Accepting the Awesome Customer Experience Challenge

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Accepting the Awesome Customer Experience Challenge

An excerpt from Customer Experiences Inc.’s book entitled, Creating and Delivering Totally Awesome Customer Experiences, by Gary Millet.

The Awesome Customer Challenge is to stop merely satisfying your customers and build a consistent and repeatable process to start delighting them. Delighting customers will fulfill the dream of creating a new customer or experience economy in which customer loyalty, deepened customer relationships, stronger brand, and solid differentiation can be achieved. Anything less will fall victim to your own competition.

The only way to meet the Awesome Customer Challenge and create loyal customers is by becoming an experience-based organization. This means that your organization must start with the belief that the customer is its most valuable asset, customer loyalty is important and the organization will do everything in its power to encourage its customers to take an active part in their own experiences. Experience-based organizations let their customers tell them what is relevant, what is valuable, and what they most want in their customer experiences.

Your organization's immediate success and long term viability depend on the quality of relationship you form with each of your individual customers. With customers having much greater access to product and service alternatives in the market place; and hungry competitors just waiting for the chance to snatch up any unhappy customers; it is crucial that every organization understands the role that customer loyalty and delight can play in its building solid relationships.

How important is customer loyalty to your organization?

In survey after survey, customer loyalty ranks as one of the top five concerns of CEOs and other top executives in an organization. Although customer loyalty has been elusive in its attainment, building and sustaining customer loyalty still remains one of the key strategic focuses of top organizations.

From a relationship perspective, most people will agree that loyalty is an extremely important attribute in a relationship. Unfortunately loyalty is not something that can be acquired or manufactured. The creation of loyalty is an earning process and must be done one relationship at a time. In the purest sense, loyalty means being steadfast in your allegiance brought on by devotion, love, or vows to a person, an organization, a cause or principles. The creation of loyalty is also an emotional event. Loyalty requires an emotional trust bond to be forged between two parties. In the case of a business, it would be the bonds formed between a customer and the organization. The strength of loyalty's bonds comes with time and the experiences each party has with each other. Sometimes loyalty bonds don't outwardly appear logical. Nevertheless, those emotional trust bonds represent the real strength of that relationship.

In short, the formation of loyalty in a relationship requires the strength and continued nurturing of the emotional side of that relationship.

In looking at the importance of customer loyalty from a strategic business perspective, two questions need to be answered. Why does your organization want or even care if they have loyal customers and what benefits will your organization derive from loyal customers?

For starters, loyal customers are important to your organization's financial well-being.

Consider. . .

Research shows that organizations could increase their revenues by 85 percent if they could retain 5 percent more of their best customers.
On the average, 60 percent to 70 percent of an organization's current customers will purchase goods and services during the year, while only 20 percent to 40 percent of lapsed customers will make purchases. Only 5 percent to 20 percent of new prospects will purchase anything from the organization.
Most organizations realize that 80 percent of their business is generated by 20 percent of their customers. It's much more desirable to sell fewer loyal customers more products and services.
On the average, it costs organizations fives times more (in just money) to acquire a new customer than to retain an existing one.

Loyal customers are also important to the longevity of your organization. Consider. . .

Delighted customers tell at least four other people about their experiences. Dissatisfied customers tell ten. Uninspired, merely satisfied customers most likely tell no one.

In a health insurance study, it was determined that less than 13 percent of plan participants were loyal to their health plans, while less than 21 percent were considered loyal to their physicians. This means respectively that 87 percent and 79 percent of the plan participants weren't loyal to either their health plans or physicians! According to the study, of those plan participants who were loyal, their loyalty was a result of the personal relationships they had built with the health care centers and physicians. These people named trust as the single biggest factor at the center of those loyal relationships. Those plan participants who did express their loyalty said they were "very happy" with their overall experiences.

The key benefits you receiving by creating loyal customers are:

The "word of mouth" factor. Loyal customers go out of their way to help you build your organizations when they feel you care about them. They tell everyone about their delightful experiences. Word of mouth is the single most powerful marketing force your organization can have working on its behalf.
A stronger brand. In difficult economic times a loyal customer will first turn to organizations they trust and trust should be the key element behind your brand. Your brand means much more to a loyal customer than a non-loyal customer. It represents the emotional trust bond they have formed with your organization.
Lasting differentiation. How do competitors break an emotional trust bond whose formation and meaning aren't well understood? The answer is, it is very difficult, if not impossible. This type of differentiation significantly reduces the "leap frog effect," because your differentiation is no longer built on the product/service/price level.
More profitable customers. Loyal customers purchase more and more often. It costs much less money for you to strengthen a relationship with an existing customer than begin a new relationship with a new customer.
Lower marketing and sales costs. Loyal customers have higher response rates than non-loyal customers. This means you need to spend less money on loyal customers to achieve the same results from spending more on non-loyal customers. In fact, organizations with loyal customers can actually spend more money per loyal customer and still lower their overall costs. It all has to do with your better response rates from loyal customers.
Lower product and service development costs. Organizations with loyal customers can more readily ask and receive accurate responses from their customers on what they really want and need. This not only reduces the cost to develop, but improves "time to market" dramatically.

