Let’s talk for a second about positive customer experience. We all know what it looks like and feels like, and (hopefully) we’ve felt it ourselves too. It means each channel is consistent, each touch point makes sense, each rep knows what they’re discussing, etc. In short, it means consistency — or as I’ve called it, experience reliability and innovation.
There are a few important things we need to discuss briefly here, though.
Positive customer experience: Do companies “get” it?
Increasingly I think they do, yes. There is a lot that can be written about the intersection of the CCO and the CMO (and I’ve written some of it), but in general, I think (and research has shown) that customer experience is trumping brand these days. I don’t mean to say your brand and position isn’t important. It still is. But customer experience is more important these days, because people have more choices. In a few industries, switching costs are huge — but in most, they’ve been lowered. So people will go with a consistently better experience over a strong brand, often. Realize that.
All this said, some companies are slow to get this. Research from 1972 to 2013 showed that many S&P 500 companies valued customers only as, essentially, wallets with fingers. The experience, and/or what the customers could give back to the brand (customer listening), was not valued.
I do think this is changing, but it’s slow in some companies/sectors.
Let’s talk costs and positive customer experience
Many companies are still run according to cost-cutting, penny-pinching strategies. I understand this at one level. We’re less than a decade removed from a recession, and while so far Trump has been good for the market (not trying to be political), the other shoe could always drop. Companies want to make sure they’re “running lean” cost-wise, and that’s all good.
But here’s the thing: the next wave of great companies won’t be the cost-cutting ones. Rather, they will understand three things:
- Positive customer experience
- Effective internal decision-making
- Better team-building and collaboration
Two important intersection points between positive customer experience and costs:
- Price isn’t the main reason for customer churn (as many execs think); it’s actually bad customer experience
- A 2% increase in customer retention is the same as a 10% decrease in costs
I’m not necessarily saying “stop worrying about costs.” No business can do that. But I am saying — think about positive customer experience more and you can thus think about cutting costs less.