Are you keeping up with your customers?
BY: Thomas Rosenberg, business design expert, PA Consulting Group
Twenty years after Joseph Pine and James Gilmore published their famed article ‘Welcome to the Experience Economy’ companies are still providing mediocre customer experience.
Is this because companies are disinterested in serving their customers in the best possible way? In my experience, most business leaders and employees really do want to improve the experience – but are struggling to make it happen. Why? Because they’re going about it the wrong way.
Keeping up with customer expectations has always been a challenge – we know they’re fickle, and with the proliferation of new channels and technologies, their expectations are rapidly evolving. While in contrast, companies’ internal workings (with linear development processes, portfolio boards and investment committees) make it difficult to make decisions quickly.
This approach is no longer sufficient because predicting the future is becoming increasingly different as the following factors have heavy sway:
- increasing political uncertainty is affecting businesses – regulation and spending priorities can quickly change. Who would have predicted Trump, Brexit and the Macron/Le Pen candidacies 12 months ago?
- sectors are becoming more fluid with entrants from other sectors – Google, Apple and Samsung are entering the payments sector. Amazon is also now in the entertainment sector with Amazon Prime Video, while Uber has become the biggest acquirer of small business bank accounts in the US.
- technology is speeding up changes in customer behaviour and expectations – apps have taken over the role of the website, completely changing the user experience and the customer journey. And artificial intelligence and robotics are poised to completely change customer behaviour and expectations yet again.
- customers’ purchasing behaviour has changed – they’re increasingly using sources outside the control of the corporation.
- the threat from new start-ups – who are built on a completely different approach to customer experience.
So it’s become very difficult to effectively predict the future – even the short term. You simply can’t spend three to four months analysing the situation, another three to four months designing your response, and then take six to 12 months to implement the solution. By then, you’ll have to start all over again.
So what can you do? Applying a more agile approach when it comes to developing your customer experience is vital.
Understand what your customers want
It’s paramount you focus on keeping up with your customers, rather than trying to predict what they’ll think 12 months from now. Understanding what drives your customers’ expectations and what outcome they’re aiming for is more relevant than ever before. Your customer segmentation needs to hit the mark.
Test ideas quickly
Using your brand values as a basis, you should articulate how your company will differentiate itself from competitors – and what this means for the customer experience you provide. From here, you can create a strong set of design principles for your overall customer experience, along with a high-level view on what the customer journey should look like further down the road. But this doesn’t mean you should spend ages working out the finer details of your strategy.
Instead, start piloting your most promising ideas. Direct feedback from your customers and how they respond are the best measures of success. By moving quickly from idea to a prototype, you’ll be able to test directly with your customers. And there are plenty of successful methodologies you can apply. Take Google Venture sprints as an example. They’re a proven method to get from idea to field testing, and are based on the ideas that you’ll create more value from testing four good ideas in a month than perfecting one idea. This will allow you to quickly test a new service or product with your customers.
If you work in a large organisation, I know what you’re thinking. It’s too difficult to develop your customer experience in small sprints, and you’re worried about how the different teams and ideas align. But you can scale agile teams using the Scaled Agile Framework (SAFe). It’ll easily align hundreds of people’s work if needed and makes it possible to simultaneously work on multiple parts of the customer journey quickly. For instance, you can try out a new process for onboarding customers, while bringing out a new app and implementing a customer experience platform. SAFe has the processes and structure to allow you to manage multiple teams that each pre-/prototype, test, refine and deliver their own part of a coherent experience. And all of this can evolve and change as you get direct feedback from the customers. So instead of doing more planning to try to understand all of the pieces, you get into execution that’s driven by results and data from the market.
It’s clear that organisations need to start becoming more agile. If you don’t, you’ll wake up one morning and find your customers have outpaced you – and taken their business elsewhere. This agile approach is one of the main ways you can tackle the customer-led revolution we call Customer 4.0.