In the age of the empowered customer, you need your customers more than they need you. Consumers have more options than ever before and access to more products on more channels.

Creating loyal brand advocates is no longer a matter of competing on price or product features.

More so than ever before, customer experience is the new currency driving loyalty.

A leading international research company said that customer experience was the new battleground for companies that can no longer win customer loyalty based exclusively on product features (too easy to copy), selection (“I can always find an alternative product or service online”), or price (“At any given moment I can almost certainly find a lower price”).

What exactly is customer experience (CEx)? It is the interaction between an organisation and a customer as perceived through the customer’s conscious and subconscious mind. It is a mix of the organisation’s rational performance, the senses stimulated and the emotions evoked.

The customer measures this against his expectations throughout the whole customer journey and across all moments of contact (touch-points or moments of truth).

CEx is not just about rational experiences such as a quick phone response, opening hours or delivery time but also about how you perform or deliver these experiences. And it is not only about things of which a customers is aware; actually more than half of a customer’s experience is subconscious or related to how the customer feels.

CEx is about the overall per­ception that the customer is left with after interaction with a brand or company.

Why CEx should be put on ­the agenda?

Nine out of 10 customers actually switch brand after a poor customer experience, but 80 per cent of customers say they are willing to pay more for a superior customer experience.

Studies show that companies focusing on customer experience generate 60 per cent higher profit than their competitors and that poor customer experiences can lead to 20 per cent revenue loss.

And emotions seem to become more and more important; today up to 70 per cent of buying experiences are based on how customers feel they are being treated.

So it’s all about getting payback for the investments made to obtain and develop customers: the better the customer experience, the more loyal he will be – and the more profit he will contribute to the company.

There are companies worldwide that deliver superior customer experience. Recent studies show that these companies have a lot of things in common, despite operating in completely different markets and industries.

Ten of the companies that scored highest on CEx lately also presented excellent financial results for the last six months. Coincidence? Most unlikely!

Researchers found that these ‘best in class’ companies had 13 common characteristics. Two were related to the product (what they offer), while five relate to the performance (how they do this) and five to the consequences. All these add up to the final factor: corporate attitude.

Corporate attitude describes the organisational culture and sums up everything that a customer perceives. Among important elements mentioned are “putting people before profits”, “hire staff for attitude”, “paying attention to details”, “empower staff” and “listening to and understanding customers”.

The product factors covered the core product or service as well as the staff’s technical knowledge and ability to use it.

The performance factors included effort, consistency, reliability, promises and speed.

The consequence factors were helpfulness, attitude, personalisation, feeling and treatment.

The most important factors were (in ranked order corporate attitude, effort, helpfulness, attitude and personalisation.

It’s worth noticing that only two out of the 13 are “hard values” related to the product delivered, while the rest are “soft values” related to the customer’s emotions or how he feels.

Clearly emotional factors count far more than rational factors when purchase decisions are made, and that they basically are connected to how people treat people.

(Sources: Bain & Co, Beyond Philosophy, Forrester Research, I.J. Golding, McKinsey, Loyalty360, Oracle, White House OoCA).

Paul Aas is the manager of Loyalty Group Malta Ltd.

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