Ideas & musings about consumer behaviour

Contemplating the Customer Experience Conundrum

Customer experience conundrum

Author: Jeremy Weinstein

There are many studies that ask the consumer about the importance of a good experience and unsurprisingly many consumers are all for it! And why not – if I had the choice between a good experience and a poor one, I know what I’d choose. But does it affect a company’s bottom line?

Well interestingly, a recent consumer research study conducted by Forrester (2014) found that “customer experience (CX) is a more powerful customer loyalty driver than price-value perception, specifically for banks and retailers.” In addition, a report put out by Optus (2013) indicated that consumers predicted “online to become their overall preferred channel of engagement” between 2016 and 2018.

There are also many precedents in the business world that suggests a good customer experience pays dividends; the global technology giant Apple built a multi-billion dollar empire on perfecting the customer experience, ensuring the customer was at the centre of everything they did. And while this all sounds good, there is still some hesitation about how to measure, evaluate and subsequently determine a course of action based on the intangible data surrounding the ‘customer experience’. This is exacerbated by businesses that are only focused on improving the bottom line by aggressively selling more products.

In reality, it makes perfectly logical sense that companies should do whatever they can to improve the customer’s experience, retail stores have evolved to improve the flow of customers through the store, or strategically positioning products for maximum return. Beacons – the relatively new technology that communicates with smartphones while indoors – are a perfect example of how understanding customers’ behaviour can lead to an improved experience.

So, what is holding back many in the digital world? Why is there a lack of belief in the financial benefits of improving the customer experience?

As a customer experience consultant with Global Reviews, we are at the forefront of understanding customer needs and behaviours, and we deal with these difficult questions constantly. Our experiences can provide insights into these challenging issues.

In our work, we encounter many companies espousing the virtues of customer experience, however when push-comes-to-shove their preference is to affect a measure that is unambiguous such as a sales targets rather than improving the murky metrics surrounding customer experience. The unpredictability of human nature and by extension the difficulty in quantifying the human experience means that no manager will set a KPI for their team that is outside of their control. Which is why all the metrics rely on the simple question, did our revenue increase? And while that is a key business imperative, this raises other questions, such as how do organisations evolve and innovate if they are only ever looking at immediate effect of their strategy on the bottom line.

The issue is that humans love to simplify things often placing them in binary opposites, especially digital humans. It is one or the other; sell more or focus on the experience, many managers still think of them as separate tasks with an unclear link, rather than seeing them as being one-in-the-same, connected by cause and effect.

Complex issues like this rarely have a simple answer and it is likely to be a combination of factors, including; a relatively immature digital space, despite all the data its generated and the importance it has in our lives, when it is compared with the physical store or the printed brochure. It could also have something to do with those who work in web design and usability often trying to simplify and perfect the visual element of the solution only to discover they have forgotten some of the basic principles of usability. Even though the starting point for a good experience stems from the foundational principles of website usability, the number of businesses that fail to implement these basic measures when creating a website experience further points to a lack of clarity on this issue. And when problems arise, as they inevitably will, there is a cacophony of voices from within the business that all ‘reckon’ they know the source of the problem, when in reality they might be pushing another agenda to fill the void left by unclear and ill-defined customer experience metrics. In addition to the previous points, the blink-and-you’ll-miss-it pace of the digital world positions businesses in a constant game of catch-up, lurching from trend to trend rather than anticipating them.

While the aspects listed above are certainly factors in the decisions businesses make about the future direction of their digital offering, it often comes down to two key aspects, business leaders’ uncertainty and impatience. Businesses do not know what to do to improve the customer experience, and those that think they do know are often not prepared to persist with the iterative nature of designing and re-designing a world class customer experience.

In this world of instant online gratification, many business leaders are falling into the trap of trialling a customer experience program only to find that the rewards lack immediacy and the improvements are unquantifiable. Despite these difficulties, some are still prepared to throw their full weight behind transforming their organisation, such as ANZ CEO Mike Smith, in the hope of building a stronger, more robust customer base into the future.

Businesses need to start now with a clear plan and a detailed program to improve their online customer experiences because if they don’t it wont be long before customers see them as antiquated. This may require significant thought and investment in management structures and personnel that can deal with the constantly changing needs of customers to ensure they are always receiving the best experience possible.

This is just the beginning of the conversation about the customer experience; this does not even touch on the benefits of personalisation, which is the buzzword for many digital leaders. If you are interested in continuing this conversation, or the many others that currently face the digital world, then come to our Digital Leaders’ Summit, June 10th, 2014.

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