Jon StephensJon StephensOctober 27, 2017
grave-2510928_960_7201.jpg

5min779

Creating great Customer Experience can be hard….however, creating CX that is truly innovative can sometimes feel impossible.

Just keeping-up with competitors requires continuous improvement, doing something new in your industry requires herculean effort, and doing something innovative cross-industry is surely the preserve of only the FANGs (Facebook, Amazon, Google, Netflix) or plucky little start-ups!

The guardians of Customer Experience in many organisations have rightly turned to a set of design tools (and design thinking) to help them tackle these innovation challenges.

However, there is a dangerous side to these tools, which if not managed correctly can limit rather than inspire innovation in CX.

1. Customer research

“The only thing worse than talking to customers, is not talking to customers.”

My organisation runs thousands of customer interviews each year and employs a wide variety of research techniques, so I am a strong believer in integrating customer insight into the experience design process.

However, all too frequently, customer research can be an inhibitor to real innovation, rather than a catalyst, creating Customer Experience that is 10 percent better rather than a factor of 10 better. There are three main reasons:

Biases and leading questions mean that research only validates existing hypotheses.

Not enough time is left for exploring interesting tangents – opportunities to re-frame problems and identify new ideas are lost.

Customer insight overpowers the ideation and creative design process, narrowing thinking rather than expanding it.

A combination of approaches is needed to harness the best insights from customers without constraining innovation.

Using experienced, curious, and well-prepared design researchers prevents biases and leading questions.

Planning extra time to explore interesting conversations ensures innovation-provoking insights are not smothered.

Phasing research so that it does not stray too early into solutioning, and ensuring that customer insight is only one of many stimulants to the ideation and design processes, helps ensure that thinking is not narrowed too soon.

2. Journey mapping

“Focus on the destination, not the journey”

Journey maps are often the cornerstone of Customer Experience programmes. Their attractive graphics and intuitive layouts make them great at organising complex CX information, and they are easy for non-designers to pick-up and start using.

However, as with customer research, using customer journey mapping in the wrong way can quickly stifle CX innovation.

Mapping the current state journey constrains future state experience design by focusing too closely on fixing individual pain points, rather then re-imagining the entire experience.

The journey framework naturally restricts innovative thinking by forcing designers to think in individual journeys or journey steps too early in the creative process.

Journey maps can quickly become driven mostly by IT or business requirements rather than by an ambition to depict an ambitious and inspiring future state Customer Experience.

Avoiding these journey mapping pitfalls starts with project scoping and planning – ensuring that activities are scheduled and ordered in such a way so that the risks posed by constrained thinking are minimised.

For example, mapping the current state is often necessary to identify areas of greatest value for the organisation, but when moving on to the designing, the future the current state should temporarily be ‘forgotten’ during future state vision and ideation activities.

Before jumping into designing a future state journey, think first in terms of concepts or individual ‘moments’ of the experience – these can later be knitted to together in to coherent journeys.

Customer research and journey mapping can be useful tools for designing and implementing improved CX. However, to move beyond optimising what already exists in an organisation or an industry, a carefully planned experience design approach is required – with a delivery team that understands the nuances of how these, and other, design tools should and shouldn’t be used.


Jon StephensJon StephensNovember 15, 2016
main-photo-why-cx-matters-1024x683.jpg

11min1985

Customer experience. It’s somewhat of an ambiguous term, which has so far carried different levels of importance to different sectors. If you’re in retail, where customer spend is discretionary and there is a constant threat of new challengers stealing your lunch, you probably see good customer experience as a key way of differentiating your service and attracting and retaining customers. If you’re in banking, telecoms or utilities, where switching is harder and barriers to entry for new providers have been high, you are more likely to work with people who think that customer experience just needs to be ‘good enough’.

Unfortunately for the latter, the world is changing. Innovation is becoming increasingly important, and we’re even seeing government forcing standards like open banking to ensure healthy competition that drives progression, more choice and better experiences for consumers.

Together with the development of new technologies and the changing attitudes of millennial consumers, customer experience is only going to become more important. But why should companies invest in customer experience, and is good, good enough?

Financial impact of experience

The most obvious way of connecting customer experience with financial impact is by analysing the connection between experience and price expectations. In 2014, Harvard Business Review reported that in a transactional business like retail, customers who rated their experience the highest spent on average 140 per cent more than those who rated their experience as poor. Similarly with subscription-based businesses, customers with the highest experience scores stay an average of five years longer than those with the lowest scores.

experience-matters-graph-1

This summer, EY-Seren did its own research into the impact of different aspects of experience on propensity to pay more for a product or service. We found that up to 46 per cent of 2,000 consumers would be willing to pay more for an experience that exceeds their expectations; between three and four per cent were willing to pay over 20 per cent more if one aspect of the experience exceeded their expectations.

Interestingly, this is more true of millennials than other generations. Consumers aged 18 – 34 were on average around 14 per cent more willing to pay for five elements relating to experience – buying and sign-up experience, payment and billing options, product and service features, customer services (for solving problems) and ease of completion tasks – than those over 35. With millennials now making up 25 per cent of the population in the UK (and US), and growing, this is significant when designing customer experiences.

