Differentiating on Customer Experience: Steps to Take Today

Picking up on my last post of 2010, customer experience isn’t defined by your company, but by how your organization is perceived by your customers when they do business with your company.  Today, many companies don’t really understand how they’re perceived by their customers. And it’s hard to do, when they often don’t understand customers as segments or groups, much less “know” them as individuals.

This isn’t surprising, since the process of Customer Experience Management can be complex. But just because it isn’t simple doesn’t mean that it can’t be straightforward.

To differentiate on experience, start today by examining “what is” – your customers, your interactions with them, and the people, processes and supporting technologies that drive these interactions –  to see what (if anything) is “broken,” and where. An understanding of your touchpoints and customer needs mapped to their journey (Touchpoint Mapping or Customer Journey Mapping) can also help you understand “what must be” to deliver the right touchpoints to the right customers at the right time, increasing engagement while driving loyalty and profitability.

For those organizations that really want to transform customer experience, this also means understanding “what should be” in the customer relationship, moving well beyond tactical fixes and incremental process improvements. It means you’re already fixing (or have fixed) what’s “broken”, and have a pretty good idea of what your customer’s want and need today – and are making sure your touchpoints effectively meet these needs, while driving customers closer to your company.

Your Interactions are at the Heart of Customer Experience Improvement

Viewed from the customer’s perspective, these interactions and their effectiveness at meeting (or not meeting) customer needs are at the heart of experience improvement, and can serve as the foundation for a customer experience improvement roadmap.

Customer centricity means interacting with your customers on their terms as well. Most of the time, companies still force customers to do business with them on their terms – carry their “loyalty card,” buy when they’re open and spend significant time repeating the most basic information – name, account numbers, passwords, and more – every time they transact, on the web, over the phone and in-person. Though the list of “poor experiences” can be long, the opportunities for identifying and prioritizing improvements based on customer perspectives and business goals are typically significant.

Despite 15 years of ever-greater technology investments meant to solve this issue, companies still struggle with internal silos, data quality and an inability to understand or deliver the kinds of consistent, well-defined customer experiences that build brand, drive customer loyalty and create barriers to competition. This is also why the strategy of differentiating on experience is going to be a challenge for many companies.

Foundational Capabilities and Core Competencies

Many companies don’t have a complete picture of their existing interactions or touchpoints today—even the ones they control. To improve them, your organization must evaluate how your brand touches, influences and serves customers by identifying, measuring and understanding the critical touchpoints that drive desired customer experiences and business results.

The foundational capabilities and core competencies required to accomplish this – ranging from customer segmentation and profitability analysis and regular Voice-of-the-Customer (VoC) programs to the ability to manage the business based on relevant, experience-driven metrics or Key Performance Indicators (KPIs) – are still goals more than reality for many companies.

But, they are goals well worth pursuing now. In fact, I’d suggest these might be the most important things you can do in 2011 to prepare for the future of your business, your customers, and your competition.

Because unless you have a clear picture of what customers want and need – and an understanding of how key events and individual customer touchpoints drive experience today – it’s going to be pretty hard to differentiate on customer experience tomorrow.