Customer Experience is having some growing pains. There are a lot of reasons for it, which I have shared before. However, by adopting a renewed focus on the following five concepts in Customer Experience, you can overcome these challenges, and, perhaps more importantly, stay ahead of the competition.
We discussed these five areas in a recent podcast. I have assembled them here for your reference.
5 CX Concepts to Stay Ahead of the Competition
1. Focus on the ROI of CX improvement
You go into business to make money. If you are a senior manager or the CEO, you need to know that where you have deployed your resources is paying off. If you have low results for your CX efforts, or worse, no record of your results, you will not be a resource that is paying off. Senior management will deploy your resources elsewhere.
A renewed focus on the ROI of your efforts is vital to the longevity of your CX program. Obviously, if you can point to an increase in revenue, do that. We have had clients like Ricoh Canada that improved their Customer Experience, which led to a rise in sales by 10%—and that was in a shrinking market.
However, ROI isn’t always about more sales; there are other ways to measure your success in ROI. It can be an increase in your Net Promoter Score, a rating that determines how likely a customer is to tell their friends and family about you. It can be an increase in customer satisfaction ratings, which are key indicators that your customers feel happy and pleased with their experience. Or you could demonstrate a reduction in costs associated with problems you had before you made the Customer Experience improvements.
2. Segment your customers into personas.
In my experience, most organizations could use a little help in this area. Many companies segment customers based on the amount they purchase, e.g., small, medium, and large. However, in our global Customer Experience consultancy, we encourage moving away from segmenting based on how much they spend with you and instead grouping centered on other variables. What drives peoples’ values, attitudes, interests? What are your customers doing and how are they doing it? Work with their preferences to deepen the relationship.
For example, if you have a customer that interacts with you online, and only online, work with those preferences when you are developing the account. Don’t waste time and energy trying to drive them to a brick and mortar location. Help them get the most out of your online channels. Introduce them to additional services available online.
Your customers have different motivators depending on the variables that apply to their lives and personalities. When you can group your customers based on their behavior or psychographics (which are factors related to people’s personality type and personal characteristics), you can create personas that represent your customer groups.
Personas are represented by an archetype. For example, a persona could be represented by Suzy, the epitome of the group. Suzy is an educated worker with a family who lives in the suburbs and commutes more than 30 minutes to work every day. Once you have personas to target, you can customize your message to appeal to that group and create an experience that is likely to appeal to them and turn them into loyal customers.
3. Use Digital Transformation as an enhancement, not a replacement.
Many companies have a focus on digital transformation for their customer process. When overhauling their digital experience, they approach it with an eye to save costs. However, this approach can throw the baby out with the bathwater, so to speak. Digital experience transformations should do more than save costs, and they cannot replace the human touch.
Elements of your experience are enhanced by the human touch. When you digitize these experiences, eliminate human contact, and improve cost efficiencies, you can destroy the emotional connection people have with your brand.
An example I like to share regarding this concept is our former Milkman, Kevin. We used to get milk from the milkman, which, even in England, was a bit old-fashioned. I suggested once that we get our milk at the store, like nearly everyone else. My wife informed me that she liked talking with Kevin when he came by and would rather continue getting milk delivered. Over time, Kevin moved on, and the new milkman didn’t chat with my wife. Instead, he asked that we put a check under the mat. After a few weeks, my wife said, “You know, I think we should get our milk from the store.”
To be fair, some customers might have preferred the check-under-the-mat system with the new milkman. But for my wife, Kevin’s personal touch made the service worthwhile and the new system, well, not so much.
When you engage in a digital user experience improvement, remember that it is an additional channel, not a replacement for the human touch. Many people will prefer to interact digitally, which will alleviate some of the burdens on the “human” channels. But you should not eliminate the human touch altogether. Some people need emotional engagement to be loyal, and computer screens and text exchanges usually cannot rise to the occasion the way a person does.
4. Embrace but manage your use of AI to enhance the experience.
Artificial intelligence (AI) is going to have a massive influence on Customer Experience over the next few years. If you are not looking into it now, you should be.
However, the same principles apply as they do to digital transformation. Take care not to eliminate what is working now to make room for AI enhancements. Understand that your customers are not necessarily logical and certain elements drive value, like human interaction.
Two cautions about the implementation of AI. First, AI is overused as a term. Some forms of statistical analysis are thrown in with AI, but they are not necessarily AI. This analysis is something marketers have engaged in for years, but it has been rebranded to sound sexy.
Second, some use of AI is creepy. People believe Facebook and Google are spying on them and then using the data gathered with algorithms to target them with ads—and people do not like it.
So, if you are too efficient with AI targeting, proceed with caution. You could alienate some parts of your customer base.
5. Measure customer emotions, but in real time with facial recognition.
Facial recognition technology opens up a new area of understanding how your customer feels. Previously, we could just ask customers how they felt. Facial recognition technology picks up on the signals a person’s face communicates, which may or may not match what they say on the survey.
We say a lot about how we feel with expressions other than words. For example, our tone of voice communicates loads about what we think. Our body language also tells others how we feel in the moment. Facial expressions say a lot, too.
Emotions are the foundation of excellent Customer Experience. Caring about how people feel is fundamental to improving your Customer Experience as over half of any Customer Experience is influenced by how the customer feels. Making an emotional connection with people is a crucial part of a relationship. Managing emotions that are not ideal in a Customer Experience contributes to trust.
However, to do any of those things, you need to be able to see how they feel at a given moment and act upon it. Asking doesn’t always work because people might not want to tell you what they think out of politeness or embarrassment. Facial recognition could be one of the ways you interpret how your experience makes people feel.
To hear more about how you can apply these concepts to your Customer Experience, please listen to the podcast in its entirety.
To summarize, this year is going to make or break what drives value for Customer Experience. By focusing on ROI and segmenting your customer base on appropriate variables, you can protect your programs. Also, embracing new digital channels and incorporating the latest technology can enhance your experience and appeal to a whole new set of customers, as well as provide you with the data you need.
Perhaps most importantly, these concepts and actions will keep you ahead of the competition, because if these trends at the end of last year say anything, it’s that the competition isn’t fairing much better than you with their Customer Experience at present.
If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire. Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.
Hear the rest of the conversation on “Are You a Risk Taker?” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX