolation, companies need to reorganize their internal operations to assess and address evolving consumer needs.
By leveraging existing assets such as talent, data, and technology and aligning them for coordinated action, companies can simplify their internal operations and pursue a common goal. This internal alignment allows companies to implement an external strategy that maximizes customer experience.
This represents a pivotal moment for the C-suite. Leaders who go beyond traditional CX strategies and redefine their organizations, not solely based on the products or services they offer, but with a life-centric approach that understands and meets customer needs, will emerge stronger and fuel growth within their organizations. Achieving internal alignment enables companies to pursue an external strategy that optimizes customer experience.
How can Companies Enhance Customer Experience?
In order to improve customer experience, companies need to move beyond traditional approaches and embrace new strategies that go beyond mere transactions.
Here are some key steps companies can take to enhance customer experience:
Holistic Understanding: Instead of focusing solely on product and service touchpoints, companies should adopt a holistic view of their customers. This means understanding their motivations, behaviors, and needs beyond just being buyers.
Technology-led Experiences: Leveraging new technologies, companies can create innovative and personalized experiences that extend beyond individual transactions. For example, implementing omni-channel services that connect physical and digital interactions can enhance personalization and convenience for customers.
Imagination and Vision: Companies must cultivate enterprise-wide imagination and vision for the customer. This involves thinking creatively and empathetically to find novel ways to engage and serve customers who seek simplicity and empowerment.
Value Alignment: By evaluating what truly brings value to customers and reevaluating how their brand promise aligns with customer needs, companies can refocus their efforts on driving growth and relevance.
Life-Centric Approach: Companies should view customers as more than just buyers. Embracing a life-centric approach means understanding and addressing the broader aspects of customers' lives and finding ways to enhance their overall well-being and experiences.
By implementing these strategies, companies can differentiate themselves in a crowded marketplace and create exceptional customer experiences that drive loyalty, satisfaction, and business growth.
A life-centric approach: Shaping the future of customer experience
The future of customer experience revolves around adopting a life-centric approach. In order to navigate the changing world and emerge stronger, brands must understand and leverage the complex life forces and paradoxical behaviors that influence consumer behavior. By utilizing data, technology, and a holistic, human-centered approach, companies can effectively respond to the diverse and ever-changing needs of their customers.
To embrace this shift, an evolution is necessary. Companies need to transition towards becoming life-centric, where the focus is on understanding and addressing the broader aspects of customers' lives. This approach goes beyond traditional transactional interactions and considers the complex dynamics that shape individuals' needs, desires, and experiences.
To learn more about the concept of being life-centric and how to develop a life-centric strategy that aligns with your business, further exploration is encouraged. By embracing a life-centric approach, brands can position themselves for success in meeting the evolving expectations and preferences of their customers.