A survey held at the HR GIG customer experience conference last September acknowledged that Maltese businesses believed customer experience culture in Malta was seriously lacking.
At the event, 129 company participants were asked to what extent they agreed with the statement “The level of customer experience in Malta is of high quality”. The average score was 1.8 on a five-point scale.
Having worked extensively in customer experience (CEX) and now at the University of Malta with over 20 local well-known service-based businesses, I am not surprised, and this is a gross understatement, almost a shocking indictment of reality today.
Most businesses say that customers are their most important asset, yet few have a plan for increasing customer lifetime value by focusing on how they create value.
Therefore, if CEX is one of the most important marketing challenges that an organisation faces, why is it lacking in Malta? Here are some reasons:
• A failure to understand the concept and confusion regarding the term CEX, with incomplete tools and approaches to design and manage its application;
• A failure to comprehend what matters to customers and what organisations do to meet those expectations, how to identify gaps between what is delivered and what customers want, and how to construct ideal situations;
• Failing to identify how technology has transformed the relationship between product brands and customer experiences, the degree to which the customer experience drives customer behaviour and subsequently purchases;
• A failure to fully understand that customer experience is a journey, not a single transaction, the single most important factor for business success.
Many define CEX as customer service or service excellence, (hospitality especially) without recognising that service is only one element of the entire experience.
Many believe designing and managing customer experiences is a marketing function, activities used to attract and retain customers, as if the customer is only associated with marketing and a retail store only with operations.
So, what is CEX?
Any interaction customers have with a brand (touch points) during the customer purchasing journey, i.e. a total customer journey. Their view of a brand can impact on a brand’s bottom line over the course of the relationship lifecycle.
Most businesses measure customers’ satisfaction with each transaction involving different parts of the organisation. Perfecting such touch points is a common way to maximise customer satisfaction. McKinsey, a global management-consulting firm, identified this as insufficient; maximising satisfaction at those moments diverts attention from the bigger and more important picture: the customer’s end-to-end journey, i.e. the total journey. Its research showed that customers didn’t much care about singular touch points. Today, it is an experience that matters.
Maya Angelou, the poet and civil rights activist, said: “Customer service is what a brand provides, and customer experience is what the customer walks away with. People will forget what you said or did, but will always remember how you made them feel”.
In today’s competitive marketplace, it takes more than low prices and great products for brands to thrive. CEX has become an important element for all businesses, and Customer Experience Management (CXM) provides the best strategy to ensure superior CEX.
CEX programmes succeed when the customer is at the heart of all your decisions. This requires:
• Understanding what your customers value most in the relationship with you, requiring identifying those journeys that matter and in which they need to excel;
• Getting closer to the consumer today, crucial not only for profitable growth but also to build brand strength and brand advocacy;
• Customers feeling valued;
• Organisational restructuring to design and implement effective customer improvement initiatives or business value growth;
• Brands gathering both appropriate and sufficient data from which to measure the customer experience accurately. Without these, it is almost impossible to solve issues in customer experience, largely because marketers can’t ‘see’ them.
Mckinsey indicates that CEX should be an organisation’s top priority and a key management objective, as positive customer experiences are vital to an organisation’s success.
Customers who are satisfied in their interactions with an organisation are more likely to become loyal customers than those who have a poor experience. It is cheaper to keep customers than to acquire them.
Research from Harvard Business School indicates that 80% of businesses in the US believe they offered a great customer experience, compared to the 8% of customers who felt the same way. This disconnection represents a large risk to profitability and value as customers are likely to act negatively.
My experience is that many local businesses rely on conversion rates, sales figures and online data reviews. These deliver experiences that are unmemorable and undifferentiated.
There is an abject failure to collect relevant insights and face-to-face qualitative information, such as surveys or interviews. Insights go a long way to empower an organisation to be customer focused, to align customers’ expressed intentions and needs with actions, and to deliver optimal experiences, rather than rely on third-party, subjective and structured data.
Louis Naudi is a visiting senior lecturer at the Faculty of Economics, Management and Accountancy at the University of Malta.