Because customer loyalty is so important, it triggers the next key question. . .

Are your satisfied customers loyal customers?

The word "satisfied" means desiring no more than what you have or ready to accept or acquiesce or being content. There's no passion in the word "satisfied." There's no emotional side to "satisfied." The word "satisfied" does not compel people to act or react. It doesn't present a strong reason to do anything except evaluate their contentment. In contrast to the word "satisfied" is the word "delight." Delight means giving or taking pleasure or joy. Delight carries with it passion, energy, and direction. So when we ask, "Are merely satisfied customers loyal customers?" The answer is "No!" Consider…

Thomas O Jones and W Earl Sasser, Jr., in "Why Satisfied Customers Defect," agree that satisfied customers are not loyal customers. Jones and Sasser believe satisfied customers are neutral in their feelings towards an organization. Although they may like the product or service, they're just waiting for the next best deal to come along. These writers say that only totally satisfied customers (we call them delighted customers) are loyal because the relationship has progressed to the point where the customers believe the organizations really cares about them.
A Xerox-sponsored research project on customer satisfaction concluded that delighted customers were six times more likely to continue purchasing products and services than customers who were merely satisfied. The study indicated that merely satisfying customers did not keep them loyal.

Billions of dollars are spent each year on customer satisfaction initiatives and loyalty programs, yet consider…

The average organization loses 20 to 50 percent of its customers every year. In technology organizations, those figures are even higher. Customer turnover costs organizations billions of dollars each year.
O'Brien and Jones, in "Do Rewards Really Create Loyalty?" indicate that most organizations today use loyalty programs and customer satisfaction incentives to promote or market their goods and services to new customers rather than designing their programs to create and sustain real loyalty. They believe that until this practice stops, there will be no ROI associated with loyalty program investments.

Is your organization at risk from not having loyal customers?

We have established that loyal customers are important, and that merely satisfied customers are not loyal. It stands to reason that if your organization's customer base is composed of impassionate, uninspired, merely satisfied customers, you are at risk of losing your customers to little more than a competitor who just comes along with a better deal. This lack of customer loyalty differentiation places your organization in financial danger and compromises its profitability and survivability.

What does your organization need to do to create loyal customers?

First, stop investing in efforts that will merely satisfy your customers.

Your organization is only wasting time and money. Investments in programs that result in mere satisfaction are like straightening the chairs on the Titanic. You are only waiting around for your competition to steal your customers with a better deal.

Second, accept the Awesome Customer Challenge.

Invest in activities that will delight your customers and earn their loyalty. Investing in loyalty means your organization does what it takes to consistently and repeatedly deliver delightful experiences, tailored to each of your customers, in an emotionally binding relationship. The result is the creation of an army of passionate, inspired, customers that spread the "good word" about your organization to all that will listen.

Never has the opportunity been greater to create loyal customers. In today's business environment customers are more in control of how they think, feel, and act than ever before. The norm has delightfully become the old Burger King tagline, "Have it your way." The reality is, customers will continue to gain increased access to greater numbers of offerings through different mediums over the next decade. This increased access will only accelerate the customer's influence and control over the offerings they wish to receive and accept.

Customers will expect organizations to understand their needs and desires and take them beyond being merely satisfied. Customers will want relevant and valuable offerings that not only fulfill their unique needs, desires, and dreams, but also delight them—quickly. Any organization not up to this task will struggle to differentiate itself from its competition and ultimately lose perhaps its most valuable assets: its customers.

But if your organization stands ready to respond to this challenge of delighting your customers and earning their loyalty, you will increase your market position, while organizations continuing to force their merely satisfying offerings onto customers will lose their market position. This repositioning process is already taking place and has set the stage for what Patricia Seybold calls The Customer Revolution. Her book by the same name, along with Pine and Gilmore's book The Experience Economy, identifies and marks the beginning of a customer-centric era. This will be an era in which every customer will not only expect, but also demand that organizations present their offerings through customer experiences…tailored specifically to them.

