In the good old days a pie cost a dollar and a brand was what it said it was, nothing more, nothing less. Increasingly, a brand is now what it does, not what it says. As media continues to fragment and the power of customers to control the public conversation about a brand grows, customer experience is a growing means to drive affinity with the brand. This is evidenced by the surge in customer experience strategies and monitoring programmes that brands have put in place in recent years. When the value of impacting the customer experience is actually measured, it’s also not hard to see why.
An agricultural supplies retailer was investing heavily in this area but without a clear measure of the impact that this was having. Their customer experience monitor survey was able to tell them how many customers were having good experiences, but it wasn’t able to tell them what this meant to the business.
Linking the survey response to their transactional data meant that they were able to observe the behaviour (and in particular, revenue) from a customer both before and after they had a good, bad or OK experience in a store. Comparing the customers who’d had a bad experience with the ones who had a merely OK experience showed a 10 percent drop in revenue from the former group after the experience. This means that for every customer who has a bad experience in a store, the retailer was losing 10 percent of future revenue. This results in tens of millions in lost revenue from all of the bad experiences across the retail network.
This finding is not out of step with what we see when we measure the impact of customer experience across any business. Results consistently show that bad customer experiences are costing brands huge sums in lost revenue.
The key to resolving this and to developing a world-class customer experience is understanding that customer experience is a hierarchy. In order for a customer to reach the top level of the hierarchy and become an advocate for the business, they must first pass through the lower levels.
In any customer experience there are a set of needs that the customer is trying to satisfy. The lowest level of the hierarchy is simply about whether or not these needs were met by the brand. For example, if a customer goes to a store to buy a product and it’s out of stock, then nothing else in the experience matters because this basic need was not met and the experience does not move beyond this lowest level.
The middle level of the hierarchy is about how easy it was for the customer to have their needs satisfied. This is all about the effort that they need to expend getting what the want. A great experience in a customer’s eyes is getting what they want with the least possible amount of effort. Minimising physical movement, searching time or making relevant comparisons easy are all example of reducing effort for the customer.
The final and top-most level of the hierarchy is all about enjoyment. If you can make the customer actually enjoy the experience on an emotional level, rather than the more functional dimensions lower down the hierarchy then, and only then, will you have a chance of gaining a brand advocate.
This story originally appeared in NZRetail magazine issue 742 February / March 2016