It’s no secret that to be successful, companies must deliver excellent customer experiences. Companies, however, can’t rely on experience strategies of the past. Linear, episodically-designed, and static experience strategies can’t keep up with today’s always-on, hyper-connected customers. Businesses need new models for innovation and growth. I caught up with Charlene Li, principal analyst at Altimeter, a Prophet company, who explained what a modern experience strategy entails and shared highlights from her new report, Experience Strategy: Connecting Customer Experience to Business Strategy.
What prompted you to study the idea of a next generation of experience strategies?
I started looking at this more than two years ago. I was curious about how people deal with experience strategy and one thing I noticed was this preponderance of personas and customer journeys, and it felt really dated. Also, it seemed that the people who handle the design aspect of understanding customer journeys and those who execute it never met. That’s a huge disconnect.
It wasn’t that no one understood that there were different touchpoints, but there was a traditional mindset that we’ll do research and surveys, map it out and then do it again in 12 to 18 months. The reality is that’s not enough—customer journeys should be looked at every day. And when I dug deeper, I found a strong interest in experience design, but most of the people who do design were looking at individual touchpoints and not pulling things together for the people executing things. Where’s the strategy behind that? So that’s the purpose of this report, to tie all these different pieces together.
In your report, you mention that customers want relevance, not delight. What’s the difference?
If you ask customers what do they want, extra perks aren’t what delights them, they want something that’s relevant and meaningful to them. That’s why we did this consumer survey. We wanted to know, what do you really want? The response was, well if it helps me do what I need to do, that’s when I get delighted. When I unexpectedly get things done in a much easier way than I expected, that’s when I’m delighted. For example, focusing on VR and AR is only great if it helps you meet the basic table stakes of what customers want. And it often doesn’t.
What if your company doesn’t have as many resources as a huge enterprise? How can they still adopt an effective experience strategy?
That’s why I have a maturity model in the report. Even for companies in levels 1, 2, and 3, I expressly wrote about some basic things they can do. One of my favorites is around learning. One of the first steps I talk about is understanding your customers. And a very simple thing to do is to have a customer advisory board. Who you put on that advisory board is very important. You don’t want your largest customers, you want your most critical, forward-thinking customers because they’ll make you work really hard. They like you, but they’re never quite satisfied. Those are the people you want on your advisory board.
Is that different from a customer panel or focus group?
If you do surveys or a panel with a sample of customers, it’s difficult to uncover the unmet narrative. That’s why it takes a deep relationship with an advisory board. These are your most demanding customers. The ones that seem a little crazy but keep pushing you and provide a back and forth dialogue to uncover what the truth is.
For example, what Steve Jobs and his team did, is they did a ton of research. This wasn’t the traditional customer survey. They specifically looked for all the unmet needs. That’s the challenge. I don’t think a traditional panel where you survey people in a static way will help. If you think of it in terms of what do customers say versus what do they actually do, it could all be different. That’s where to start uncovering the hidden needs.
According to your report, one of the qualities of a next-generation experience strategy is to be ready for unpredictable developments. How do you prepare for something that’s unpredictable?
This goes back to step one of understanding the customer; it’s never done. The unpredictable part says instead of dictating the journey your customers will go on, think of yourself as a lab rat. Always test and experiment. A better journey is one that says from the beginning, I don’t which journey you, the customer, is going to be on, but if you decide to take this journey, we will follow you and we will figure it out with you. It’s anticipating as much as possible where that journey will turn. And you have multiple dimensions and analytics to figure out those different journeys. Companies should also be asking themselves, is this a fluke or something we should be paying attention to? Constant curiosity is essential in a company to be able to find and appreciate what those changes are.
What is an example of an industry where a next-generation experience strategy is being put into play?
Retail jumps out. What always strikes me as interesting is how small businesses are holding their own against some really big online competitors. And I think the reason is that they’ve found ways of being able to deliver on next generation experiences. For example, there’s a chain of independent bookstores in San Francisco that are holding their own.
One of the reasons is they appeal to a different set of clientele than the usual customer base at Amazon. And they constantly try to understand who those people are and how they’re different. I think it’s also about commitment to empowering their employees to really serve people online and offline. I also looked at disruptors also like Warby Parker and Casper, who have taken traditional businesses and because of their obsession with customers and focus on data, they’re able to create different experiences in their products and their journeys. You know experience is a key place for competitive advantage, but how people systematically go through that and create it is the interesting thing.
I’ve also talked a little bit about United [Airlines]. It’s unfortunate they’ve had these incidents, like the customer being dragged down the aisle, because when [CEO and President] Oscar Munoz came in, he put a huge premium on customer experience. He shook the company mindset from cost containment and the bottom line to investing in the customer experience. Everything from changing the coffee to trying new types of meal services and improving economy. I also shared in a report how United’s mobile experience even delighted customers.
What happened? Where was the fallout?
I think they were in the middle of the transition and it’s one thing to change the policy and the food, but it’s another thing to change the hearts and minds of employees. They’re used to doing things a certain way, and in hindsight, there were a bunch of missteps that could have been done differently in terms of policies and decisions that could have prevented what happened. When you have decades of doing things a certain way, of following guidelines and guidebooks, empowering people to make smarter decisions systematically can take a while to take effect.
So what’s a good rule of thumb to avoid becoming complacent about the customer experience?
If you’re not thinking of the customer experience at least once every day, then you’re focused on the wrong thing. Also, some people tend to think of customer experience as just customer service, when in actuality you have to think of all aspects for deploying a customer experience. That includes the employee perspective, which I’m going to explore in another report. It’s also important that this is done at the highest level of the organization. A true customer experience strategy isn’t something to assign to a small subsection of your company—it has to be at the center of the business or else it’s not worth pursuing.