People like Pine and Gillmore, Seybold, and others have identified this new customer or experience economy. They are right on target when they predict that an organization's success, in the future, will start and end with the customer. . .and creating a loyal customer is the ultimate investment any organization can make.

Third, meet the Awesome Customer Challenge.

Simply recognizing that customers are one of your organization's most valuable assets and writing it on a mission statement plaque and then hanging in the reception area isn't enough. It's one thing to talk about the dream of a customer or experience economy, but it's another to create and deliver it from every department and employee within your organization. This leaves every organization with the need to meet the Awesome Customer Challenge in order to make its dream of a new customer economy come true…

Meeting the Awesome Customer Challenge

Why can only experience-based organizations create loyal customers?

Experience-based organizations believe their operations, infrastructure and resources are there to support the experiences and offerings they need to delight their customers, form an emotional trust bond and earn their loyalty. In contrast, operational-based organizations believe that focusing on improved operations will create satisfied customers who miraculously transform themselves into loyal customers.

For example, when Walt Disney first designed Disneyland, his entire concept was experience-based. Anything operational that went into building Disneyland was a result of Disney's overwhelming drive to make families' and kids' experiences come alive. Disneyland's real product was the experiences it created. Disneyland even decided to call its employees "cast members."

Being experience-based is not always easy. Disney faced a lot of tough questions. How do you make believable wild animals? How do you make a Mississippi paddlewheel steamboat? How exactly do you go about building a big castle in the middle of Anaheim, California? The design of Disneyland-like theme parks had never been done before. By keeping his focus on customers' experiences, Disney finally came up with his brilliant idea of creating five unique experiences for customers. They would be the five uniquely different lands of Main Street, U.S.A, Adventureland, Frontierland, Fantasyland, and Tomorrowland.

Had Walt Disney listened to the operations people in terms of their perspective of what they considered possible, rather than keeping his organization and dream experience-based, Disneyland might never have turned out to be-well-Disneyland, having loyal Disneyland customers telling everyone on earth, "You can wish upon a star."

What is required for your organization to become an experience-based organization?

Becoming an experience-based organization takes vision, courage, enthusiasm, and two fundamental changes. . . .

Change #1 - Become and Enjoy Being Customer-Focused

There are two types of organizations: customer-focused and customer-manipulative. A customer-focused organization does everything in its power to provide its customers with the offerings and experiences they need to be delighted. A customer-manipulative organization tries to convince its customers they'll be satisfied in buying the products or services the organization wants to sell.

Change #2 - Develop and Use Customer Trust Currency

The information your organization knows about its customers and what it does with that knowledge in its relationship with its customers is called Customer Relationship Currency©. There are three levels of customer relationship currency your organization can employ. They are: Customer Information Currency©, Customer Knowledge Currency©, and Customer Trust Currency©. Each type of currency has different purposes, powers and relationship outcomes (customer relationship currency is explained in detail in Chapter 2 of Creating and Delivering Totally Awesome Customer Experiences).

Customer Trust Currency is the highest level of customer relationship currency because it provides the formation of an emotional trust bond and gives your organization the "direct right to ask" your customers how to delight them. Customer Trust Currency is essential to the creation of customer loyalty. It also plays a vital role in your ability to strengthen your brand, and tap into a very unique type of differentiation that competitors have great difficulty in duplicating.

Customer Trust Currency is built using a tool called Customer Experience Mapping©. Customer Experience Mapping is essential in consistently and repeatedly creating and delivering Totally Awesome Customer Experiences to delight customers. Customer Experience Mapping can protect an organization from the random acts of excellence and chaos by employees that cause customer confusion and hamper the organization's efforts to consistently delight its customers. The repeated and constant use of Customer Experience Mapping in an experience-based environment is part of the magic that can help you easily transform uninspired or merely satisfied customers into delighted customers and meet the Awesome Customer Challenge.

One last comment. . .

Accepting the Awesome Customer Challenge requires that your organization recognizes the power behind delighting customers to earn their loyalty. Meeting the Awesome Customer Challenge requires your organization to become experience-based. The outcome of accepting and meeting the Awesome Customer Challenge will energize and mobilize your organization's entire resources towards the fulfillment of the experiences and offerings your customers really want and care about—but more importantly, it will help you convert uninspired, merely satisfied customers into a proactive, vocal army of loyal customers who command the most powerful marketing tool in the world, "word of mouth," to help you grow your organization and maintain its longevity during good times and bad.

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