Why Customer Experience Transcends Customer Service

Kimpton486px.pngKimpton Hotels is a luxury chain famous for its customer experience. Among their many unusually generous amenities, they allow dogs in all their hotels. Photo credit: JeanninePC99 (cc)

For many executives, the terms “customer service” and “customer experience” are interchangeable, the latter simply representing a new industry buzzword to file away.

For the world’s most successful brands, customer experience represents so much more than service–it begins the moment a customer hears about your brand, and follows them through their decision-making process, purchase, post-purchase and yes, customer service interactions.

Traditionally, businesses have segmented the customer experience into silos. The marketing department handles the initial introduction to the product, the Web team handles the online information-gathering process, the sales team handles the purchase process, and the service team handles everything post-purchase.

The result can be a lumpy customer experience.

At the Oracle OpenWorld conference in San Francisco this week, Gartner analyst Gene Alvarez described getting a letter in the mail from a bank opening a branch in his neighborhood, offering him $300 to open a new checking account with them. But Alvarez was already a customer at the bank. He’d held a checking account there for 30 years.

“It made me think, ‘This organization doesn’t even know me,'” Alvarez said.

He later canceled his account at the bank and opened a checking account with a competing bank that had provided him a better experience.

Improving Customer Experience: Simple Goal, Complex Underpinnings

The average company holds a range of data points about a specific customer in a number of competing CRM systems, something Alvarez called “organizational amnesia.”

In a recent Gartner study, executives said data gathering and analysis remained one of their top three business challenges.

Alvarez specializes in customer relationship management, and says he still sees a lot of companies solve their cross-platform data challenges by importing and sorting everything in an Excel spreadsheet. That’s rapidly changing, he said, with sophisticated customer experience software capable of anticipating people’s needs.

“Those who get this right are going to be the leading organizations as we move into 2020, and our customers are going to be the judge,” he said. “They’re going to see where we have holes in our customer experience and when those holes come up… they’re just going to move on to whoever gets it right.”

No One Size Fits All

Companies obviously vary in their approaches to building customer experiences.

Walmart’s Mexican subsidiary is experimenting with temporary pop-up shops, which allow busy commuters to order products on the go, and get them delivered by the end of the day. Similarly, McDonalds is experimenting with fast food delivery in major metro areas in Asia.

McDelivery. Photo credit: KJM 427 (cc)

The idea is to produce excellent brand experiences when and where the customer needs them. A car dealership in Brazil recently ran a clever marketing campaign, offering people test-drives of the new Chevy Cobalt every time they called a tow truck (and were stranded on the side of the road).

Amazon.com recognized the value of customer experience at its inception, and founder Jeff Bezos is fanatical about the subject, said Gurval Caer, Chief Marketing Officer at Wunderman, one of the world’s largest digital advertising agencies.

Amazon was an early pioneer in personalized product recommendations, and continues to invest heavily in the field. The company studies customer behavior and tailors experiences based on how and when people interact with the brand.

For example, Amazon’s smartphone app is all business–people are there to make a purchase, and fast. Its tablet and desktop experiences are more content-focused, recognizing that people are probably there to read reviews and research products.

Amazon was one of the first major retailers to embrace user-generated product reviews, at a time when its competitors were wary of giving people the ability to complain publicly about products on their sites.

Better Service, Big Rewards

The advent of Amazon Prime, which offers serious Amazon shoppers free 2-day shipping for an annual subscription fee, removed unnecessary friction in the customer experience. The experiment, scoffed at by some in the industry, ultimately resulted in higher per capita spending for Prime customers, Caer said.

That focus on customer experience is paying off on the balance sheet. Amazon is currently the ninth largest retailer in the world, but is expected to grow 54.7 percent over the next 5 years, becoming the world’s second-largest retailer by the year 2017, Caer said.

Photo credit: Steve Gibson (cc)

Customer experience is equally important for B2B companies, which often deliver personalized service and training to clients. Alvarez described using predictive contact center software to alert the service agent if a customer was calling in after being short-shipped.

Instead of starting the conversation with, “May I have your name, account number and the reason you’re calling?” the agent might greet the client and say, “I understand we recently didn’t ship you your complete order. I want to let you know we’re expediting the rest of your order, which should arrive at your warehouse later this week.”

To achieve that level of service, different departments inside a company need to share information internally; ideally not on an Excel spreadsheet.

Today, customer experience management is focused on solving the challenges around data sharing and federation, with the goal of delivering a personalized and consistent experience, Alvarez said.

The challenge going forward will be to deliver context-aware customer experience, taking into account environmental factors (such as your device type and physical location) and past data (who you are, what you’ve bought in the past, and all your earlier interactions with the company) to create predictive experiences–guessing what you want at this very moment.

Click here to see a gallery of photos from Avaya at Oracle OpenWorld 2013.

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