Hacking a Better Customer Experience

By now, we’ve all heard about the lucrative competitive potential that improvements in customer centricity can deliver. In fact, it’s widely touted as an essential capability just to maintain business relevance. Certainly, in this era of “customer-driven capitalism”, customers are in charge and in many cases have a breadth of choice that exceeds their capacity/willingness to browse. Averaging results from recent research, companies having high multi-year customer experience (CX) scores tend to have a growth speed and shareholder returns advantage in excess of 2X. As a result, advancing CX capabilities is highly likely to be a compelling investment. At a minimum, just to improve the chances that customers continue to choose your brand.

There are a growing number of ways to approach a CX initiative. At the two ends of the spectrum are those that produce incremental gains and the more ambitious alternatives that aggressively reimagine the entire customer journey. Because it shifts the focus of an organization’s measurement system from traditional financial metrics to the underlying causal drivers (customer performance and stewardship), it’s tends to be a difficult initiative to prioritize for funding. It’s also an inherently difficult initiative to execute because it requires a strong collaborative process between two key counterbalancing disciplines: applied creativity and analytics/value-significance. Not to mention, potentially overcoming organizational culture roadblocks.

The intent of this paper is to offer a bit more than a middle of the road no-frills self-paced approach that uses some key principles and a simple process to both help break inertia and improve the likelihood of rewarding outcomes. It offers an accelerated path to conjure your own magic for a reenforcing cycle of elevated and differentiated experiences. As experience and learnings are earned, your approach will/should become increasingly intricate and proprietary/unique. Technology and behavioral science tailwinds have never been more creatively and diversely enabling. Because situations vary, the style can be adapted. It encourages a design thinking or jobs-to-be-done orientation to uncover transformative opportunities yet allows the execution pace to align with situational conditions. Specifically, creating momentum by building confidence and results through a series of increasingly ambitious incremental moves.

Design Principles

Customer

The law of the vital few applies to an organization’s customers. It’s better to target design efforts on the homologous features of the few high performing customer constituencies (the high potentials) than risk diluting/nominalizing the impact across a broad diversity of demographics and psychographics. The best customers are easy to find, they are the top 20%-30% of active customers who represent a large disproportionate percentage of an organization’s economic prosperity. They are also the ones that are inordinately expensive to replace. Creating ways to recognize top customers and discriminate service quality in their favor provides the first best path for meaningful improvements in engagement outcomes.

Persona

Personas are the prevailing mindsets that the target customers assume when engaging with a brand. There may be more than one. For example, a travel services company may have customers who alternate between business and family travel mindsets. Personas are used to help us empathize (walk a mile in the shoes of) to design meaningful experiences/connections. Ideally, they enable us to enhance relevance through emotional triggers/motivators. If you happen to be fortunate enough to have your target customers neatly fall into one or a few segments of an established lifecycle cluster (Personicx for example), you have a jump-start advantage. Otherwise, you’ll need to build them up using your identifying data.

Value

It’s important to clearly understand the brand’s value proposition from the target customer’s (persona) vantage point. It’s easy to wrongly assume that it’s intuitive. Then, focus design energies on ensuring that target customers receive reliable/consistent service. Customer service exchanges have an above average tendency to end in negative experiences and recovering an at-risk customer is certainly more challenging/expensive than avoiding mishaps through consistency. At least initially, evade getting wrapped up in the idea of delivering astonishing service. Consistently astonishing customers is expensive and a moving target. Achieving consistency is a substantial first/requisite step. Then experiment with the economics of astonishment to find if and where it can deliver mutual value.

It’s definitely an advantage to have a clear and tight value proposition where execution can be delegated with latitude. This (along with a strong shared purpose) increases the probability of favorable execution outcomes through adaptability and by enabling faster ongoing improvement evolutions. What’s more, it more accurately calibrates customer expectations with the brand promise.

Purpose

The idea of a shared purpose is to establish a cause oriented emotional abstraction which brings customers and associates closer together to achieve an outcome (perception) that transcends a transaction. It expresses the “Why” a brand exists. It’s short and simple, easily remembered, accurately interpreted/articulated across a wide range of contexts, and it inspires action. Clarity of purpose also makes the essentials (the right things to do) more obvious to people. As a result, the most important things tend to get done more reliably. A shared purpose not only encourages customers to initially embrace the journey, by innately injecting a larger meaning into each interaction, it can gravitationally pull them through it.

Connection

Analytics are a key part of achieving an insight advantage. Data driven insights come fast and can detect important patterns of behavior. However, metrics are a poor proxy for understanding causation and emotional drivers. As a result, it’s important to gather empathy driven insights. Empathy insights may come slower, but they are much more likely to reveal causal insights that lead to impact-fully novel innovations in relationships, experiences, and products. It’s a particularly good means of discovering latent and unexpressed needs.