Acquiring new customers is also a key part of financial success for any business. Because one of the main drivers of acquisition is word-of-mouth recommendation, EY-Seren also looked into the impact of experience on propensity to recommend a company. We found that all aspects of customer experience have a significant impact on customer propensity to recommend a company, product or service; better product and service features and customer services were seen to have the most influence (21 per cent and 22 per cent respectively). However, as with the pricing analysis, all categories are significant in generating recommendations.

experience-matters-graph-2

The good, the bad and the ugly

While some industries are already ahead of the game when it comes to customer experience, others are still woefully behind. When looking at which specific brands respondents would be willing to recommend to their peers, EY-Seren’s research found retailers fared particularly well.

Ten times more respondents said they would recommend both Amazon and Marks & Spencer than actively discourage others from the brands (Amazon: 63 per cent recommend, 6 per cent actively discourage / M&S: 51 per cent recommend, five per cent actively discourage). Sixteen times more respondents would recommend John Lewis (48 per cent compared to three per cent).

Amazon is well known for revolutionising customer experience, jumping on new technologies as they emerge. The company pioneered real time recommendations for customers in the early days of existence, and expanded its services across multiple devices in recent years, even adding a ‘Mayday’ button to its Kindle products for round the clock customer service. It was also one of the first companies to use a chatbot to manage customer queries when it launched Amazon Alexa – although far from perfect, Alexa has some pretty good qualities.

In an industry where new competitors spring-up every day, great customer experience has the potential to make a huge impact. So it’s unsurprising to see this level of innovation in retail and similar industries. However, in industries where barriers to entry are high, and switching is difficult, ‘good enough’ has, until recently, been enough. As long as a competitor isn’t offering a similar product at a significantly lower price, customer churn stays low.

Telecoms and energy providers both fall into this category, and were the only two sectors where most respondents in the EY-Seren survey were more likely to discourage friends and family from almost all leading brands, than recommend them. With both industries facing significant disruption, these providers won’t be able to rest on their laurels for long.

Figures released by Cornwall Energy last September showed that, while the big six energy providers still had over 87 per cent market share, over 600,000 people had already moved to smaller independents. Furthermore, smaller companies like Ovo and Good Energy are raking up customer satisfaction scores of over 80 per cent, while the legacy companies don’t break 50 per cent, according to Which?

experience-matters-graph-3

Banking is in a similar situation, as an increasing amount of fintech startups enter the market and raise the bar for customer experience. London company Tramonex for example, uses Blockchain technology to reduce transaction costs and speed up money transfers so SMEs can use the foreign exchange market. Elsewhere, Artificial Intelligence is being leveraged to spot irregular transactions to improve fraud prevention, as well as predict bad loans and credit risk models. The technology is also being used by fintechs to track consumer activity and get a better understanding of how people use a service. This enables disruptors to tailor their offer to a customer’s specific needs and behaviour.

New open banking regulations will force major banks to make transaction data available to trusted third parties, driving innovation and making switching easier. These regulations will take effect from January 2018 so the incumbent banks will need to reassess their investment in customer experience quickly, or risk losing their customers in the long-term.

Where to start

There is a clearly a case for investing in experience based on generating increased spend and loyalty from existing customers. However, a ‘good’ experience won’t necessarily open-up opportunities for increasing customer spend or Average Revenue Per User (ARPU). Experiences have to exceed expectations in some way. Understanding expectations is therefore key, as is building a strategy that differentiates the experience you provide to that of your competitors.

When doing this, there are a couple of important things to consider. First, don’t focus too soon on individual touchpoints or specific parts of customer journey. It’s crucial to consider customer experience as a whole to truly put yourself in the shoes of the customer. Once this is understood, the potential commercial return for improving different aspects of the experience can be modelled.

This commercial analysis then informs prioritisation of different experience initiatives. Second, remember it’s not just your traditional competitors that will impact customer expectations. Make sure you look outside your immediate competitors to those that are already delighting customer with great experiences and feed those lessons into your own strategy.

Ultimately all companies can win market share and reduce churn by offering an experience that surpasses expectations of consumers. We believe that finding ways to provide truly differentiated and innovative experiences will be the defining characteristic of the most successful companies in the next five years.

Interesting links:




Inform. Inspire. Include.
A free way to improve your business.

Customer Experience Magazine is the online magazine packed full of industry news, blogs, features, reports, case studies, video bites and international stories all focusing on customer experience.


CONTACT US

CALL US ANYTIME



Contact Information

For article submissions:
Editor
Paul Ainsworth
editorial@cxm.co.uk

For general inquiries, advertising and partnership information:
advertising@cxm.co.uk
Tel: 0207 1932 428

For Masterclass enquiries:
antonija@cxm.co.uk
Tel: 0207 1937 483

Awards International ltd
Acacia Farm, Lower Road,
Royston, Herts, SG8 0EE
Company number: 6707388

JOBS IN CUSTOMER SUPPORT

Find a job in customer support with Jobsora


Newsletter