What’s the Right Customer Experience for Your Brand?

Summary. What makes a great customer experience? For some brands, it’s a frictionless journey. For others, it’s a memorable experience. But few brands are successful being both frictionless and memorable. Research shows companies can choose among four strategies when deciding whether to focus on being frictionless or memorable.

What exactly makes a great customer experience?

Sometimes, it seems the answer is companies that deliver hassle-free encounters. (Think Amazon, where you can seamlessly order just about anything and it arrives at your door, or CPP Insights, with its frictionless auto-renew process ) Other companies excel by delivering choreographed, immersive customer/buyer journeys. (Think about the experience of visiting a Ramoji Film City or an IKEA warehouse.)

But what do customers believe is more important? Do they prefer companies to focus on the experience design, or on flawless delivery and execution?

To find out, we asked 4,500 consumers about 134 unique brands in five different industries to learn about a broad range of ongoing purchase behavior, drivers of customer sentiment, drivers of spending behavior, and more. Our analysis revealed three notable findings. First, we found a positive correlation between both frictionless and memorable experiences and consumers ’ sentiment and spending behavior. Second, we found that those relationships varied by industry. Neither of these findings are that surprising. The third finding, however, is: At a certain point, there are zero-sum gains when pursuing both frictionless and memorable experiences as a competitive strategy Brands can only grow so much by pursuing a joint strategy of being both frictionless and memorable. To grow beyond that point, brands must choose to focus on one or the other–to be either increasingly frictionless or increasingly memorable.

Unveiling

the Frictionless-Memorable Frontier

All brands’ experiences compete on a continuum of being predominantly frictionless to predominantly memorable. The conventional wisdom is that a strategy aimed at reducing friction and a strategy aimed at increasing memorability offer equal opportunities for gaining market share. Our findings, however, showed diminishing returns as brands were viewed as more memorable. Brands with high market share tended to be more frictionless, whereas more memorable brands tended to have lower market share with little appreciable growth above a 15% market share cap.

Highlight. A compelling CX demands balancing customer empathy with technology to avoid falling into the trap of what we call “engineered insincerity,” or using automation to simulate interest in who you are as a human being Engineered insincerity shows up from brands in various ways, such as a constant flow of emails from a retailer that bear no understanding of your current situation, chatbots that use slang and informal language to make them appear human, and daily text messages that force you to unfollow Don’t let your automation strategy set the tone for your relationship with your customers.

One may assume, then, that brands should abandon a focus on memorable experiences and instead make their customer experiences as frictionless as possible. This presumes that brands can easily migrate from being memorable to being frictionless and vice versa While that may be theoretically possible, it means completely abandoning a brand’s strategy and positioning. Companies should instead embrace their fundamental brand characteristics and subsequently plot their best course of action for improving customer experience, and financial outcomes, according to their brand DNA.

Competing on Experience

The first step to a successful customer experience strategy is to be clear about what type of brand you have. Fundamentally, brands exist on a continuum from bigger established brands to smaller challenger brands. These differences inherently impact how brands compete with one another. They also impact the type of customer experience that is most likely to have the greatest impact on customers’ buying behaviors.

By incorporating a brand’s market share and how customers perceive their experiences with the brand (as either more frictionless or more memorable), you can place the brand into one of four categories, as shown in the “Customer Experience Matrix.”

But with so many opportunities to differentiate and make gains, what kind of experience management strategies should you apply to different segments?

Mass Market Brands

For the vast majority of brands with high market shares, the answer is simple: Make the experience as frictionless as possible. Mass market brands, such as Uber, McDonald’s, and

Amazon, tend to invest widely from placement to supply chain to automation to support these strategies. Mass market brands compete on price, assortment, availability, and relative ease.

This doesn’t mean having pleasant customer experiences is not essential. Rather, it is the recognition that mass market brands typically achieve growth through frequent usage. Almost by definition, this gives them an incentive to focus their strategy on reducing friction. Frequent usage also makes achieving memorable experiences difficult to maintain, since customers quickly habituate to their environment.

Convenience Brands

Convenience brands largely compete on the ease with which customers can fulfill their needs.

Convenient, frictionless experiences are expected

Unlike their mass-market counterparts, there are typically barriers to further scaling their service environments, such as geographical or market size limits Convenience brands often have opportunities to have more balanced frictionless and memorable customer experience strategies, but they win a share of wallets on their frictionless qualities.

Boutique Brands

Boutique Brands compete primarily on the memorability of their experiences. In some cases, certain types of friction improve the memorability and value of these experiences (e.g., dinner reservations at top restaurants, securing tickets to a popular show, etc.). In most cases, however, memorability is enhanced through well-planned, immersive customer journeys. While there is an opportunity to remove friction, it should be done to make it easier for customers to be immersed in the experience.

