Why has Southwest Airlines made a profit for 40 years and the name of Southwest Airlines pops up when you hear CUSTOMER EXPERIENCE in the airline?
Excellent customer experience goes a long way in giving people a good perception of your business. Many studies show that a 5% growth in customer retention will impact the company profits to rise by 25% to 95%
Good Service and Customer Experience don’t happen by miracle.
Brands like Four Seasons, Six Senses, McDonald’s, Christian Dior, Lego, and Burberry did not happen just like this. All brands were born by someone’s vision and purpose, translating this into mission value and ensuring that these vision, purpose, and mission are shared with individuals.
“Culture eats strategy for breakfast” is a famous quote from legendary management consultant and writer Peter Drucker. And after so many years, it is so true. You can still use a strategy. But to create this and make it happen, you need a strong organization with a strong leader who “Walk the Talk.”
- Culture cannot be copied
- People are loyal to a culture, not to a strategy
- Culture provides resilience in challenging times
- Culture creates a competitive advantage
- Culture is more efficient than strategy
- Cultural miscues are more damaging than strategic ones.
“When Senior Leaders Personally Instill a Strong Vision and a Set Of Principles In Their Employees and Give Them The Confidence, Freedom, and Authority To Act, People take Responsibility for Their Jobs and Do Whatever Is Necessary To Satisfy Their Customers. ~The Ritz-Carlton 1992 Malcolm Baldrige National Quality Award Application
Burberry digital transformation story, put in practice by Angela Ahrendts, CEO (2006-2014), is a fantastic story that shows once more that company success, even in a digital world, is based on core competencies, company vision, culture, and company history.
Burberry wanted to tell people authentic, emotive, compelling stories and continue building a lifelong relationship with people, building on the trust that existed since 150 years ago when Angela Ahrendts became CEO. A cultural anthropologist studied the company story to make the story was understood and could be passed on to the next generation. Burberry was looking to write exciting chapters (not a new book) around trust searched by all stakeholders by going back to the roots. They wanted to tell one story everyone can understand and remain authentic to their culture.
Once the basement is strong, the company can create the Experience using various tools such as Customer Journey Mapping and Blue Print. Both are complementary and, if well managed, can help make this a fantastic customer service and Experience.
The key to success is to look at the customer journey along its entire continuum. To create this memorable Experience, you should think about:
- Ease of contact
- Reducing customer effort
- Creating a seamless experience
- Delight customers around emotions
- Have an omnichannel approach
- Start always with the customer
- Uncover the most frequent path used by the customer
- Spot red potential danger areas in advance
- Have strong customer database management
- Put yourself in the customer’s shoes
What is essential is to create high customer value to increase customer engagement in your brand. Studies show that customers who stay longer and are loyal and engaged with your brand spend more on your brand. A survey by Cap Gemini shows that 70% of customers with high emotional engagement spend up to two times or more on your brand and will talk about you in the market.
While trying to understand what excellent service may be complex, its benefits on firm performance are evident. Exceptional service is how a customer perceives a service to exceed their expectations. The critical issue behind a customer’s evaluation of a service is that the perception of one customer will be very different from the perception of another. The benefit of managing guest perceptions and understanding their needs and expectations is that consumers are willing to pay more for companies they perceive to provide excellent service.
Even with acknowledging that good customer service can affect long-term firm performance, many companies still deliver lousy service. Approximately 60% of Americans believe businesses haven’t increased their focus on providing good customer service. The same study shows that among these 60% of Americans, 26% think companies pay less attention to service. Four in five Americans (81%) agree that smaller companies emphasize customer service more than large ones.
The reasons for customers not doing business any longer with companies can vary. However, it is essential to note that 68% of customers claim that their disloyalty is not linked to the product but to employee attitude.
“Getting service right is more than just a nice to do; it’s a must-do,” said Executive Vice President World Service American Express, Jim Bush.
What companies tend to forget is the following: according to an article in the Harvard Business Review, “Increasing customer retention rates by 5% could increase profits from 25 to 95%.”
This fact underscores the business necessity of managing and measuring the Customer Experience, not only as a function of customer service, but also as a strategic initiative for driving company revenues. Companies that handle inquiries properly and give excellent service exist, but more than outstanding products and services are needed nowadays. Customers aim for Experience, however:
- 95% of firms think to focus on the customer,
- 80% think to deliver a superior experience,
- Only 8% of clients agree
One of the main problems nowadays is that companies forget the basics, are mainly turned towards short-term profit, and are under the influence of stock markets. Many firms are more focused on short-term gain and need to pay more attention to the necessity of having a longer-term strategy to deepen customer experiences and create long-term customer relationships.
“In today’s wired marketplace, the damage to a brand from negative Customer Experiences extends well beyond the loss of existing customers; it can also inhibit top-line growth from new customers.”
So ask yourself:
- What is the customer experience you are trying to deliver?
- What are the Emotions you are trying to evoke?
- Is your customer Experience deliberate?
- How memorable can the Experience be?
Remember that guest Experience occurs on many levels and includes every step of the guest journey. Every guest interaction or touch point is where a company can make or break it.
According to Joseph Pine II and James H. Gilmore, authors of the Experience Economy book, we are emerging into a new era of thought where we are finding that what our customers want is an Experience that keeps them coming back for more.
So ask yourself the following questions:
- Do you believe that you deliver EXPERIENCE in your company?
- Can you describe the Experience you give customers and why you believe this is special?
- What would you change in your customer EXPERIENCE?
- What would the customer say about his Experience?
Why does customer service have to be so tricky and mysterious? Why do some companies react like they do not want to receive guest complaints when it is a dynamic process vital when amending bad experiences? It’s impossible to call them, to find an email address or even a telephone number.
Bill Gates used to say: “Your most unhappy customers are your greatest source of learning.”
Sam Walton, Founder of Wal-Mart, used to say: “The goal as a company is to have customer service that is not just the best but legendary.”
Excellent service is relatively easy; it’s remembering the fundamentals and applying them day after day. In today’s competitive world, delivering superior service and Experience is crucial, but still, many companies need help to provide even the basics.
The beginning of the Experience starts already in the design phase of your service delivery system. To create a comprehensive and easy service system, you should understand what makes value for the customer and how everyone in the company can be engaged in this delivery process. The critical components of this will be:
- Vision/Mission Leadership
- Culture Employees
- Service quality
- Customer Experience
To conclude, if companies aim to thrive in today’s environment, or for many even survive, they must remember that an Experience can/should:
- Attract customers and generate repeat business
- Be used to position a company
- Be used to create emotions
- Be delivered at every point of interaction with the guest
- Strengthen your brand
- Be “Authentic-Personal-Memorable”
