A customer-inspired experience is critical to growth. According to a Temkin Group analysis, a great customer experience increases likelihood to recommend by 19.5% and likelihood to repurchase by 18.4%. And the best way to get that inspiration is through those who talk to customers every day – your front-line employees. In this piece you will receive the first key of creating a great customer-inspired experience. Keys two and three will follow soon!
This seems like a no-brainer. Companies know what matters to their customers, right?
In fact, many have it wrong. Leaders get so focused on their tangible capabilities that they no longer see through their customers’ eyes, and use their over-informed perspective to prioritize efforts. As a good example, I worked with a global fast food company to determine the best way to increase growth. This company was laser-focused on R&D – inventing the newest menu item to drive that bump in sales. They applied a very rational lens to their customer experience – if we provide good food fast and keep coming up with new items, we’ll grow.
This approach is so alluring that it is no surprise they succumbed to it. And sure enough, the company was rewarded with a spike in sales every time they came out with a new food item. So, like most companies focusing on next quarter’s results, they kept feeding the R&D beast. But despite these sales spikes, their same-restaurant sales continued to drop each year.
We identified a segment of customers who visited their restaurants more than any other. But even within this segment, we found huge discrepancies on monthly spending based on emotional engagement.
Engaged customers spent $8 more every month than average customers, and $14 a month more than those who were disengaged. We shared this with the company, then asked them to identify from the following list which were the top drivers of engagement.
What do you think is the top driver? Let’s compare your guess with the executives of this company. Which one item had the biggest impact on emotional engagement, and thus revenue?
Their leadership chose rational items – speed of service and taste of the food. But these are table stakes. A slow restaurant with bad food will lose customers – but getting the food out 5 minutes faster will not generate frequent return visits. As Dunn Bros Coffee understands, emotional connections bring people back. In this case, the Warmth of the Greeting was the top driver. Yet this company’s focus on R&D led to the rest of the company – particularly the hiring process – to be starved for resources. Interestingly enough, they study Chick-fil-A – but do not make the same commitment in their people. This company failed to understand this first key: Identify what truly matters for your customers.
This discipline is critical for any business. On a very different front, I have done quite a bit of work with Health Savings Accounts (HSAs). While it is very difficult to build emotional engagement with HSAs, it is still critical to understand what really matters for your customers.
Earlier studies showed a strong relationship between consumer satisfaction and the profitability of the individual account holders. Satisfied consumers deposited more money and were more likely to use self-service options, meaning both higher revenue and lower cost – a double win! (One note: the Net Promoter Score did not have a strong a tie to profitability. This is often true in health insurance products, which typically see negative NPS scores. Nobody is a health insurance promoter!)
We wanted to understand what drove an account holder’s satisfaction. Whereas many of the hypothesized factors had connection, one stood out far above the rest. Look at the list and see if you can determine which it was:
Do you have your guess?
Confidence in the HSA Bank is a logical conclusion – especially after the previous discussion on emotional connection. Unfortunately, it did not have a high impact. The company invested significantly in the debit card, but improvements in debit card ease of use had almost no impact on satisfaction. What did matter was the Website Ease of Login.
Once you know the answer it makes sense. Typical HSA consumers log into their website only twice a year. Worse, a combination of regulatory requirements and a lack of effort made this an arduous experience involving the knowledge of the bank account number and two separate passwords. As a result of this effort, many users never really learned how to login and eventually disengaged with the account. Yet, there were some users who took the time to learn the process – and they were very satisfied.
This study completely changed the company’s development focus. Previously, the difficult login was simply accepted as an issue, not considered worthy of attention. But once the company understood its importance, they kicked off two work streams to attack the issue.
First, they created education on the login process. Once account holders learned how to login, they did engage with the account. So the fastest way to react was to create better education. The login experience became a topic in webinars and in-person training, and job aids were created.
For a long-term approach, the company kicked off a development project to improve the experience. By understanding what really mattered for their customers, they were able to alter their development pipeline to address the key need, and were rewarded with an immediate increase in logins.
Here’s the punch line. Both of these examples came from Fortune 100 companies. They each had tons of resources – but were too close to their products to understand what really matters.
We tend to take a rational approach towards our products or services, acting as if our customers spend as much time thinking about them as we do. It can be hard to take a step back and get that “beginner’s eye.” That’s why we end up focusing on the wrong areas – the speed of the food or the debit card. We tend to focus on the items we most want improved when we use the product. We don’t care about the warmth of the greeting because we’re there anyway – we want our food fast. And we know how to login because we do it every day. Why would we need to improve the login process?
How do you determine what matters most? This white paper lays out a brief overview of the process required to understand the drivers of your customer experience. Feel free to email me with any questions!
Taking the time to understand your customers’ true needs helps to make sure you are focusing on what matters. Start by reviewing your past market research. Have you taken the time to understand what drives your customers? Once you identify What Really Matters, you are ready for the second key: Use Your Whole Team to Innovate.