People tend to lean more toward the irrational and emotional when it comes to shopping. Purchase decisions are substantially influenced by how we feel and our interpretation of remembered experiences are based on how they made us feel. Similarly, the decision to make subsequent purchases are also influenced based on how the last experience unfolded. Given that emotions drive the most desirable behaviors and create the strongest connections, adopting an empathy driven methodology (Think-feel-do model, Jobs-to-be-done, Design Thinking, Disney’s compass model…) is essential for effective journey design.

Armed with a methodology and well-defined personas, it’s possible to begin designing and/or assessing journey touchpoints. Not all touchpoints have equivalent value (improvement potential). Focus most on the influential moment of truth touchpoints. They are the ones that present opportunities to trigger the emotional motivators that drive profitable behavior or forge stronger connections. Give preference to emotional motivators and the relationship that customers form with the product. Avoid using customer satisfaction as a measurement mechanism. The correlation between satisfaction and repeat business is nominal (most customers that defect a brand were satisfied). Instead use NPS or something similar.

Peaks to Finish

Customers tend to only remember snapshots of an engagement experience and not necessarily as they actually occurred. According to Daniel Kahneman, what they remember is heavily influenced by peaks in pleasure and pain and the ending. Ideally, consolidate the pain points and get it out of the way early (don’t let negative surprises incubate). Segment the pleasure points so they gradually increase as the experience unfolds. End with a bang (on a high point). It may also be useful to employ positive surveys (especially with best customers). Positive surveys encourage the customer to recall the pleasurable aspects of the engagement thereby strengthening those memories. Later when recalled, they tend to remember the experience as being better than it actually was. In effect, designing a journey is more about engineering experiences that the customer will remember as abstractly happy.

Effortlessness

Look for points of friction between the customer and what they’re trying to achieve. Friction is anything the customer has to do, remember, or even think. Find creative ways to shorten the distance between the customer and their access to the product/service. Focus on designing a “happy” path (main thoroughfare) for best customers and avoid trying to design every potential variation. By narrowing the design effort to homologous groups of best customers and limiting the path/scenario variations, the probability of creating an impactful effortless journey that customers will prefer to travel increases.

It’s easy to confuse the notions of loyalty and habit. Habit is a friend of effortlessness. Once a customer chooses a brand, each time they repeat an engagement it becomes more ingrained in their system-1 mind. Since brains prefer to remain in a low energy state, as long as a repeat engagement is convenient and the product recognizable, it’s more likely to reoccur. And probabilities continue to improve with each successive occurrence. P&G’s Tide and Head&Shoulders brands used this principle to help create an accumulated advantage that’s survived for over a half century.

Participation

There are creative ways to recruit customers into co-creation relationships that build intimacy, add value, while also building high quality insights. When designing journeys, some will include co-creation opportunities as a differentiator. Many include a segment for recruiting advocates from customers. However, it doesn’t have to stop there. In the same way that Tom Sawyer recruited a neighborhood into painting his fence under the auspices of fun, active customers can be continuously engaged as privileged insiders (like employees inserted into business processes) to share opinions that can be used to enhance a wide variety of business decisions (including assortments, potential new services, prices…). Since the feedback comes from a homologous group (best customers), the aggregate results can be calibrated to inform better decisions. At the same time, it can create new and stronger brand connections with best customers.

Process Overview

Process Steps

1. Map and instrument the current state journey. Instrumenting includes, for each touchpoint, gathering direct customer feedback (NPS for example), cost of execution, and empathy assessments. Once done, its likely to yield some potent low-hanging improvement priorities that can be spun-off. But remember, one of the purposes of the cumulative view that journeys provide is to avoid sub-optimization and downstream mishaps. Consider how changes to each touchpoint will impact the other touchpoints.

2. Design an ambitious future-state journey. Certainly, give it considered thought, but don’t over-think it. It will continue to change as this overall process progresses. The intent is to exercise the teams’ divergent thinking ability. This step isn’t complete until the journey is considerably different from the current state and has potential for a significant economic upside (it typically requires both to be realistic). There are a lot of emerging technologies and behavioral science breakthroughs to help make that happen.

3. Design and execute a next best incremental change to the current state that brings it closer to the future state. Use a pre-mortem exercise to help vet expectations of the change and key things to measure. Once deployed, measure and learn as much as possible about the impact of the change. There are some good models for representing and measuring the health of the customer eco-system, and approaches for gauging its trajectory as improvements are deployed (cohorts for example). The results from each execution should provide new insights that alter/refine your opinion/theory about the future state. Be sure to guard against confirmation bias.

4. Loop back to step 2.