1 Perspectives on Orchestrating Customer Experience Growing in importance, but still elusive As more and more companies see the necessities in becoming customer- centric, the concept of customer experience has risen in importance and chatter. We now have Customer Experience Officers, or the equivalent, whose primary responsibilities are to provide a superior set of touchpoints with customers and manage those touchpoints across functions and departments of the organization - - not a simple task. And, while more attention is put on customer experience, it remains a difficult and often ill- defined concept for companies to get their collective heads around. What does an ideal customer experience mean? Who, ultimately, is responsible for it? How should data be used to improve the experience in meaningful ways? How should it be measured? How much should be invested in it relative to other strategic priorities? To begin answering these and other questions, it s helpful to start with a set of principles or beliefs that guide organizational philosophy around what customer experience means, decision making around where to place emphasis, and how to manage it on an ongoing basis. While it is dangerous to overgeneralize customer experience, as it must be defined and attended to in very individual ways depending on a company s business, the following represents a set of perspectives to consider: A series of exchanges Sometimes one- way, sometimes two- way, and sometimes multi- directional, customer experience can be viewed as a series of exchanges between customers and the company they engage in seeking to satisfy a need. Although dynamic, customer experience is a means of developing a relationship that deepens over time as the company learns more about the customer and his/her needs, and the customer learns more about how the company can satisfy those needs. These exchanges occur through expressions or communications made by the company, impressions customers receive, and interactions between the two where they engage in more meaningful ways. Therefore, customer experience might be defined as a set of expressions, impressions, and interactions between a customer and company that result in certain perceptions of that company that, in turn, drive some type of action (in the near or long long- term), or fizzle into non- action. The best customer experiences have six things in common: 1. Brand first, transact second The best customer experiences balance long- term equity building with near- term transaction driving. Most companies think of the customer experience solely as taking customers through a series of events driving them toward a sale, but many times the customer experience doesn t result in a transaction, at least not in the near- term, especially for more complex or involved purchases. An important goal of customer experience is to build the brand with individuals so that when they are in the market to consume, they will preferentially consider the company for that product or service because of the positive experience they received when learning more about it. As stated by Angela Ahrendt, former
2 CEO of Burberry s, when speaking about the Burberry in- store experience in a recent Fast Company article, I don t want to be sold to when I walk into a store. The job is to be a brilliant brand ambassador. Don t sell! No! Because that s a turn- off. Build an amazing brand experience, and then it will just naturally happen Ikea, rated #26 on Interbrand s 2013 Best Global brands, has an intense focus on customer experience and value. They have successfully created a unique experience in their stores that gets customers excited about design while satisfying their need for self- expression. Ikea makes customizing interiors easy by enabling consumers to pick and choose among a wide variety of furnishing styles that can go together like a kit of parts or stand out as room highlights. As consumers browse an Ikea store, they feel like its two- parts inspiration and one- part sales a good mix that balances brand and transaction. 2. Distinguish customer types Big data, technology, and smart analytics are enabling increasing degrees of personalization and allowing companies to tailor the experience they provide to different customers. Of course, this makes the experience more personally meaningful to individuals, but it also gives companies an ability to optimize what they do and what they spend to accelerate prospects paths to purchase, and customers eventual loyalty and advocacy. When viewed through the stages of inquiry, consideration, trial, purchase, and beyond, companies can begin to segment their segments into categories that can guide a more strategic approach toward experience design and management. Once this is mapped out and a proportion of economics is estimated for each category, it s not difficult to see why more resources should go toward experiences directed at target segments that are at critical stages of decision / action After seeing dilution of their brand due to saturating the market with its $750 logo- embossed tote, Louis Vuitton began to segment the products and experience they provided to wealthy consumers and regain the perception of exclusivity it once had. They created an invitation- only experience for wealthy customers, which included a VIP second- floor apartment above its exclusive New Bond Street sore in London, and a nautically themed store accessible only by a private jet in Singapore, where customers on yachts disembark to pick up items from the latest collections. Louis Vuitton found that the moments leading up to and including the in- store experience with this target audience were significantly more impactful to its brand and business than other areas in which they could invest. 3. Focus on what matters most Customer experience can be a complex and overwhelming subject to model, let alone manage, from a business perspective. There is a multitude of moving parts interacting with one another to create a mosaic that oftentimes resemble something like a Jackson Pollack painting. To create solutions for complex challenges like these, it often helps to break down the whole into its essential components and then assess them to determine which ones should be focused on to improve the overall effect. It s more than a financial allocation decision: it s a return- on- effort decision because any single touchpoint can take considerable time, money, and human capital to get right, so selection becomes paramount. While
