Abstract
The need to keep an existing customer happy and leverage that influence in converting prospects to active customers has never been more important than it is today, in the ultra-competitive and volatile market space that companies operate. And the most important aspect in this regard relates to how an organization enhances their customers’ experience on an on-going basis. In this article, we describe five key practices that an organization could use to achieve this objective
How good you are as an organization in increasing / consolidating market share is likely to determine your success in the medium to long term. To do this, you first need to retain your existing customers, and then through their referrals and other marketing efforts, win new customers. To retain existing customers, the most important thing for any company to do is to enhance their experience of working with you as a provider. Out of several things that an organization needs to do in this regard, here we elaborate on five key practices:
- Delivering incremental and continuous value to the customer on an on-going basis
- Understanding your customer’s real needs and co-creating solutions for them by working with them on what is most important for them at any point in time
- Leveraging technology and ecosystems that use digital transformation strategies
- Listening to their feedback at all times and using that to enhance their experience of working with you as an organization
- Leveraging different channels to reach out to your customers – omni channel experience
We will discuss each of these practices / strategies in some detail in this article. For a more comprehensive discussion on these and other practices for enterprise agility, wait for our (PM Power Consulting’s) new book “Practices for Enterprise Agility” scheduled for release later during the year.
- Incremental/ continuous value delivery and associated approaches
Incremental/ continuous value delivery is about delivering value to customers on an on-going basis based on their evolving business needs. This is an expectation today from virtually every customer around the world. The need to be customer centric / customer focused is the primary driver for defining and implementing approaches that support incremental / continuous value delivery
The following are some key performance indicators impacted by this practice:
- Product/ Service Quality
- Delivered customer value
- Delivered/ Perceived experience
- Revenue/ Market share trends
- Referrals/ testimonials as well as repeat business
What does this practice require?
The following are the key things that need to be done for implementing incremental/ continuous value delivery and associated approaches:
- Overall understanding and alignment to customer needs, on an on-going basis
- Having a vision for a specific project context or from a customer perspective for every team – this helps provide a big picture for everyone in the team. Everyone understanding and aligning to this big picture will help provide the best value for a customer for the efforts put in by the team.
- Being able to deliver on demand for specific needs of the customer
- Addressing unstated needs – often non-functional requirements as well as aspects such as how the customer wants the experience to be, while implementing a certain functionality, are unstated but perceived as high value and so they need to be considered while understanding and analyzing requirements
- Prioritizing business value for user needs and ensuring delivery of just enough value, within the time it is needed. Value is often associated with when it is delivered, often because of the need to be ahead of your competition. Further, delivering large chunks of functionality infrequently may mean unused functionality and lost business value to the customer as a result of that. What is needed is “just in time delivery of just enough customer value”
- Ensuring the required focus on customer / user experience. Apple is an outstanding example of a company that has used innovation to drive extraordinary customer experience. It is the IT company with the highest revenue (2021) as well as the most valued company today with user base in excess of one billion for their iPhones. User adoption of their new versions is rated the best in the industry
- “Co-creation of solutions” with the providers / partners / other concerned stakeholders. While this is needed for virtually every context, it is even more critical in a services context where one is trying to provide specific solutions for your customer needs. To ensure adequate buy-in and ownership to solutions proposed, and to ensure the best value to your customer for meeting their requirements, involving all concerned stakeholders in co-creating solutions is necessary. This is described in detail subsequently.
2. Co-created solutions
This practice requires involvement of all concerned stakeholders – the provider and their partners as well as the customer – in creating a solution that meets or exceeds a customer’s needs and provides the customer with the required user experience. It is being seen today as a business strategy to create a value-rich experience for the customer. It’s obvious that such a strategy is likely to meet the customer needs better and create more ownership from the customer’s perspective for implementation (as they have been involved as partners in creating the solution).
The following are some key performance indicators impacted by this practice:
- Product/ Service Quality
- Delivered customer value
- Delivered/ Perceived experience
- Referrals/ testimonials and Repeat business
What does this practice require?
