Organizations strive to create a competitive advantage from the very first day they're in business. After all, competitive advantage is why customers select one offering over others. We design our business models to maximize advantages and create a “moat,” making it difficult for others to copy our advantages.
Differentiating by experience is one of the most successful ways to create an advantage and put distance between your brand and your competitors.
Designing Customer Experience With Tunnel Vision?
Customer experience can be context-sensitive. When you speak to a marketer, customer experience is often viewed through a different lens than if you were speaking with someone in post-sales. Progressive organizations take a horizontal view of customer experience, using customer journey maps and personas to help understand their customer’s desires and how best to provide frictionless interactions.
Most companies today have a strong focus and specialization in one specific aspect of experience. We know focus can be a powerful tool, yet it also narrows our field of vision. Think of the peripheral vision tests you get at the eye doctor, where you notice objects besides the main subject, but you’re unsure of what exists. The same phenomenon happens when we specialize in one aspect of customer experience and don’t actively scan to get a more complete picture of the entire customer lifecycle.
The following three-step approach is the most streamlined and effective means to identify opportunities for customer experience to create competitive advantages.
Related Article: Are You Ready to Compete on Customer Experience?
Conduct a Customer Experience Self-Assessment
To begin, you must understand what you intend to deliver customers at each stage in their journey. The self-assessment should use your existing customer journey map (assuming it is kept up to date). Examine the map to understand your organizational intention for every experience you provide at every step in the journey. Ask yourself: are we looking to set the standard for our industry, or is parity with others sufficient?
Next, identify any in progress initiatives where you are focusing your improvement efforts. Very few organizations are satisfied with how they engage and support customers, and understanding what efforts you're currently making to change customer experience is a critical next step in the process. Rather than creating a simple inventory of in-process or planned projects, you'll gain more insight by asking questions like — how were the improvement initiatives selected? Has anything changed that would cause you to refocus or change your improvement target?
With an understanding of your current capabilities and active initiatives, you're set to evaluate how the experience you deliver compares to others in the industry.
Related Article: Frictionless Customer Experiences Are the Best Customer Experiences
Understand Competitor Capabilities
Every business is competing to grow their business, which often means getting more customers. In many SaaS verticals, companies work to reduce friction for customers to switch from their competitor to their own business. Some companies go as far as creating a marketing channel to pursue customers and get them to switch. Regardless of the industry you are in, it’s critical to know what it’s like to be a customer (or prospect). Find out which firms make it easy to become and remain a customer and which require more effort.
Conducting a competitor analysis may seem like a daunting task, yet it can be simplified by following a few steps and utilizing assets most organizations have in place. Start by using design thinking techniques: focus on being in a customer mindset. Your goal is to understand how it feels to be a customer interacting with your company versus interacting with competitors. Approach this exercise through your different personas for the added benefit of validating the characteristics you've defined as your targets. Personas also give you a common reference for comprehending your customer’s experience with competitors.
While it’s possible to conduct the assessment using internal resources, there is a significant risk for confirmation bias, meaning you expect to discover certain things and therefore skew the results to align with your expectations. To reduce the risk of bias, you may want to use a third party to conduct the assessment. Using a third party helps eliminate bias, and they'll likely also ask questions to confirm they understand the personas. As annoying as these questions may seem, it's a powerful way to uncover undocumented assumptions that can then be either validated or invalidated. Pro-tip: Amazon’s Mechanical Turk is a nice resource for help with competitive research.
Related Article: The 6 Pieces of the Customer Experience Puzzle
Develop an Opportunity Map
Once you've established the customer experience you deliver and that of your competitors, you can make comparisons to identify where gaps exist. As you identify gaps, it’s important to note if the gap is a result of an intentional decision (e.g. it is expected), or if it's an unexpected surprise.
Regardless of the source of the gap, this is new powerful information which can be used to develop a roadmap.
Developing a roadmap is not as straightforward as it may seem. Once more, you must put yourself in the mindset of your customer, but not as they are today, but as they will be in three months or even further into the future. You know your competitors will work on improving and as they do customer expectations will evolve. The classic Kano effect, which identified three levels of customer expectations, is always at work.
Here are a few questions that have proven helpful in developing a roadmap focused on the future expectations of your customers:
- As a customer: How would I define frictionless interaction? (How much friction exists/is targeted to exist?)
- As a customer: How does my current experience compare with competitors or substitutes?
- As a customer: How do I value the difference in experience? (What factors would need to be important to a customer for your company to be preferred?)
The battle for customers is never-ending and certainly, a core capability businesses need to have to remain relevant today. The question is will you be proactive and set the direction for others to follow, or will you be reactive and try to quickly match others? There are many factors to consider, yet know without a doubt: outstanding alignment between customer expectations and a company’s CX capabilities delivers competitive advantage.