Why you are thinking all wrong about customer experience: a data driven answer to what customers really care about

Thursday, August 28, 2014

There is a fundamental misunderstanding taking place right now in the customer experience field. Companies of virtually all sizes and industries are ignoring a growing body of scientific evidence showing what customers actually care about.

How the Ritz Carlton and a toy giraffe put a spell on us

When the son of Chris Hurn’s forgot his favorite toy giraffe, Joshie, in their hotel room after a recent stay, he told his worried son that Joshie was just taking a few extra days of vacation. He then got on the phone with the Ritz Carlton and told them about the missing toy and the story he had told his son.

Before doing the obvious and returning the giraffe to its owner, the savvy staff at the Ritz, well known for their willingness to go above and beyond expectations decided to take a series of photographs that included all of the activities Joshie had been involved in during his “extended vacation.” This was then complied into a booklet filled with artful content about Joshie’s stay as well as a host of pictures showing what a good time he’d had.

 

The above is a great example of what to not focus your customer experience strategy on.

 

Insight #1: Don't get blinded by delight. It doesn't pay off

The graph below captures the core of the misunderstanding, namely the assumed relationship between customer satisfaction and customer loyalty. If you believe in this relationship it makes sense to pour time, energy and resources into trying to exceed customer expectations. After all this is assumed to lead to loyalty.

But it is not true. Data from CEB from over 97,000 customers, show that there is virtually no difference in loyalty between those whose expectations are exceeded and those whose expectations are simply met. So rather than a "hockey stick" effect where loyalty grows exponentially, loyalty actually levels out when expectations are met, as illustrated in the graph below.

 

This means that companies significantly undervalues the benefit of simply meeting expectations. 

By the same token is also means that companies overestimate the loyalty from "wowing" their customers. In other words: All that hard work in aspiring to create a service that is is extraordinary, surprising, memorable and delightful, brings almost no financial return at all.

This may seem counterintuitive, but think about the example below from Nick Toman and Rick Delisi of CEB.

 

 If you are like most people you have a much easier time answering the second question.

 

Insight #2: Stop trying to exceed expectations. Focus on making it easy 

There is now several studies showing that customers care about effortless experiences, where you provide what you set out to do. No more. No less. And when things go awry, they just want you to fix it with the minimal amount of effort being invested from their side. A free cookie, a cheerful smile or even a personal relationship with someone at your company is not what they want.

So unless you are one of the few companies in the world that base strategy on truly delighting customers (Ritz Carlton, Zappos & Nordstrom might qualify here), the real opportunity is to find and reduce the friction your customers have in interacting and doing business with you. Not to drive loyalty, but to mitigate disloyalty.

This might sound boring or pessimistic, but here is the thing: this is a HUGE opportunity, because customers invariably report broken journeys, where for one reason or another they are unable to succeed in what they set out to do when they came to you.

 

Insight #3: Start obsessing about your problems

As marketers and merchandisers, we always want to track positive performance metrics and conversions. But if you accept the overwhelming evidence that your main objective is not to delight, but to make it easy and work systematically to reduce friction, you will need to start measuring and obsessing about your main problems.

Digital customer experiences are relatively straightforward to measure and you are probably already sitting on a good chunk of data showing you where you main bottlenecks are and where your visitors drop off. Below is a simple example to illustrate this:

But being "problem-oriented" in the quest for loyalty, also entails identifying and measuring less obvious friction.

  • Do you know if mobile and tablets visitors are able to complete their goals as easily as desktop visitors or are they facing additional friction?

  • Are there differences between how hard it is for visitors in different regions to complete their goals?

Another major annoyance that was highlighted in the CEB research referred to customers being forced to switch channels. Let's say Jasper hits your website with hopes of resolving a support issue, but doesn't manage to find a solution. Now, even if the call center subsequently is able to solve Jaspers's issue quickly, perhaps even exceeding his expecations, Jasper will still be grumpy and disloyal since you made him switch channel in the first place. Think about the implications of that, next time you consider the KPIs of your support organization.

So stop trying to be cute and aspiring to delight; it's time to get to work on how you can get out of the way of your customers. Disloyalty will prevail amongst those to those who don't.

 

 


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