By: Dave Farber
With much of the world recently locking down in one form or another, individuals have been spending far more time in their homes. Some businesses have basically had to build a digital presence overnight, while others have simply seen their digital channels rise in importance. Because customers are having so many more digital interactions, even businesses with established online operations are starting to realize that customers are raising the bar in terms of their expectations for a good customer experience (CX).
Even before the impacts of COVID-19, having just a decent customer experience was no longer good enough. According to a recent benchmarking study, companies that prioritized CX improvement were three times more likely to have significantly exceeded their top 2019 business goals than their peers. A 2019 Gartner report found that two thirds of customer loyalty is driven by customer experience, outperforming the impact of brand and price combined. Companies are starting to realize the importance of CX investments. As CX budgets rise, those who attempt to maintain the status quo will simply be left behind.
While the benefits of a great customer experience are clear, many struggle to turn their CX efforts into demonstrable results — especially those who have only recently devoted significant attention to the task. In that same study by Gartner, over 70% of CX leaders acknowledged that they have a hard time designing projects that actually increase customer loyalty. For that reason, I’ve compiled five proven innovation tactics that will allow companies to improve their digital customer experience.
Simplicity. A common issue among companies is that they haven’t invested in getting to know their customers very well, so they try to be all things to all people. It makes sense. If you ask people whether they want options, they’ll always say that they do. If you continue the conversation, they may even speak favorably about brands that are known for offering lots of options. But you’ve asked the wrong questions. Ample research shows that while the idea of choice is great, customers who are presented with too many options become paralyzed with indecision and avoid making a purchase altogether. Even those who do make a purchase often express dissatisfaction with the experience.
Increasing your conversion rates and decreasing customer churn requires creating an experience that allows customers to quickly and easily accomplish what they set out to do. Rather than asking whether customers want options, ask what job they hired your brand to get done. Then focus on delivering a curated set of options that help accomplish that job.
Humanity. I couldn’t even begin to guess how many emails I’ve been bombarded with over the past month. So many sound exactly the same: “We’re a brand you probably interacted with once. We care. We’re different.” If your brand is actually committed to social good endeavors, that’s great. Roughly two thirds of consumers will pay more for products that come from companies that are committed to making a positive social or environmental impact. But paying lip service to social good or over-hyping your efforts to build positive brand sentiment is likely to backfire. Customers are going to know if you’re not being genuine.
Beyond doing something good, your brand can win over customers by having a personality. I’m notoriously ruthless in my quest to achieve Inbox Zero. A company wants me to receive their weekly newsletter? Unsubscribed. Grandma wants an email chain for sharing more baby photos? Filtered to spam. I did allow one exception. Not only did I let Eat24 (now owned by Grubhub) send me their weekly $2-off-takeout coupons; I even read the fine print on every email. The fine print was funny. It was relatable. It made each Friday just a little bit better. I settled for Inbox One.
Autonomy. It’s not new to say that customers value a personalized experience. Many brands have been moving in that direction already, though I’m constantly surprised by how little progress has been made there. In some advertiser research I did last year, I saw very few companies that were tailoring their website experience to different users (e.g., showing different images to customers in different locations or who had clicked through from different sites). Many said that some form of personalization was on the horizon, but most hadn’t gotten there yet.
The next step in personalization is a greater amount of customer autonomy. Rather than telling customers what personalized experience they’re going to have, we can give customers some freedom in choosing that experience for themselves. In the same way that some rewards credit cards let customers choose the categories in which they earn the most cash back, we can give customers a voice in choosing their experience. Autonomy breeds loyalty.
Recognition. Similarly, customers who do interact with your brand regularly want to be recognized for their loyalty. I can’t tell you how often cable companies get criticized during consumer research for offering great deals to new customers while increasing the prices for those who have been with them the longest. Get to know the customers who transact with you, show them that you understand their needs, and prove that you value the relationship.
Engagement. Sometimes a relationship between a consumer and a business is purely transactional. In those cases, customer retention can be hard unless there are other forces at play (e.g., high-inertia categories, government-supported monopolies). One option is to create a community that your customers can be part of. Beyond creating an incentive for customers to keep interacting with your brand, communities can help guide your future product development efforts. DEWALT, for example, regularly turns to its community of tens of thousands of power tool users for new product ideas, helping it stay differentiated in a field that could otherwise quickly become commoditized.
Whether your digital CX strategy is in its early stages of development or just in need of a refresh, it’s important to think carefully about what you want to achieve and how best to get there. Simply copying what you’ve seen other companies do probably isn’t going to get you very far. Build customer journey maps to understand all of the different touchpoints customers have with a brand (from emails to website visits to advertisements). Conduct customer research to ensure you’re responding to actual customer needs with messaging that truly resonates. And get tactical to ensure that the experience you offer is producing measurable results.
Dave Farber is a strategy and innovation consultant at New Markets Advisors. He helps companies understand customer needs, build innovation capabilities, and develop plans for growth. He is a co-author of the award-winning book Jobs to be Done: A Roadmap for Customer-Centered Innovation.
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