About two years ago, a tow truck backed into my car. The damage was not cosmetic.
The insurance and repair process on fast forward went something like this: Call insurance company, wait 30 seconds, tell story. Reassured I won't be held at fault, deductible waived. Drop car at repair shop, rental car waiting for me. Car fixed and ready on time, within five days, returned to me better than new.
Unexpected, and fantastic.
The experience was so good I still tell people about it. It was a genuinely positive customer experience.
Customer experience was a bit of a buzz term pre-recession, and it is now making a comeback. Conferences and seminars on the topic are popping up, and the 'CXO' title is again en vogue.
There are many definitions of customer experience. Some companies focus on customer service, particularly call centres, while others take on a broader orientation to include multiple customer touch points.
Lewis Carbone in the book Clued In refers to customer experience as a three part, cyclical process. It starts with perception, transitions into interaction, and finishes up and begins again with recollection. This point of view has a lot of merit.
This is the start of the cycle because customers have pre-determined views of companies, brands, or products and services, whether they are conscious of those views or not.
This is more obvious, where customers touch and feel and have conversations with brands and people from their organizations. What may not be obvious is all of the points of interaction that customers have with those companies – and each one offers an opportunity to impress or disappoint.
Great customer experiences are remembered later. So are very poor ones. The interactions have to hit an emotional chord in order to resonate after the fact.
There are some points of debate over customer experience playing out in the market. Three contentious matters are:
Customer experience is the same as customer service
Some firms take a very focused view here, aiming to measure and improve on customer service. Customer service is only a portion of customer experience. In the cycle described above, customer service only plays into the "interaction" phase. Neglecting other aspects of interaction and the other phases can entirely miss important customer touch points.
Customer experience is the same as brand experience
A key difference between brand experiences and customer experiences relates to where the attention is during the experience. Customer experience relates to how people feel about themselves as they interact with a company.
Brand and customer experience can be thought of as two sides of the same coin. Brand experience tends to deal with customer perceptions of a company as a whole, while customer experience speaks much more to how customers perceive themselves and their dealings as part of the process of engaging with a company.
Customer experience programs are complex and expensive
All customers have experiences. Customer experience is an orientation, not a program. It's about understanding all the points of interaction between customers and a company, and taking advantage of those interactions. Solutions don't have to be expensive, they just have to be smart.
Customer experience is a direct driver of repeat purchase behaviour and loyalty, referrals, and PR (good and bad).
• A company is more likely to generate repeat business with positive overall customer experiences than without them, although it is not always linear. Some research shows that if a customer has a very positive experience during the first interaction with a firm, that company has, in effect, bought itself time and goodwill with that client. The business can deliver a neutral customer experience the second, third and even fourth time and still keep the customer coming back. Repeat business is normally about five times easier to get than net new business, so there is a big incentive to provide customers, especially new ones, with a tremendous overall customer experience.
• Many businesses count on referrals to generate net new business. The effects of customer experience here tend to be polar, and skew more heavily toward action on the negative end of the spectrum. In other words, very positive customer experience generates positive referrals, but the experience has to really exceed expectations. However, even mildly negative customer experience leads to negative referrals (people actively encouraging others not to do business with a given company). Neutral customer experiences don't generate referrals or word-of-mouth at all. This premise is one of the ideas behind Net Promoter Score, an important metric in customer experience.
October 18: Three important stages to think about when you approach customer-experience management for the first time. Look for it on the Report on Small Business website.
Special to The Globe and Mail
Mark Healy, P.Eng, MBA, is a partner at Satov Consultants – a management consultancy with practice areas in corporate strategy, customer strategy and operations strategy. Mark's focus areas inside the customer strategy practice include consumer insights, customer experience, innovation and go-to-market strategy. He is a regular speaker and media contributor on topics ranging from marketing to strategy, in telecom, retail and other sectors. Mark is known as much for his penchant for loud socks and a healthy NFL football obsession as he is for his commitment to Ivey and recent Ivey grads. He currently serves as chair of the Ivey Alumni Association board of directors. Mark lives with his wife Charlotte and their bulldog McDuff in Toronto.
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