(Image credit: Parker Byrd/Unsplash.)
Today’s economic environment has led to companies engaging in widespread cost-cutting. This in turn has taken a toll on customer experience. Unfortunately, this comes at a time when customers are increasingly demanding higher levels of service, convenience, and personalization, more so than ever before.
Organizations have received a wake-up call: neglecting the needs of the customer today will have dire consequences in the mid- to long-term. But we’d suggest that paying close attention to improving the customer experience is not at odds with being budget conscious. They can exist together if companies focus their processes and prioritize around moments that matter—those interactions that drive retention and buying behavior.
Think of the Customer as a Nerve Center
Great customer experience should go beyond “nice to have”—it is becoming a necessity to deliver great experiences that make life easier for customers. Depending on the organization, customer-focused processes may be better suited to operating within rigid parameters, singling out the specific interactions that drive retention and buying behavior. All initiatives should consider the impact on customer experience to ensure no negative outcomes—but for the great majority of companies, customer experience should be thought of as the central nervous system that informs all surrounding processes, operations, platforms and enabling technology. If properly executed, customer experience will then serve as your growth engine.
Taking a closer look at our central nervous system analogy, this model in driving retention and new customer acquisition—it also encourages automation, pinpoints and remedies inefficiencies, cuts costs, and improves employee engagement. It comes in stark contrast to previous experienced-based growth models which don’t go far enough and underestimate the importance and benefit of an institutional focus on improving customer experience. Meanwhile, the outdated methods aim for “good enough,” hoping that a modicum of customer service is enough to foster brand loyalty.
The business case for a true focus on customer experience is much more compelling than the historic growth models. A customer experience mindset can stimulate growth and drive efficiency even as it improves the customer experience.
Today, Your Dollar Goes Further
Taking a “Customer Experience First” approach makes more financial sense today, now that the cost of doing so has drastically dipped when compared to the past couple decades. In the late 20th century, investing in customer experience meant making much risky, upfront investment. Now enhancing the customer experience and investing in technology can go hand-in-hand, enabled by digital transformation. Companies are no longer required to choose between investing in technology and satisfying the customer.
Investments should be prioritized around the moments that matter. How? Companies need to continually focus on understanding what is important to their customers and what influences their behavior—that is, the moments that matter. They need to track their performance, adapt to their customers’ changing needs, and ensure that the customer is considered in all changes.
For example, for large companies that sell to small-to-medium businesses (SMBs), we have found that they have often relied on, and been hindered by, outdated, paper-based processes which took anywhere from 30 to 90 days to complete a cycle. Once they’d successfully completed their digital transformation, the increase in transparency, efficiency and data quality weren’t the only positives: we have noted that customer satisfaction was also increased, encouraging frequent and instantaneous communications with their SMB customers.
The Bar Has Been Raised
Expectations for customer service have also never been higher. Amazon has set the bar high, yet few companies are willing to reach for this gold standard of customer experience. Critics were skeptical when Amazon first introduced 24/7 customer support, a generous return policy, and a wide range of Prime benefits. Yet they were proven wrong once these perks didn’t eat into margin—rather they became a cornerstone of Amazon’s profitability.
Some organizations have become defeatist when comparing their levels of customer experience to Amazon’s. They’ll claim the company is only able to offer impeccable customer service because of their sheer scale. Rather they should see Amazon’s scale as a result of their customer service, not the other way around.
Run Lean, but Don’t Starve the Customer Experience
Despite Amazon’s success and the subsequent increase in customer expectations, many organizations today are still focused solely on cost-cutting. Current macroeconomic conditions have forced many organizations to boast how lean they can run above all else, often to boost shareholder value. Drastic cost-cutting measures extend to nearly every industry—Mattel, PayPal, and Nike have announced large-scale layoffs, while Macy’s is downsizing its physical footprint and United Airlines no longer offers meals on select First Class flights.
However, as noted, trimming fat is often to the detriment to the customer. Many of these austerity measures will only be successful in the short term, while balancing cost-cutting with optimizing the customer experience positions an organization for long-term growth. Investment in customer experience can lead to better targeted cost-cutting actions elsewhere. In this efficiency environment, there may be a unique opportunity to enhance the customer experience at moments that matter, for example, by investing in greater automation which will deliver efficiency as well as increase speed, quality, and convenience for customers.
A Meticulous, Gradual Shift
Switching to a model wherein all processes branch out from the customer at the center cannot be done overnight. It requires the adoption of new data tools, rigorous end-to-end process management, and a shift in corporate culture. There needs to be constant communication and synergy between marketing, sales, product development, operations: a customer experience-first approach is only effective when cross-functional collaboration is heightened.