Article:

Customer centricity and the impact of the customer experience

The concept of customer centricity is really simple to define – making business decisions that put your customers first. Most people and businesses get it in theory – it has flown around as a marketing buzzword for a number of years now.

The sad reality though is that while businesses may understand customer centricity in theory, they don’t actually do it. It is difficult to completely modify your whole businesses perspective from what is good for me and the company, to what is good for the customers. In some instances, organisations have grown successfully by focusing only on themselves and not looking at their customers so a departure from that is a challenge.

From a practical perspective adjusting to becoming customer-centric can be a challenge too. Having siloed customer data or insufficient technology to pull the information together. Or even just a lack of skills amongst staff to understand the benefits and how to think customer first.

One thing that is clear however is the impact that customer experience has on the overall success of a business, both when done well and when done poorly.

Have you ever bought something online, found it a challenging process, and thought “why can’t this be more like Uber/Airbnb?”. This is whats called having liquid or fluid expectations. In essence, this means that when it comes to customer experience you are no longer compared strictly to your competitors, but you are now compared to the likes of Uber, Airbnb and Apple. This means that the bar is set incredibly high in order to deliver a great customer experience. But what happens if we don’t meet that expectation?

What a poor customer experience means

The impact of a poor customer experience is significant and is something that in some organisations has been historically overlooked in favour of product development and marketing. The fact is the experience that customers have when interacting with your brand is the most critical element in driving new sales, retaining customers and building advocacy.

With these liquid expectations, customers have less patience or tolerance for bad customer experiences and are willing to move on to a competitor. In fact, 51% of customers won’t engage with a brand again after just one negative customer experience. The expectations are high and any slip up can mean that customer is gone forever.

If that wasn’t bad enough, not only will more than half of customers abandon a brand after one poor experience, but they let everyone know about it. Of customers who have a bad experience, an astonishing 95% share their negative interaction with others. So the impact of one poor customer experience can an exponential impact on your brand’s reputation.

 

The impact of a great customer experience

So while a negative experience can be incredibly damaging to a brand, the upside is that by investing the time and energy in focussing on customer centricity and experience companies can transform their business and separate themselves from the competition.

Research has shown that 64% of people find the customer experience more important than the price of the product itself when making a purchase. This is incredibly important as it shows that lowering prices to undercut the competition isn’t necessarily a beneficial strategy. Brands can maintain their prices and focus on the customer experience in order to justify paying extra.

This, of course, has a flow-on effect in terms of revenue and profitability with 73% of customers with just an above average customer experience outperforming their competitors financially.

The correlation is clear – good customer service equals good business, and good business means greater profits.

So how do we become more customer-centric?

Flipping the customer centricity switch is not an easy thing to do, particularly in established businesses that have already proved successful over a number of years. That said there are a number of steps businesses can take towards becoming more customer-centric and improving their customer’s experience:

Establish customer experience focused KPIs

While revenue and profit will always be the ultimate key performance indicators for the vast majority of businesses, it is critical to incorporate metrics that measure the success of your efforts to improve customer experience. Examples of metrics that measure customer experience in one way or another are:

  • Lifetime customer value
  • Voice of customer
  • Net promoter score
  • Churn rate

These are all quite different in the elements of the customer experience that they measure, however they are all of critical importance. If you aren’t measuring these metrics currently, click here to read more about their importance to a business.

Invest in customer journey mapping

Customer journey mapping is a foundational piece of work in terms of understanding your customer and how they interact with your brand at various stages of their lifecycle. Every purchase has a lifecycle from the point the customer determines they have a problem they need solving, to becoming a long-term customer and brand advocate. The process of customer journey mapping is complex and can be quite involved, but the outcomes can be astonishing and can transform a business.

Prioritise customer satisfaction with staff

To ensure that decisions are made with the customer in mind first and foremost it is critical that all team members are in alignment. This means clearly educating and communicating what it means to be customer-centric, what the measures of success are and techniques on how to approach problem solving with a customer first lens.

Additionally, this means that staff need to be both held to account when they make non-customer-centric decisions and rewarded when they have customer experience successes.

Customer first design

When designing, whether it is your product, website or any other customer touchpoint, it needs to be customer focused. This means prioritising whatever will make it easier for the customer, even if that means that may be more challenging for the business in the short term. Above all, the rule of thumb is that customers just want things to work as effectively as possible, so a focus on function is critical here. Beautiful design is great, and may win awards, but if it doesn’t help the customer achieve their goals then what’s the point?

Testing with customers

One of the most important elements in transitioning to a customer-centric business is to implement a testing culture. This means that when we are designing or problem-solving, not only do we think customer first but we actually test with real customers to validate that what we are doing is what they want. Examples of this are:

  • A/B testing content changes on your website
  • User testing a new design for a mobile app
  • Conducting focus groups to concept test a new product

Testing and learning with real customers are fundamental to the development of a strong customer experience. I talk more about testing and learning in the context of conversion rate optimisation here.

Summary

The impact that these liquid expectations have on the customer experience is significant and it makes it all the more challenging for businesses to keep up. However, this is the new reality and those brands that fully embrace customer centricity and prioritise the customer experience will emerge as leaders whereas those who maintain the status quo will struggle to compete and lose business.

Transforming your organisation into a customer-centric business is a long journey but as the proverb says it starts with a single step. Whether that step is redefining your KPI’s, developing a customer journey map or simply to start testing website changes with your customers, every little bit of progress helps improve the customer experience.