Following up on yesterday's look at customer experience from the internal perspective — employee engagement, today we look at the second half of the equation, providing better experiences for end-users and customers.
Thinking about Customer Experience Management (CXM) from an end customer perspective, it’s becoming clear that the world has moved from classic Customer Relationship Management (CRM) techniques and is now focused on more disruptive ways to manage and engage clients.
There is a clear linkage emerging with how customer experiences are driving financial benefits. Companies that realize this and transform their customer experiences will be celebrated as millennial enterprises; those that fail will become extinct and most likely go out of business.
So, why now? What is driving this CXM transformation?
Social and Mobile
First and foremost, social media and mobility have gone completely mainstream. The accelerated adoption and growth of several social platforms has captured the attention of many businesses. It has forced them to critically examine the opportunities and threats that this new phenomenon presents.
The mobile consumer has introduced a whole new set of opportunities around location-based services and real time interactions. The ability to engage customers through these social and mobile channels has become a strategic priority for many companies. These technologies are forming the foundation of many modern customer experience platforms.
Second, the recession has reminded many companies that one of the best routes to achieving strong financial performance in a tough economic environment is to keep existing customers happy. It is ten times more costly to acquire a new customer than to retain one. The correlation between customer experience and loyalty remains very strong.
Lastly, organizations are now able to better measure and quantify the benefits of CXM programs. Widespread adoption of customer satisfaction and loyalty metrics, such as the popular Net Promoter System (NPS) now give organizations a baseline of how loyal customers are and how likely they are to be brand advocates that proactively recommend products and services.
Companies are also getting better at monetizing the revenue benefit that results from customer experience improvements. Some companies are reporting that this can be worth millions in annual revenue.
What Good Customer Experience Looks Like
So what does a good customer experience look and feel like in the millennial era? Leaders in this area are companies like Apple, Disney, Starbucks and Zappos to name a few.
No one would question what Apple has done in the way of creating a far superior customer experience with entirely new markets around “iAnything.” The loyalty to the brand is incredible despite the fact that there are often better technology choices available to consumers. If there are any doubters, just look at the demand the iPhone 5 (a fifth generation product!) has generated.
Disney is probably the best example of outstanding customer service where every customer interaction is greeted with a pleasant smile, informative exchange and fast resolution. The ratio of service professionals to customers makes you feel like you have one on one relationship. Have you ever noticed the attention to detail, the cleanliness of their theme parks, efficiencies of their transportation, availability of information when needed and use of technology to improve wait times and overall experience at their facilities? Now you will.
Starbucks is a great example of redefining a popular experience (coffee shop) to become the leader in coffee experience. The company created a brand around a total experience by fusing a comfortable, inviting location with music, technology (wireless) and innovative coffee products.
Zappos is a great example of a millennial company formed around the online customer. Its vast catalog of products offers unprecedented choice, their platform makes ordering very intuitive and they provide fast shipping and free return shipping. This has redefined the buying experience for shoes online. One interaction with any of their customer service representatives will clearly distinguish their service levels compared to other traditional retailers.
What This Means for the Rest
All of this means that the expectations have increased as certain companies have set the standard for outstanding customer experience. And, more and more companies are moving in that direction. The gap for many companies is widening, yet they are not moving fast enough to transform. The question is how much time is left before they become extinct and consumers flock to more modern equivalents which were built in the millennial age?