Back in 1989, my hero Frederick F. Reichheld was busy proving that loyal customers and loyal employees can be translated into cold hard dollars.
He not only considered research in which customers simply indicated their intention to be loyal, but also showed that organizations who focus on loyal customers and loyal employees demonstrate enormous differences in turnover, profit and customer value figures.
I was 11 in 1989, and obviously wasn’t particularly interested in these themes, but 1999 saw the publication of his bible The Loyalty Effect which I was delighted to read.
For me, this was the first firm evidence of what I believe to be true: namely that good treatment of customers and employees can be translated into cold hard dollars.
The emergence of customer experience
In the years which followed, loyalty became less fashionable and attention waned.
Many companies were struggling with the question: how do I get that satisfaction score higher than 7.5?
That figure hasn’t budged for years. The issue was much too complex for many people to tackle.
While the concept was simple enough, as everyone would agree, realization in practice is so complex that people give up.
Around 2003, Reichheld introduced the phenomenon of the NPS score which was followed by books such as the 9+ organization and The super promoter.
The NPS score, which actually translates the complex concept of loyalty into a simple question, put customer centricity back on the map.
The customer experience management field also put in an appearance in that period, its aim being to create enthusiastic and loyal customers.
Contradicting noises were heard in 2013, namely that customers are not at all interested in that brilliant level of service which exceeds their wildest expectations, but rather in the most convenient experience.
Although this research is not as firmly linked to dollar benefits as that by Reichheld, but simply to the intention of loyalty in the questionnaire, it is certainly a notion in line with my thesis.
So what goes wrong? In my view, the idea of loyal customers tends to be quickly linked to exceeding expectations. And rightly so.
However, the approach taken is often wrong. Organizations soon take to showering all kinds of gifts and flowers on customers.
Yet the simplest of services can exceed their expectations.
Think in terms of convenience, which is a driver of extremely satisfied and therefore loyal customers.
By also offering convenience therefore, you will certainly exceed customer expectations in the end.
The basic human elements in question concern being heard, being kept informed and employees sticking to their word.
After all, this is certainly not the standard experience during consumer interaction with companies.
At the same time, because companies find it much harder work to offer such a friction-free experience, they continue to focus on the gifts and flowers.
So what purpose does customer experience serve?
Customer experience is therefore the target in discovering the perfect experience for your customers.
If that turns out to be convenience, you make sure you study all your customer experience journeys from the convenience perspective, and remove any bottlenecks where possible.
If sticking to your word turns out to be your organizational bottleneck, you make sure you study all your customer experience journeys from that perspective.
The rationale of customer experience is therefore (1) to understand your customers’ true drivers and (2) to apply that perspective to your end-to-end journey, adjusting them wherever there is a mismatch with these drivers.
By doing so, you will exceed your customers’ expectations and create loyalty. In due time, this will translate into hard cash.
Read the other articles in the Customer Experience miniseries here:
- What purpose does customer experience management really serve?
- CRM versus CEM versus CCM
- Experience Engineering: a brilliant discovery, but how can you start it right now?
- Customer Experience versus Patient Experience: surprisingly similar.
- What is the shelf life of customer inspiration? 3 x 7 tips!