According to a Gartner report on customer experience (CX), even with an emphasis on creating a world-class customer experience, over 70% of CX leaders struggle to design projects that increase customer loyalty and achieve results. This is especially troubling, considering that the report also indicated that CX drives over two-thirds of customer loyalty, outperforming price and brand combined.
Surprisingly, the report also suggests that positive interactions and personalization of the customer experience are not the biggest drivers of customer loyalty, but that continued improvements in the product experience itself play a larger role than was previously expected. This knowledge provides opportunities for customer experience innovation that businesses can use to enable a greater level of customer self-affirmation, and with it, a higher level of loyalty.
A report from Ascend2 showed that 79% of marketing professionals said that improving customer retention and satisfaction is the primary objective for their CX strategy, with 61% indicating that it’s also the top critical challenge they face. Businesses that want their customers to keep coming back for years must make a commitment to providing an excellent customer experience.
It’s the Journey That Matters
Ralph Waldo Emerson once said that “it's not the destination, it's the journey” that matters. When it comes to customer experience, he couldn’t have said it better. The customer journey is all the intersection and pain points a customer experiences as they interact with a brand.
Positive Emotional Experiences Drive Customer Loyalty
According to Harvard Business School professor Gerald Zaltman, 95% of purchasing decisions are made by emotions. To connect and resonate emotionally, brands must know who their customers are and what type of journey they are on. In an ideal state, emotional design anticipates and then accommodates user needs,“ he explained. “Does your brand have the proper tools to start connecting emotionally? Do you have specific personas and customer journeys prepared to respond accordingly? Do you understand customer motivations and needs at a basic level?”
The recent experiences that a customer has with a business stand out in their mind for three months, according to the Gartner CX report, and heavily influence their decision to continue doing business with a company. Gartner classified customer’s experiences into four primary categories:
- Interaction experience: The ease of use, convenience, personalization, uniqueness, and in-experience learning when the customer interacted with the business.
- Product experience: The product’s usability and utility, how it meets the needs of the customer, and how a customer’s life is enriched by using the product.
- Brand perception: The customers’ beliefs about the company and how it fits in the industry, and their sense of alignment with the values and mission of the company.
- Price: Was the product worth the money spent on it.
Interaction and brand perception are both elements that can be improved as part of the CX initiative, however, businesses should initially focus on experiences that enable customers to feel that they’ve made the correct purchasing decision and are personally benefiting from using the product or service.
Customer feedback, reviews, and VoC metrics are among the tools most commonly used to enable leaders to more effectively determine which elements are the most memorable and important to those customers, and which are most likely to stick in their minds, to be salient experiences (as Gartner refers to them) among the various touchpoints with the business. Davidson believes that qualitative data should be gathered to better define the customer journey. “Brands should always ask if they’re collecting the right type of customer data. Qualitative data is incredibly meaningful in terms of meeting expectations tied to emotional- and need-driven decision criteria. Qualitative data describes the reasoning behind the choices your customers make and includes opinion, motivational and attitudinal insights. It’s important to use a variety of techniques to capture these commonly hard-to-get insights. And with these insights, brands can truly elevate their design projects and customer experience,” he suggested.
Gartner describes the two most prominent salience indicators as issue durability and issue polarization. Issue durability refers to the positive and negative issues that a customer will remember over time, and issue polarization refers to opinions and impressions that have left a strong emotional memory.
Research from Gartner indicated that 44% of customers are concerned that they have missed a better option each time they made a purchase. By prioritizing the issues and experiences that leave memorable and personally meaningful impressions, especially those which increase the level of positive customer self-affirmation (i.e. “I made the right choice in buying this product or service”), a CX strategy can be crafted that has a much greater impact on customer loyalty.
Personalization for Improving Customer Interactions
Personalization can have a positive impact on the customer journey — but it must not be intrusive, and should be implemented to improve the interactions that a customer has with a business. Amazon’s personalization efforts are directed at helping a customer locate something they consider to be relevant, such as recent orders or products they recently viewed (and ultimately, place another order).
Customers care about the little things when it comes to personalization. An example of this is targeted emails from a brand a customer has already done business with. Customers should automatically be logged into their account when they click a link within the email. It’s not enough to recognize a customer. Personalization should help them do something more easily, solve a problem they are facing, or fulfill a need.
CMSWire spoke with James Brown, CEO of Smart Communications, about the importance of omnichannel, personalized experiences. Brown doesn’t believe there is a single approach that will magically do the job. “There isn’t one ‘silver bullet’ for developing an exceptional customer experience,” he explained. “The customer experience is incredibly complex — encompassing multiple touchpoints, changing preferences and unique customer needs — so businesses can’t rely on a one-size-fits-all solution or a ‘set it and forget it’ approach.”
Creating a unified picture of the customer as a person is a challenge that must be solved in order to deliver the best experience for the customer. Brown emphasized that in order “To build a meaningful customer experience, CX leaders need to use all of the tools at their disposal to engage customers in two-way conversations across the entire customer lifecycle. Doing so will require them to construct a comprehensive and tightly integrated ecosystem that provides a more complete view of the customer — with a goal of having conversations that are personalized, interactive and consistent across multiple channels.”
