What makes your company different from the competition? Most people tend to think of differentiation as a function of their product. But positioning yourself as having the best product, or the best prices, is no longer a viable differentiation strategy. Your competitors are positioning themselves the same way—making products, services, and pricing commodities today. But as Gartner VP Jake Sorofman said,
As competition and buyer empowerment compounds, customer experience itself is proving to be the only truly durable competitive advantage.
And in 2016, most companies will compete primarily on customer experience. But according to Forrester’s Q1 2015 US Customer Experience Index report, only 1% of companies deliver an excellent customer experience.
The case for customer experience
The ability to deliver a superior customer experience is becoming increasingly rare at exactly the same time it is becoming increasingly valuable. And as a consequence, the few who cultivate a mature CX practice, and then make it the core of their business strategy, will thrive. This generates an exciting implication. If you can figure out how to integrate a seamless customer experience across all touch points, you have the possibility of blowing past your competitors, as you’ll likely be alone in your dedication to systematically improve the experience for your customer and potential customers. Therefore, to successfully stand out from the noise, you have to approach your CX practice in the same way that organizations like Zappos and Disney World do—with a dedication to customer-centricity. Here are 7 tips to help you as you progress to the most advanced stage of CX maturity: differentiation.
1. Make decisions based on data, not opinions
Former Netscape CEO Jim Barksdale once famously said, "If you have facts, present them and we’ll use them. But if you have opinions, we’re gonna use mine.” Making effective decisions about how to improve the experience your customers (and potential customers) have requires the careful analysis of both qualitative and quantitative data from your business and the competition. This can be hard for our egos. We like to think we were hired because of our excellent instincts. But, like Google Ventures Partner Ken Norton explains:
A delightful thing happens when you stop relying on the opinion of the highest paid person in the room and start demanding data: you move faster. Rather than arguing for weeks, you test your assumptions and see what works and what doesn’t.
2. Map out the customer journey
Customer journey mapping is a valuable exercise that’ll give you a clear picture of the interactions customers have with your brand—both positive and negative. And it’ll help you discover opportunities to drive a continual improvement of the experience that your customers have, which translates into your desired outcomes (both online and offline). Journey mapping will help your team keep the customer’s needs and intentions at the center of your decision-making process. It means figuring out what it’s like for customers to interact with your brand over time and across different channels—and taking a step back to look at the whole picture. It helps you understand where you’re putting up barriers between your customers and their desired outcome. Once you identify those barriers you can remove or reduce them, and grow your revenue in the process.
3. Understand your customer’s desired outcome
What's your customer’s desired outcome? What’s the ultimate outcome your customers want to achieve? In order to answer this question effectively we have to address two parts. First, what’s the required outcome that your customers absolutely need? If they’re flying on a commercial airline, for example, their requirement outcome would be to get from Point A to Point B fast and safely. This is the bare minimum. Second, how would they like to accomplish that outcome? This is where you can differentiate yourself from the competition. United Airlines and Virgin Atlantic both get you from A to B fast and safely, but the experience their customer’s have while getting to that outcome is what differentiates them.
4. Uncover your customer's unmet needs
Once you understand what your customers want to accomplish—and how they want to accomplish it—you still need to be aware of their needs that aren’t being met. Forrester VP Harley Manning effectively summed this up when he said:
Remember that customers often lack self-awareness about their real motivations. It’s your job to uncover their unmet needs, not only by asking them but also by studying their actual behavior and involving them in the creation of a solution. That will enable you to design solutions that really are solutions, not just a response to a well-intentioned but naïve customer wish list.
Conducting exploratory research at the early stages of a new project or initiative can help you discover new ways to add value to your customers.
5. Invest in great customer service
Happy customers will tell nine people, on average, about their experience with your company. And for every unhappy customer who complains, there are 26 others who don’t say anything—they just get frustrated and leave. On top of that, you have a 14x better chance of selling to an existing happy customer than to a new customer. This is why it’s so important to invest in excellent customer service. Great support is so rare today that 86% of customers are willing to pay more for it. And if you don’t deliver it, they’ll leave. That’s why companies like Zappos go to such great lengths to invest in making their customers happy.
6. Personalize the experience for your customers
Rather than delivering the exact same experience to everyone, tailor each experience to the preferences and interests of each individual customer or potential customer. Disney World has begun using their infamous MagicBand—a wristband that knows your preferences and all the vacation choices you made online before you arrived. When you walk into one of their restaurants, for example, the host already knows your name and your food comes out without you having to order it. As another example, Target recently rolled out their mobile beacon technology in 50 stores nationwide. When you’re in those stores, the Target app will send you deals and recommendations on nearby products. Remember: there’s no "silver bullet" personalization tactic that will work for every company. The way you approach personalization will depend on your business model, product or service, and your audience. Often times, companies will simply try to copy the customer experience tactics of other organizations. But that’s a bad idea because you can’t differentiate yourself by copying others. Rather than trying to do what others have done, emulate the approach they took to arrive at a specific solution.
7. Set up a Customer Experience Council
We’ve seen some companies really run with the idea of collaboration, and how important it is for creating great experiences for their customers. You might consider bringing like minds together once a month (or quarter) for a CX Council. Identify the top areas of improvement for your customer experience that are related to your strategic business goals. And then, as a committee, prioritize how you’re going to approach improving those areas (and how they’re going to impact the bottom line).
Wishful thinking and random efforts aren’t enough to deliver a superior experience to your customers—and differentiate you from the competition. The only way to effectively make CX improvements is to act systematically and create a company-wide focus on serving your customers. Making concrete, measurable improvements means you need to work with your C-level executives to dedicate personnel to take ownership of the customer experience, allocate budget to customer experience initiatives, and craft a documented customer experience strategy. And if you want your CX initiatives to make an impact on the bottom line, you need an executive who’s accountable for CX-related goals, and who leads CX efforts across the entire organization or business unit. Platitudes such as “We want to delight our customers” aren’t going to magically improve the experience you deliver to your customers. Instead, craft an overarching customer experience strategy that’s aligned with the specifics of your business model, product, and audience—a strategy that will be your true north when prioritizing your CX initiatives.
Insights that drive innovation
Get our best human insight resources delivered right to your inbox every month. As a bonus, we'll send you our latest industry report: When business is human, insights drive innovation.