Monday, March 3, 2014

Digital Age with the Rise of Customer Empathy

The digital age of business and world shall move up from apathy to sympathy to empathy. 

It is the age of the customer, some say, this is the era with the rise of customer empathy, organizations now can take advantage of the advanced customer analytics tools to get to know their customer deeper and timely, to create value and cultivate customer intimacy. Every company is creating certain customer value; the only thing needed is making them aware of both consciously and subconsciously, such as what is a good definition of "Value Creation" for customers? What can company executives do to build a culture increasing value for their customers and manage customer experience lifecycle effectively?

The creation of "value" is always contextual (depending on the situation the customer finds themselves in), personal (what the customer expects from the product or service) and intangible (a feeling not an outcome). Value is predominantly subjective and perceived. Customer expectations are based on the experience or reputation of delivering a specific capability as perceived by that customer's expectations of what a particular product or service should deliver.

Customer Experience (CX) value creation is to provide the tailored customer solutions: It is the process of making a company's products and services extraordinarily relevant to the wants, needs or desires of customers - physically, spiritually and/or emotionally. Value creation means the company management knows enough about their customers, and take action to fill that type of need, be transparent to an extent where you don't lose profits.

Customer Value consists of two components: Value for the cost (rational) & Feeling valued (emotional). Quality products and services are obviously important, but for a company to deliver true customer value, it starts with employees feeling valued. Thus, company management is in a tight spot. Their stakeholders are looking for short-term financial returns and to create customer value demands longer-term investments with company processes, people and technology. Also, it demands an in-depth analyzing of customer’s experience which understands their emotions and cultivates customer empathy.

There are two levels to value creation for customers. Customer Engagement, Self Service, Customer Segmentation and many other customer experience capabilities are all about measuring the "value" of a customer to the organization in order to ensure that the service/experience was aligned with the customer's value to the vendor/provider. There are two levels to value creation for a customer, the first has to do with helping the customer achieve their goals, the second has to do with how that "something" compares to the next best alternative which could spark the innovative ideas upon knowing what customer needs next before they know themselves. 

There’re three steps of customer value creation: The better you know your customer and what your product or service can do for them, the better positioned you are to create value for them. Value is created at 3 steps:-

1). Getting the directions right: Build a customer-centric strategy or customer experience as the key component of business strategy. Set the right roadmap to execute it.

2) Providing the proper company-wide means to achieve: Customer experience improvement is not just the responsibility of customer service department, it is the work needs to be done by the cross-functional collaboration, and it is one of the key organizational capabilities built on the multitude of business processes, technology, cultures, and talent., etc.  

3). Measuring business performance. Having a clear understanding of how customer value creation enhances the business model and by extension of profitability. It requires consistently digging deeper and having the right metrics in place that keep a pulse on the inner workings of the business. Using (1) and (2) increase deposits to the customer emotional bank and make more profit.

The “Risk of Empathy” is the arena business will be focusing on more, either customer empathy or employee empathy; all functions and business as a whole should set the principles and enforce the best and next practices. The purpose is to make a significant difference in the overall levels of customer loyalty and overall business results for any business, large or small. 


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