3 several points of interaction and the interchange between them are important, through careful analysis those touchpoints that have disproportionate potential impact on customers impression and on business metrics can be identified. From a branding perspective, these touchpoints might be called defining moments, or those interactions that seed the brand like no others in the customers mind, and leave them with either a favorable or unfavorable perception for future considerations. Hästens, the Swedish manufacturer of hand- made luxury beds, strives to make consumers experience transformative, from the first time they lay on the bed until the bed arrives in their bedroom. The company starts this transformation the minute guests enter into one of their stores. They suggest guests take off their shoes, pick their own personal pillow, and even take a private nap on the bed of their choice. This simulation coupled with the highest level of hospitality distinguishes Hästens from other bed manufactures, and burnishes the brand like no other form of marketing can. As an acknowledgement of the care for their brand and customer experience, Hästens won Sweden s prestigious Signum award for quality of long- term branding in Nespresso s Business Solutions, which provides quality coffee to premier hotels and restaurants, saw a need to improve the experience customers were having after the Nespresso system was in place at their locations. A defining moment, which was negatively affecting customers perceptions of the brand, was occurring when coffee machines wouldn t work. Even the fastest response by service engineers rendered the machines inoperable for an extended period of time. This required guests to have to unnecessarily wait for coffee, which was a bad reflection on the organization and the hospitality they provided. To remedy this issue and improve the experience, Nespresso focused on ensuring that every machine was always working and delivering the full Nespresso experience by implementing remote diagnostics. Through this solution, each machine was technologically enabled to feed up- to- the- minute information of its status including rate of consumption, water temperature, pressure, extraction, etc., so local Nespresso service offices would have warning of potential issues and be able to address them proactively vs. waiting for a service call. Early results show Nespresso is delivering a consistent brand experience for B2B customers with preventative maintenance that significantly increased the uptime of its machines and allows them to more continuously brew great coffee for discriminating guests. 4. Make people feel special in some way, at some point More than personalization, making people feel special in some way further differentiates the brand while creating an enduring bond with them. This will become increasingly important as global brands expand, offering consistently high quality and homogeneity around the world. While operationally pragmatic, an overly systematized experience can leave customers cold, detached, and feeling like automatons. Special touches can go along way, even within a process that is somewhat mechanized and routine. They bring us back to being humans and connecting with others (even companies and brands) on deeper levels that mean a lot more than saving money, convenience, or even product quality. Zappos views every engagement with a customer as a personalized experience and an opportunity to
4 build a strong relationship with them. Zappos CEO, Tony Hsieh, doesn t care how long his customer service reps stay on the phone. He doesn t enforce any KPI s around phone time. He sees it as an opportunity to strengthen the customer experience and make people feel special in a way that even the best online experience can not. He states, Too many companies think of their call centers as an expense to minimize. We believe that it s a huge untapped opportunity for most companies, not only because it can result in word- of- mouth marketing, but because of its potential to increase the lifetime value of the customer. Zappos has remarkable customer loyalty. Impressively, 75% of purchases made at Zappos come from returning customers, and repeat customers order more than 2.5 times every 12 months. Repeat customers also have higher average order sizes; in large part because Zappos makes them they feel special. First Direct, a division of the HSBC Bank, is an online and telephone only bank that provides a range of standard products and services such as current accounts, credit cards, savings accounts, insurance, and loans. The type of customer services they provide, however, is anything but standard. Each customer service representative is available around the clock and empowered to act on customer issues. They are assigned to customers, stay with them throughout their problem resolution