I was lucky enough to catch a fascinating session at Gartner Symposium 2018 focusing on Customer Experience(CX) and how that translates to the business bottom line. Olive Huang of Gartner defined CX presented insight on the power of customer feedback and also tips for turning customer experience into a profit driver. Here are my key take outs.
There was a time when being the second best in terms of CX wasn’t so bad. However, now the general distance has increased enormously between the first and second in a marketplace, to the point that it’s not even a close competition. In the world of business black-and-white is the new grey. As Steve Jobs said, “either you are insanely good or total crap.” Gartner research strongly promotes the importance of CX and explains how some of the world’s largest companies are investing in that area.
What is CX?
CX is completely changing the business landscape. It isn’t just user experience, customer service or for that matter digital strategy. It’s the perception of customers towards a particular brand or service based upon their one-off as well as cumulative experience interacting with a businesses’ entire existence- employees, systems, channels, and more. The associated term customer experience management is the process of streamlining customer interactions to exceed their expectations, increase satisfaction, and loyalty. Most importantly it is to turn them into evangelists for your product regardless of what you’re selling. The following are some of the invaluable knowledge I took away from the conference.
● Winner takes all: Whether it be Mercedes leading BMW or Johnson and Johnson beating P&G the chasm between number 1 and 2 is increasing day by day both in terms of market share and revenue across industries. Source: Drucker Institute, JD Power.
● Better CX is better business: According to data by Standard & Poor’s American Customer Satisfaction Index (ACSI) Stock Portfolio, CX satisfaction is positively correlated with stock price.
● Statistics place number 1 firmly ahead of number 2: 9.1% vs -0.4% in terms of revenue growth compared to sector average, 39.5% higher vs 28.5% lower gross margin relative to sector average, $548K instead of $264K revenue per employee. The top companies are leaving behind others in the dust.
● The young and wealthy use digital services and online reviews for pre-purchase education: The graph below shows it clearly.
● Big business place significant importance on CX: 50% of businesses surveyed had CX experts reporting directly to the CEO. CMO, Service, Supply Chain, CEO, Sales executives list CX their top 3 current focuses
What You Should Be Doing
● Set better expectations: Don’t just be satisfied if all is going well. Keep setting higher benchmarks and exceeding them as well so as to be on a continuous trajectory of growth. Either you go up or down.
● Seek and respond to feedback: Gathering and acting on the feedback isn’t enough, you should tell the customer what you’re doing with the feedback. Keep them in the loop.
● Move products and services to experiences: Customer intimacy should be on your priority list if it already isn’t. A singular focus on customer experiences would allow you to differentiate yourself and charge a premium.
● Try to be the number one: Market research has shown the difference between above average and below average is stark, so unless you’re putting effort into distinguishing your CX you risk becoming irrelevant. Case in point- Amazon and Apple spend over $6 billion on CX, they must be onto something, right?
● A 4-star rating is just not enough: Customer’s expectation is increasing at an ever-increasing rate partly due to increased competition and partly due to extensive access to digital info. See point above.
In today’s competitive landscape, it is not enough to delight your customers every now and then. Effortless customer experience should be at the core of your business philosophy because once you set and constantly beat expectations, new customers will naturally lineup to your services and/or products. This encourages promoters and word of mouth lead generation. Once you set a standard, differentiating yourself is a much, much easier task. In the years to come as technology converges and services become more and more alike, CX will increasingly provide your Unique Selling Proposition and that can’t be taken away from you. Good luck!