What is Customer Experience Differentiation?

Are customer service and customer experience the same thing? Though it seems like the terms are frequently used interchangeably, there is a distinction.

It’s important to distinguish between the two. Customer service involves activities that connect a consumer to the brand. Interacting with staff to get answers to questions, or registering a concern are just a couple of customer service examples.

Customer experience is broader, it has to do with product design and use in addition to customer service. It drives a deeper emotional connection to the brand if it’s positive, and impacts customer loyalty. For example, Starbucks offers an experience for coffee-lovers that is quite different from, say 7-Eleven, or any number of other locations where you could order a cup of coffee.

Harley-Davidson’s brand has HOGs (Harley Owners Group) to share in the experience of riding Customer_Experience_DifferentiationHarley bikes. Nordstrom is a stand-out retailer due to the customer experience they are known for delivering; for example, alteration services included with purchase.

Most companies aspire to offer good customer service, with good reason: Studies suggest that consumers are willing to pay a premium for good customer service. But there is a tremendous payoff if you take stellar customer service a step further and differentiate your company’s customer experience offering.

Building Customer Relationships based on Customer Experience

Stan Phelps, in his book What’s Your Purple Goldfish?, states that customer experience should be priority number one in marketing. His premise is differentiation is achieved by adding value. I recommend the book.

Apple and Microsoft are distinct brands that have loyal followers based on very different customer experiences. For the most part, consumers are loyal to one brand and tend to stick with that brand. The ultimate goal is creating an experience that is so engaging the consumer will identify with the brand. It is good, solid relationship marketing.

Is Loyalty Marketing Evolving?

Traditionally, we think of loyalty marketing as a specific program or tactic, often promotional in nature. The challenge with this approach is your competitor can often emulate it quickly and easily. Doesn’t it seem like just about every grocery store has a rewards card?

Additionally, loyalty marketing programs usually offer some kind of incentive as a reward for using the product or service. The goal isn’t to create more programs, i.e. “me-too” work done only out of obligation, or keeping up with competitors.

But, if the differentiating factor is the experience, there is a great deal more value in this kind of relationship.  I am not suggesting you should never offer incentives; I am suggesting there is a larger more important perspective to building customer loyalty.

What are the Four Competencies of Customer Experience?

The Temkin Group Insight report identifies four customer experience competencies:

Purposeful Leadership

This means consistently operating a business based on a clear set of values and norms.  First a clear purpose must be determined. This is often referred to as the “Why are we in business?” question. What is the organization trying to accomplish, and how will they go about it?

Behaviors must be consistent with statements.  Leaders must make decisions, spend their time consistently with the stated values and norms. This is often referred to as walking the talk; it must be more than a slogan.

Human resource practices must be consistent with the values. There must be empowering and accountability. Executives and owners often overlook the importance of marketing to internal colleagues.

Engage Employees

Employees must be aligned with company goals. Senior leaders have to ensure a culture that will ensure that employees embrace the values. Temkin recommends four specific practices:

  1. Create a culture that makes it easy for employees to do the right thing.
  2. Spend on training; don’t underfund.
  3. Communicate, and then repeat yourself. Messages have to be reinforced. It is almost impossible to over-communicate. Human beings have short memories; let’s face it, we are inundated with all kinds of messages every day. Getting everyone on the same page requires relentless, consistent repetition. Be sure the message is communicated across multiple channels and media. Keep in mind that individuals process messages very differently; some are visual; others auditory, still others kinesthetic. So remember to cover all the bases.
  4. Measure employee engagement – Create the internal equivalent of a Net Promoter Score. The essence of the Net Promoter Score is a simple yet telling metric. NPS only asks one question and that question is: “Would you recommend this product/service to your friends?”  The answer is provided by circling a number on a scale; from this a single score is derived. Measuring provides telling feedback, it can be a valuable tool if used properly.

Deliver on Your Brand Promises to Customers

Know what your brand stands for and ensure that everything you do as a company is consistent with your brand identity. Brand value has meaning; it will create expectations from all constituents so pay careful attention to feedback and behaviors around the way your brand delivers. Brand value must be clear, consistent and constantly communicated.

Connect to Customers

Make sure customer insight is shared across the organization. In a world awash in data there is way too little insight. Encourage collaboration and curiosity; use these to your advantage.  Don’t just rely on intuition, look at trends, patterns, changes in behavior; beware of data gaps that can be created by functional silos. Find ways to link the data so you get a holistic picture of your customers.

4 customer experience core competencies were expanded on in our previous blog post.

How would you rate your company’s success on customer experience differentiation? Could you defend your organization’s efforts to create a differentiated customer experience, or are your customer service practices program-based? What are some other ways you create meaningful customer experiences?