Instead of thinking about customer experience in a holistic, strategic way, the responsibility for customer experience is often fragmented between product, marketing, sales, and other departments. Lately, the introduction of the CXO, “the officer responsible for the overall user experience (UX) of an organization [...] for curating and maintaining a holistic user-, business-, and technology-appropriate experience”, has brought attention to the lack of C-level attention to customer experience.
But why exactly should customer experience be of strategic relevance?
Customer experience impacts three major strategic aspects of a company: the product and brand, the required capabilities, and, ultimately, the competitive advantage.
Defines product & brand
Customer experience not only communicates a company’s products and services, but also increasingly becomes part of the product. The increasing software-augmentation of products allows and requires companies to design the interaction between the customer and the product or service in much higher granularity than ever before. In the end, the customer experience is what the customer remembers about the product or service. And this can also be expected to have a lasting effect on the brand perception.
Defines required capabilities
Companies have to build up the required resources and capabilities to deliver a desired customer journey. Traditional corporate strategy describes this as a company’s strategic challenge to create “internal fit”. Only the company that has the people, processes, and systems in place to deliver a delightful customer experience is going to win.
Ultimately, defines the competitive advantage
Customer experience is a differentiator with the potential of creating a competitive advantage. Tech companies already dedicate resources to benchmark their products and services along the dimension of user experience. And timing is important: While for many startups learning from the lack of customer experience of incumbents allows them to acquire customers through offering a superior customer experience, other companies such as Netflix, Zappos, or Amazon created a customer experience from the start that since functions as a competitive advantage.
If customer experience has this deep strategic relevance, which levers can a company address to build a competitive advantage?
Companies should focus on four areas to deliver a desired customer journey: technology and intellectual property (IP), product design, partnerships and integrations, and employees.
Technology and intellectual property (IP)
Technology supports, facilitates, or oftentimes enables the customer experience. As technology evolves this creates new opportunities to create experiences. “Easier”, “faster”, and “fancier” are important aspects of experience, all of them highly impacted by technology. Customers care about product specs and features because they associate them with an expected customer experience - e.g., RAM stands for responsive computer and customers expect to get everything done faster the higher the number is.
Creating a great customer experience requires companies to focus on a defined user and use case. This helps in designing a product or service to deliver the highest benefit for the user. Iterative testing and design changes are suitable ways to narrow down the options and measure the product impact on the user experience. By combining existing products and services and utilizing a company’s capabilities. Ultimately, customization and localization to increase customer delight as demonstrated e.g., by Chinese developer Apus (the “smallest, fastest, simplest user system”) that offers options to customize and localize Android and has seen massive growth to more than 80 million MAU (monthly active users).
"Design is not just what it looks like and feels like.
Design is how it works."
- Steve Jobs -
The customer journey reaches beyond the actual product or service and includes the sales, installation, education, and customer support experience - even the upgrading process to the next product generation. While in the past, many products or services were focused on one channel, the customer journey increasingly takes places across many different channels (omnichannel). Customer-facing processes need to be consistent across channels to provide a seamless customer experience. Partnerships and integrations can help a company to fill gaps where capabilities aren’t sufficient to deliver the desired experience.
Ultimately, employees are at root of providing a better customer experience. As an example, high touch customer support can directly impact customer experience and drive loyalty or word-of-mouth promotion. This is important when considering outsourcing/BPO and evaluating potential implications.
What does this mean for your company?
For your company, this means you should evaluate if customer experience is treated the way your customers and your P&L deserve it. Some questions that can help you in this analysis are: Who is responsible for the customer experience provided by your company? Do you think about customer experience in a strategic way? Do you know where you stand compared to your competitors? And which improvements could you make today to turn customer experience into your competitive advantage?