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Actively Manage the Customer Experience

on Wednesday, 02.05.2016

It is obvious that there are marked differences in how companies manage or mismanage customers’ experiences. A once-intimate customer experience can get “lost in the sauce” as the company becomes larger and more complex.

Take the task of returning a product. Some companies force customers to go through so many cumbersome steps, like recovering documentation that the company already has, and generally discourage returns by making it a “jumping through hoops” contest. To some extent, I get it: Especially in low-margin businesses, returns cost money both by reducing revenue and incurring the expense that the company may not be able to recoup. Other companies make returns easier, and assume the additional expense as a cost of doing business.

I once had a problem with a Moen sink faucet that carried a lifetime warranty. I called the service department, expecting difficulties in obtaining a replacement faucet, but when I explained that the faucet hose was leaking, the employee actually consoled me as if I’d suffered a death in the family. Taken aback, I responded that it was just a faucet. Imagine that: I, the customer, had to limit the perceived severity of the problem due to an overly empathetic customer service staff person! Clearly, the company was paying attention to the whole customer experience.

Such positive experiences, clearly, are important factors in landing follow-on business, either directly from the satisfied customer or from others influenced by that customer. Though marketing departments and operations departments are typically managed separately, they should have joint influence in shaping the customer experience. “Customer experience,” in fact, can be defined as “the sum of all interactions a customer has with a company.” The challenge is that individuals within a company, in practice, operate with a narrower view dictated by organizational structure and division of labor. For example:

• Employees in a company’s operations department might understand their scope of responsibility as being limited to customer service or service excellence, without recognizing that all individual touches that could be categorized as “service” are only one element of the entire experience.
• Employees in the marketing department might understand their scope of responsibility as being limited to communications and promotional activities used to attract and retain customers. Again, these activities represent only a fraction of the interactions between customer and company — and as observers have said time and again, what an organization says in its advertising has far less impact on customer perceptions than what it does in reality.
Data can be misleading in measuring the customer experience.
Even with the correct, complete view of customer experience, it’s still possible for companies to mismanage it because they lack the proper tools to help design and manage their approach.

The most common mistake in trying to manage the customer experience is starting with customer sales data alone. Using data and analytics as a starting point fails to recognize the importance of coherence between customer experience and brand identity. (By brand identity, I mean the defining values and attributes that distinguish a brand from other brands.) Delivering on the brand promise, expressing the brand personality and bringing the brand attributes to life should be the primary objectives when designing the customer experience. Some companies drive their customer experience with conversion-rate and customer-lifetime-value targets, then end up delivering experiences that are unmemorable and indistinguishable.

Other common tools, like journey maps (an illustration or diagram of all the places, known as touchpoints, your customers come into contact with your company), are also incomplete because multiple customer journeys usually exist for a single organization. Most companies target more than one customer segment with more than one need or driver, and today’s customers engage in more than one channel or sequence of channels.

Process to Design the Full Customer Experience

A more thorough approach to designing and managing the customer experience is to use customer-experience architecture. This is a framework for designing and delivering the optimal experiences to different customer segments, in different business segments, with different business objectives. To develop a customer-experience architecture, follow these steps, in order:

1. The brand platform – State the overarching ideas that represent the brand. What is the promise of the brand to the customer?

2. Customer experience strategy – Describe the desired customer feelings and perceptions of the brand across all interactions with the organization.

3. Business segmentation – Break down the business into discrete units, such as traffic versus trial versus transition. The objective is to identify the different experiences the organization delivers as a customer moves through the company and to articulate the requirements and objectives of each.

4. Customer segmentation – Different customer segments have different needs. Some customers may be price-driven, others may be convenience- or value-driven, others may want a specific experience or to avoid a specific experience. Simply put, customers’ desired experiences vary. Describe each segment with a profile and a needs inventory, including key drivers of purchase decisions and brand perceptions. A way to think about this is that each segment has different needs and a different journey map.

5. Prioritization – Create a grid, with the business segments as columns and customer segments as rows. Each business-customer intersection represents a discrete experience to design and deliver. They should be prioritized to focus design and management. Prioritization criteria include profit potential, fit with long-term strategy, competitive advantage and differentiation, resource requirements and how the experience affects and/or reinforces brand values and brand position.

6. Experience design – Determine how to meet the segment-specific needs in each business segment, either by improving existing approaches based on new insights from the architecture or by developing entirely new ones. All the levers of the customer experience — product, service, content, channels, touchpoints, pricing, facilities, sensory engagement, etc. — should be considered and described in the design.

7. Assessment and integration – Now that the architecture is ready to be inspected for integrity and coherence, consider these key points: Is the brand platform expressed throughout every experience? Do the discrete experiences contribute to the overall customer experience strategy? Do experiences complement and enhance each other, or do they conflict and detract from each other? Are there some business segments or customer segments to be abandoned because it is too difficult to serve them?

Developing a customer-experience architecture isn’t that complex, but it requires accepting a broader, fuller definition of customer experience and committing to a robust planning tool and process. Developing such an architecture will enable the breaking down of organizational silos, especially marketing and operations and addressing the diversity of customers and their needs – and it can produce unique and compelling experiences for customers.

These concepts and the customer-service architecture are from the Harvard Business Review Weekly hotlist, 7 Steps to Deliver Better Customer Experiences, by Denise Lee Yohn, February 2015.