By using best of class technology, a brand can gather, analyze, and utilize all of the data that is required to personalize the experience and give the customer access to relevant content. “This will require them to embrace modern, digital-first tools that will enable them to break down internal silos, easily synthesize customer history and preferences and deliver the information customers want when and where they want it,” said Brown. “This may sound like a heavy lift, but when achieved, organizations can develop loyal customer relationships that are so important for long-term success.”
Corporate Values Must Be Aligned With Those of the Customer
Not only has 2020 brought many changes to the world as a result of the COVID-19 pandemic, but it’s also changed the way that businesses define their mission and values — how they approach corporate social responsibility — to customers. No longer can a brand afford to sit on the sidelines during a crisis or cultural event. Customers are interested in knowing where a brand they do business with stands in regards to social engagement, community involvement, racism, and societal norms.
Many large brands have made public commitments to join the fight against racism and police brutality. In late August of 2020, Uber sent all of its customers an email celebrating the 57th anniversary of Dr. Martin Luther King Jr.’s "I Have a Dream" speech during the 1963 March on Washington. Uber reminded those marching on the anniversary date that Uber stands with them, and issued a statement that said “We stand against racism. In July, we announced several long-term commitments to becoming an anti-racist company. Among these commitments is a responsibility to help create a community that treats everyone equally and with dignity.” Uber is a company that recognizes the value of CSR, values and commitment.
Last year a report from GlobalWebIndex revealed that 68% of online consumers in the United States and the United Kingdom would consider not using a brand because of poor or misleading corporate social responsibility and nearly 50% would pay a premium for brands with a positive socially conscious image. The emotional connection consumers make with a brand largely comes from how they perceive that brand in conjunction with their own beliefs and values.
Mike Wittenstein, founder and managing partner at Storyminers, spoke with CMSWire about corporate culture and how it affects customer loyalty. Wittenstein recognizes that it’s human nature to prefer to be around people that share one’s values. “In general, people like to do business with people (and companies) that share their values. For a few years now, there’s been talk of ‘Glass Box Brands.’ This refers to the idea that people (B2C and B2B) select the brands that serve them in part by how they treat people on the inside,” Wittenstein explained.
The concept and nature of corporate or brand culture extends to every industry. Wittenstein said that “In the fashion and grocery worlds, we’re seeing a move toward fair trade. Among quick-service restaurants (the fast food sector), customers are responding positively to companies that use some of their sales income to better educate their employees. Chick-fil-A in Atlanta is well known for sending thousands of kids to college and bringing some back to corporate. Others have similar programs.”
The ramifications of immoral or negligent corporate culture are long-lasting — consumers have long memories. Wittenstein understands that just as a positive business culture can increase customer loyalty, when business and customer values do not align, it can have devastating effects. “Companies that suffer from executive-level scandals involving dishonesty and poor moral decisions (both failures to set good examples for other employees) notice more quickly than ever before a flight away from the brand. These snap decisions by customers happen to be long-lasting. It’s quite difficult to win these customers back,” Wittenstein reiterated.
Customers interact with a brand through the company website, social media, customer service, interactions with employees, and all of those interactions play a role in defining the brand. Additionally, a brand’s mission statement, company culture and how it relates to its employees help to define a brand. In our hyper-aware culture, customers are able to see the culture of a brand all around them — at home, in the community, and on social media. Not only that, but customers that are not aligned with a brand’s values will speak out against it.
Reward Customer Loyalty
Customers like to know that they are valued by the brands that they support. Loyalty reward programs are a popular way of showing appreciation to customers, and are actively used by the majority of customers that have the option of taking part in such a program. According to the Accenture report, 77% of consumers participate in loyalty programs.
The Wharton Baker WisePlum Consumer Loyalty Study, released in August 2020, revealed a 7% increase in enrollment in loyalty programs over the first quarter of 2020, showing that even in times of crisis, loyalty programs provide a recognized and accepted means of customer engagement with a brand.
The study also indicated that of those customers who participated in a brand’s loyalty program, 80% were more likely to download a retailer’s app, were twice as likely to subscribe to emails and push notifications, and 3 times as likely to engage on a brand’s social media presence.
Tara Sporrer, SVP of marketing at goMoxie, shared her thoughts on the effectiveness of customer loyalty programs. “When executed well, loyalty programs deepen customer relationships, drive business results, and even create brand differentiation,” Sporrer explained. An efficient loyalty program should make a customer feel that they are important and that the brand cares about them as people first, customers second. Sporrer suggested that “Once a customer has joined a loyalty program, treat those customers like the VIPs they are by guiding them to special offers or information tailored for them.” Traditional coupons and personalized advertising may still be a part of it, but customers need to be able to recognize the value of being in a loyalty program. “Go beyond standard offers of discounts and promos, guide loyalty members to premium content in rich video format that extends in-person expertise to the digital platform,” said Sporrer.
A customer experience program follows the journeys of customers, and looks at each touchpoint and pain point that customers experience while interacting with a brand. By paying attention to those customer experiences that make an emotional or self-affirming impact, personalizing the experience, living up to a brand’s mission and values, and rewarding customer loyalty, customer retention and loyalty will improve and the experiences they have with a brand will be remembered for a long time.