Leading the Customer Experience

Inspirational Service Leadership

Sarah Cook

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317106777
• Edition: 1
• Topic: Computer Science
• Subtopic: Desktop Applications
• Index: Computer Science

Leading the Customer Experience explores the relationship between leadership behaviour and exceptional service. Most organisation's strategic aims and goals centre on the delivery of excellent service. Loyal customers not only keep buying from a company but also recommend the business to others. It is clear that managers and leaders throughout an organisation have a key influence on the experience that customers receive. How leaders behave has a direct impact on their team member's motivation to go the extra mile to deliver excellent service for the customer. Sarah Cook's vision for Leading the Customer Experience is to provide practical advice, tools and techniques for managers in how to effectively lead and motivate their team to deliver the best possible customer service. This book encapsulates her research on the behaviours of leaders who successfully create an environment where employees deliver exceptional service and she brings a pragmatic and business focused approach to the topic. Each chapter contains a variety of case study examples from businesses in UK and Europe, Asia Pacific, US and BRIC countries. These include service organisations in the financial sector, manufacturing, hospitality, transport, healthcare, public and third sectors.

Chapter 1
Why Does Leadership Matter When it Comes to Customer Experience?

In this introductory chapter we look at:

• What is exceptional customer experience?

• The increasing power of the customer

• The benefits of delivering exceptional service

• Employee engagement and customer engagement

• The role leaders play in creating a customer-focused environment

You will find tips and ideas, self-assessments and checklists throughout this book to help you reflect and develop your and others’ role as a customer leader. At the end of each chapter there are also suggested actions you can take as a leader based on the key learning points.

Exceptional Customer Experience and Customer Engagement

Think of a time when you have been impressed by the service you have received from an organization. It could be online, face-to-face or on the phone. Chances are that you can recall an exceptional customer experience. You probably also can remember just as vividly, if not more, a poor experience where your expectations were not met. The way our brain works means that we have a tendency to more likely remember the negatives rather than the positives. In fact for every one negative experience, we need 12 positive customer experiences for the negative to fade away.

As customers we buy based on emotions as well as logic. The more we receive exceptional service as a customer of an organization, the more we become emotionally engaged with the brand. Customer engagement is not something that happens by chance, but is rather an outcome of an exceptional and differentiated customer experience.

Engaged customers are loyal to a business and customer loyalty has long been linked to profitability and growth. Engaged customers buy more from a company, lessening the cost to serve. If they like what you do, they’ll talk about it. They’ll recommend your service. Nothing is more powerful and authentic than a peer referral or word-of-mouth marketing. Engaged customers are passionate about the organization. They love what you do and they’ll provide free peer-to-peer advertising to make sure it’s known. Customer engagement improves your business revenues, opportunity for growth, your reputation and customer lifetime value.

THE WAY CUSTOMERS INTERACT WITH ORGANIZATIONS HAS CHANGED

However, driving high levels of customer engagement has become increasingly more challenging as the way customers interact with businesses changes. Fifty years ago most organizations adopted an industrialized approach to customer interaction:

• Centralized decision makers anticipated and shaped customers’ needs

• Organizations treated people as passive consumers

• Detailed demand forecasts carefully scripted the actions organizations had with consumers

• Businesses focused on pushing product to large, loosely defined customer segments

• The approach many businesses took to their customers was: ‘We know better than you do about what you need,’

Fast-forward to today. Businesses have experienced a big shift from ‘push’ product-centred marketing to customers to a ‘pull’ approach which needs to be far more customer-centric. This has been brought about by factors such as:

• The revolution in digital infrastructure which has improved processing power, storage and data transport, cloud computing and mobile Internet access

• Government liberalization across countries and deregulation

• The economic shift – enhanced technology has reduced barriers to entry, making it much easier for customers to find information and switch suppliers

• Changing work life patterns and greater use of tablets and mobile phones which mean that customers are now connected 24 hours a day and require constant access to information

• Wider choice of communication channels from webchat to video phones, which means that customers want to interact with businesses in different ways.

