Ever get the feeling that customer experience strategy is an intellectual battle? Or that your company’s customer experience strategy would be better if only you had grander plans and bigger budgets? Well, stop. Nothing could be further from the truth.
That’s just one of the takeaways from spending a whirlwind hour with author and CX expert, Matt Watkinson. We’d treated another group of Customer experience professionals to the latest in our series of CX Leaders Masterclasses, with Matt as guest speaker. He touches on customer experience strategy best practices and more.
Matt is great at simplifying the complexities of CX thought into clear action plans. Burning issues were confronted, myths were busted and shibboleths slaughtered. Here, we are going to uncover 5 industry-leading customer experience strategy best practices from Matt.
1. The definition of customer experience should be specific to each organization
Does your company have its own definition of customer experience? Matt argued that definitions should differ because CX stems from unique combinations of product and service. Commercial objectives will also differ from company to company, and these should be a starting point for setting CX to work.
Deciding what CX is for can also be surprisingly elusive, even in large organizations. As discussed in Inside the customer experience masterclass, when these are fixed in generalities like “delight” and “happy” there is no real correlation with a commercial goal.
“The reason that so many CX programs are struggling to create any meaningful returns is because they were never conceived to. They weren’t designed with business objectives in mind. They haven’t gone to their leadership and said “what’s your strategy and how are we going to help you accomplish that”, they’re just saying “we’re customer experience and we’re in the satisfaction business.”
According to McKinsey research, there are numerous other reasons why customer experience strategies are failing to hit the mark.
2. Using CX for business growth is unrelated to customer loyalty
Most senior leaders want to grow their companies, and so they want CX to support revenue growth in some way. Accordingly, you’d expect the CX strategy to orientate toward that.
In Matt’s view, the reality is that it doesn’t. The stated aims of CX programs typically revolve around the concept of customer retention and loyalty. Matt pointed to decades of research showing that these have very little to do with revenue growth. Certainly a good deal less than orienting toward customer acquisition.
Matt also introduced the observed principle of ‘double jeopardy’ in relation to customer loyalty. Data apparently shows that, on average, the more customers you have the more loyal they become, and the fewer you have the less loyal they become. This is directly opposed to the received wisdom that diverting energy to existing customers is a more productive strategy than focusing on new customers.
“The bigger a company is, the more loyal their customers become. The way that you achieve more loyalty is actually by getting more customers.”
Reinforcing this is the connected principle of ‘buyer moderation’. This demonstrates that, typically over time, your ‘heaviest’ customers become lighter and your ‘lightest’ customers become heavier.
“Because a lot of CX people have a loyalty-first strategy, they over-invest in their heaviest buyers and neglect their lightest buyers. They actually stall growth rather than encouraging it.”
Matt’s final blow to ‘loyalty-first’ was an attack on the institutionalized thinking around advocacy. Advocacy is essentially positive word-of-mouth. And where does word-of-mouth come from? Well, it doesn’t tend to be loyal customers. It is almost exclusively new customers reporting how a new experience stacked up against expectations.
“If you want people to say nice things about your company and spread word of mouth, you need to focus on the path to purchase.”
3. A ‘great in every way’ experience is not a customer experience strategy
Companies that are successful with CX focus on what they want their experience to be known for. A distinctive ‘experiential signature’. He used the example of Amazon to illustrate this point. Everything about the Amazon experience is geared for ease, low effort, and stresslessness. That’s their niche. Not emotional, sensory, fun, social or beautiful (there are examples of other brands that major on one of those) – just easy.
This limitation in scope is crucial. Partly because it enables the brand to reinforce this competence and experience at every opportunity. Partly because an experience ‘great in every way’ just isn’t possible. And an experience that is ‘OK’ in every way is not a good idea.
4. Put a ‘zone of tolerance’ swimlane into your customer journey map
Matt returned to one of the central tenets of CX, Leonard Berry’s zone of tolerance, to illustrate how to prioritize CX initiatives. The concept is explained in detail here. In summary, it’s the idea that experiences are forgettable if they meet our expectations. They’re only memorable if they rise above or fall below these expectations.
“Go and dig out a journey map, or Google one, and see whether there’s a swimlane on there for expectations. See if there’s any consideration for which stages are ‘below adequate’, ‘above ideal’ or ‘unforgettable’. I guarantee you there isn’t, which is a massive oversight.”
5. Do nothing bad and one or two things consistently better than competitors
Where CX strategies go wrong, says Matt, is a lack of prioritization that tries to improve everything arbitrarily. By being selective, you can make a meaningful and measurable difference.
Affecting customers’ perceptions is key to impacting the customer experience. However, he stresses that creating memories needs to start with “doing nothing bad, and doing one or two things better than other people”. Advice that we at CT would call ‘brilliant basics and magic touches’!
The problem here is that many organizations tend to gravitate toward large, all-encompassing projects rather than being targeted. He gave the example of a company that had broken down its purchase and install process into 36 stages.
“One (stage) was memorably good, 26 or so were in the zone of tolerance and the rest were noticeably below what customers wanted. So we started the program there; fixing those things.”
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