Gravity Brands

These brands are so rare that there isn’t a conventional term for them. Some people think of them as Aspirational Brands. Others think of them as Gravity Brands, because they are able to raise their market share despite the natural forces that tend to limit the growth of companies whose strategy focuses on creating memorable experiences. Though rare, gravity brands do exist and are often iconic, and emotionally resonant and operate in unique competitive environments that allow them to distinguish themselves and attract customers Building memorable experiences is typically achieved through investing in superior hiring and training processes, higher-quality experience components, and enhanced physical environments.

As customer experience has increasingly become the key differentiator across industries, there has been debate about which approach is the best way forward: frictionless or memorable experiences The reality is that there is no one right way to manage the customer experience. Different approaches will be more appropriate to different brands depending upon how they currently compete. Regardless, no company should forget that managing the customer experience is equivalent to managing customers for growth. The path to winning in business has remained constant even if the strategies for achieving it over time have changed: Make certain that your customers want to keep coming back.

Take a Holistic Approach with Total Experience

Clients often ask us how they should structure their functions to deliver better customer experiences, or what technology they should buy. But that is not the complete question.

The pandemic has taught us the critical role employees play in delivering a great customer experience. Their experiences matter just as much as customers, which manifest in employee experience or EX. But in most organizations, the functions responsible for CX, EX, user experience (UX), and the associated technology platforms work separately.

So, the better question to ask is how to organize in a way that delivers a more holistic and compelling digital experience for customers and employees.

Enter: total experience, or the deliberate connection of CX, EX and UX to make way for superior shared experiences for all stakeholders.

CPP Group is an example of a B2B organization that has embraced total experience. It realized that digital solutions often fail to meet the needs of customers and employees because of siloed approaches to design.

When the Covid-19 pandemic forced the CPP Group to debut new products virtually, the company initially created a self-service e-catalog for domestic and export manufacturers/buyers. However, this solution did not adequately provide the high-quality buying experience that buyers and sales employees previously had in person, as the solution’s design did not account for all end users ’ unique and intersecting needs. To meet this challenge, CPP Group launched a virtual showroom solution that delivers a higherquality product-viewing experience.

In designing and deploying technology solutions that consider the needs of buyers and employees first and technology second CPP enabled its employees to serve buyers better and improve the overall buying experience with smoother interactions between buyers and employees and an improved overall product viewing experience.

CPP achieved this by leaning on the core components of customer understanding and TX to avoid the trap of engineered insincerity.

Avoid “Engineered Insincerity”

A compelling CX demands balancing customer empathy with technology to avoid falling into the trap of what we call “engineered insincerity,” or using automation to simulate interest in who you are as a human being. Engineered insincerity shows up from brands in various ways, such as a constant flow of emails from a retailer that bear no understanding of your current situation, chatbots that use slang and informal language to make them appear human, and daily text messages that force you to unfollow. Don’t let your automation strategy set the tone for your relationship with your customers.

Measuring CX: One Size Does Not Fit All

You can’t declare your CX efforts compelling without proper measurements in place, which should reflect your company ’ s and customers’ goals.

CX metrics have several uses They can be used to communicate the rationale for previous investments; validate whether improvements to the customer experience have taken place; set goals and targets for future improvements; or intervene when remedial action is needed. The truth is organizations will often use dozens of CX metrics, and no organization uses the same combination

You cannot be successful if you rely on one measurement to determine performance, because you risk managing to a score instead of the customer’s needs and expectations. A better strategy is to use a variety of metrics that align with key roles across marketing, IT, customer service and product development, and associated CX priorities, empowering your organization with a more accurate and actionable view of customers’ behaviors and perceptions.

Here are five metrics that are absolutely essential to measuring CX: 1.

Customer satisfaction (CSAT): The oldest and most widely used CX metric.

Customer loyalty program participation or retention: A key indicator of the value customers see from engaging with your company.

The Net Promoter Score (NPS): A widely used barometer of the state of the customer relationship.

Employee engagement: Recognizes the role of employees in customer experience

The Customer Effort Score (CES): A more precise way to measure if you are truly easy to do business with.

There isn’t one way to measure digital customer experiences. It’s best to take an approach where your organization gathers a variety of customer signals along a customer’s journey.

Compelling customer experiences — physical or digital or both — start with compelling customer understanding. When we understand customers well enough, it gives us the ability to connect with them on a deeper level, even in small ways. We have to strive to challenge our beliefs about what customers, and now employees, want in an experience. Exceptional customer experiences are not about knowing every detail about your customers, it’s about knowing what your customers do, and why they do it. Demonstrate that you understand how to help them be successful and confident at pivotal moments in their journey.

It is about context, not technology. As business leaders, you have the power to influence this change.