CMO Australia Opinion Piece: Why Customer Experience Driven Growth is Set to Take Off

Alex Allwood Customer Experience

First Published in CMO Australia:

Written by Alex Allwood and Published 14th February 2017.

Our overall brand perceptions are invariably shaped by our experiences. Loyal customer relationships can be severed in moments from a negative service interaction.

With customer retention strategy now firmly on marketer’s agendas, improving customer experience is quickly becoming a priority for business growth.

Even in the face of global commoditisation, eroding margins, dramatic shifts in purchasing behaviour and customer amplification of complaints; many organisations continue to neglect transforming their frontline and customer service teams; rendering them unable to meet today’s changing customer expectations.

Take last week’s experience for example: I was at the airport and next in line to check my luggage, when I hear the customer in front of me state loudly, “I’m her mother, and here’s my driver’s licence”. Heads turn and everyone in the queue is now listening.

Then come those five words that are meant to appease, “Let me get my supervisor”, but only serve to irritate the customer further; she’s now invited to recount the problem from the beginning. The tension is palpable – I can literally feel the customer’s frustration.

In desperation the customer becomes the solution provider. As if she worked for the company, rather than the other way around, the customer rattles off a number of proactive solutions, only to be stonewalled; the outcome looks inevitable.

Like most organisations today, frontline staff are well trained in dealing with the company’s policy matters; with cheerful smiles and passive, assertive customer negotiation, they stay rigidly fixed on the required customer service outcome.

In a last ditch effort to get her daughter on the flight, another call goes up to the supervisor – and then, the final customer shutdown, “I’m sorry, the company gives us zero flexibility on this policy.”

These days, losing customers is an expensive business; dealing with disgruntled customers requires substantial human capital cost, which negatively impacts the bottom line.

The customer service department is involved. If they don’t manage customer expectations, the accounts department will need to process a refund. And depending on the seriousness of the problem, the issue could be escalated to a member of the leadership team.

The cost of marketing that’s required to find and acquire new customers will increase too; at a cost of 6 to 7 times more than that required to retain existing customers.

Then there is the cost of negative online reviews and negative recommendation to friends and family, affecting future customer purchasing decisions.

At a time when most customer relationships with brands are primarily based on service quality and price, more organisations are becoming adept at improving their customer experience by designing tangible touchpoints to meet customers’ expectations.

However, it is increasingly service interactions with organisations that cause the most customer frustration and irritation. Progressive customer-centric organisations are using service design to innovate their experiences and provide greater customer value.

Service design best practice solves the customer problem from the customer perspective, where the service improvement based on satisfying the customer’s unmet needs and creating efficiencies for the business.

Companies like Amazon are well known for customer experience excellence – they have an organisational culture that thinks, feels and lives customer. CEO, Jeff Bezos’s approach is to innovate from the ‘outside-in’; “Determine what the customer needs, and work backwards.”

Designing great service experiences begins by listening to customers, observing their behaviour and taking the time to understand the problems they’re trying to solve at every step of their journey with the brand.

This outside-in approach utilises the customer’s point-of-view to inform the businesses decision making; rather than innovation efforts based on what the company believes their customer wants.

Critical to success is empowering internal stakeholders to work together for a common purpose – the customer and improving their experience. Cultural alignment around ‘what’s best for the customer’ can be initiated by bringing the ‘customer to life’ across the business using customer insights.

When employees ‘buy-in’ and cross-functional work groups collaborate, this ensures everyone across the business owns improving the service experience, not just the customer facing departments. By sharing information, insights and efforts it creates a positive multiplier effect on the creation of value for the customer.

Utilising co-design disciplines to innovate services also has a positive impact on the organisation’s culture. Co-designing with stakeholders – both customers and employees, shifts the process of innovation from company-centric to customer-centric; generating ideas in a process of joint creation of value and delivering richer, human centred experiences.

This is a time when customer experience is the brand. To grow and retain more customers, organisations need to build a customer experience growth engine that is responsive to changing expectations and provides great service experiences that keeps customers returning and talking positively about the brand to their friends and family.

About the Author

Alex Allwood

Alex Allwood’s focus is connecting customer and culture to empower customer-centric growth. Working with B2B2C, Alex helps improve experiences that enhance customer value and distinctively differentiate. With a 20 year track record in leadership, operations and marketing, Alex’s strength is developing customer experience strategy: customer understanding and empathy, experience vision and guiding principles and the customer narrative to enable collaboration and alignment. Alex is principal of the customer experience consultancy, All Work Together; has authored the book Customer Experience is the Brand, regularly facilitates Customer Journey Mapping workshops and is a speaker on customer-centric transformation.