First Published in The Guardian: https://goo.gl/7gxsSF
Written by Kylie McGregor and published 23rd December 2016.
In an increasingly competitive marketplace, customer experience has become the great differentiator. Here’s why.
Customer expectations are rising. No longer is it enough to provide a solid product or competitive price point. In today’s competitive marketplace, an organisation’s brand is built – or broken – on its customer experience.
In fact, according to the ‘Customers 2020’ study by Walker, a customer intelligence consulting firm in the US, by 2020 customer experience will overtake price and product as the key brand differentiator. The study, which was published in 2013, found that changes such as the explosion of digital, the empowered customer, and the acceleration of innovation are having a profound impact on customer expectations.
As a result, today’s customers – and those of the future – expect more. Walker found that, in the coming years, customers will expect companies to know their individual needs and to personalise the experience to meet those needs. Tellingly, the study showed that 86 per cent of consumers are prepared to pay more for better customer experience.
Alex Allwood, CEO of The Holla Agency and author of Customer Experience is the Brand, believes there is no waiting for 2020 – we are already there.
“It comes down to how your customer experiences the brand – and how that brand makes a person feel.”
“Today’s marketplace has become very competitive and commoditised,” she says. “There is little differentiation between one brand and the next. And so if you are already competing on price, technology or innovation, what is going to differentiate you from your competitors? What is going to be your point of difference? That comes down to how your customer experiences the brand – and how that brand makes a person feel.
“Customer experience is emotional. You can have positive emotional and negative emotional, but either way they will be remembered. That is why we are seeing businesses start to focus their energies on the customer and meeting customers’ needs and expectations, so their experiences are positive.
“We know that if a company can create an experience that people love and want to share, they are going to be loyal to that brand, and purchase more from that brand, and recommend it to their family and friends. So experience has become the great differentiator from one brand to the next.”
Customer experience encompasses a number of things, customer service being one of them. But essentially it is any interaction a consumer has with an organisation, and the perception of how a company treats them. Ultimately, a positive customer experience leads to customer satisfaction and loyalty, which results in customer retention as well as increasing cross-selling and up-selling opportunities.
Each year, Forrester releases the Australia Customer Experience Index, which examines the quality of customer experience by Australia’s leading companies. Bendigo Bank and ING DIRECT have topped the Index for the past two years running. The 2016 Index revealed that while the majority of companies in Australia are providing only mediocre customer experience (CX), “the level of CX delivered by Bendigo Bank and ING DIRECT clearly stands out and should serve as the benchmark for other firms aspiring to be a CX leader in Australia”.
“We like to believe that investing in customer experience is mutually beneficial – customers get innovation, they get their needs addressed and they get an easy and enjoyable experience,” says Chris Kenny, Head of Customer Experience at ING DIRECT. “On the flipside, we get a positive perception, higher customer loyalty, referrals and ultimately higher profitability. It’s really important because customers today are more attuned to their experience than ever before.”
So what is it that has ING DIRECT standing ahead of the pack when it comes to customer experience?
“It really is about having the right people,” says Paul Claassens who, as Senior Manager of Contact Centres at ING DIRECT, is at the frontline of customer experience and understands how critical customer interaction is. “At ING DIRECT, we recruit for culture and behaviours – finding people who will demonstrate our values. After all, we can teach people banking skills, but not attitude and behaviour, so a person’s cultural fit is very important to us. Ensuring every one of our team understands the role they play in creating a positive customer experience is essential.”
Kenny agrees: “I think it comes down to our culture and therefore our people. We have been customer-centric from the start – back in 1999 – and we continue that today. When it comes to our staff – which is where customer experience really begins – we like to say that our customers will only love our company as much as our employees do. There’s a real link there.
“Then it’s about execution through our unique business model. Not having physical branches really challenges the status quo – that’s the next layer. When you are working somewhere different and doing business with an organisation that’s doing something different it creates a genuine sense of pride.
“Another very important part is that we really do listen to our customers. We have in the order of 300,000 interactions with customers every day, whether it’s mobile, web or via our contact centre. So we understand that each of those moments is an opportunity to build our brand.”
Kenny says that to provide excellent customer experience, you need to truly know your customers and their needs and wants. That knowledge can then be used to tailor personalised and powerful interactions.
“Ultimately, customer experience is about understanding what matters most to your customer, and then working to continually improve it,” he says. “It starts with listening closely to your customers – whether that’s on the phone, monitoring social media or looking at feedback they leave on our digital channels.
“Then you really need to take care to interpret those needs correctly. What a customer is saying is only part of the picture; you also have to examine their behaviours. When you understand your customers it allows you to focus on what really matters to them. And this makes it a lot easier for an organisation collectively to deliver a high quality of service.”
Now more than ever, with the bar constantly being raised, if organisations are to succeed, they need to evolve and adapt their customer experience to meet the changing expectations of their customers.
“Customers can see the difference between companies where experience is easy and good value for money and they are starting to question whether they have that amongst all the providers that they need – for example, their telecom company, their bank, their energy company,” Kenny says. “So the pressure is on for all industries to really step up their game.”
Allwood agrees: “With those brands who are leading the charge, we will see a big difference with how they deliver and provide customer experience as opposed to those who don’t. And so the customer experience is going to become not only a competitive advantage or differentiator, but a business imperative. Because if you can deliver the customer’s unmet needs and satisfy their expectations then you will remain competitive – and when you remain competitive, you get a bigger market share.”
As demand for personalised, seamless and enjoyable experiences with brands becomes increasingly important, delivering a good customer experience is becoming a key business opportunity, allowing organisations to gain customers, grow market share, and, in turn, provide a firm foothold for success.