In a global, online marketplace, customer experience is increasingly becoming the key differentiator for companies. But what is a great customer experience? Here is a secret for you...
Nobody knows. Your customers are your customers, and no white paper or research report is going to be able to tell you exactly what they want. Sometimes even your customers won’t be able to tell you what they want – they might not know until they see it.
The good news is that there is a way of finding out scientifically what your customers want and how to deliver the best possible experience for them. It requires that you work methodically to learn what your customers really care about and what they care less about, and then working to continuously improve that experience.
Many companies say that they put the customer at the center of their business, but in fact few truly use the new power of digital technology to listen to their customers and hone in on what customers really care about. Today the future belongs to companies that can speed up the process of getting products and services in front of real customers, learning from their behavior and building new iterations with the insights about their customers’ behavior taken into account.
If you do not focus on watching how your customers behave and have the agility to test and tweak the experience – then it is time to start worrying. There are plenty of industries that have already been disrupted by new players who are simply providing a more customer-friendly, friction-free experience. Airbnb and Uber, for example, are not the first or only companies to offer services for vacation rentals and taxis, but they are succeeding because they are providing a superior customer experience. We’ll get back to this in a moment.
When Forrester Research conducts its Customer Experience Index, it measures three ways customers judge companies: How enjoyable are you to do business with? How easy are you to do business with? How effective are you at meeting your customers’ needs?
These questions matter because in today’s marketplace every moment of friction in your business increases the chances that users will go somewhere else. Consumers today are overwhelmed by choices, and it is your job to make the choices for them as easy and enjoyable as possible.
For example, Amazon focused on customer experience early on with features like one-click purchasing with no need to re-enter credit card information and email confirmations. Amazon studied what its customers did and didn’t do, then worked on streamlining the process as much as possible to reduce friction. They still do today.
As obvious as focusing on the customer experience sounds, a recent survey of global CMOs found that 63 percent of them listed acquiring new customers as their top priority, while only 22 percent said retaining current customers was their top goal. This lack of focus on customer experience shows in the bottom line. The average e-commerce company earns just 7 percent of its business from repeat customers, while Amazon, on the other hand, earns 66 percent of its business from repeat buyers.
These statistics matter, because today’s customers are empowered like never before. “They are tech enabled, they’re highly connected, and frankly they demand a whole new level of customer obsession for you to win their business and keep their business,” says Forrester Vice President and Group Director Sharyn Leaver. More than ever, customers control how and what they find out about your company and products.
The world is in constant change, as are customers’ preferences, so smart companies are always on the hunt for novel ways of getting closer to their customers. One way of doing this is to let go of rigid, waterfall projects where you wait until the end to get the customer involved.
Instead products, services or websites are developed in smaller cycles. At the end of each cycle – which lasts a month or less – customers can start using what has been built and the company can start learning how real customers interact with it and what is important to them. Then this feedback is used in to validate or falsify assumptions and is incorporated in the next cycle of development. In this way the development plan can also be adjusted based on changing conditions and the actual behavior of real customers.
The companies that will be the most successful in creating great customer experiences will be those that – in addition to having a great vision and strategy – go through the loop of building something, getting feedback and getting to validated learning quicker than their competitors. Startups without much of the legacy systems and heritage of established companies can have an easier time speeding up this process, which is why they have managed to disrupt industries by creating superior customer experiences. However, there are several examples of established companies who have benefitted from continuous experimenting.
Intuit, an American software company that develops financial and tax preparation software, has established a process where it continuously experiments with new ideas in order to learn what works and what customers want. In The Lean Startup, Eric Ries describes how Intuit – with 8,000 employees – changed its development process and gained significant results. Previously over the course of a year, the marketing and product teams would conceive one major initiative that would be rolled out just in time for tax season, which often led to too many of its products failing.
“Now they test over five hundred different changes in a two-and-a-half-month tax season,” writes Ries. “They’re running up to seventy different tests per week. The team can make a change live on its website on Thursday, run it.over the weekend, read the results on Monday, and come to conclusions starting Tuesday; then they rebuild new tests on Thursday and launch the next set on Thursday night.”
Just like Intuit, if you approach a big idea by breaking it down into small steps, perhaps launching a smaller part of it to test whether your customers really care about it, you can gauge the impact early on and make necessary tweaks – or drop it altogether before it becomes an enormous waste.
Ries and many with him now believe that a company’s only sustainable path to long-term economic growth is to build “innovation factories” like at Intuit to create disruptive innovations on a continuous basis. Rather than trying to get it right the first time, companies need to focus on shorter cycles and smaller changes that they can immediately learn from and adapt to.
Getting the customer experience right in all of the touchpoints where you interact with customers is a difficult and continuous process, and it can be hard to know where to begin. An excellent way to start is with your website or even a specific part of your website. Remember to think like a scientist: develop a hypothesis based on something you can measure, then test it.
Here are some questions to ask yourself to help you get started: Are you crystal clear on what the ultimate success criteria is for your website? Or for a given page or specific part of your website? Have you identified the main bottleneck that causes your visitors the most amount of friction to achieving your success criteria? What would happen if you changed just one small part of the customer’s journey?
It is OK to have brilliant (or non-brilliant) assumptions about what your customers want. That is part of the innovation process. It is not OK, however, to leave these assumptions untested – particularly for long periods of time. So get out your magnifying glass or put on your lab coat – whatever research paraphernalia you need – and start discovering your customers today.
This blog post is a condensed version of the theme article in Engage #1 2014.
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Joakim Holmquist & Chad Henderson