• Informed buyers now taking control of the sales cycle

• Consumerization of business-to-business markets via increasing customer power.

The old-fashioned ‘push’ approach is one where organizations try to put product and services in front of customers who may or may not have knowledge of a company or realize they have a particular need, in an attempt to create demand.

With the advent of the digital age and social media, the ‘pull’ approach ensures that customers know who businesses are so when they have a need they know where to go to satisfy that need. This means that organizations must create advocates for their brands because the buying decision itself is often driven by the opinions of other customers, rather than what the organization says about itself:

• A recent survey for Consumer Focus found that more than 62 per cent of consumers trust what other consumers tell them more than what companies say

• Research by BT and Avaya found that 51 per cent trust the advice on review sites more than an organization’s official website

• Research from the USA by Nielsen found that 68 per cent of social media users go to social networking sites to read consumer feedback on products and services, with over half using these sites to provide product feedback, both positive and negative. Nielsen research also found that ‘recommendations from personal acquaintances or opinions posted by consumers online are the most trusted forms of advertising’

• A 2013 survey of Internet users in Britain by Reevoo found that 88 per cent of consumers consult reviews when making a purchase, and 60 per cent said they were more likely to purchase from a site that has customer reviews.

So the customer is more in charge of the buying process than ever before. This phenomenon is just as prevalent in the business-to-business sector as the business-to-consumer. Research by Sirius in the UK in 2013 found that business consumers were typically 57 per cent of the way through their purchase process before they contacted suppliers. The same research found that 45 per cent of business consumers had already consulted the Internet before speaking to the potential supplier, 24 per cent had spoken to team members and colleagues about supplier options, 21 per cent had discussed options with a peer and 11 per cent had accessed online communities for reviews.

Reputation and trust therefore have become far more important in the customer’s mind, as has the power of great service. As illustrated in Figure 1.1, further research by Sirius in 2013 found that brand reputation was driven 40 per cent by the product and price, 20 per cent via the quality of the processes used to interact with the organization and 40 per cent via the quality of the service the consumer receives.

Figure 1.1 Reputation

THE CHALLENGE OF CREATING CUSTOMER ADVOCACY

So service quality is playing an increasingly important role in the customer’s eyes. The issue for many businesses is that research shows that while 80 per cent believe they are delivering a great service, only 8 per cent of their customers would agree. Paradoxically our experience shows that the larger and more seemingly successful a business is, the more remote it becomes from its customers and the less agile and less empowered employees are to anticipate and respond to customer needs. At the time of writing (April 2015), supermarket chain Tesco appears to be an example of a large corporate that has lost its way when it comes to customer experience.

AUTHENTIC SERVICE

The best customer engagement experience feels authentic for each customer but not in a one-size-fits-all fashion. Customers value a personal and individualized service that is tailored to their needs. Their degree of engagement is determined by the total sum of the experiences they have with the organization – at each touch point and via whatever channel they chose.

Customer engagement is also driven by consistent service. So for example, in the UK the telephone and online banking organization, First Direct, consistently tops the polls for customer satisfaction and retention year after year within the financial services sector, as the levels of service it provides remain constantly high in every customer interaction, irrespective of channel.

In order to deliver exceptional service an organization needs to provide a consistent service at three levels, as illustrated in Figure 1.2.

Figure 1.2 The Service Pyramid

GETTING THE BASICS RIGHT

As a service provider, you do not pass ‘Go’ in the customer’s eyes unless you deliver the basic requirements of the service. The basics will be different for each type of organization. For an online retailer the basic requirements of the customer may be easy access to the site, the ability to easily navigate the site and being able to order goods and services in a speedy and hassle-free manner. For a restaurant or visitor attraction the basics may be clear signage, easy parking, access to clean toilet facilities, a warm welcome etc.

Often the basic elements of a service are the ‘hygiene’ factors that your business needs to get right in order to create a positive experience. They can be a mixture of physical and material elements such as product merchandising and opening hours, as well as things service employees do personally such as wear a uniform and/or meet and greet customers in a friendly manner.

