Customer Experience Is about listening

  • Opinion
  • April 4, 2019
  • Dylan Berrington
Customer Experience Is about listening

In todays’ retail landscape, customer experience is regarded as the key differentiator and driver of organisational growth, competitiveness and revenue for businesses. Where once brands may have fought each other to the bottom of the pricing barrel in a bid to win market share, the tides have shifted and today 72 percent of businesses say that customer experience is their main priority.

While many are keen to talk about the ‘strategic benefits’ of customer experience and debate which companies do it best, it’s not always immediately clear what people are referring to when they talk about ‘customer experience’. When a customer interacts with your business, they have an experience, and in turn they form a perception of this experience. The important thing to note here is that customer experience is subjective (for instance, our statistics show that Kiwi customers will spend more if they rate the in-store experience relative to Australian customers who spend more based off word of mouth experience). Two customers may have very similar interactions with your business but come away reporting completely different reactions. Therefore, the art of owning customer experience is managing this discrepancy.

Managing this ‘customer experience gap’ is proving to be a challenge, however, As reported by Bain & Company, 80 percent of companies believe they provide ‘a superior proposition’, but only 8 percent of their customers agree. A major part of this challenge is that businesses tend to have objectives that differ from what their customers want. While business owners may want to drive revenue, build brand awareness and encourage customer loyalty, these are not the things their customers care about. To stay competitive, firms should align their strategic objectives with the concerns of their customers (e.g staying true to authentic brand values, providing ethically sourced goods, driving emotionally positive experiences) and the rest will fall into place.

Another aspect of the challenge, certainly for brick & mortar retailers, is that of analysis and evaluation. While online merchants have long enjoyed the luxury of being able to analyse each point of their customer journey to microscopic levels of detail, the in-store experience continues to languish, neglected from a measurement perspective.

A common stumbling block for retailers in overcoming these challenges is cost. Traditional customer experience solutions like mystery shoppers and surveys are expensive to implement and slow to return. By the time a 3-month report has been filed, it’s already out of date. Deloitte’s assertion that ‘in times of rapid change, the only way to innovate is to experiment’ holds true, but in the absence of an accessible source of real-time customer experience data, many retailers are not setup to A/B test or deliver the fast-moving innovation they need to survive.

In 2015, when Starbucks rolled out its ‘Evenings’ program, selling beer and wine in select stores after a certain time, they took a chance on a concept that shifted their core offering and value prospect. While commentators were quick to label the move doomed from the start, the business won praise for at least demonstrating a will for experimentation. When it became apparent that customers weren’t about to start flocking to their local Starbucks for after works drinks, the business pivoted and moved on, no lasting harm done. In fact, the misstep became an opportunity to demonstrate that it was willing to listen to what its customer’s feedback and wants.

In the case of a giant like Starbucks, the business case for experimentation is easier, as long-term revenue growth tends to mitigate the risk of a short-term drop. But how would the landscape look if every retailer was armed with the tools to implement changes and instantly measure the impact on the customer and their buying behaviour. What if businesses could learn from their customers?

When you provide retailers with the ability to collect validated customer data and feedback, en masse, at speed, they become quite literally empowered. The key tenets of ‘customer-centricity’ are not the lessons that need to be taught – providing retailers with the tools to quickly learn and understand the impact of their innovation is key.

Dylan Berrington is the managing director of ANZ

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