An Overview of What is Customer Experience?
Customer Experience, the business deliverables buzzword that has seen exponential growth in use this past decade, as businesses are recognizing the importance of customer connection to overall business success.
In this article we will:
- Define what is customer experience strategy
- Identify the mistakes businesses make and the opportunities they have
- Analyze how top companies use customer experience
- Customer experience examples of Walmart, Toyota, and Costco
- Discuss the complexities of customer connections.
- What factors do these companies have in common when it comes to building a long-lasting customer connection.
- What lessons you can learn to start achieving the same results by implementing a customer experience strategy for your own business.
What is Customer Experience?
Customer experience is a set of interactions that results in a positive perception of the business. Right from navigating the website to the after-sales service, companies must be able to deconstruct the whole process into its components.
The world's most successful companies are customer-centric and consider their customers as the most critical element to their success. These companies focus on customer empathy and creating a customer connection.
They collate and analyze the prior user experiences to enable the development of exceptional service. This is a big contributing factor that distinguishes successful companies from unsuccessful ones.
What Mistakes Are Businesses Making?
As Peter Drucker said, “a business’s true purpose is to create and keep customers.” Although seemingly simple, this is not well understood by most businesses.
The relentless pressure of earnings forces businesses to produce quick results which means a compromise in product quality and the service provided. By failing to consider long-term growth and prosperity, businesses potentially expose themselves to greater issues in the future.
Many businesses have emphasized the touchpoints of user experience for a long time. Those that are the most successful focus on the critical parts of the customer's end-to-end journey.
Correctly identifying the most vital point in the customer's experience is business and industry-specific. Those businesses that are able to correctly recognize this point are typically the best-positioned business in their respective industry.
What Opportunities do Businesses Have?
Some businesses are unsure as to why they need to worry about customer experience, while others try to collect data but don’t circulate the findings.
A survey by Bain & Company studied the customers of 362 companies. The findings revealed that only 8% of customers classified their experience as “superior”, whereas 82% of companies “believe” that they deliver a superior experience - the former believed in customer empathy.
This disparity allows for a great deal of improvement with an urgent need: the millennial customer has a huge number of choices, and more channels than ever before to pursue them. In such a scenario, a simple, integrated customer experience will win the favor of the time-pressed customer.
Businesses have the opportunity to obtain market share through adopting a customer-centric approach to business. As in a competitive market having an established customer connection can provide differentiation and become a business's unique value proposition.
Delivering Customer Experience Example- Toyota
Toyota, the global car giant adopts a “customer first” philosophy. With a commitment to deliver the highest quality products and provide complete customer satisfaction, derived from its customer-centric focus the company adopts a strategy aiming at constant development.
Toyota has effective procedures in line so that whenever a customer faces a problem, the issue can be assessed promptly with the least inconvenience for the customer - highlighting the importance of maintaining a customer connection to Toyota.
1. Reliability, Quality, and Longevity (The Distinctive Feature)
The three-tier approach adopted by the company is how it drives innovation through engaging with its customers, employees, and dealers to deliver an unmatchable experience.
Establishing its name as a testament to reliability, quality, and longevity, Toyota’s business methodology is based on ‘Kaizen’, which means continuous improvement. This underlying principle, coupled with Toyota’s belief statement ‘a better tomorrow starts today’ has enabled them to gain customers through their customer connection, exceptional offerings, and extraordinary user experience.
2. "Customers Will Tell You Everything..."
The General Manager of the Customer Services Division, Spencer Morris, shared that “customers will tell you everything you need to know about how to improve your business.”
This highlights the importance of customer connection as insights into the issues faced by customers is best understood by the customers themselves. This is how the Kaizen philosophy was adopted and deployed the Customer Radar technology.
3. Customer Radar Technology
A premium example of this is how Toyota manages its dealerships from the start. A new reception area was built in one dealership with a fully refurbished look, new furniture, and a completely new outlook and deployed Customer Radar technology for ensuring the best usage of the space.
A customer said that the display lacked internet login details. Although it was a minor detail it was rectified, enhancing the customer connection and experience. This is an instance of how the company uses customer feedback to guide improvements.
4. Data is the New Oil
From vehicle performance to user behavior, Toyota collects and organizes all this data to improve the customer experience. It has partnered with Acxiom, this provides Toyota with a unified view of the customers all across its marketing ecosystem, with the objective being to deliver an exceptional user experience.
5. Act Upon Regular Employee Feedback
The customer experience is not completely reflected unless it becomes ingrained in every part of the company’s processes.
When employees observe a culture whereby the senior management acts on customer feedback and information from user experience, they tend to base their actions on that information too - and this asserts the importance of employee feedback.
Incorporating core values such as independence, respect, collaboration, and excellence into how the company operates helps connect people while developing a shared purpose.
The employees are the touchpoints to the customer experience delivery, this means the feedback employees can provide is invaluable. This showcases why acting upon regular employee feedback paves the way for success.
Toyota believes that whenever anyone purchases a Toyota, they place their trust in the company. Now, this trust calls for a focus on a culture that is built on the delivery of customer experience.
Employees are part of the company’s structure that ensures a focus on quality improvement and assurance. This is part of the driving force behind ToyotaCare, Toyota’s maintenance and roadside assist plan which comes free with every Toyota.
Establishing a Customer Experience Vision Example- Costco
The secret to a good user experience lies in the company’s vision and ability to deliver. A successful brand shapes the experience by embedding value in all of its offerings.
6. A Travel Destination (The Distinctive Feature)
Costco, the retail giant with over 94 million members is here because of how it clearly established the customer experience vision. Not only that, but it has also become a travel destination too, as a fan stated that she has been to 70 Costco stores.
This level of enthusiasm for a grocery store seems unreasonable unless you are a Costco customer.
