Three reasons to invest in customer experience

3.9.2014 -

A few weeks ago two friends met for lunch. His eyes gleaming, the first began to talk about his new car and his experience buying it. The story began with the car’s technological innovation and ended with the great customer service agent, who had tenaciously contacted the customer five times to help solve a problem.

The conversation then turned to the other friend’s new laptop computer that immediately presented problems when he tried to install software. The external display didn’t work and he had to contact the customer service department online. They in turn had instructed him on how to register, pack and send the device to Germany for repairs. However, a quick Google search showed that barely one kilometer away was a local authorized service provider, contrary to what the global customer service department had indicated.

Both stories were compelling and left a lasting impression. I was the lucky first customer and I won’t ever be purchasing the laptop my friend bought. On the other hand, my positive experience inspired my friend to become interested in Tesla cars.

Positive customer experiences generate recommendations and stories that confer a lasting competitive advantage.

Customer experience is the result of reliability and emotionally engaging experience. Reliability means that the service or product delivers what it promises. Emotionally engaging experience means that the customer’s expectations are surpassed and he or she enjoys the act of buying as well as the service provided. This is the combination that generates recommendations and stories that can be key criteria in making a purchase decision.

Three reasons why you should invest in customer experience:

1. You are in the Customer Experience Business – whether you like it or not

Traditional product or service innovation is transitioning to customer experience innovation. In the worst case scenario, ignoring customer experience can mean the death of a business. The often-used example of good vs bad experience is the Apple vs Nokia comparison. Apple was built on reliability and experience. Nokia didn’t offer either.

Traditional business boundaries also vanish when products and services are built around the customer. In this scenario traditional operational models will also suffer. Service providers such as the eCommerce provider Zalando and the on-demand media company Netflix have grown phenomenally in many countries and are threatening traditional players. These services are not technologically superior compared to their counterparts, but stand out due to their ability to combine customer experience with their business concept.

2. Lasting competitive edge and profitability

Customer experience has a significant impact on customer loyalty: it reduces costs and facilitates growth. Attracting new customers can be costly and regular customers spend more than occasional buyers. Customers who have had good experiences purchase up to 140% more. According to research by Forrester and Watermark Consulting, customer experience has a substantial impact on a company’s financial performance.

Disgruntled customers are also expensive. They return their purchases more often and need more support. The US telecommunications company Sprint has been able to reduce customer service costs 33% by improving customer experience.

3. Consumers have more power than ever before

The Internet, globalization, mobility, and social media have resulted in increasing transparency while trends are becoming global and emerging and spreading quickly, especially due to Generation Y.

Customers obtain information about services, products, and merchants from different sources and businesses are no longer in control. Customers make decisions and share their experiences immediately and retailers don’t even get a chance to influence them. In the past, consumers could do no more than vote with their wallets locally. Nowadays they – and their friends – can do so globally.

“Where the big guys lead, the smaller ones follow” no longer holds true. Mega-trends are spawned among the Generation Y and are further spread by older age groups via changing operational models. Good recent examples include selfies or the Twitter phenomenon. Consumers have transitioned from watching television broadcasts to using internet-based TV on-demand services, bypassing traditional prime-time advertising. New operational models don’t only influence purchasing; they also influence leadership.

Developing customer experience should start out small, but must ultimately become the foundation of business strategy and culture

Customer experience can only come from creating customer-oriented products, services, and customer journeys, and by means of a customer-focused business culture. The development and innovation of customer experience must be continuous.

Development should begin on a small scale in areas where there is a good chance of success and where results are measurable. Customer experience that can’t be measured isn’t worth developing. Changes to mindset and business culture are difficult and it’s also challenging to accept the idea of investing in customer experience.

Technology enables better personalized services and customer experiences

Technology can be used to gather information about customers, devices, and the internet, allowing companies to automatically analyze and predict customer behavior and needs. This information can in turn be used to develop personalized services and to focus omnichannel marketing and sales. You can also use software and information to diversify and enhance logistics and customer service, as well as to benefit from social media. By using technology or intelligent software and hardware you can change your company’s entire operational model to support and develop customer experience. 

Credible and emotionally engaging customer experiences require technology as well as reliable software since the quality of service and the customer experience are determined by the functionality and capability of the entire chain. A single line of code, server performance, network quality, or user interface functionality can all spoil the overall customer experience. The flexibility of the entire solution will determine the company’s ability to offer a positive customer experience.

At Descom our mission is to work with our clients to create better customer experiences using comprehensive services, marketing, technology, and expertise.

When unnecessary routines no longer consume resources and actions can be measured, our clients can focus on customer innovation and use personalized services to complement their customer experiences.

Juha Harju

Juha Harju

Every day, week, and month are both different and similar. My leadership is based on routines and situational awareness as well as decision-making and social skills. Especially in our business environment, we must lead with passion, but also with expertise and numbers, to ensure growth, development, and profitability. I am excited about winning, feedback, learning, and creating something new.

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