The basics don’t necessarily equate to increases in satisfaction when done well, but they invariably lead to complaints and dissatisfaction when done poorly. If an organization does not succeed at getting the basics right then the chances are that customers are likely to become detractors of the organization and the levels of complaints will rise. So the trick is to do the basics brilliantly.

SATISFYING THE CUSTOMER’S NEEDS

The next level of service centres on satisfying the customer’s needs. For example a customer may need to have their car serviced: was the service carried out efficiently, on time and within the anticipated costs? Did the service organization meet the requirements that are important to the customer with minimal effort? An example for a train service could be whether the train ran on time, whether staff provided relevant information during the journey and the availability of staff at the station.

Customer requirements in this area generally relate to efficiency, reliability, quality, accuracy, knowledge and responsiveness. These factors help the service organization meet customers’ requirements. However, they are not factors which will differentiate the experience in a way that adds value to the customer and gives them something they don’t think they’ll get elsewhere. They are not factors which excite or delight the customer.

DELIVERING EXCEPTIONAL SERVICE

The majority of customer experiences fall in to the ‘satisfied’ category. The customer has received the service they were expecting and they think no more about it. The experience does not engender loyalty to the organization and as a consequence the satisfied customer is unfaithful: they are just as likely to use other similar products and services that your competitors provide, and less likely than highly engaged customers to repeat buy your product, to increase their average transaction value and to recommend your service.

By going above and beyond what is expected by the customer, an organization can enhance the level of engagement that the customer feels towards the brand. Engagement goes beyond satisfaction. It is fundamentally about an emotional connection the customer feels to a business or a brand. When customers become emotionally engaged they are passionate about the organization; they become advocates and promoters for the brand.

Successful service organizations create customer advocacy in three ways:

1. Personalized service: They offer a tailored, personal service that recognizes individual preferences and provides the customer with choices related to their needs. An example of this is how online retailer Amazon has created advocacy via its online service, remembering the products customers have bought in the past and making it easy to do business via its one-click option. Many organizations such as car retailer BMW remember the personal preferences of its customers so that they can individualize the service to each customer.

2. Above and beyond service: they provide more than the customer expects – either in terms of the little extras it may provide the customer, such as a carry out service to the car, a thoughtful unexpected addition to the product or service, or most likely, where service personnel take the time to help the customer in ways that are unexpected. There are many examples of this, ranging from the bank clerk who takes responsibility to personally visit a housebound elderly customer with the forms she needs to sign rather than the customer having to come in to the bank, to the airline representative who offers to post a letter on their return to the country of origin on behalf of a customer who has forgotten to send off an important document.

3. Service recovery: organizations with highly engaged customers take complaints seriously and realize the power of effective service recovery. This means ensuring that complaints are dealt with speedily, making it easy to complain and giving the customer the benefit of the doubt. (Research from my company, The Stairway Consultancy shows that the longer the customer has to wait for their complaint to be resolved, the less likely they are to be happy with the resolution. Global research company TARP has found that a customer who complains and whose complaint is dealt with well is more likely to remain loyal to the organization than those customers who do not complain at all (91 per cent loyalty versus 87 per cent loyalty for non-complaining customers).

These three drivers of customer engagement are not about what is being done, they are rather about the way it is done and how this differentiates the organization and builds sustainable competitive advantage.

So What is the Result of Exceptional Service?

If you or your colleagues still remain unconvinced of the need to take a lead when it comes to customer engagement, here is some empirical research which sets out more reasons why. Evidence points to increased levels of profitability and organizational growth when companies do well by their customers. As I have outlined earlier, they are rewarded by repeat business, lower price elasticity, higher repeat business, more cross-selling opportunities and greater marketin...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• Acknowledgements
• Preface
• 1 Why Does Leadership Matter When it Comes to Customer Experience?
• 2 Qualities and Actions of the Customer-focused Leader
• 3 Customer Insights and Priorities
• 4 Recruiting for Attitude, Training for Excellence
• 5 Motivating and Empowering Your People
• 6 Communication and Praise
• 7 Improve and Innovate
• 8 Consistently Consistent
• Bibliography
• Index