Customer experience is known as that ‘soft’ factor with an unclear link to profits. According to recent research, customers are investing in it, but often in an uncoherent, unstructured and barely measurable way. The research also showed: whoever invests wisely in the six pillars of customer experience, obtains demonstrable (and significantly more) profits.
In recent years, KPMG has surveyed the brand assessments of over 1.4 million consumers and has obtained an in-depth understanding of customer experience. The latest data and analysis were published in ‘Making Memories’, a report by KPMG Nunwood on Customer Experience Excellence (CEE) in the UK. This revealed that there is one connecting element between British companies that beat the Financial Times Stock Exchange Index: they all invest heavily in the customer experience. It is therefore that brands such as Amazon and Lush to record additional turnover of £43 million on average over the last five years.
So there is a direct link between a ‘soft’ issue such as customer satisfaction and hard financial parameters. Many companies believe the connection is there. However investments are often unstructured and not always well thought-out. This was clear from last September’s KPMG survey ‘How Much is Customer Experience Worth?’. What also seems crucial is that the customer experience is not determined by clever marketing, but by the actions of the entire company. By fulfilling the promises to the customer, every day.
Six pillars, one winner
How can organisations get a grip on an issue as elusive as customer experience? From the answers of numerous respondents to the Customer Experience Excellence Centre over many years, it has distilled the six drivers of customer experience. Six buttons for organisations to push in order to raise the customer experience to a level where it affects profitability. At a minimum, it’s often about hygiene while, at its highest level, it’s about distinctive capability. These are the six pillars, with six examples from the ‘Making Memories’ top 10 standout CEE companies.
1. Integrity: Lush
Consumers want to be able to trust their brands. When it becomes common knowledge that a clothing brand is producing its clothes using child labour, that brand has a problem. The other end of the spectrum shows that integrity results in customer loyalty. The cosmetics brand Lush (number 3 on the ‘Making Memories’ list) communicates the following as part of its core brand: no animal testing; no lavish packaging or management salaries; honest prices for suppliers; and active involvement in charitable sponsorship.
2. Resolution: Apple Store
This is the classic hygiene factor. When a customer isn’t satisfied and not compensated, this can damage the brand. Apple Store (number 9) sees this as an opportunity to surprise customers, to go one step further. The iPhone of one of the respondents had water damage but was one month outside the guarantee period, however the store decided to provide a replacement phone with a three-month guarantee.
3. Expectations: M&S Food
A brand should always be able to meet the expectations that have been raised (i.e. through brand marketing). At a minimum, this means to supply the product or service that was promised. When a retailer claims it’s always the least expensive, and one of its product is found cheaper elsewhere, this can damage the brand. According to respondents, M&S Food (number 7) meets that high expectation. The meal deal ‘Dining in for two’ was mentioned in this respect. The ready-made meals are of restaurant quality, low-cost and sustainable. The customer experience can be as good as dining out, just as M&S Food promises.
4. Personalisation: Amazon
Can you make a customer feel that it’s all about him or her? When you want to buy a television from a huge electronics store and there aren’t enough staff to help you, the experience can be ruined. You feel like just another number when you arrive at the register. The online retailer Amazon (number 5) can offer that feeling of personalised service without the need for any staff. For example, one of the respondents bought an e-reader twice by mistake. He immediately received an email pointing this out in a friendly way and suggesting that the duplicate shouldn’t be sent. As he said, they could have also just sold me two.
5. Empathy: Emirates
The customer experience is very much determined by the measure in which a brand can add emotion to a product or service. Some brands aim to radiate superiority and aloofness in order to emphasise the level of luxury. The airline Emirates (number 4), however, would rather invest in creating memories, in order to load the value of the brand. It sometimes even does this literally, for example by taking photos of families together with their stewardesses.
6. Time & effort: First Direct
This pillar represents the ease with which customers can make purchases. Can a purchase be made with a few clicks, or does it take twenty clicks? How many contact moments are required? But also vice versa: being able to move along with a client that wants to take his time to make a purchase? According to the ‘Making Memories’ respondents, First Direct (number 1 on the list) is best at this. Staff are trained to be where customers need them quickly, and to give them all the time and advice they want.
Choosing between customer experience and efficiency: breaking the paradox
Investing in the customer experience has been proven to work. But only when an organisation invests in all six pillars, taking the experience beyond the hygiene factor. And for a significant increase in profits, it helps if the customer experience is also ‘operationally excellent’. This feels like a paradox to many companies, because sometimes investing in the customer experience seems to reduce efficiency. That this contradiction is an illusion will be shown in our next blog.