Co-creation, in general, is the collaborative development of new value (concepts, solutions, products and services) together with experts and/or relevant stakeholders (such as customers, suppliers etc.). Ideas are shared and improved together, among the concerned stakeholders. The following are the key things that need to be done for implementing co-created solutions
- Shared understanding and appreciation of user / customer needs and the recognition that collaborating with customers / users will bring in significant value from a solution perspective
- Customer empathy and the ability to work with customer or user personnel for identifying solution alternatives in a collaborative manner
- When providing a solution for a specific customer (as part of a service or solution) as suppliers (and other supportive stakeholders) to the customer, ensuring you are detached from the solution ownership, as the solution needs to be owned by the customer. This is an important aspect as, too often, one finds suppliers being too attached to a solution/ approach provided by them (as their own) to the customer
One example of a brand that has succeeded immensely using co-creation is Lego. Their Lego Ideas platform is an online community which brings together passionate fans and creators from around the world to imagine, iterate, and evaluate ideas for new LEGO kits. It is a great example of open innovation and co-creation, where members have actively participated in the journeys of several successful products from idea to development. There are other examples of companies such as DHL that have shown how co-creation can be applied in the service industry as well.
This practice often ensures a high quality and innovative product / service in addition to excellent value / experience for the customer. The customer knows the business / domain and the provider has the required technical / technology / solution experience and when their ideas come together there is potential for innovation, quality and value – and these in turn drives customer satisfaction and hence referrals and repeat business.
3. Eco-system nurturing
Ecosystems use digital transformation strategies to create / partner with, industry platforms. The primary driver for this practice is the need to provide a mechanism that leverages technology and helps in product / service out-reach as well as adoption, to customers and prospects. In addition, the need to compete effectively against your competitors is also a key driver.
The following are some key performance indicators impacted by this practice:
- Product / Service Quality
- Delivered customer value
- Delivered / Perceived experience
- Ease of working
- Rate of new products introduction
- Market / competition knowhow and leverage
What does this practice require?
As mentioned before, ecosystems use digital transformation strategies to create / partner with, industry platforms. Typically, ecosystems
- Allow users to interact with each other socially
- Allow sharing of data / provide data-based services
- Increase product outreach / enhance customer experience
- Integrate services of other companies to address customer needs in a holistic manner
An ecosystem such as IoT (Internet of Things) helps multiple applications to communicate with each other as a network.
By plugging into and nurturing ecosystems, an organization can get access to entire networks to find new customers, leverage new sources of data and so on. In the context of IT and IT enabled organizations (and most organizations today fall into these categories), nurturing ecosystems is an extremely important part of business strategy in the digitally transformed world.
4. Customer Experience / Feedback Management
Organizations need to keep their existing customers happy and leverage their influence in converting prospects to active customers, thereby increasing / consolidating market share. Getting new customers is several times (often quoted conservative number is between 10 and 20!) more expensive than retaining existing customers and this has been proven over time. So, while retaining existing customers is the primary goal, leveraging their referrals as a result of that, to get new customers, also lowers the cost of acquiring new customers. The only way you can keep existing customers happy is by enhancing their experience with your products and services and in the process use their feedback, actively, to achieve that.
The following are some key performance indicators impacted by this practice:
- Product / Service Quality
- Delivered customer value
- Delivered / Perceived experience
- Ease of working
- Relationships / customer dealings
- Referrals / testimonials
- Repeat business
- Market / competition knowhow and leverage
What does this practice require?
Customer Experience Management relates to understanding customers, engaging with them and in defining and deploying plans to ensure a customer centric culture across the entire organization.
The main goal is to build customer loyalty, reduce customer churns and increase referrals. Customers frequently identify speed, accuracy and personalization as the most important characteristics in dealing with a business. With the kind of competition witnessed in today’s environment, understanding competition and innovation are key to succeeding in the marketplace.
Customer experience management relates to a customer’s holistic perception of their experience with you as a business or your brand and the various stages they go through while doing business with you. It spans every possible interaction including the following:
- A customer or prospect’s experience of your company’s website, including ease of navigation, obtaining relevant information, understanding services and so on
- Experience with pre-sales team / personnel on offerings, especially in relation to their context and specific needs
- Deployment support, Customer service, post-sale support etc.
