Another buzzword…?

Every era has its management buzz word. We have known the eras of “net promoter score”, “big data”, “IoT”, and “disruption”, to cite only a few. Right after “AI”, “customer experience” is the dominating trend right now, especially within the areas of digital channels, customer interaction or service design. But what does it actually mean and how does it fit into the bigger picture?

In short, the story goes that, in a world where product features will not give enough competitive edge anymore, something else is needed to compete out there, and that is why customer experience have become a burning issue.

It is also tightly linked to the idea that it is customers who drive growth, not products. One’s customer base is the key driver of the whole company’s value. It is only through a growing customer base and a booming customer life-time value that one can increase one’s business in the long run.

What is actually required?

As always, the final delivery to customers is only the tip of the iceberg. In order to really drive customer experience, you need a lot more than a great service design team.

The basic fundaments of the organization need to be driven by customer insight built into the process. This includes the business planning and the development processes, how you define your business proposition, the governance model (for example, which performance KPIs are use), ways of working, corporate culture, etc.

What is needed is a paradigm shift from a product driven to a customer centric business. This shift includes among many other things, changing the nuts and bolts of the organization.

The bigger picture

The key assumption that customer experience advocates is that customer experience drives loyalty and that loyalty in the long run drives business value. Which is essentially true. But customer experience is not the only driver for loyalty. Indeed, trust and emotional investment are equally as important as the latter.

On one hand, there’s trust. Trust is earned when a company is truthful, reliable and when it delivers on its promise. More than ever, an increasing number of products and services are bought via digital channels, those transactions being made without any human interaction. Trust will therefore reinforce the confidence one has in a company, making it an inevitable metrics that drives loyalty.

On the other hand, there’s emotional investment. It is basically when customers are aligned with the company’s values and basic morals, and intrinsically want to see it succeed. In real life, it is this is the feeling one has for their favorite sports team, supporting it at all costs, even when they hit rock bottom. Emotional investment is one of the key drivers for brand advocates, and hence loyalty.

Therefore, customer experience is not the single driver for loyalty. Even though almost everyone uses Google services such as the search engine, Gmail, YouTube, etc, there’s an increasing number of users who don’t trust the brand anymore. It has been noticed that, the customer will easily switch to a new player entering the market if its level of execution and experience is good enough, and if the new player is more aligned to the customer’s values and beliefs. In other words, if there is trust.

What to do

Customer centricity and customer experience are increasingly important and could give to companies a genuine competitive edge if well-orchestrated. Transforming an organization from product oriented to customer centric is quite a challenging journey, as it requires careful planning.

Start with mapping out your current state in terms of business planning, governance, ways of working, etc. Then identify which steps can be taken in each area given your current maturity level and what you think will have the best effect.