7. Basic Psychology, Store Layout, and Real Value
Patricia Hong, a global management consulting firm partner, said in an interview that most of Costco’s customer base is addicted to the Costco shopping experience.
It is part of Costco’s vision to get you hooked with everything, from the psychological tactics to the store layout, to bulk-buying value, and of course, valuing the customer feedback.
8. COVID-19 and Customer Connection
Costco has built a connection with its customers that has withstood testing times. This would be aptly explained by its strategy adopted during COVID. With consumer trust being at an all-time low, Costco has been able to cater to a wide range of panicked customers.
Prioritizing customer feedback along with customer connection has made it stand out from the crowd. There is something magical about the company’s customer experience, as it scored the highest in the ACSI, and knocked off Amazon from a position it held for almost a decade - isn’t it something mind-blowing and self-explanatory?
9. Innovation is at the Heart
There is something about Costco that keeps customers coming back amidst the chaos. The primary factor is that of innovation. During the pandemic, it took a lot of steps to ensure consumer safety and came up with better ways to protect its customers, particularly those aged 60 and above. Costco prioritized building a connection that made the customers feel like “we are in this together”.
10. Use a Quality Framework
While the customer may always be right, there are times when they are not. The pandemic was a testament to such times.
The company’s CEO Craig Jelinek said, “While the circumstances continue to change and we modify our operations as necessary, we thank you for your patience and cooperation...As new developments occur, be assured we are committed to taking care of our members and employees and to our mission of providing low prices, quality merchandise, and exceptional service.”
The customer-centric approach allows for a unique shopping experience, through innovation and acting on customer feedback. This has contributed to amassing the market share Costco has.
Understanding Your Customers Example- Walmart
The leading American multinational retail corporation Walmart brightens the customer experience by understanding its customers. Walmart has created a seamless experience both online and its 11,700 stores, Walmart delivers an experience that repeatedly brings back its loyal customers.
11. Store Maps, New Online Shopping User Experience, Marketplace Shopping
The factor that establishes Walmart as an industry leader is a deeper knowledge of its customers and a commitment to deliver the ultimate convenience - customer empathy in short. Store Maps, New Online Shopping Experience, Easier Marketplace Shopping, are some of the actions it took in wake of the evolving shopping dynamics.
Scott Hilton, the chief revenue officer of Walmart said that they decided to rebuild the website so customers can get a totally different shopping experience.
12. Exclusive and Accessible User Experience
The retail giant has established a reputation and overall credibility which offers their vast range of customers value that keeps them coming back.
Believing in reaching where others have not, Walmart works on delivering a great user experience by being one step ahead. Not only it is exclusive but accessible.
13. Capture Customer Feedback in Real-Time
Walmart realizes the importance of good customer feedback and its link to sales and enhanced business performance. People’s expectations are linked with their prior experiences with a company, which is why feedback is greatly important.
Capturing and building on customer feedback helps Walmart transform its people’s expectations into a reliable and enjoyable experience.
Working on a customer-centric approach, Walmart incorporates customer empathy and seeks reviews from its customers that help inform organizational processes. The brand is “customer-obsessed”, and aims to provide the best customer experience to its existing and new customers.
14. "Customers are the Backbone..."
Denise Incandela, Walmart’s Customer Experience Manager, says customers are the backbone of the company’s success; and this means a repeat shopping rate, acquisition of new customers, a focus on customer empathy, and continued brand building.
15. Create an Emotional Connection with your Customers
An emotional connection with your customers is imperative, because, let’s face it, customer empathy is the key to success. From what the most successful companies are doing, exclusivity is the main element of user experience.
Brands that connect with the customers and build themselves based on customer-facing functions tend to act with reference to the customer experience. For instance, Cisco Systems, as explained by its CEO, acts in accordance with the reactions of its key customers.
This is the power of building a brand through customer experience.
Successful companies have always maintained a strong growth outlook based on user experience, all thanks to the customer experience they deliver. It is this exceptional customer experience that drives increased traffic through returning customers, as well as new customers.
The mutual fund company Vanguard continues to make the list of organizations with the most loyal customers, and that’s not a coincidence.
The CEO from 1996 to 2008 Jack Brennan, emphasized the cycle of attracting loyal clients who then refer additional clients through word of mouth. This is how crucial building a connection with your clients is.
16. Listen to the Voice of the Customer- Incorporate Customer Empathy
So, what’s the right way? Are there any techniques that help companies embrace the customer experience? Are there ways that companies can incorporate customer empathy into their operations?
Matt Gillin, the CEO of Relay Network, says that “the world is highly personalized, and the secret to winning the game is to make it easy.” To deliver a better user experience is to win, and this is where the voice of the customer comes in.
Customer Voice is extremely important, and very opinionated in today’s global marketplace. The easy availability of substitutes, access to information, and multiple brands are shaping customer expectations. Customers are empowered, and although companies know a lot about the buying habits of customers, they need to know more about them at a personal level.
The thoughts, emotions, and mindset of customers are extremely valuable. Unless companies incorporate these subjective aspects into delivering customer experience, customer satisfaction will remain an ideal goal yet to be achieved.
Improve your Customer Experience Using Cascade
What are your customers to you? At Cascade, we transform the customer experience you deliver. We help you deliver a customer experience that makes you stand out from your competitors.
A major component in developing a unique customer experience is customer feedback. Now wouldn’t it be useful to know who in your organization is collating that feedback, and what is then done with that feedback?
Cascade enables you to see all your team's objectives, projects, KPIs, and goals. So you can easily see who is involved and at what stage in the customer feedback loop. Helping you to develop greater insights and deliver a better customer experience.
This is just one example of how Cascade can help you to Align at Scale, Act with Context, and Adapt at Lightspeed.