CHAPTER 25

Optimizing Customer Experience

Here’s a conundrum for you. Regis McKenna wrote an excellent piece in the Harvard Business Review in 1991 called Marketing is Everything. He argued that marketing was not just the task of attracting the customers to your product or brand, but that in a customer-centric world, marketing was the touchstone for the whole business. The principles around every part of business should operate. Yet, in 2017, another article in the same publication, called Why CMOs Never Last by Whitler and Morgan shared data on the tenure of chief marketing officers have been steadily declining. Another recent trend is the rise of chief customer officers (CCO), whose remit extends to the full cycle of customer experience. CCOs are supplanting CMOs. Their reach includes what was once the purview of operations. Marketing has indeed become everything and nothing.

The New Customer

Digital era customers behaviors have not only changed, they have also morphed quickly with new technologies, platforms, and trends. Customers have grown much more fickle—brand loyalty has dropped, and their behaviors have splintered and shifted. They block or skip through ads. They cut the cord and binge watch OTT channels. They demanded instant gratification and 24/7 availability. And they don’t conform to the traditional segmentation rules. But an ever-larger proportion of the new customers behaviors is already connected and quantified. Knowingly or unknowingly, consumers are also optimizing their lives around digital tools. Here are some of the new digital behaviors that you need to optimize for.

The Encyclopedia Effect: The Consumer Knows More

When a consumer walks into a TV showroom today, the smart money is on the probability that she knows more about the product than the person behind the counter. It’s not just about TVs, consumers today have all the means and are in the habit of thoroughly researching their purchase—including features, price comparisons, technologies, accessories, and performance. They are also armed with opinions of friends via social media, as well as in store comparisons via mobile devices. This calls for an entirely new way of assisting informed customers make their choices effectively, rather than old mode of handholding or even nudging buyers into choices.

The Shazam Effect: Telescoping AIDA

Back then (more than 15 years ago), you heard a song, you tried to find out what it was, maybe you heard it again, then on the radio. Somebody told you what the song was if you were able to hum it. Or you searched the lyrics on the Internet. You went to the music store/Amazon and bought the cd, if it was worth the £16.99, or whatever the arbitrary price point for the cd was. Now you hear and like a song that you’ve never heard before, you Shazam or SoundCloud it, and it tells you the song, artist, and offers you the chance to buy it with a single click of iTunes. In 30 seconds, from never having heard the song, you now own it. This telescoping of the traditional AIDA marketing and sales cycle is seen across categories and consumers are expecting it. If you run out of toothpaste, it can be ordered from Amazon in seconds. You will soon be able to upload a picture of a dress and get a search result for similar if not exact garments as well as retail stores in proximity or delivery options. Real time is in. Waiting is out. How real time is your business?

The Interface Is Dead: Long Live the Interface

We’ve been through multiscreens, second-screens, and even third screens, but what is happening now is much more amorphous. The screen is vanishing, yet it’s everywhere. On your watch, in your line of sight from a wearable frame, on your shoes, and in your car. In fact, sometimes it’s not a screen at all, just a natural interface. Think of Nest, or Amazon Echo, and it’s not a screen that comes to mind, is it? And once we get into the IOT, the environment will be one giant interface. With both computing and interfaces becoming much more amorphous, you and your consumer will always be connected in multiple ways. Are you ready for this kind of commitment?

Fragmented Identities

What’s even more granular than the individual? Federated identities. Your customer in her office and the same customer at the park with her kids are not really the same persona. Her needs are different, different receptors are being used, and her emotional states are different. In the pre-digital world, it would have been near-impossible to tailor messaging to this kind of contextual personas, which are segments of an individual. But today, the customer can signal her intent based on the profile she explicitly chooses on her device.

Attention Deficiency

First there were letters, then came e-mails, then text messages, and Twitter. Our patience for longer communication has dwindled both as senders and receivers. Newspapers and long op-eds have given way to snappy blogs and bullet point memos. Videos have replaced text, and short videos have replaced the longer formats. TikTok is now a unicorn (a startup with a billion dollar valuation). You get the gist—we are increasingly in an attention starved economy. Attention is fragmented, fleeting, and in generally very short supply. Meanwhile, the volume of noise keeps going up, so finding the signal becomes even harder. What little attention consumers have, they guard ever more zealously. How ready are you for micro-engagements and micro-transactions?

Trust Erosion

Who do we trust? Not the government, not large enterprises, not banks or telcos, and not Google or Facebook. Yet, we trust the feedback of strangers on recommendation websites. However, you still wouldn’t trust a random stranger to provide you with broadband services, find stuff on the Internet quickly, or hold your savings for you. Trust can mean competence or ethical alignment. You would still trust the bank with your money because they have demonstrable competence, and because they are regulated. Trust is the basic currency of all communication, and consequently, for brand creation. Organizations use trust mechanisms to very you as a customer. Blockchains are federating and tokenizing trust and creating a completely different way to transact on trust, via the network.

Three New Models for Customer Experience

Getting to True Omnichannel

I don’t believe I’ve met a bank or a retailer in the past five years who don’t have an omnichannel initiative on. The omnichannel initiatives have the additional objective of integrating the customer experience across channels, and allowing users to alternate between channels as they wish. You should be able to start a search on the website, call the company with some queries, and finally, conclude the transaction on your mobile device or in person. And at each of these points, the company should be able to continue the conversation from where you left off on the previous channel. In order to do this, every channel needs to be connected and quantified. Even physical store visits can be digitized if you can incentivize customers to be recognized via their mobile devices when they are in the store. Once every channel is connected and quantified, you can do interesting optimizations. Tesco famously allowed shoppers to use images of products at train stations to add items to their shopping basket. But you could have all kinds of combinations. Shop on the bus, pick up at store, shop in the aisle on the way to a movie, and get it delivered with the ecommerce order and so on.

Lifetime Models

Everybody wants customers to come back to for future purchases—be they upgrades, replacements, or just continuing to buy more products as they need them. If you’re an insurance company, for example, you know that one of the first types of insurance that people buy is usually car insurance when they start driving. A typical consumer may subsequently buy health insurance for himself when he starts work, or professional insurance if he starts a business. He may purchase family cover when he gets married, and home insurance when he starts a family. This kind of pattern driven by life stages and key life events is a simple model that an insurance company might construct toward creating a lifetime model of a customer. Such a model should be a staple of health care and education businesses that are likely to have a lifelong association with a customer. But equally for banks, credit cards, retailers, and even restaurants. Within the limits of data privacy principles, there’s no reason why every customer shouldn’t be a customer for life, assuming they’re happy with your service.

Life Cycle Models

This brings us to another important redefinition of marketing and digital. Companies still focus their efforts on acquisition rather than retention of customers.¹ This is true of digital expenditures and also of the focus of marketing. Yet, as we’ve just discussed, customer experience (i.e. of existing customers) is historically not owned by the marketing function—it is much more impacted by the decisions of the COO or the CFO—in the way that the delivery of services and the support systems work. It is now part of marketing lore that selling to new customers cost much more than existing ones. Yet, retention is often the black hole of the digital experience. Historically, industries where switching between providers is time-and effort-intensive, customers have often been taken for granted but with most industries now offering easy switching, thanks to regulation, the time may have come to give digital pride of place in the battle for retention. This means customer centricity, understanding journeys and pain points, and the use of digital tools and data to make it as easy as possible for customers to buy and consume new services, as to fix problems. Especially as your products become connected and intelligent, and allow you to access usage data.