Customer loyalty is the consequence of providing a superior customer experience in ways that matter to the customer. That create value for the customer. Value includes cognitive elements (so beloved of the B-school crowd), emotional elements, aesthetic elements and others elements too. Only the customer decides what is of value. If we want loyal customers, we must concentrate on building a customer experience that delivers superior value, on customers' terms. Not just on the company's (or the brand's) terms.
But this is not as straight forward as it sounds.
Vargo & Lusch's new thinking around service-dominant logic shows us that value is co-created with customers at the point of use. This is a radical departure from today's business thinking, which sees value as having been delivered at the point of sale. The auto dealer is happy at the moment you buy the car. But you are cumulatively much more happy after many years of trouble-free motoring. If you are really happy you go back and buy another car from the same dealer. If value is co-created at the point of use in this way, then customer experiences need to be designed as flexible platforms that allow the customer to create value in their own way. A car is not just a means of transport, it is a status symbol, a lifestyle statement, a safe place, a creator of happy family memories and so much more. So the car experience platform should be much more than just the car itself, financing and insurance. It should also about lifestyle events, roadside help when you need it and so many more things. That doesn't mean the customer experience shouldn't express the brand's values, just that the they shouldn't be allowed to get in the way of co-creating value for customers.
Perhaps the biggest change in designing customer experiences on customers' terms is in thinking through what customers are trying to achieve at critical moments in the customer experience. This means moving beyond just looking at what customers do (which itself is limited by what customers are allowed to do), towards looking at the jobs customers are trying to do and the outcomes they are trying to achieve by doing them. If we understand the jobs that customers are trying to do, and struggling with, we can innovate to provide better touchpoints and thus, a superior customer experience.
As my knowledge, skills and experience has evolved over the years, I see myself today as more of a design thinker than a ‘customer-centric innovator’ or ‘customer value manager’ that my business cards describe me as. I see the broad range of disciplines that merge together in design thinking as the ideal toolkit to sense the world through the eyes of the customer, to know how they are trying to do jobs, to think how value can be co-created with them, to build experience platforms that enable co-creation and to act in a more customer-centric way. Customer-centricity is co-creating value with customers at the end of the day. Customers and companies both benefit from co-creation.
The British economist John Kay talks about 'Obliquity'; the idea that you only achieve what you want by focussing on the things that enable it, not by focussing on the result itself. Never was this more true than in creating loyal customers. To misquote Bill Clinton, "It's the customer experience stupid!". And we design thinkers know that really, the customer experience is all about co-creating value with customers.
What do you think? Is co-creation the way forward for customer experience design? Or is your customer experience still stuck in a corporate branded mind-set?
Graham Hill
Customer-Centric Innovator, Customer Value Manager, or simply, Design Thinker
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Further Reading:
Reinartz & Kumar, The Mismanagement of Customer Loyalty [2]
Bernd Schmitt, Customer Experience Management [3]
Vargo & Lusch, Evolving to a New Dominant Logic for Marketing [4]
Mertz, Yi & Vargo, The Evolving Brand Logic: a Service-dominant Logic Perspective [5]
Ulwick & Bettencourt, The Customer-centred Innovation Map [6]
John Kay, Obliquity [7]