CUSTOMER EXPERIENCE AND CUSTOMER LOYALTY

Transcription

1 CUSTOMER EXPERIENCE AND CUSTOMER LOYALTY Part One: Building a Customer-Centric Organization

2 It used to be so simple. photo: Ephemeral New York, Creative Commons.

3 The Old Way. Brands made products that were distributed through one-directional channels to customers. Customer experience was mostly about interactions with the product, not the way it was acquired. And if brands thought about customer loyalty, discounts were often the first tactic they turned to. yay. a product. (and since this is my tenth one, I might expect to get it cheaper.)

4 But Now, Rather than Just Centering on the Product, Business Needs to Center on the Customer. As markets and channels have evolved, products and services have become less differentiated. Customers have more choice in both the brands they connect with and the means they use to connect with them. Brands have less control over the process, but now have more opportunities to make a customer connection. Then: Now:

5 With all these options in play, customer experiences - not just product and price - drive buying decisions and loyalty.

6 Organizations are aligning to deliver value through customer experience, not just product experience.

7 And since the customer can engage with multiple channels and touchpoints at once, no part of the brand can be out of alignment with the rest.

8 For this to work, the entire organization needs to center on the customer.

9 For that reason customer experience and customer loyalty are colliding. And that is a very good thing for everyone

10 Good Customer Experience Leads to Loyalty FROM THE BUSINESS IMPACT OF CUSTOMER EXPERIENCE (MAXIE SCHMIDT-SUBRAMANIAN, FORESTER. JUNE 10, 2013)

11 And Loyalty Leads to Growth CEB 2013

12 And Long-Term Profitability GARTNER RESEARCH

13 Loyalty Marketing Has Been Around Much Longer Than The Age Of The Customer. But Customer Experience (CX) has shifted how we look at loyalty 1980s PRODUCT & SERVICE DIFFERENTIATION Maturing markets & commoditization Increasing price pressure Limited secondary value props Mid 2000s PRESENT CX ERA BEGINS Age of the Customer * Mass technology adoption Increased consumer savvy & skepticism On-demand & shared economies emerge Increased financial pressure on loyalty programs 1980s 2000s LOYALTY MARKETING BOOM Travel & financial early to market Prevented price wars Increased perceived value PRESENT >>> CX SOPHISTICATION Holistic value delivery Consumers drive brand Radical innovation around consumer

14 A Customer-Centric Organization: So Where Do You Start? Start with your internal organizational structure to prepare for a successful journey. photo: Aaron Danowski, Creative Commons.

15 PRODUCT STRATEGY SILO LOYALTY + RETENTION SILO SALES SILO MARKETING SILO ECOMMERCE SILO CUSTOMER SERVICE SILO Silo Busting To accelerate expansion, many businesses have organized themselves into discrete specialized teams that can replicate programs quickly. Communication between groups isn t a priority because the program is fixed by management from above. This is great for speed, but terrible for innovation. No one in this organization can get a complete view of the customer s experience. The brand can t evolve consistently to face the customer and eventually the result is a fractured brand, lower sales and lower customer loyalty.

16 One Customer, One Experience An integrated approach looks holistically at the customer experience in order to estimate the success of potential loyalty marketing tactics focusing deeply on the core product or service experience itself. SALES LOYALTY + RETENTION CX CUSTOMER SERVICE ECOMMERCE MARKETING PRODUCT STRATEGY

17 Customer experience spans all of this and more. Traditional Approaches to Loyalty Still Have Their Place But Remember The 80/20 Rule! Loyalty Marketing must take into consideration the core product experience and meet basic customer needs, at a minimum, in order to retain customers. Rewards 20% Higher Customer Needs Recognition Benefits Affinity Met by Traditional Loyalty Marketing 80% Basic Customer Needs Ease, Speed Value Product / Service Utility Information Service Quality Met by Optimization of Core Experience photo: nick leonard Creative Commons.

18 Preparing Your Organization is Only a First Step

19 Next, develop a current state audit across functional areas to better understand how your customers connect across ALL touchpoints with your brand. Here are five simple questions to get you started

20 1. What are Your Customers Loyalty Drivers? What impacts customer decision-making at each step in the journey in engaging with your brand? A detailed understanding of the answer to this question is key to designing tactics that effectively drive desired behavior. Many companies have existing insights and research that can help answer this question. Any gaps that turn up in the existing materials can be filled in with focused research.

21 2. Currently, What Known Opportunities Exist to Improve Your Core Product Experience? Start at the beginning with the known customer pain points or opportunities that will address an unmet need. These are often the issues that sit on a spreadsheet filed away for months without action being taken, as they can be daunting to address and yet, this is where the greatest opportunity often lies. Consider which of these opportunities are highest impact and would provide the greatest improvement in customer experience. Then work outward to identify new areas for growth and development.

22 3. How is Your Company Utilizing Technology Today? Technology is a powerful tool that can transform the way customers interact with your core product or service. Given the proliferation of mobile technology and big data, consider what opportunities exist to ease, simplify, and generally improve the product via available technologies. Remember, technology must foster an integrated and seamless brand experience across digital, physical and service-driven touchpoints.

23 4. What Are the Current State First- and Second-layer Experiences That Surround Your Core Product? Enhancing the core product or service offering is the greatest opportunity to drive loyalty as it directly enhances the core value proposition and primary reason for customers to engage with the brand. However, first- and second-layer experiences, that are not the core product or service itself, can be similarly powerful both for good and for bad. Consider what first- and second-layer experiences are impacting your customers and identify which may present opportunities for improved, deeper engagement.

24 5. How Can you Operationalize Customer-centricity Within Your Company? Creating an effective, integrated loyalty strategy is a process that requires cross-functional stakeholder support and buy-in. Who will you need as advocates? Who do you expect to be skeptical? What sponsorship is required to gain traction politically? What data and insights does the Loyalty Marketing team know of that will support your case for change?

25 These questions will help drive alignment and a rationalized plan that can serve as a starting point for building a culture of customer-centricity at your firm.

26 Interested In Leaning More? Check out Organizing for Customer-Centricity: Two organizational models for internal re-structuring Lenati is a marketing and sales strategy consultancy that helps companies acquire, grow and retain customers. Our clients come to us to build market leadership, whether through radical innovation or intelligent evolution. Our core services focus on: CUSTOMER EXPERIENCE CUSTOMER LOYALTY CUSTOMER ACQUISITION GO-TO-MARKET STRATEGY SALES PERFORMANCE lenati.com