Customer Experience Strategy: Why Being Customer Centric Is Critical to Business Success

Editor's Note: Take a look at our featured best practice, Digital Transformation Strategy (145-slide PowerPoint presentation). Digital Transformation is being embraced by organizations across most industries, as the role of technology shifts from being a business enabler to a business driver. This has only been accelerated by the COVID-19 global pandemic. Thus, to remain competitive and outcompete in today's fast paced, [read more]

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Editor’s Note:  Shane Goldberg is the founder of CustCore Consulting, a boutique consulting firm focused on helping businesses unlock hidden growth through improving end-to-end Customer and Employee Experience.  His firm also sells Customer Strategy consulting frameworks on Flevy.  You can view their materials here.

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Back in 2014, Gartner predicted that by 2016, 89% of businesses expected to compete mainly on customer experience. Now that we are in 2017, I would argue that the percentage of businesses competing on customer experience is even higher than this. With customer experience becoming the key battleground for business success, it is critical that businesses focus on ensuring they have a really robust and focused customer experience strategy in place.

If you need any more proof of how critical a customer experience strategy is, consider the following findings from a range of very well-known research and consulting firms:

• 89% of consumers who experience poor service with your brand will leave for your competition – Forrester
• It costs 6-7 times more to acquire a new customer than retain an existing one – Bain & Co.
• 64% of people think customer experience is more important than price – Gartner
• 86% of buyers will pay more for better customer experience – Forbes
• Customers who had the best past experiences spend 140% more compared to those who had the poorest past experience – HBR

So, how do you create a robust and clear customer strategy? Critical factors to include in such a strategy include:

• A clear understanding of customers and their moments that matter
• Simple customer centric business goals
• A definition of the customer centric culture that is desired in the company
• Robust customer metrics supporting achievement of the customer goals
• A clear view of channels supported in both pre and post sales situations
• Delivery models which support customers in achieving their aims
• A plan to articulate and share the strategy with the broader team and stakeholders

The order of items in the list above is not a coincidence. To explain why I’ll provide a bit more detail regarding each of the items.

Customer Understanding

To drive real customer experience improvements in any business, by necessity any work has to start with understanding the business’ customers. This understanding should be based on thorough and in-depth research, surveys and interviews to fully understand the customers that are being targeted, their needs and desires and the ways they choose to interact with a business.

This understanding also needs to extend to understand what the critical moments are in the customers’ experience of the business, those “Moments that Matter” which drive key decision points in the customer journey.

Customer Centric Goals

Once a detailed understanding of customers, their needs and requirements has been developed, the next step is to align everything done in the business around a clear set of customer centric business goals (I’d suggest 5 at most).

These goals should define at a high level how the business wants to “show up” for its customers, and hoe it plans to achieve this. The goals should link to the broader company strategy and vision, and make it very clear what the business is trying to do to drive both customer and company success.

Customer Centric Culture

There is an old saying that “culture eats strategy for breakfast”. This implies that the two are separate, whereas, in fact, having a defined customer centric culture is part of having a robust customer experience strategy.

With business goals defined, the next most important activity for success is to define the internal customer centric culture that needs to be fostered to deliver excellent customer experiences. More and more research is showing that the most successful companies focus on creating a tight and well understood culture internally, and that having such a culture in place inspires the delivery of great customer experiences. In fact, having engaged and focussed employees I would argue is a critical hidden factor in all aspects of business success.

Customer Metrics

Whilst it is great to define customer centric goals and a culture to match, it is also important to tie the customer experience strategy and its associated goals to real, tangible measures that can show whether the strategy is working and driving business and customer outcomes.

Ideally, each customer centric goal would have at least one metric specifically tied to it, and the metrics used could and should be a mix of explicitly customer facing metrics (such as NPS or Customer Effort Score) and internal measures that track customer outcomes (e.g. time to deliver, quality of billing etc..).

Channels

As part of developing a clear view of customers wants and needs, it was suggested above that it is important to understand the channels that the customer prefer to use as they move along their customer journey.

It is therefore also critical the company offers those channels and facilitates the customer in achieving the tasks they are trying to undertake. For example, if the customer analysis has identified that there is a preference to research products or services online, it is important that the company provides such a capability to its customers.

Delivery Models

Rounding out the strategy it is important to define how the various parts of the strategy which have been defined in previous sections manifest into what the customer sees and experiences from your business, which can loosely be defined as the delivery models for the business. This includes

• The buying experience – The experience a customer has when exploring and buying from the company
• The service experience – What a customer sees and feels when they need support after buying
• Awareness & Retention plan – How the company plans to raise awareness of its offering with customers, and how customer engagement is maintained to to keep them coming back

 Sharing the Strategy

Whilst not explicitly part of the strategy, it is useless if a really robust and well thought out customer experience strategy is developed, and then it is not communicated effectively and implemented into the business.

Given this, it is crucial that an effective and comprehensive rollout plan for the strategy is developed. It is also important to view this rollout as a change management exercise, as effectively implementing a new or updated strategy often involves asking people in the business to change, which is something they are not always open to doing. As such, covering all aspects of change management in such an exercise is critical to success.

By defining, delivering and implementing all aspects of a customer experience strategy as outlined above, any business can be well on the way to dominating in its market, no matter in which industry it plays.

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