The customer experience creates the brand. Great customer experiences produce great brands and great business results. Look at companies such as Apple and John Lewis. Different industries, different business models. But they have one thing in common — large and growing groups of passionate customer advocates, earned by delivering an experience competitors can’t match. That, more than anything else, is why these companies lead their industries in profitable organic growth.
Every company can tap into that power. And making the commitment to deliver a superior customer experience can turn a laggard into a fierce competitor, or an “also ran” organization into an industry leader. Charles Schwab is an example. Between 2003 and 2005, Schwab was a troubled company that had a compound annual growth rate of –3.6 percent. Over the next two years, it began a dramatic recovery, growing at an average rate of +17.5 percent, and by 2008 it had regained its position as an industry leader. One big reason for the change: Schwab’s large investments in creating a stellar customer experience. The company’s Net Promoter score — the percentage of advocates or “promoters” among its customers minus the number of detractors — rose from -34 percent to +42 percent in the five years between 2005 and 2010. That’s a record-setting increase.
Why don’t more companies emulate Apple, John Lewis and others that win with customer experience? It’s a long, hard road, especially for companies that have neglected their customers. Turning that around requires energy and resources, and it takes time. But the journey is not mysterious, and the rewards are substantial. Our research and experience over the years have led us to fundamental insights that can help you get there:
- Understand loyalty economics. An outstanding customer experience creates promoters, and promoters are more valuable to a company than other customers. Customer experience leaders analyse loyalty economics in detail, so that everyone in the organisation knows not only where to invest but how much and what the payoff will be.
- View the experience from the outside in. Customers don’t see the complex structure and processes that operate behind the scenes to deliver their experiences. They see that series of interactions from the outside in, coloured by their expectations and their alternatives. Customer experience leaders embrace the same perspective, rising above internal complexity to see and manage the whole picture from the customer’s point of view.
- Design and deliver. You don’t need to be John Lewis to create this kind of customer experience. Yes, it is hard, and yes, it takes time. But it’s a process that can be learned and launched like any major change program. Eventually it can be built into an organization’s DNA.