Research shows that companies with better customer experience win increased consideration, more loyalty and less churn. People talk about these brands--and they're even willing to pay up to 25% more for them.
The question is: What's behind great customer experience? With industry gurus arguing that soon "every company will compete on the basis of customer experience", that's an urgent question for marketers today.
Our latest white paper looks at seven ways brands gain competitive advantage through customer experience:
• Understand What Customer Experience Is--and Isn't
• Define Your Experience Platform
• Put Value on Experience
• Be Omnichannel Like You Mean It
• Listen to Customers (Duh, Right?)
• Own It
• Never Stop Reinventing
You can download the white paper or read it here–and do let me know if you’d like to learn more about how we can partner with brands to build customer experiences that drive competitive advantage.
7 Ways Brands Gain
3/ INTRO: EVERY COMPANY WILL
COMPETE ON EXPERIENCE
7 WAYS BRANDS GAIN COMPETITIVE ADVANTAGE
4/ #1 UNDERSTAND WHAT CUSTOMER EXPERIENCE IS — AND ISN’T
5/ #2 DEFINE YOUR EXPERIENCE PLATFORM
6/ #3 PUT A VALUE ON EXPERIENCE
7/ #4 BE OMNICHANNEL LIKE YOU MEAN IT
8/ #5 LISTEN TO CUSTOMERS (DUH, RIGHT?)
9/ #6 OWN IT
10/ #7 NEVER STOP REINVENTING
11/ ADVICE FOR BRANDS
12/ TALK TO JACK
One of the most surprising moments at this year’s
South by Southwest Interactive conference may have
been when Wharton marketing professor Jonah
Berger declared, to a room full of technology-obsessed
movers and shakers, “We spend far too much time
thinking about technology—and not enough time
thinking about psychology.”
Berger threw out this zinger as part of a presentation
on word of mouth in which he argued that we
over-emphasize channels of influence without first
understanding fundamental drivers of influence.
This is also true of customer experience.
Customer experience is now recognized as a crucial
area of investment for brands today. It’s been said
that “Over the next decades, literally every company
will compete on the basis of customer experience. In
fact, they already do—most just don’t realize what
that really means, what’s at stake, or how to
do it well.”
/3Unpacking Customer Experience
Every Company Will
Compete on Experience
But while a lot of marketers seem to spend a lot of
time thinking and talking about customer experience,
it often seems we’re jumping to the hows before fully
defining the whys. Often that means asking what
technology—case in point: silver bullet du jour, Big
Data—can do for customer experience, without first
understanding what the customer experience should
and could be for specific brands.
So let’s look at fundamentals first. And let’s take the
time to define what we mean by customer experience
so that it’s not just an empty buzzword.
In that spirit, what follows isn’t everything we need to
know about customer experience—but 7 ways brands
can gain competitive advantage.
Customer experience is generally understood as the sum of
a person’s interactions with a brand over time.
Let’s be clear:
• “Interaction” means connecting with brands in a back-and-
forth way. Experience touchpoints aren’t defined by
medium but by engagement.
• Customer experience is much bigger than customer service;
it’s a crucial ingredient of customer experience, but just
• “Over time” means more than an event or moment. It can
mean quite a bit of time—from the period of time it takes
to fulfill a particular customer need to the entire lifecycle of
the customer relationship.
• There’s no singular customer experience. It varies from
brand to brand and from customer to customer.
and Isn t
Figure 1: A simplified set of customer experience touchpoints sampled
from recent interactions with a “fast fashion” brand, shows the variety
of different interactions.
/4Unpacking Customer Experience
At the heart of great customer experience is a clear definition of
how the brand should behave—an experience platform (fig. 2).
It’s second nature to marketers to ask “What’s the brand
platform?” and to use that as the basis for how the brand is
expressed in the market. We need to have similar expectations
for customer experience: we need to ask “What’s the
experience platform?” and use that as the basis for how the
brand behaves in the market. The experience platform needs to
become core to how we work with brands now—in the age
Every experience platform should be unique not just because
it’s core to the brand on a conceptual level but also because it
can transform the business in very concrete ways.
Figure 2: Experience platform provides the basis for how brands behave
/5Unpacking Customer Experience
Again and again, research shows that companies perceived
to have a unique brand experience gain clear competitive
advantages: increased consideration, more word of mouth and
even a price premium.
Our own research has shown the value of experience (fig. 3).
We’re not alone: Forrester has correlated superior experience
to greater loyalty, increased word of mouth and lower churn;
others have argued that people will pay as much as 25% more
for a better experience.
Better experience brings value to the organization—both
through increased revenue and through cost avoidance. Show
that to help justify investing in customer experience and to track
its impact on an ongoing basis.
