Customer Satisfaction is dead! Customer Experience is the X Factor in business today!

By August 3, 2016Uncategorized

Does your organization know the difference between customer satisfaction and customer experience?

Customer satisfaction was the buzzword in the 90’s if your company was focused on customer service. Companies used to survey their customers by sending them what they called, a “customer satisfaction survey.” Many companies are still using that terminology and metrics such as customer satisfaction index to gauge their customer overall feedback. But is customer satisfaction still relevant with today’s customer expectations? How many companies are aiming only at “satisfaction?”

You don’t have to go very far to find out the answer. Take ten current customers of your company and ask them if they would be happy as a consumer if everything was simply satisfactory?

A report by McKinsey found that companies focused on maximizing the customer experience, with regard to the entire customer journey, have the potential to increase customer satisfaction by 20%.

Essentially, in order to improve customer satisfaction, focus should be on the whole customer experience. The report suggests that it is no longer good enough to focus on individual interactions with customers. Instead, think of small random acts of kindness. The name of the game is the customer experience. As Carlton A. Doty puts it, “your brand is defined by the interactions that people have with it.”

According to a recent Gartner Survey, “89% of companies are expected to compete mostly on the basis of customer experience, versus 36% four years ago.” That shift is having huge effects on every aspect of business, from sales to marketing, to customer loyalty. According to the same Gartner research, fewer than half of companies see their customer experience capabilities as superior to their peers — but two-thirds expect these capabilities to be industry leading or much more successful than their peers within five years.” The customer experience paradigm is: who will exceed the customer expectations? Which brand or a company will surprise and delight customers on a consistent basis? If your organization wants to thrive in a highly competitive world, you must make the customer experience a strategic business priority.

The importance of customer experience is going to make a big impact on how companies conduct business in the coming years. Companies have got to stop thinking about customer service as a service or a department. They need start to focus on developing genuine relationships with their customers by creating experiences that foster customer engagement at every interaction.

The concept of the experience economy was popularized in the eponymous book published in 1998 by Joseph Pine II and James H. Gilmore. The customer experience has become the X-Factor in the new experience economy. “When a person buys a service, he purchases a set of intangible activities carried out on his behalf. But when he buys an experience, he pays to spend time enjoying a series of memorable events that a company stages-an in theatrical play-to engage him in a personal way.”

Customer experience is much more valuable than customer service or satisfaction. Would a company such as Disney or Ritz Carlton deliver satisfactory service or an experience? Their reputation and brand core values speak to the hearts and minds of their customers. They want their customers and guests to be delighted and fulfilled beyond the basics. They want you to walk away with an emotional connection and create raving fans.

Starbucks is another great example of a company that has created many experiences for their customers. Although Starbucks is in the coffee making business, they are not about the coffee.  Howard Schultz, the founder said, “We’re in the people business serving coffee, not the coffee business serving people.”

Think about it, when you’re standing in line about to order your tall toffee nut latte, you see that a display with coffee beans in different stages of roast, which teaches you something about what you’re about to drink.  They have music in the background and you can get a sense a cozy coffee house as the expresso machine grinding the beans to make your coffee. That’s sensory experience. Then, when you order your coffee, the barista asks your name and writes it on the cup. That’s personalization. It all adds up to the Starbucks experience. The outcome-a customer experience!

You may not be a coffee lover (which I highly doubt!) but maybe you are a business traveler going from city to city and need a great hotel experience right? Hotels aren’t just places to sleep anymore. They’re places to experience something unique. Renaissance Hotels calls their guests, “Discoverers.”

The new generation of travelers are viewing hospitality as an experience ready to be intrigued with memorable connections. Travelers don’t want the cookie-cutter hotel experience. They’re dropping their luggage in the room and ready for an adventure! Bill Marriott was quoted once as saying,” We don’t sell widgets, we sell experiences.”

So if you are an entrepreneur, CEO and business executive, what can you do to achieve customer experiences? Remember it’s not a department or an initiative to delegate to someone.  A brand experience demands leadership across the organization to deliver an awesome customer experience. Here are few suggestions:

  • Personalize your company’s services to anticipate the customer’s needs.
  • Connect with the customer at every touch point. Although technology has made things more efficient, customers also like the human touch as well. “People don’t care how much you know, until they know how much you care.”
  • Customize products and services to their preferences. Every customer is different.
  • Surprise and Delight them. It’s the small things that matters the most!
  • Complete solutions that address the problems customers face with a sense of ownership and quick resolution.
  • Empathize with their concerns and stay open to their feedback. Stay humble!
  • Create emotionally engaging experiences that treat the customer as a Very Important Person with feelings and emotions and recognize his/her hopes and dreams.

In the future, companies that offer genuine experiences will soar above the competition and will thrive in the experience economy.

Tal Shnall is a Customer Experience consultant and mentor. He specializes in customer excellence, employee engagement, corporate culture, branding and leadership.

Share the wisdom