From customer experience to competitive advantage
Article

From customer experience to competitive advantage

Ben Reason
  • Ben Reason
  • Founding Partner
Take aways
  • Making complex services easy to use from the beginning onwards improves customer experience.
  • Preempting hotspots boosts customer experience, and thus revenue.
  • It is pragmatic to focus on the common needs of most of your customers.

Bad services drive away customers, worse than pricing and product problems. In order to create consistently good customer experience, the pragmatic approach is to truly understand what most of your customers value and deliver to them in a timely fashion, as well as to get rid of “hotspots” - interactions which most customers might find frustrating with the organisation.

A customer is four times more likely to switch to a competitor due to problems with services, compared with pricing and product issues. In order to gain competitive advantage, therefore, consistently good customer experience is much more helpful than optimising internal processes alone.

For organisations which realise this and are spending more on improving customer experience, oftentimes they face two challenges: Who are our customers? How and where shall we start?

Missing the mark, still

Most organisations are still trying to re-centre or step up their focus on customer experience, but many of them miss the mark. Millions of dollars have been spent on mining and analysing big data, many hours on engaging customers through social media and countless meetings on Voice of Customer (VoC) and other customer inclusion programmes. The truth is, understanding customers remains an elusive business.

Focus on the big picture

The above approaches and techniques are useful but only get you so far, unless you truly understand the experiences MOST of your customers have in common. It is true that individuals become your customers for all sorts of reasons, but it is very expensive for an organisation to build a sound business case based on varied individual experiences. Addressing the common concerns among most of your customers, therefore, is a more effective and economical strategy in understanding them.

Know your ‘hotspots’

One of customers’ common concerns is hotspots. They are particular interactions with organisations when customers consistently have negative experiences, such as poor handover to aftersales or overly-complicated user instructions. Customer responses range from mild irritation to filing complaints. Organisations are usually aware of their customer experience hotspots, or can easily identify them.

Get rid of hotspots early

Identifying hotspots is one thing, knowing where and how to intervene and improve a hotspot experience is another.

Negative customer experience should be prevented early in the customer lifecycle. Providing customers the information of what to do next, or setting them up to use a complicated service can make a real difference! Oftentimes, interventions are no longer likely to prevent or reduce customer irritation when negative experience is already an issue.

Disproportionate gains on customer experience

Organisations tend to fix and solve problems related to experience hotspots after they occur. It is already too late and does not necessarily improve overall customer experience. Designing interventions that prevent a potentially negative situation from happening can get rid of one or even more hotspots, significantly improving customer experiences.

A customer is 4 times more likely to switch to a competitor due to service-related problems, compared with problems related to pricing or product.

Small but powerful

Customers are constantly interacting with your organisation, through both products and services. Therefore, a holistic view which focuses on both significantly improve the overall customer experience. Small interventions, if applied at the right time and on the right hotspots, can disproportionately boost customer experience.