Wednesday, February 19, 2014

Key Factors in Customer Experience Management

There are many variable in managing customer experience based on the nature of business.

Customer experience becomes key component in more organizations’ strategy, but what are the key factors in customer experience management, and how can companies do the better work when its scope is seemly so large, what’s the better approach, and what’s the methodology nailed?

There are so many variables based on the type of business, their vision and mission, the business size, the culture, startup or well established - just to name a few. The key factors in Customer Experience may include the product(s), the price, the distribution, the availability, the (in)convenience and the branding., etc. The business decides where they're going to place themselves in each category to create an overall customer experience, and set brand tone as availability leader or the trend setter. The customer decides in most cases their own trade-offs.Compound that with the fact that most businesses are not staffed much further beyond managing the day-to-day, and that's why much of the customer experience is disconnected, siloed and left to chance. Are they starting with the customer at the center or already have the infrastructure and want to define the customer experience around what already exists.  

Product is DEFINITELY part of experience: for product companies, then the product is done really well, things like after-sales support, obviously, become less important. Therefore, it's efficient for a company to create 'error free', intuitive, great-experience products. This doesn't mean that support experiences will be any less important should the need arise. It is just that when the product is done right, it leads to less need for a company to invest heavily in support centers -- get the product right and reap the benefits. Make it intuitive and set up the right self-service or customer-champion communication channels, and customer service may largely take care of itself. Customer loyalty is what drives company performance. And loyalty is not just about the experience, unless you define experience as about everything.

The balance between customer retention and customer acquisition: An important distinction in putting a strong focus on customer experience is, are you doing this for your current customer base or are you diversified to the point where much of your future business is going to come from products/customers you do not presently have? This will vary widely depending on the business. Is it a one-sale-and-done product or a high transactional business with repeat transactions? These are some of the variables that limit any turnkey, "boxed" solution in designing the customer experience for every business.

Holistic customer experience design and management are customer experience is about, the key elements include:
1) Design focus -- Designing a customer experience for whom? Does the business have a clear point of view as to ...
2) Customers' operational priorities -- what they need and most highly value and when they need it in the customer lifecycle?
3) Funding mechanism -- do they know how they are going to afford to deliver the experience they've designed? Do they know it will produce the returns they expect?
4) Employee management system -- aligned to their designed customer experience?
5) Customer management system -- service methodology aligned to their designed customer experience?

Operational priorities --Frame the right set of question to set the strategy and operational priorities such as:  What does the brand believe its customers value at each point of the relationship (by customer segment if this varies by segment)? What does customer actually value at each leg of the journey? How well is the brand delivering on these? What's going on in the competitive space? That is, how well (poorly) are competitors delivering on the firms' customers' operational priorities? Obviously this can inform priorities/ expose opportunities. How do you do this, concretely? Efficiently? How do you prove you're getting these results efficiently, effectively? Businesses are at the different stage of business life cycle, some run down a diminishing returns pathway, others do the best they can with existing products/customer and spend a lot of time on future products/customers. The strategic and operational priorities are key factors in customer experience management.

Customer Value Management: One way is to measure Customer Value Added (CVA) and have it presented quarterly with the financial results. If CVA goes up, then the executives will re-enforce it. If not, they will ask why it went down. They will also see the correlation between financial and customer results. Customer Experience is an aggregate of all the different strategies around product differentiation, pricing differentiation, channel and any other activity which is intended to give the customer a unique experience. Values create value -that are the values a company stands for, the corporate social responsibility, sustainability; all add value to the shareholder, because they add value to the customer.

Customer Experience Matrix: In order for customer experience to be a differentiator as a strategic option, you must be able to map one company's experience versus competitor's customer experiences - this was part of why, companies could examine the entire customer lifecycle from acquisition through disposal - and isolate where in the experience they choose to invest, where they choose to compete and where they choose to innovate. (Competition and the lack of competition is a significant factor when evaluating where to invest along the customer experience lifecycle). Most companies think they are doing everything for a customer and do not know all they could be doing (knowledge block).

There are many key factors in customer experience management. An enterprise would do well to qualify customer segments based on the incremental value that it is likely to generate from any of the customer experience strategies that it wants to adopt, to make the initiatives meaningful and profitable


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