User experience is the new competitive battleground for differentiation. Uber is worth over $50 billion. Airbnb has a 90% growth rate to its valuation, is worth more than Marriott or Starwood and is aggressively moving into enterprise services. Facebook, who doesn’t even create content, is the largest publisher and has been valued higher than GE or Walmart. Each of these examples has disrupted their respective industry by being customer obsessed and finding new ways to create customer value.
In Forrester Research’s “The Revenue Impact of Customer Experience” report, data shows that brands in nearly every industry, from wireless providers to retail banks, stand to gain tens of millions of dollars a year in upside revenue from the retention, enrichment and advocacy loyalty associated with great customer experiences.
Experience is a fundamental business differentiator
While startups have the advantage of orienting themselves around the customer from the beginning, many enterprise-level businesses have entrenched structures that make it difficult for them to truly put the customer first. Many brands are making progress by shifting away from silos where different groups own different channels or functions. Instead, they are collaborating on the best customer experience, focusing on the moments of the customer journey that drive business value for the customer and the business.
With the increasing expectation that experiences be personalized, and with more channels to design for, data is critical to connect our business goals to the behavior of our customers. Many brands are developing their own strategies to make sense of data across the entire customer journey, enabling greater decision-making. There are now many specialized consultancies who specifically focus on data driven strategies.
A Gartner leadership study in 2015 shows that “By 2016, 89% of companies expect to compete mostly on the basis of customer experience (versus 36% four years ago).” For brands to stay competitive in today’s customer experience focused market, they need to reorganize around customer behaviors. This can be done through the following four steps.
Reorganizing Around Customer Behaviors
Internal barriers (like disconnects between teams or an overly product-centric culture) can get in the way of an optimal customer experience. The first steps a brand should take to break down these barriers and better align around customer behaviors are:
1. Map the Experience. Many brands use customer journey maps, but they are often illustrative or based on intuition. Brands must be advocates of understanding and mapping the journey, doing so through a combination of behavioral data about current customer friction points and qualitative observations of unmet needs.
2. Prioritize the Opportunities. Develop a shared vision that prioritizes customer experience opportunities based on their business value and complexity. The business value of an experience improvement can be determined through understanding the customer behavior it is meant to influence and the impact on the KPIs that drive brand success. The goal should be to understand the net value of an experience change. Will it influence a larger sale? Will it make a customer come back? How do those things affect business metrics?
3. Visualization of the New Journey. After mapping the journey and prioritizing new opportunities, articulate the intended future vision for the experience to stakeholders in a visual way using storyboards, wireframes, full creative mock-ups or video. Define the overall ROI improved by each individual experience based on the anticipated behavioral change.
4. Roadmap Development. Once stakeholders are aligned on the new journey vision, create a phased action plan to guide implementation. This needs to incorporate details about the planned functionality, the internal teams and governance structures, the technology and the data required. As well as the anticipated timeline for creation and ROI.
Execution of this roadmap will usually fall into two types: Reinvention and Pioneering.
When it’s not working, reinvent. When a project has high customer value and is not meeting customer expectations, that experience needs to be fixed. For example, doing a full experience redesign to streamline common tasks or a conversion and funnel optimization that decreases friction across digital channels.
When looking at the moments that need to be improved, the solutions still need to be channel agnostic. There can also be tremendous opportunities to improve business outcomes by reinventing portions of an experience, especially at touchpoints or in channels that are rapidly growing in use.
When it doesn’t exist, pioneer. When a project has high customer value but does not yet exist, pioneering entirely new experiences, products or services is required. New experiences come about with the opening of new channels that change traditional ways of interacting with a customer or the introduction of new technologies that enable entirely new types of interactions. Customer behavior is constantly changing and building new experience to meet it is mandatory.
Identifying the opportunities to pioneer your business and industry through innovative experiences is heavily dependent on the insights through observation of customers and an awareness of the likely future customer.
Disruption is not a switch that can be flipped when an organization deems itself ready. Agencies need to help clients change the way they work. Understand behavior and your customer, start with a hypothesis and keep iterating with the experience until it generates the desired outcomes (like user adoption, satisfaction or loyalty). This should be done quickly and often. No matter the issue at hand, success will require evolving around the customer and managing solutions as part of a holistic customer experience program.