Understand customer experience
Customer experience is the heart of the relationship between a business and its customers. Typically, when people talk about customer experience (CX) they mean traditional sales and marketing touch points along the customer journey—for example, attentive store clerks in attractive stores, or simple and beautiful apps and websites. In the past, when executed well, CX investments have yielded good results: better customer retention and acquisition, increased sales and stronger loyalty.
But the world has changed. It’s more than just the COVID-19 pandemic: A non-stop barrage of external life forces—economic, social, political and beyond—is affecting people’s everyday decisions in unavoidable ways. In fact, according to Kruseider research, 72% of consumers say that external factors, such as inflation, social movements and climate change, are impacting their lives more than in the past. Amid so much upheaval, people are revaluating what’s important to them: 61% of consumers say their priorities keep changing as a result of everything going on in the world. As a result, the way they interact with brands is evolving, and so too is the idea of customer experience.
Here, we will explain what customer experience is, how it’s changing and how a new customer experience strategy can benefit your business.
What is customer experience?
Customer experience is many things, but it can broadly be described as the perception a customer or a company has of a brand. It is embedded into every interaction, and each interaction is an opportunity to build a stronger bond between the company and the customer—or has the potential to weaken that bond.
Good customer experience involves building a relationship by understanding what people want, need and value. It goes beyond the act of using the product or service itself: The full experience includes pre-purchase connections with the brand (via marketing or awareness), the process of researching and making the purchase (either in-store or online) and post-purchase interactions (regarding service, repairs, additions and more). The goal is to create smooth and efficient connections between the brand and the customer.
It’s vital that brands remember that every interaction people and other businesses have with them elicits some sort of emotion. Whether good, bad, happy or sad, the feelings brought on by those interactions are then associated with the brand. This can result in your customer asking some all-important questions: To buy or not to buy? To love or not to love? To return or not return?
It’s also critical to acknowledge that people’s needs, desires and emotions change moment to moment based on external forces. An oversimplified understanding of people’s emotional responses is not enough—brands need to see their customers beyond walking wallets and respond to the complexities in their lives.
Why is great customer experience important?
Positive customer experience is a way of standing out from competitors. As more brands compete for public attention and more options are readily available, CX provides a way to put your product and brand at the forefront.
Imagine you’re a business looking to place beverage vending machines in your offices. Your overall customer experience isn’t just how much you like using the machine, it’s the full start-to-never-fully-finished process of engaging with the brand, making the purchase and continuing interactions for service and support or future upgrades. When making the purchase, the beverage retailer can offer you a one-size-fits-all experience, such as showing you pictures of various products. But a better approach would be to use augmented reality (AR) or virtual reality (VR) to create a bespoke, personalized and customized experience so that you can see exactly how each type of machine would look in your office space. Because of this great customer experience, you and your business colleagues are happy, and your business will use the same retailer next time you want a vending machine.
Brands that want to increase customer acquisition, customer loyalty, customer engagement and drive growth need to think about delivering more exceptional experiences and connecting with customers in more dynamic ways.
With so much at stake, brands need to ask: is great CX enough to elicit positive emotions and meet customers’ changing needs?
How is customer experience changing?
Twenty years ago, the answer to “what is great customer experience?” would have been a straightforward explanation about optimising touch points, mapping out customer journeys and designing and producing covetable products that customers want.
But today, how we interact with brands and what we need from them has transformed exponentially. At a time when people are navigating constant change amid external economic, social, environmental and political forces, their behavior is increasingly inconsistent. Consumers are more comfortable with paradoxical choices as their decisions become trade-offs between what they want, what they need and what options are available.
A life-centric approach to customer experience creates connections that hold fast amid constant change and disruption.
Adapting customer experience to these changes isn’t easy. Oversimplifying segmentation and underestimating the impact of external life forces has created a disconnect:
64% of consumers wish companies would respond faster to meet their changing needs, while
88% of executives think their customers are changing faster than their business can keep up.
Though businesses have evolved past the product-centric approach that focuses on performance to accept the importance of customer experience, seeing CX as something static can be their undoing. Instead, companies need a life-centric approach.
Life-centric businesses accept that people are multifaceted, complex and doing their best to adapt to unpredictable life circumstances—and use that insight to meet customers’ evolving needs. By taking a life-centric approach to customer experience, companies can better reach them at a variety of pivotal moments and create connections that hold fast amid constant change and disruption.
Who is responsible for customer experience strategies?
Historically, CX was limited to the Chief Marketing Officer’s (CMO) or the Chief Operating Officer’s (COO) purview with different functions in the business operating in siloes focusing on their own priorities.
Internal alignment lets companies pursue an external strategy that maximises customer experience.
Let’s take a quick look at how traditional CX thinking has informed how leaders and functions within an organisation think about their customer experience strategies:
CEO: prioritise maximising profitability
Marketing and brand: focus on making people want things
Sales: focus on the product the company wants to sell
Product development: create products based on market research that are easy to use
Talent: use traditional metrics based on employee performance within a function (onboarding, annual reviews, etc.)
Tech and IT: focus on enabling business processes at greater scale
Operations: focused on providing efficiency for the company that often limits growth
Supply chain: focus on moving products and goods to consumers
As you can see above, each department and function has its own priorities, targets and metrics. With blinders to the rest of the company, each department is executing a specific customer experience strategy template without seeing the bigger picture. Instead of operating in isolation, companies need to organise all of their internal operations in new ways to evaluate and serve changing consumer needs.
To remain relevant and compete in today’s ever-changing world, customer experience strategies need to be top of mind for every stakeholder in your business. From management to marketing to sales to service, everyone across front- and back-office functions needs to be invested in delivering a life-centric customer experience.
By taking the company’s existing assets (such as talent, data and technology) and rewiring them for more coordinated action, internal operations become simplified in pursuit of a common goal. Internal alignment lets companies pursue an external strategy that maximises customer experience.
This is a pivotal moment for the C-suite. Leaders who push beyond traditional CX strategies and redefine their organisations, not just by which products or services they sell and offer, but with a life-centric approach to understanding and meeting customer needs, will emerge stronger and ignite growth in their organisations.
How can companies improve customer experience?
From banking onboarding journeys for new customers to how clothing should be presented online, many of the fundamentals of customer experience have become commonplace. As a result, it is increasingly difficult for brands to differentiate themselves via CX alone.
Businesses have traditionally focused on optimising customer touch points around product and service. In the past this has been a successful approach to increase sales and loyalty. Now, it’s no longer enough. The way forward is to take a holistic, dynamic view of who customers are and what motivates their behaviors—and to treat them as more than just buyers.
To grow a life-centric CX strategy, brands need to think of customers as more than just buyers.
Today, brands must enhance customers’ lives through new technology-led experiences that go beyond short-lived transactions. Consider the impact of omni-channel services that connect brick-and-mortar shopping with customers’ digital data for greater personalisation. Companies also need to have the enterprise-wide imagination, vision and empathy for the customer that will drive them to find creative ways to engage and serve people who crave simplification and agency.
By evaluating what brings value to customers and reconsidering how a brand promise fits with customer needs, companies can refocus their efforts to drive growth and relevance.
The future of customer experience is life-centric
Brands are looking for ways to harness the changes the world is experiencing to emerge stronger and more prepared for the road ahead. To do so, they need to hone in on the complex life forces and paradoxical behaviours driving consumers today. Through data, technology and a holistic, human-centred approach, they can respond to people’s diverse, often paradoxical and ever-changing needs.
To achieve this, an evolution is needed: It’s time for companies to become life-centric.
Explore more about what it means to be life-centric and find out how to create a life-centric strategy that works for your business.