Switching to the Outside-In Perspective

Objectives

After completing this lesson, you will be able to:

  • Know the importance of Customer Experience

Customer Experience

What to Look Out For

Why are companies - like Airbnb, Netflix, and Amazon - so successful and gain millions of new customers every year? The answer is simple: They have a sharp focus on customer experience. 

Redefining what is customer experience has allowed them to enter an established market and completely dismantle the status quo. Excellent customer experience is the basis of their success and the reason why these companies have established a leading position in their industries. Instead of focusing on profits, bottom-lines, new products, or services, they provide their customers with the same product or service but in a more efficient way. The customer experience became more convenient and simplified which led to a better overall experience.

New Level of Customer Service

  • Understanding your customers. 
  • Anticipating their needs.
  • Predicting their behavior.
  • Satisfying their desires almost before they know what they want.
  • Emphasis on how your customers actually experience your business. 
  • A great customer experience paves the way for customer loyalty.

The Modern Customer

  • Focus is no longer on products and technology, but on other customers and their ratings.
  • Navigates through an omni-channel route with several contact points established on different media: online options, comparison websites, social networks, chat, call centers, and shops.

Today, Customers Expect to:

  • Get customized products or tailored services.
  • Be treated like a person, not a number.
  • Receive personalized offers.
  • Have orders and service requests addressed in real-time (immediate responsive service).
  • Get new products/innovations more frequent than ever before.
  • Provide personal data in exchange for a better product/service.
Note
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Impact of Customer Experience

Some organizations are aware of all the different ways customers interact with them. Today, customer experience has a tremendous impact on purchase decisions. 

This is shown in the study "Experience is everything: Here's how to get it right", for which PwC interviewed around 15,000 consumers in 12 countries, from 2017/2018. 

Product/Service

It clearly shows that customer experience should be managed, so it can be constantly improved, especially as companies are always in a global competition. If the customer gets a great experience, it is easier to make decisions on buying a product.

Is It All About the Customer?

Employees, suppliers, or business partners also interact with a company. To ensure they all experience excellent satisfaction levels when interacting, it is also worth thinking about modeling and analyzing their journeys.

Key Points About Customer Experience

  1. Customer experience is the result of the customer's exposure or interaction with the people, processes, technologies, products, services, and other outputs of a company.
  2. Customer experience depends on different factors and is based on emotions, trust, relationships, and expectations.
  3. A positive interaction between a customer and a company generates a happy customer. A happy customer becomes a loyal customer who is supporting the revenue of the company in the long run.

Customer Experience Example

In addition to positive customer experiences, there are also bad customer experiences. Mostly, it is bad customer experiences that stay unrecognized by companies. Companies often don't realize that they are creating bad customer experiences with their standardized processes as they focus on the smooth execution of their internal processes. In doing so, it is often neglected to put oneself in the customer's shoes to include their point of view. 

So, what characterizes a bad customer experience?

  • A customer orders a product from an online e-commerce store, experiences a problem with it, and learns that they must return the product themselves.
  • When it is time-consuming for the customer to solve their problem.
  • Having to explain the same issue to multiple customer service agents.
  • When the customer discovers after the purchase in store that they could have received a discount online. 

IKEA has been offering self-service checkouts for years to reduce waiting times at other checkouts. 

However, instead of leaving customers to their own devices and thus causing chaos and longer waiting times, there are employees who stand in the checkout area and provide friendly and informative support for helpless looking customers. 

Why is this so extraordinary? In the UK, the first self-service checkouts in supermarkets were equipped with unpleasantly loud alarms. When a customer entered something incorrectly or otherwise had problems, the alarm went off. After initial enthusiasm, these cash registers were used less and less. In IKEA's case, help is always available without customers being exposed to a loud alarm. Importantly, questions about vouchers or discounts can be answered quickly and discreetly.

The Impact of Improving Customer Experience

Focusing on customer needs first has a huge impact on the entire company. A positive customer experience not only makes a customer happy, but accomplishes so much more. So, what is the power of improving Customer Experiences?

A satisfied and happy customer is also a loyal customer, there is no doubt about it. A customer who has a good experience with the company, the products, or the service will be a customer who buys again. Furthermore, these customers are also willing to buy more or try other products (cross-selling).

Satisfied and loyal customers attract new customers, as they tend to share their experience, whether it be positive or negative, with companies.

Nowadays, experiences are easily shared via social media, Google, or in person. This influences potential customers because potential customers have more trust in already existing customers.

Increased sales and revenue are the side effect of satisfied and loyal customers, which in fact gain more customers. Once customers are familiar with the company's products or services and share good experiences, customers don't mind if prices are increased. After all, customers are also willing to pay higher prices if they know they will receive better customer service than from competitors.

Good customer reviews increase the status of the company or the brand on the market. Loyal and convinced customers thus become an advocate of the product and the brand. This attracts potential customers and supports the existing customer base.

Many business people ask themselves the same question every day, but often they fail to look at it from the customer's perspective. If a customer can get the same product at the same price from Store A and Store B, but Store A has unfriendly staff, disorganized shelves, and a confusing website that lacks information about its products, the customer is more likely to choose Store B just because there is a more pleasant experience. However, if you are Store A, how do you know the reasons why you lost the customer?

How Can Customer Experiences Be Improved? 

Customer journey models are the best way to answer that question.

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