Unlocking customer experience thinking
“We know that satisfaction generally is an indication that people have had their expectations met, but that doesn’t actually guarantee their loyalty,” Highett-Smith said during a GfK breakfast seminar in Sydney last week.
Studies that focus on how satisfied a customer is with a specific retailer’s service fail to take into account the pull from competitors, Highett-Smith explained. Understanding the balance between stickiness to a retailer and pull factors from their rivals is key to understanding how likely a customer is to stay or defect.
Highett-Smith argued the way to increase the likelihood of loyalty is to build strong attachments to a brand by creating strong positive memories throughout the customer journey, or recover from any of the negative, memorable experiences.
The trick to creating these positive memories is to tap into a cognitive bias called the peak-end rule – the peak and the end of an experience disportionately colour our memory of an overall experience, rather than taking the average of an episode.
“If we can create peaks within our customer journey as well as making sure it ends on a high note, we are actually going to have more satisfied customers than if we just performed at a moderate level throughout,” Highett-Smith said.
To create those positive memorable experiences, not only should each consumer touchpoint be optimised, but the customer journey should be considered more broadly from the customer perspective to understand what they are trying to achieve.
“The real difference between customer experience and customer satisfaction is the need to look at it from a more broader, holistic perspective.”
Focusing solely on optimising individual interactions, such as managing call centre volumes, could lead to addressing the symptoms rather than the underlying cause of problems, and being blind to declining overall satisfaction.
One brand taking a holistic view of customer experience thinking is Red Energy, an Australian energy provider that appoints a single point of contact for each customer, Highett-Smith said.
“If we make one person responsible for fixing that customer’s problem, then they will fix it holistically,” Highett-Smith said.
The potential value in customer experience thinking comes from the opportunity to rethink the broader business from a customer perspective, and to reengineering or redesign products or services to create a competitive advantage.
Highett-Smith argues this will help consolidate relationships with existing customers and ultimately attract new ones.
Customer experience thinking provides interesting opportunities for FMCG and durables businesses, Highett-Smith said.
“Often the focus is very much on the interaction with the product or the interaction with the purchase process in retail or researching online,” he said. “Maybe actually rethinking that journey from a more holistic perspective, which could in the case of fridges or washing machines perhaps even last nine to 10 years on average, could be quite interesting.”
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