process, and get to know them as individuals. Moreover, they often provide a personal touch, like occasionally sending flowers to a customer or their partner to mark a birthday. These gestures turn a faceless and somewhat cold experience into something a bit more special, and give the brand a real heart and soul. 5. Design for continuity and intent (across channels, platforms, and path to purchase) Today, people gather information and experience brands in a multitude of ways. One way remains through television and print media, and more dynamically, through digital channels, social sharing, and on the go via mobile platforms. Harmonizing expressions and information sharing across these channels is important, but so is the way a company interacts with customers through two- way means. Part of experiencing a company is getting to know the brand, what it has to offer, its positioning relative to other choices, and its distinct identity. It s in a company s best interest to have customers, especially new ones, get to know it as quickly as possible to become their preferred choice. There is little more disruptive and damaging in this getting to know phase than inconsistencies, awkward transitions, and fragmented messages. Such discontinuities not only make for a frustrating overall experience, they can actually discredit a company and diminish confidence and trust customers have with it. J. Hilburn strives to deliver luxury brand experiences in a personable and approachable way by combining online shopping with personal fittings from independent sales consultants. The menswear retailer taps into a network of 2,700 trained personal stylists across the U.S. to meet with customers, take their measurements, and build up their shopping profiles. J. Hilburn then tailors all products - - including jackets, shirts and trousers - - to match each consumer s unique measurements and proportions. J. Hilburn is also focusing on extending the luxury brand experience to the web. Consumers can visit the company web site to connect with personal stylists while both consumers and stylists can browse inventory and outfit look books together.
5 Walgreens has transformed itself to be a model 21st- century retailer and leader of multichannel convergence. They use both mobile and social channels to drive loyalty and sales by connecting with customers across web, mobile, and in- store platforms. Shoppers at Walgreens acquire and use points across channels, use mobile devices to upload photos for in- store printing, and receive coupons that can be used both on and offline. This approach is paying off for Walgreens, as they are finding customers who shop online and in their stores spend 3.5 times the average of store- only customers. 6. Measure, manage, and continuously improve As customer experience becomes more professionally managed, metrics and measurement become increasingly important. More and more companies are putting into place the means to capture critical data along customers path to purchase that enable continuous improvement and optimization. As in any metrics tracking effort, assessing the customer experience should begin with establishing baselines across a host of attributes, with a cadence of measurement that constantly updates a dashboard that highlights gaps and progress. A customer experience dashboard can also provide a useful tool to experiment with different elements such as advertising, demos, sales process, etc., to determine what has more or less impact both negatively and positively when changes are made. Another important aspect of management is internal governance and functional responsibilities. While data intelligence is getting better and better, it still takes functions working together to execute key touchpoints so that the experience is seamless for customers. Too often, departmental motivations and silos actually interfere with how customers should experience a company. To overcome these organizational issues, it is helpful to appoint one person or team as customer experience leaders / managers (a chief experience officer, as mentioned in the beginning of this article), and give them decision- rights in the interest of the whole customer above individual departments or functions. Often, companies establish enterprise- wide initiatives focused on customer experience improvement to capture the attention of executives across the organization and involve a critical mass of employees. As part of its customer- centric strategy, Zurich Financial Services Group (Zurich) put into place series of SMART metrics to measure the performance tied to the customer experience they provide. To measure customer satisfaction, for example, in the various regional markets in which it operates, Zurich uses a measure known as a TRI*M index. This assesses how well different parts of Zurich's business are performing in relation to satisfying customers. It combines this measure with further customer satisfaction research carried out by an independent research company. This research measures how satisfied customers are with each of eight elements and additional underlying attributes. Using these research findings, Zurich is able to allocate resources to those aspects where customers want most support. Action plans to deliver service improvements are then developed by local teams.
6 Michael Million (mmillionfullsurge.com) is a partner at FullSurge, a strategic consulting firm that helps clients grow through brand- building, marketing and innovation. For more of FullSurge s thinking on customer segmentation and other topics related to brand, marketing and innovation, please visit fullsurge.com/service- offerings/marketing/customer- segmentation