It has never been more important to keep close to your customers. With an explosion of media channels, customers now have access to countless sources of information on the products and services they are interested in. Dr Emma K. Macdonald from the Cranfield University School of Management’s Customer Management Forum, – partners for the UK Customer Experience Awards 2014 – talks about connecting with customers.
Customers can find information from offline and online sources, from real and virtual friends, from retailers, product experts and from other consumers. A quick search online will bring up price comparisons and reviews to help customers get the best product at the best price.
Keeping in touch with customers via all of these channels presents a mammoth challenge. The reality is that when making a decision about what and where to buy, customers can now get all the information they need without even making contact with the company they are buying from. It is quite feasible for customers to make a commitment to a brand without any input from the company at all.
So how do you keep close to customers across all stages of their journey? To start you must put the customer experience and their requirements at the heart of your organisation. In order to develop a customer-centric approach you must understand the multichannel journey customers take and ensure that you are visible at each stage. In order to be fully effective a customer experience strategy must be supported by appropriate structures and metrics.
The traditional sources of customer insight such as brand tracker and customer satisfaction surveys are limited in their ability to capture customers’ journeys across all touchpoints. For instance, they typically ignore peer-to-peer encounters and are notoriously poor at capturing customers’ emotional responses to specific brand encounters. Although getting into the mind of customers is not easy, by taking the time to try you can identify areas where you are doing well, where you can do better, and where product or service innovation might be fruitful. This deep understanding is difficult to achieve through surveys but can be achieved through immersive research such as ethnography or real-time observation. Immersive research is particularly valuable as it can reveal how your customers view the world.
A good example of this is Procter & Gamble’s ‘Living It’ programme, which involved sending a group of their brand executives to live with less well-off families in Latin America. By immersing themselves in the lives of their customers, the brand managers not only saw how their products were being used day-to-day, but were also able to understand the challenges facing their customers and the conditions in which they live, often having to manage without electricity or water.
Customer experience management means considering the entire customer journey including those stages where you are not in contact with the customer. This might include parts of the customer journey where you rely on partner organisations for services such as bookings or delivery. While an inside-out perspective might say those non-core activities are not your responsibility, when you look outside-in from your customer’s perspective, you can see these are all parts of the customer journey that need to be considered. Your approach to customers must also account for the multiple journeys that they have with you. For instance, in the banking sector a customer might have a savings account, a mortgage and a credit card with their bank. Customer experience management will ensure that all conversations with the customer take this into account rather than focussing on individual products.
Customer experience is not just a hot topic in consumer markets. Business-to-business marketers have also recognised the opportunity for creating value for customers by extending what they offer beyond traditional boundaries. This explains the ‘servitization’ models adopted by companies like IBM, Rolls-Royce and Xerox. Xerox for example, have moved a long way from just selling photocopiers to providing document management business solutions for their customers.
A focus on delivery ‘in the customer’s space’ allows the supplier to become embedded in the customer organisation, which helps them to get closer to the customer. Those companies who are ahead of the game now offer contracts based on ‘value in use’ rather than products sold, such as the ‘total care service’ provided by Rolls-Royce, which contracts on the basis of aircraft in the air instead of engines sold. These servitized business models create complexity in terms of responsibility, risk and value definition, and require greater levels of cooperation and integration between supplier and customer. However the benefits of close supplier-customer ties include better understanding of customer requirements leading to better solutions and stronger business relationships.
For the supplier this level of customer closeness not only helps to understand the customer’s burning issues today but also provides valuable insight for tailoring future value propositions. Our research has shown that customers expect their suppliers to think about how to improve their business and are disappointed if a flow of incremental innovations does not emerge. While the pressure on suppliers to be proactive can be challenging, this represents an opportunity in a world where keeping close to customers is not always easy.
Developing the customer experience is a challenge organisations are grappling with across competitive markets. Achieving great customer experience requires commitment and cooperation across your organisation. In order to become more customer-centric, organisations must design appropriate channels around the customer journey, inspire the commitment of employees and stakeholders, and measure and reward the right activities.
However, the most important action you can take is to step into your customers’ shoes every now and then and look at the world through their eyes.
Emma K. Macdonald
Dr Emma K. Macdonald is Research Director of the Cranfield Customer Management Forum, Senior Lecturer in Marketing at Cranfield School of Management and Adjunct of the Ehrenberg-Bass Marketing Institute. Her interests are in customer insight, customer experience and customer value. Prior to completing her PhD, Emma worked for several years in telecoms marketing, and as a commercial researcher. She has published in Harvard Business Review and in several academic journals. Emma teaches on the topics of customer experience management and integrated marketing communications. emma.macdonald@cranfield.ac.uk The UK Customer Experience Awards are partnered by the Cranfield Customer Management Forum (CCMF).