How to create a total customer experience?
06 July 2020
"A total customer experience builds customer loyalty and also makes customers the company's biggest supporters"
Please wait on the line, a customer care executive will be with you shortly," is a familiar refrain on one of India's largest mobile networks. Truth be told, you don't have to wait for long before someone is with you on the telephone line. However, if you expect them to solve your problems and provide you with a satisfactory resolution of your issue, you will encounter a mixed set of experiences, mostly unpleasant.
My own experience has been far from favorable. I have had the misfortune of talking to the customer service hotline of that company no less than 20 times and I can faithfully say that over 70 percent of my experiences have been negative, with the rest bordering on satisfactory. They range from the mediocre to the stupid to the downright comical. Okay, I've had some bad experiences; now, how does this impact the mobile network operator, that is, the company?
The fact is it affects the company in more ways than one. It probably has many such customers because the problems seem to be of a systemic nature, that is, failure of processes, systems, and procedures. As a result, not only does the company have to spend more on fielding more customer service phone calls from unhappy customers, it also suffers from disloyal customers. These customers are likely to `switch' to another mobile network more easily because of their dissatisfaction. The company's woes do not end there. These dissatisfied and disloyal customers wittingly or unwittingly talk about their poor experiences to other potential customers, thus `costing' the company money in the long run. These types of customers are called `terrorists' because they are spreading bad blood among potential customers. Many studies have shown that such customers end up costing more than 180 percent of the revenues they bring in, depending on the industry the company is in.
The Loyal Quadrant
Satisfied and loyal
The exact opposite is true if the company has satisfied and loyal customers. These customers are called `angels' because they not only keep coming to the company for more business and services, but also refer their families, friends, and others to the company because of their positive experiences. This, fortunately, is a common phenomenon.
Consider the number of times you've referred your family or friends to your favorite restaurant or hangout. Elite luxury car manufacturers such as Daimler-Chrysler, BMW, and Porsche spend a good deal of time courting such customers because of the benefit to the bottom line. In fact, Fred Reichheld, renowned loyalty guru and author of
The Loyalty Effect
says that by increasing customer retention rates by 5 percent, companies can improve their profits 25-125 percent depending on the type of industry they are in.
What about the other two types of customers? The ones that are satisfied, but not loyal are called `mercenaries'. They will freely switch from one company to another because they do not feel any sense of loyalty to the company. For example, I've filled petrol in many petrol stations, but there isn't one that I feel particularly loyal to. Or think about the number of people you know who keep flipping television channels without any particular loyalty to a single one. It is easier to convert such customers into loyal ones. Companies would much rather contemplate making these customers loyal and turning them into evangelists, and reaping the benefits.
Dissatisfied but loyal
The final type of customer in this framework is the dissatisfied but loyal, also called `hostages'. You can wonder how that can happen, but it happens all the time in many industries. More often than not, customers who buy a product such as an expensive high-tech system or software find that they are at the mercy of the service organizations of these companies. Such customers are trapped, in the sense that it is expensive to switch to other companies, and therefore keep purchasing from the same company. These customers are, by summary definition, deemed `loyal'. Nothing can be further from the truth. Companies will usually have a hard case of converting these customers into true `loyalists'. However, if they do, they will also turn out to be the most outspoken evangelists because of the dramatic difference in the satisfaction they feel.
Armed with this information, we can assemble the `loyalty quadrant' (see the accompanying chart) and understand its implications.
The loyalty quadrant allows the company to categorize its customer base into any one of the four categories and ask the question whether it wants more or less of each. Most companies will definitely want more angels than terrorists, but the choice is never theirs to make. Customers eventually decide whether they will be angels or terrorists based on the Total Customer Experience (TCE).
TCE is a term that is not new to the industry. However, it is fast being recognized as the single most important differentiator between a great company and a good company. Examples abound of companies such as Southwest Airlines, Target Corporation, Commerzbank, and Google amongst others. So what do these companies do that is different? For one, their approach to TCE is determined by the end-to-end view that the customer has of an organization, from sales to delivery to billing and collections. For example, the boarding time in a Southwest flight is decidedly shorter than in other airlines and the process is easier to follow. Every single process appears to have been vetted through the TCE microscope for a differentiated and pleasant experience. Now contrast that with the 70 percent negative experience that I had with the mobile phone operator.
Let's return to the mobile phone experience. First of all, the term `customer care executive' is a misnomer because many of these representatives are just that the first line of defense, with hardly any executive powers to speak of. The problem begins right there because there is a contradiction between nomenclature and empowerment. A question of trust has risen out of literally nothing but a name. The negative customer experience has just begun. It seems that this company is determined to provide the opposite of a positive TCE.
Expensive to switch
As I write this article, I have paid my monthly mobile phone charges, but I get text messages and umpteen phone calls reminding me to pay "or else". And here is a downright absurd experience: in one instance, I sent my assistant to pay my monthly bill prior to the usual due date to avoid discontinuation of service. This was promptly rejected by the `customer care executive' because it lacked an "accompanying" physical bill which was never delivered to me in the first place. My service was also promptly discontinued as promised. Any guesses as to what my TCE is?
Now, here is the dilemma. I am still a customer of that mobile phone company. Why? It is very expensive for me to switch to another carrier because I will have to inform a whole lot of customers, friends, and suppliers of the change in number. Therefore, I qualify as a hostage in the loyalty quadrant of that mobile phone network. What will change the behavior of the carrier in an instant? Try `mobile number portability' and your customer experiences are guaranteed to change dramatically.
On a different note, contrast the mobile phone experience with the experience at a fruit shop in Chennai. A number of my family and friends gathered at the fruit shop one night to have some shakes. While we ordered shakes for everybody, I reckoned that my three-year-old son would not be drinking an entire milkshake and that he would share mine. All of our drinks arrived promptly and we started enjoying the tasty shakes. A few moments later, without any prompting, the waiter reappeared with a tiny glass with milkshake in it, just right for a three-year-old.
The entire group was touched by the experience, and needless to say, we tipped the waiter well and talked about the experience all through the night. I have already referred the shop to quite a few people that's what positive TCE gets a company.
Grow revenues and profits
What's the benefit of TCE? A company-wide TCE program with senior management support can help retain your top customers, grow your revenues and profits. Returning to the loyalty quadrant in the chart, companies can, for example, try to move customers from mercenaries to angels using a structured and disciplined approach (like Six Sigma) to TCE, using improvement initiatives that impact customer satisfaction and loyalty. When you have satisfied and loyal customers, it is more likely that they will be your evangelists. One way to increase the likelihood that these loyalists will be your evangelists is to increase the customer `delight' factor. That is precisely what the elite luxury car manufacturers do to grow market share. They throw in a number of `freebies' or free accessories that add to customer satisfaction, thus growing the `delight factor' and the number of promoters of the company and eventually, revenue and market share. To summarise, customer loyalty is good, but customer reference-ability is best.
Finally, the benefits of a company-wide TCE program do not stop with market and revenue growth. When properly engaged through active management and infrastructure support, the program can deliver significant productivity benefits as well as employee loyalty and satisfaction, also called Total Employee Experience (TEE). TEE with TCE is a potent combination and will set the company apart from the competition is very significant ways. Is your company ready for the TCE journey?
Dr. Balasubramanian Krishnan
CEO, NuVeda Learning Pvt. Ltd. & NuVeda LLC
Courtesy: The Hindu Business Line https://www.thehindubusinessline.com/todays-paper/tp-new-manager/Creating-a-total-customer-experience/article20189719.ece