- Interactions with non-delivery / support functions such as finance, logistics and so on
- The consistency of messages they are getting from different interactions, and finally
- The overall feedback that they have about your organization, based on their complete experience with your products and services
The most obvious example of a company / brand that has had phenomenal success – going back to a few decades now – based on customer experience and innovation is Apple and their iphone brand. Apple continues to invest heavily, to this day, on customer research including customer behavior. While there are many other such examples from both the IT and non-IT industry, here are two examples of different kinds of organizations, that bring out how the best in business deal with customer experience and address customer concerns:
- When Nature’s Path, a pioneer in the organic food movement market, discontinued their maple cinnamon waffles, they didn’t think expect to care or even notice. But for Jerico, a boy who had severe autism, those waffles were the only thing he wanted to eat. His distressed mom put out a call for help, and Nature’s Path responded. Not only were they able to locate and ship her the last six cases of waffles available, they also set their research and development team to work on converting their commercial recipe for home use so Jerico didn’t have to go without those waffles.
- Chewy’s, an American online retailer for pet food and other pet products, is another company that has succeeded based on valuing customer experience and service. When one of their customers had to cancel future orders when her pet dog died, they not only refunded the order amount promptly, they sent her a card and flowers as an empathetic gesture. Even more kind than these gestures were their spoken words, which were asking her to give them a call them anytime she just needed to talk.
5. Leveraging different channels / the omni-channel experience
The phenomenal advances we have seen with internet and related technologies over the last two decades has transformed the way consumers do shopping as well as their expectations of experience from that process. The retail industry has perhaps undergone the greatest transformation during the last decade with the emergence of a plethora of channels for customer interactions from anywhere and at any time. This has enabled a unique, complete and seamless shopping experience for customers that breaks down the barriers between channels. For an organization to succeed and outsmart their competition, it is imperative that they leverage all different channels available for interactions with their consumers and facilitate an experience that hooks them on to your organization and its products / services
The following are some key performance indicators impacted by this practice:
- Product / Service Quality
- Delivered value
- Delivered / Perceived experience
- Ease of working
- Repeat business
- Referrals / testimonials
- Rate of new products introduction
- Market / competition knowhow and leverage
- Revenue / earnings and market share trends
What does it require?
Leveraging different channels and providing an omnichannel experience to your consumers typically involves the following:
- The first aspect is understanding the difference between a multi-channel and omnichannel experience. In a muti-channel experience, the consumer can use different channels for doing different things – like searching for information, exploring alternatives, placing an order and so on but these channels are not inter-connected whereas in an omnichannel situation, the channels are integrated to provide a seamless shopping experience for the consumer. Such a seamless experience allows them to pick up from where they left off on one channel and continue their experience on another channel.
- A typical process in implementing an omnichannel strategy will include understanding the customer and market, mapping a typical customer’s journey, implementing and integrating multiple channels to provide them the required support services and finally enabling an omnichannel experience from start (prospecting / pre-sales) to finish (including post sale support). These support services not only span different channels but different platforms and devices as well.
- To illustrate, Amazon’s omnichannel strategy involves integration across different marketing channels – these may include channels such as mobile push ads, social media, newsletters, mobile apps, laptop / desktop purchasing, and chatbots. Such integration and easy accessibility enhance the overall consumer buying experience.
- The important thing about this marketing strategy is to ensure consistent messaging, positioning etc. across all channels, platforms and devices. The idea is to create a seamless brand experience for customers by ensuring that your brand is presented the same way from platform to platform.
- Another important aspect to consider is that the different channels are blurring together as the natural boundaries that once separated them begin to disappear. In today’s world, they are used seamlessly and interchangeably during the search, purchase as well as the post -purchase process, and it is almost impossible for firms to control this usage.
- Examples of some companies that have implemented an excellent omnichannel experience include Disney, Virgin Atlantic, Starbucks, Oasis, Amazon, Spotify and Apple
