Providing a top-notch customer experience is how businesses can secure brand loyalty. But with so many organizations focusing on customer experience innovations, how can one stand-out and compete? Companies will need to think outside of the box in order to provide a customer experience that truly impresses the customer enough to remain loyal to that brand. Businesses must completely understand their customers; how and why they are engaging, points where they are experiencing difficulties, and use this information to improve the experience. This constant feedback loop is necessary for businesses to remain competitive in this consumer-driven landscape. The article below provides seven areas where companies can improve and deliver stellar customer experiences.
That’s how long it takes financial-technology start-up Kabbage to approve a small-business loan—nearly 5,000 times faster than the 20 days it takes a typical bank. It’s no wonder that customers’ experiences with technology companies have not only altered their behavior but also raised their expectations about how interactions with all businesses should work. As a survey conducted by Ipsos and LinkedIn found, some 67 percent of affluent millennials are open to using non-financial-services brands.1
Incumbents are moving fast to adapt, applying a range of approaches to improve customer experiences. These include everything from design thinking, which involves applying creative, nonlinear approaches to reinvent how customers interact with businesses, to agile, which calls for fielding prototypes quickly, gaining early customer input, and then iterating continually.
With so many players in the mix, the bar is being raised ever higher, and the danger is that an incumbent may work hard but end up with a “me too” customer experience that does not set it apart. Instead, a great experience that delights customers and earns their loyalty is needed. We’ve found that improving a customer experience from merely average to something that wows the consumer can lead to a 30 to 50 percent increase in measures such as likelihood to renew or to buy another product. Here are seven areas we’ve identified where incumbents can step up to design and deliver great customer experiences.
From measuring customer behavior to spending time with customers to truly understand them
Most companies conduct quantitative research on customers. Such data provide important insights, but to create distinctive customer journeys, companies must not only understand their customers’ behavior but also develop deep empathy. In particular, companies need to empathize with customers when they experience difficulties and obstacles.
This means embracing new techniques for intimately understanding customer journeys: ethnographic observation and “shop-alongs,” where researchers watch or accompany customers in stores; customer diaries, where customers describe, hour by hour, their activities and reactions as they interact with products and services; codesign, where customers give feedback about early versions of proposed offerings; and continual live testing and design iteration with customers after launch.
Top-performing companies also develop a clear vision of the entire customer ecosystem, understanding relevant interactions that extend beyond the core journey the company controls. For example, the journey to securing a mortgage includes an understanding of how potential home buyers consider schools. Such an approach allows companies to uncover new insights that allow them to design and deliver truly transformative customer experiences.
Example: Climate insurance for farmers
An insurer was developing a new product to protect livestock farmers from the greater variability in hay yields caused by climate change. It undertook traditional market research but also sent a product-design team to observe the daily activities of farmers.
The team learned that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. The insurer had originally planned to market its new product through traditional channels, but insights gleaned from an observation trip led it to create a digital solution, which allowed farmers to gather information and buy policies online at night and on weekends. The user interface was streamlined and incorporated the farmer’s perspective: for example, it quantified the number of cattle and sheep using the term “livestock units.” The insurer also provided additional value to customers by offering historical weather data and future forecasts on the app.
From designing the user interface to designing the complete customer experience
Many executives believe design is about making devices and screens look pretty. Good visuals improve any experience, but being great requires thinking about everything—and everyone—it takes to fulfill customer needs. True customer-experience design involves crafting each interaction customers have with a company along the path that runs from the minute they consider a purchase through their entire relationship with the product or service. As Steve Jobs said, “[Design is] not just what it looks like and feels like. Design is how it works.”
To design a compelling customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular, operational and IT groups should be involved. Companies need to not merely map out customer touchpoints but also implement changes that must occur in the background to deliver a superior journey.
Example: Disney’s MagicBands
After a five-year effort to root out pain points in the experience of visitors to its theme parks, in 2013, Disney introduced MagicBands. These brightly colored wristbands allow visitors to board rides, pay for meals and gifts, and even unlock the doors of their hotel rooms. More important, the bands and the technology behind them—which is stitched into every part of the park—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day at Disney from a series of highlight attractions interrupted by waiting in line to a magical end-to-end experience.
From addressing issues in the customer journey to completely rethinking the customer experience
Many companies spend a lot of time improving their current customer journeys. This can lead to incremental cost reductions and quality enhancements. But such an approach may also cause companies to narrow their horizons and blind them to better overall solutions.
True reinvention requires taking a hard look at journeys from the customer’s perspective to find the pivotal insight around which a new journey should revolve. The focus is addressing customer needs, not improving a process. Bringing in people who are not normally involved in the process can be a great way to encourage fresh thinking. Assessing the best digital experiences employed in other industries can also be useful inspiration.
Example: Amazon Dash
Online retailers recognize that customers often forget to order household items when they run out, resulting in lost sales. Most deal with this problem using solutions that reside online: standing orders delivered on a periodic basis or checklists on the company website to jog customers’ memories. But Amazon bridged this gap by wholly transforming the order experience.
Amazon’s pivotal insight was that the moment when people want and are most inclined to reorder is when they’re using an item and realize they’re about to run out. So it created Amazon Dash, a small Wi-Fi-connected device the size of a USB drive, decorated with the logo of a common household item such as laundry detergent, plastic wrap, or coffee. Customers place these “order buttons” around their home on appliances or cupboards and simply press them when they realize they are running low on an item.
From working around the regulations to rewriting the rules
At many companies, particularly those in financial services, efforts to transform customer journeys have been constrained by the understandable and necessary caution of internal groups responsible for ensuring compliance with regulations. Some companies address this challenge by being innovative about everything but the mandated steps, often leading to a jarring or cumbersome experience for customers: “You can complete this application online, but you then need to print everything and come to the branch next week.”
The best companies focus on the underlying purpose of the rules, engaging regulators and lawyers to show how technological advances can make things better for customers while improving risk outcomes. This process also often uncovers status quo situations where people assume there are constraining regulations—“Things have always been done that way for a reason”—when in fact that isn’t the case.
Example: Digital identification and verification
Advances in optical character recognition and machine learning have allowed technology companies to develop solutions for the verification of government-issued identity documents, such as national identification cards and driver’s licenses, with a high degree of reliability.
Many banks wanted to adopt digital identification and verification to enable online opening of accounts. But internal compliance groups were wary. One bank broke the logjam by going directly to national regulators with a pilot demonstration showing the new, technology-based process was even more reliable than the existing process, paving the way for regulatory acceptance. As a bonus, the digital process automatically captures names, addresses, and dates of birth from documents used to verify identity, so customers don’t even have to type that information when they open a new account online.