Customer experience is big differentiator for organisations

It has become hard for firms to stand out from the crowd in pricing, products or services. Now customer experience is the big differentiator

In many consumer sectors, it has become increasingly difficult for organisations to really stand out from the crowd in terms of pricing, products or services.

As a result, the last great bastion of differentiation in recent years has become that of customer experience – and that seems unlikely to change any time soon.

Ed Thompson, an analyst at market research firm Gartner, says: “Between 5% and 10% of companies truly have a customer culture at their core, but the rest have been forced to care because all other means of differentiation have been eroded over time. That’s why it is currently a hot topic and has been very high on CEO agendas for the last three years or so.”

But a major challenge faced by everyone is that optimising the customer experience is a continually movable feast. To make matters worse, today’s customers are more demanding and vocal than ever.

While providers struggle with a proliferation of contact points and channels, ranging from telephone and email to social media, customers expect to move simultaneously and seamlessly all of these – and for the experience to be consistent.

Yunus Ozler, a partner at management consultancy Ernst & Young, says the problem is that even if you manage to create an optimum customer experience, it has a habit of changing, which makes the situation a constant battle for continuous improvement.

“The holy grail is to be 100% responsive to customer expectations, but that’s almost impossible,” he says. “So you have to keep on shifting and growing because if you don’t, the customer will always be one step ahead.”

The most advanced sectors in this regard tend to be retailers, particularly in the fields of food, clothing and consumer electronics. Other exemplary organisations include HSBC’s First Direct bank, motorbike manufacturer Harley Davidson and airlines such as Malaysian and Cathay Pacific.

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Interestingly, over the last couple of years, many of these companies have taken on heads of customer experience, and the trend does not appear to be abating.

Although their teams tend to be small and focused, the role of these managers is to co-ordinate activities across the whole organisation to ensure that personnel in all departments, including sales, HR, logistics and IT, are working towards the same customer-oriented goal.

To date, this strategy has been found mainly in the high tech, banking and consumer packaged goods industries, but it is now also starting to emerge in other sectors.

Amanda Whittaker, a senior manager in management consultancy Deloitte Digital’s customer advisory practice, says: “They are generally at chief operating officer level as this gives customer experience a board-level focus. If the position is lower down, it tends to get buried in operational requirements.”

This is an important point because to ensure a consistently positive customer experience, the right culture must be in place – something that is usually ordained by senior managers at the very top of the organisation.

Another important consideration is that, despite many product suppliers, ranging from analytics and survey tools to contact centre voice system providers, describing themselves as customer experience specialists, the term has yet to be appropriated in technology as customer relationship management (CRM) was a decade and a half ago.

This means it is currently not possible to simply deploy an off-the-shelf customer experience software suite to achieve your goals. Instead, it is about using technology from across the spectrum to underpin a wider customer-centric vision.

Gartner’s Thompson says: “Customer experience isn’t really a market per se. It’s a business goal and, while technology can help you get there, the term hasn’t yet been usurped into just buying software.”

Instead, customer experience is all about “doing things that benefit the customer rather than things that benefit the organisation,” he adds. “So it actually looks very similar to the original ideas behind CRM.”

Case study: Orlebar Brown uses NetSuite e-commerce software to tailor more stylish customer experience

Like all clothing retailers, particularly in the luxury market, delivering a positive customer experience is vital for Orlebar Brown’s brand and reputation.

This means that the upmarket provider of designer swimming shorts and resort collections tries to put customer service at the heart of whatever it does.

To this end, every Monday morning it begins the week by holding customer service meetings that include senior and middle managers, as well as selected staff members, at its London headquarters.

The aim is to discuss what is happening across all its sales channels, which comprise a website, its own stores and franchises in department stores such as Harrods and Barneys New York, in order to react quickly to any problems.

Senior managers also meet once a month to share information and co-ordinate activity, much of which is IT-related, at an organisation-wide level.

For example, at the end of each season, which lasts about 12 weeks, customer experience designers are brought in to update the presentation of the London-based retailer’s website. Merchandisers are also hired to understand what has and has not worked for customers in-store.

Senior IT manager Abi Somorin says: “We couldn’t offer a good customer experience without technology – it drives everything in one shape or form due to the data element, which is important to continually improve what we do.”

Orlebar Brown has used NetSuite’s cloud-based enterprise resource planning systems at the back end to run its operations since 2011.

But a couple of years ago, it also decided to migrate to the supplier’s retail and e-commerce software in order to improve the customer experience. A key objective was to ensure that activities such as customer service and pricing were consistent no matter which channel the customer used.

“Our customer data was held in three different places and it was becoming apparent that the customer experience was being eroded,” says Somorin. “For example, if someone placed an order but changed their mind, they’d call up, but our customer service people might not know anything about it.”

As part of the move, the firm also introduced a master data strategy that involved a data-cleansing exercise. “Customer and product data have to be very accurate because they are the most important, and everything else is built on top of them,” says Somorin.

For example, if customers are willing to give Orlebar Brown their personal details, a service has been set up to email them a copy of their receipt before they even leave the shop.

This service is particularly handy for the firm’s key jet-setting demographic, who may want to buy from a store in one country but return the item to a store in another – and who were prone to losing the paper version.

Somorin adds: “It’s all about recognising customer challenges and ensuring that we can support them no matter where they are because, in luxury retail, you have to get it right first time.”

Case study: Elmbridge Borough Council uses customer contact software to capture service user data

Elmbridge Borough Council in Surrey has spent two years transforming the way it works in order to ensure that customers are at the heart of everything it does.

The catalyst for its huge change management programme, entitled “Brilliant customer service every time”, was a combination of a mutual peer review undertaken with another local council, and budget pressures, which made it important to streamline operations.

It also helped that the second-largest political party in the Conservative-controlled council was a residents’ association with a strong interest in obtaining value-for-money services.

Dawn Crewe, head of customer services at Elmbridge Council, says: “Our senior management team see this as our most important project to help the organisation move forward. They have absolutely bought into it, which is important because if they hadn’t, it would never have happened.”

A key part of the initiative has involved rationalising and reworking the local authority’s previously siloed business processes. To do so, ICT and customer service staff work in tandem as a combined project team, alongside different service departments.

“The service areas tell us what they want to change and we see ourselves as the facilitators to help them achieve that,” says Crewe. “So we use best practice benchmarking and technology to help us get there.”

The work kicked off in large, high-profile departments such as waste and recycling, parking, planning services and general enquiries, but over the next year it will be expanded to council tax and other smaller departments.

The council's next step after revamping its business processes is to automate them as much as possible. Key systems here include customer relationship management, in order to provide a 360-degree view of service users.

But according to Mark Lumley, head of ICT at both Elmbridge and Epsom and Ewell Borough Councils, it is not so much the technology that is the most important thing as the underlying data.

“It’s not about joining up systems A and B, but what data you want to get from the system and that’s the key thing,” he says.

One useful vehicle for capturing such data from service users is customer contact software VoiceSage. This enables the council to automatically send customers a five-question survey via interactive text, mobile or telephone voice message immediately after they interact with any of its channels.

This information is then stored as a file in each individual’s CRM record, enabling negative feedback to be dealt with more quickly than if it were simply compiled into a report.

Also, not only are customers contacted directly about their problem in order to either sort it out or inform them of any resolution, but if the complaint is ongoing, the feedback is also used to further enhance service delivery and ensure a process of continuous improvement.

“We are not just asking customers what they think of the initial process,” says Crewe. “We also ask them what they thought of the whole experience. This enables us to home in and fine-tune our existing processes as we can track the customer journey from start to finish.”

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