Many companies do not understand their core competency and why customers continue to do business with them. They have vision/mission statements that change every year, without having any meaningful impact on their customer.
My advise to these companies is to put yourselves in your customers’ shoes and start thinking about “Customer Experience“, the single most important factor that drives business to you. Many companies think they are customer centric but they are looking at the companies’ view of the customer and not the other way around. To be successful they have to stop thinking about themselves and start seeing their products/services through customer experience perspective.
Here is a “Customer Experience Framework” with nine key factors that drive that experience. This framework is applicable across many industries as demonstrated by the examples below. Every company should ask their customers to rate the company’s performance on these factors on a scale of high, medium and low. This will give them a good sense of their customer experience and help them in enhancing that experience.
Customer Experience Framework
- Requirements: Different customers have different requirements from a product/service, and how a product satisfies those needs defines the customer experience. Companies usually tend to overshoot on the customer requirements, which enables them to serve many diverse customer segments with one product. This is good unless there is a conflict with other key factors of customer experience. An example of customer requirements for a television is 1080p, 3D, HDMI outputs, LED, 60″ etc…
- Price: This is one of the key factors of customer experience, as it defines the value that the customer is able to derive from the product. For a Wal-Mart shopper, low prices deliver the right kind of experience. While Neiman Marcus prices deliver the right kind of customer experience to high-end luxury shopper. So this factor varies by the customer segment being served.
- Availability: Many companies ignore this factor but this is one of the key drivers of customer experience. This is driven by availability of your product/service when the customer needs it the most. Your customers rely on your products/service for their needs, and not being available drives a bad customer experience. For example, availability of mobile network when a customer wants to make a phone call or get some information. Similarly, availability of e-commerce websites that offer the right product when the customer is looking to buy.
- Convenience: This factor determines how easy is it to use your product/service in different situations. The easier it is to get access to and use in different situations the better is the customer experience. A good example of this would be Google search, as it is easy to use search engine that deliver good results consistently.
- Service/Support: Post-sale service/support, which is essential in many industries. Different methods of delivering service/support are available and accepted as enough for delivering the right customer experience. But one aspect that remains key is the time spent for initial contact and satisfactory resolution. Insurance companies carefully measure their performance on delivering this customer experience. Many of these companies are making it easier to file claims and the resolve claims at a fast pace.
- Quality: Imagine your television breaks down right in middle of an important game, quality is an essential part of customer experience and it hurts companies over a long run when product quality is sub-par. And example of a company delivering good experience on this dimension is BMW. With their 48K and 4 year full service maintenance program they have taken out quality fears from a complicated machine which has many parts that can break.
- Fashion: This is the “Cool factor” define by how cool your product is perceived by the customer. This requires meeting customer requirements it in a way that amazes the customer. Apple iPhone comes to mind as an example, but I would like to give one from semiconductor industry. NVIDIA and AMD are fierce competitors in the graphics card market, they keep delivering cool products year after year to amaze and capture the gamer market. The quality of graphic images and the speed of rendering keeps improving every year. I tag this as fashion as the trend keeps changing all the time. The most cool thing today might be outdated tomorrow, as experienced by Motorola RAZR.
- Social Responsibility: This does not have much to do with the product/service but more to do with the practices employed by the company. A socially responsible company that employs the right practices in the minds of its customer base delivers good customer experience. An example is Nike and the effect of the child labor issue on its business. Also, Toyota’s efforts to convince the American customer that their cars create jobs in US. Also, the green revolution and the phone app for flight boarding passes.
- Brand: All companies have some brand value that gives the customer the level of comfort required for doing business with that company, hence driving the customer experience. This is the most important factor of all as it carries the fruits/burdens of good/bad customer experiences across the other eight factors. For B2C focused companies this customer experience is associated with the company, for B2B focused companies this experience is a function of individual relationships and company brand.
Companies that focus on just one of these nine factors seldom survive, and it is impossible for a company to excel at all nine factors. But a good company is strong on 3 – 5 factors. The company might or might not choose to focus on the other factors. Depending on the factors they choose, they define the customer segment they attract and the financial benefit they derive from those customers.
In future blogs I would give more examples around this framework to show the impact of customer experience on company performance. Thanks for reading this blog.
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2 comments
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Adam Boulton
January 24, 2012 at 2:48 am (UTC -8) Link to this comment
I love the thinking behind this article and provides a great tool for benchmarking and identifiying areas that need improving. What is the exact method you would use to carry out this research? Do you simply ask the question how well do we do in each area and do you provide background on the definition of each area?
And how would you find and question competitors customers?
Thanks for a great article
Jagan
January 24, 2012 at 7:37 am (UTC -8) Link to this comment
Thanks for the comment Adam,
Over the next few weeks I will blog about ways to gather information related to “Customer Experience Framework”. Would love to hear your thoughts on those blogs as well.
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