Organisations have traditionally followed one of three ‘go to market’ strategies to grow their business. Either they would compete on lowest price, product uniqueness, or differentiated service. In today’s global, hyper-competitive economy, the reality is that it’s no longer possible to sustain growth through price or product alone. Alison Higgins-Miller explains why the only viable strategy for sustained business is through ‘winning on service’, achieved by delivering a competitively superior customer experience.
You can call a cat a dog but it still won’t bark. It’s the same for Customer Relationship Management (CRM), you can call it Customer Experience Management, but if the same approaches and processes continue to be used when interacting with customers, then the change is just cosmetic. Discussion about Experience Management seems to be gathering pace, everyone’s nodding in agreement that organisations need to take better care of their customers, listen more, frustrate less; but no one has actually stated what the difference is between CRM and Experience Management, and how the latter is going to transform business.
Customer Experience Management
The global economy means intense price pressure is making it increasingly difficult to compete with a ‘lowest price’ business strategy. Likewise, leading with product uniqueness is costly and difficult to sustain for the long-term. Today, customers have infinitely more choice; you just have to consider how eBay is allowing people all over the globe to set up their own marketplaces to understand that we’re now functioning in a very different economy. The reality is that good products and competitive prices are necessary, but not sufficient. Today’s business imperative is to compete and differentiate by the customer experience they offer.
To succeed, companies must adopt a ‘win on service’ business strategy. By this we mean they recognise the need to provide a superior experience at each customer interaction point, whether it’s during a sales discussion, a targeted and timed marketing campaign, or during a customer service interaction – the focus has to be on providing an enhanced customer experience, otherwise you risk sending your customers to the competition.
Take the Internet Service Provider business in Australia as an example. A Newspoll survey conducted on behalf of RightNow Technologies in June this year found 46 percent of Australians with broadband internet would leave their current internet service provider (ISP) as a result of poor customer service. Indeed, 21 percent have already axed a previous broadband internet provider based on a poor customer service experience.
The survey found poor customer service was a major concern, and behind much customer churn in the industry. Alarmingly, of the respondents that said they would switch ISPs as a result of poor customer service, 31 percent would switch because of poor overall customer service responsiveness, and 15 percent for a poor customer service experience.
In the dog-eat-dog world of business, an idea that is seen as a great way of winning new customers or keeping existing ones is often viewed as a costly ‘nice to have’, and so sidelined in favour of reducing costs. The pressure comes from the quarter-by-quarter focus on keeping shareholders happy. While this short-term focus obscures any longer-term customer satisfaction vision, it does serve to show how the focus on cost reduction has coloured perceptions about investment in customer communication. The commonly-held view is costs increase in ratio with efforts to boost customer experience.
It’s this cost and service dilemma that’s keeping executives awake at night. They are challenged with serving two masters – driving improved customer experiences and reducing cost. Nevertheless, when push comes to shove, nine times out of ten, VPs of customer communications will take cost saving over spending – because that’s what they are measured on. However, there is a breakthrough to this dilemma and it’s based on understanding that knowledge is at the centre of a great customer experience.
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As consumers, most of us will agree that receiving a timely sales call, relevant marketing communication, or speaking to a service agent who can actually see our previous interactions, leaves us feeling more positive towards an organisation. It makes us feel valued and remembered. These experiences become different because they are relevant and timed, driven by an understanding customer loyalty is made or lost one experience at a time. What they have in common is that they provided ‘knowledge at the point of action’ empowering us to either make a decision or resolve a problem.
Lack of knowledge is the root of most poor customer experiences and consequently must be the foundation for any attempt to deliver consistently great experience. By knowledge, we do not mean data, instead the collective knowledge of departmental customer interactions. Piles of ‘data’ typically make the problem worse. Knowledge could be an understanding of a customer’s previous purchase history, or insight into how they’ve responded to marketing campaigns. Generally, businesses are a maze of information but it’s only useful if it can be made immediately available to the customer-facing business operations. This is when data and information becomes knowledge, something meaningful and usable.
However, if the knowledge isn’t ready when the customer’s ‘at the point of action’ then the chances are the customer won’t be able to make an informed decision about a purchase. Just putting company knowledge into a database is not enough. It needs to be broadly accessible to staff and customers alike, so that every interaction is knowledge infused. The knowledge also has to be able to grow, change and develop. If it is static, it becomes stagnant – placing you and your customers at a disadvantage. To avoid this, there is cognitive technology available today that continuously self-learns from each customer interaction to immediately enhance the next customer experience.
Think of it like this; the heart pumps blood along arteries to the limbs and back again. In our scenario, the heart is the company knowledge, it pumps that knowledge along arteries, or in the case, purpose built, multi-channel applications. These applications are customer-focused, built to learn from customer interaction. What they learn is pumped back into the central knowledge repository to further improve the next customer experience.
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How to attract customers
Customer experience is inherently an external customer-facing process, and consequently we need an entirely new approach to systems. Existing systems are not built to deliver consistent experience. Enterprise Resource Planning (ERP), CRM, Supply Chain Management all focus on internal company process automation. More attention is spent on managing clunky databases rather than on how information flows from the customer into the business and vice versa. However, the more advanced software vendors are moving beyond just internal process management, to deliver Customer Experience Management – where the focus is on serving the customer and applications are built with the customer experience in mind. In essence it’s about helping businesses adapt to customer needs rather than ‘managing’ customers to fit with internal CRM processes.
By focusing on knowledge rather than data and using applications that have been built, from the ground up, with the customer experience in mind, the scales are beginning to balance out in favour of serving both the customers and the shareholders. In actual fact, this balancing out of the scales is more about the changing enterprise software market and how companies now want to engage with their application vendors.
The fast paced, ever changing market place demands that companies don’t miss a beat, the decision you make today is the success or failure you see tomorrow. So companies must look for the business advantage and benefits from day one of their investment. This starts with eliminating unnecessary costs such as infrastructure, databases, only buying what software is really needed and paying for it in a way that suits the business. Furthermore, smaller, trial implementations help define th
e goals and test the expected results, all before a significant investment has been made. This sets the results baseline for rollout on a wider scale and ensures vendor accountability throughout the relationship.
Ultimately, organisations have to recognise that customer empowerment is a disruptive force in business, either to be embraced or ignored. Those that embrace it will have understood the nuances of what it takes to deliver a great experience that will attract customers, and they will be leading their market on that basis. Those that don’t, will still be deploying process-led software designed to force customers to fit with their own internal systems and will most likely be out of business in the not too distant future.
*Alison Higgins-Miller is Vice President Asia Pacific of RightNow Technologies.
* The opinions expressed in this article are those of the author, and don’t necessarily reflect the opinions of DYNAMICBUSINESS.com or the publishers.
