Renowned investor Warren Buffett uses a unique aspect to choose the businesses he invests in – moat.
In ancient days, a moat was a deep, broad, ditch, filled with water, that surrounded a castle or monument. It served as the first line of defense to keep the monument safe.
Buffett uses this analogy to describe an economic moat: a business’s ability to maintain a competitive advantage and protect its long-term profits and market share.
In the pre-2000 days, companies’ size served as moats. The deeper their pockets, the more they could advertise and build a reliable distribution channel. But the internet has brought everyone on a level playing field.
The only moat that companies can have today is superior customer experience.
“The customer experience is the next competitive battleground.” – Jerry Gregoire
What Does Customer Experience Mean?
Think about the last time you visited a restaurant with your family or friends. From the time you reached the entrance to the time you exited, everything you felt contributed to your experience – whether the doorman opens the gate for you, the manager’s and waiters’ interaction, quality of food, and time of its arrival – everything left an impression on you. This impression decides whether you would revisit the restaurant and whether you’ll recommend it to people in your circle.
This is what customer experience means. Every point of interaction that a customer has with your business adds to their experience. In other words, customer experience is the perception the customer has of your brand.
According to research, customer experience management will be the most important aspect to differentiate businesses. Thus, CX takes priority over the quality of your products, your distribution, or advertising.
Why Customer Experience Strategy is Important for Your Business
CX has a visible impact on a business’ topline and bottom-line. A good and predictable customer experience:
- Improves customer retention.
- Increases customer loyalty and lifetime value.
- It generates word-of-mouth and brings more customers onboard faster.
Not only does a poor CX do the exact opposite and harm a business, but it also means that businesses don’t know when customer needs are changing. The result is that they get left behind when the market and their competition moves forward.
Are Customer Service, Customer Relationship and Customer Experience Different?
Customer service is a subset of customer experience. Customer service occurs after customers have purchased a product, while CX begins before they make a purchase.
Customer service occurs when a customer requests for assistance or help—for example, calling an operator to request a refund or interacting via email with a service provider.
CX comprises of every point where a customer interacts with any part of your company, right from first hearing about it to the time they call the customer service team to complain about the product and get the issue resolved.
3 Strategies to Improve Customer Experience
Let’s take a look at how you can refine the way things work to design a CX that improves your customer satisfaction.
1. Focus on the customer.
Most businesses copy what other players in the field are doing. This is why there is little to choose between companies in a sector.
When businesses focus on each other, they forget about the most important stakeholder – the customer. As a result, startups disrupt the market by fulfilling a customer need that nobody else even thought of.
“Everything starts with the customer” – Louis XIV.
Since CX includes every touchpoint that your customer expectations has with the company, encourage people across all your departments to focus on the customer.
Zappos and their parent company, Amazon, have customer centricity as a core value of their culture. As a result, they enjoy an enviable customer loyalty that most of their competitors find hard to imitate.
2. Use technology to enhance Customer Experience.
Technology is reducing dependence on people and with it the chances of errors. It’s also enabling companies to collect and analyze data, personalize offerings, and build faster onboarding processes.
The only companies that don’t adopt technology are the ones that will shut down soon. If you don’t want to be one of them, you cannot afford to ignore CRM tools, ITSM, and helpdesk systems. These will enable you to streamline business processes and deliver a high-quality and predictable customer experience.
In our experience, companies that have embraced technology have been able to improve their revenue by at least 30% in the long term, while reducing costs.
3. Empower people to make decisions.
Strategies that get designed in the boardroom behind closed doors fail badly when the rubber meets the road because they go against what customers really need.
Building a solid customer-oriented strategy and culture demands that leaders involve the people closest to the ground in the decision-making process. They should also give their people the freedom to step outside the process a little in order to satisfy a genuine customer.
When people feel heard and empowered, they repay their faith in them by taking good care of their customers. The result is a positive CX. Thus, your people are happy, your customers are happy, and they make you happy.
Customer experience is no longer the function of only the customer service team, but of the entire organization. All systems and processes must contribute to enabling a positive outcome for the Most Important Thing – your customer.
From wanting a product to wanting a promise to an outcome, customer buying behavior has undergone a paradigm shift. Make sure you keep up with the times.