Customer Experience in times of Austerity?

The promise of Customer Experience is to improve the return on loyalty through better customer emotional engagement. But what about in recessionary times when the simple survival of the organisation in the short-term is at stake and cost cutting is a top priority, how can Customer Experience help here?

We do not deny that cost cutting is an important part of your business and should be undertaken in lean times (or at least seriously considered); the point is that you want to cut those parts of your experience that are a cost, not those parts of your experience that are fundamental to differentiating yourself from the competition and drive value.

So, how can we determine the difference between those parts of your experience open to cost cutting and those that should not be cut as they are value driving?

The first thing here is to understand that when we look at ‘what to cut’ and ‘what to keep’ we are looking across the whole Customer Experience. This means we measure a very diverse range of touchpoints including the seemingly emotional (‘empathetic manner’) or subconscious (‘colour of the carpet’) as well as the rational; to be clear, drivers to value are not necessarily just about a cheap price or good product features.

Consider this example; I was recently in Madrid, staying at a renowned International Hotel Chain. Of course price was important (we do not deny this) but what really stuck in the memory were the small things, often incidentally designed to help emotionalise the core and, previously considered, functional value of ‘getting a good nights sleep’. Core value clues like a scent spray that you could put on your pillow to help you sleep, black out curtains and so forth, all communicated ‘helpfulness’.

The point of mentioning this is that if your value, the reason people come to your hotel is based ‘in part’ on the memory of events that say ‘I get a better nights sleep here’ then a Lean or other Cost Cutting programme that focuses on eliminating these small experiences as unnecessary is cutting into your core marginal value over other similar hotels. In essence, you will lose business and reduce your ability to grow higher margin segments (such as luxury or other business traveller types).

In much, the same way if a credit card company with a brand association for ‘warmth, empathy and consideration’ decides to outsource their premium customer contact centres to save money, then Experience measures must indicate whether the contact centre experience drives value or not before any final cost cutting decision is reached. If customers start thinking ‘this company I thought was ‘warm, empathetic and considerate’ is now treating me like ‘a number’, you risk moving yourself into a value dimension opposite to the value-add differentiator you wanted to be in! Ultimately the brand ethos is lost and you start to lose market potency.

Of course the big issue in all this is: how do we measure Experience in order to understand what is truly of value or not and thereby understand where and by how much we can cut costs?

Determining where to cut costs

This is where our service Emotional Signature® can help. The name may focus on Emotion but in fact it considers all drivers and destroyers to value across the whole Experience; for instance the emotional and rational effects; the subconscious and conscious effects; what is a driver or destroyer of value today (customer ‘as is’ reactions) and what customers think could or should be important to value (of psychological ‘to be importance); how all parts of the experience are important.

It is from this process that the whole Experience can be judged across a Value-based Methodology to Cost Reduction. The following diagram shows how from running an Emotional Signature® we can create a 2×2 box of where the attributes of your experience sit and whether they can therefore ‘safely’ been considered a candidate for cost cutting.

Clearly, those attributes of your experience that drive value are worth maintaining or investing in from whatever quarter they arise. Likewise, those that do not drive value or actively destroy value are worth considering for reduced investment or cutting.

This methodology as an empirical approach therefore sits independently from internal ‘beliefs’ on what should be cut or not and helps the organization truly appreciate where their true value lies.

This process is also supported by a benchmarking database of 30,000 interviews and has great kudos being referenced in the International Journal of Market Research:

The case for focusing on emotion as a philosophy for building a better experience for customers as presented in the book is a compelling one. The methodology for undertaking the necessary emotional analysis is practical, simple, potentially very effective, and enables organizations to benchmark themselves by sector and ‘best practice’.
International Journal of Market Research Vol. 53 Issue 1