/6Unpacking Customer Experience
I’m willing to pay a premium price if I
know that I will have a great experience
I’m more likely to consider a brand if
I know I will have a great experience
Fig 3 (Source: Best Experience Brands 2013)
According to a Time Inc. study, “people who grew up
with mobile technology switch between devices and
platforms 27 times per hour”.
That in a nutshell is why “omnichannel” is so important
these days: because consumers live in a world where
they move constantly across channels, they expect
brands to be consistently great across them.
But while it’s easy to say “omnichannel” (yes, it’s a big
buzzword) it’s much harder for brands to actually deliver
on it. Consumers expect seamlessness; likely, they only
pause during that average of 27 back-and-forths if an
isolated touchpoint fails to deliver. At such moments,
they probably don’t credit the brand for all the other 26
interactions that were great and recognize the challenge
of stitching them all together with likely dozens if not
scores of players and partners. They expect the customer
experience to be uniformly excellent. They hold the
Brands that invest in customer experience will by
definition be more truly omnichannel. Two personal
favorites: NPR, a media brand that’s perpetually
expanding how it brings great content to the public; and
vitaminwater, which set out to “make boring brilliant”
and has invited its fans to bring a hugely expansive
world of new ownable touchpoints to them.
/7Unpacking Customer Experience
Great customer experience starts with a clearly defined
experience platform that’s authentic to the brand and consistent
across audiences and touchpoints. But as the name implies,
customer experience can’t happen without an outside-in
approach that embraces clear channels to elicit input from
customers—and an active commitment to listening to what they
have to say.
Fortunately we have hugely powerful social channels and
technologies that are pervasive in our world. As marketers we
often think about using them for talking, but they’re even more
powerful for listening. Indeed this is one of the ways that Big
Data really benefits customer experience: not so much as a way
of pushing information to consumers in ways that feel invasive,
but as a better way of taking in information from them.
/8Unpacking Customer Experience
Who owns customer experience? In many organizations, there’s
not one single person who’s empowered to truly own all of the
touchpoints that influence customer interactions (often
the complexity and sheer number of factors are big barriers).
With ownership comes accountability; the opposite can
also be true.
That’s beginning to change. As companies have increased their
investment in experience, they will look to experts inside their
companies (as well as partners outside) to lead experience.
The Chief Experience Officer, or CXO, is on the rise. So are
CEOs who embrace putting experience at the center: think
Howard Schultz of Starbucks, Steve Ells of Chipotle and
Tony Hsieh of Zappos.
/9Unpacking Customer Experience
A brand that isn’t willing to update its customer experience is a brand
with a limited future.
The experience platform should be unique to the brand and relatively
stable, in the same way that other elements of the brand are
relatively stable. No brand would confuse its customers by changing
its logo from month to month or from year to year, nor should it do so
with its experience platform; it’s core.
But customer experience has to be dynamic. If it doesn’t keep up with
and reflect customer needs, there are going to be problems pretty
quickly. Think of how brands struggle when their customer experience
lags. RadioShack’s leadership has done a good job of investing
in an updated customer experience and made my favorite Super
Bowl ad—“The ‘80s called: They want their store back”—poking
a bit of fun at themselves for waiting so long to do so. Their stock
surged on the huge media that resulted from announcing this change
in customer experience; its current struggles reflect the difficulty of
actually delivering so much change in customer experience across
every channel, in-store and online, when there’s so much catching up
to do both externally and internally.
/10Unpacking Customer Experience
platform is core
Again, now and the near future “literally every
company will compete on the basis of customer
experience”—so the question isn’t really whether but
when to begin making it a priority. What happens
when you’ve made it as far as knowing it should be
a priority? To my mind, three simple things:
1. Take the time to understand and define how your
brand should behave in the marketplace. Do the
work to establish an experience platform.
2. With the experience platform in place, invest in
educating your people to understand how they
should behave to deliver your unique brand
experience. Internalize it before you try to
3. Audit the touchpoints that make up your current
customer experience and work to bring them in line
with your experience platform.
4. Last but not least, listen to your customers. If your
customer experience is working, they’ll let you
know—and they’ll let their friends know, too.
Advice for Brands
/11Unpacking Customer Experience
Berger asked one of the most important marketing questions today: why do some
things get shared, go viral, blow up all over the internet—and others things, well,
not so much? His recent research as well as the coverage of his talk are worth
checking out. Full disclosure: I wasn’t one of the 15,000 people at SXSW. http://
jonahberger.com/wp-content/uploads/2013/02/BzzAgent.pdf ; http://www.inc.
Outside In: The Power of Putting Customers at the Center of Your Business
Interestingly, a customer experience lens is just one more reason for brands to be
inclusive of the diversity of their customers’ varied backgrounds and perspectives
in how they plan their interactions and work with their marketing partners.
Best Experience Brands 2013: A Global Study http://www.slideshare.net/
Cited in “Most Contagious 2013” http://www.slideshare.net/contagiousmag/