If organisations want to lead with experience they need to stop “decorating” and start “renovating” according to Maxie Schmidt-Subramanian, Principal Analyst, Forrester.
During the virtual Forrester CX Sydney event, Schmidt-Subramanian said brands have behaved a little bit too much like they are redecorating because the customer experience strategy they came up with was not aligned with a company strategy.
“For example, there were customer programs we came up with that were really just helping us refine and fix problems that should have not been there in the first place,” she explained.
To change this, brands need to rally their teams around the value for customers, not the value of a customer. She said brands need to work from the inside out — essentially renovating — to improve customer value.
Schmidt-Subramanian defined value for customers as the perception of what they get versus what they give up. She also noted there are a number of misconceptions around the definition of value, firstly, value is never inherent but contextual.
“The context is the worldview … what a customer believes, how they’ve grown up, the situation a customer is in and comparisons that they have,” she said.
The second misconception is that value is only monetary. Schmidt-Subramanian said it actually has four dimensions: functional, economic, experiential, symbolic and economic.
She said, “Functional value is about accomplishing a task or a goal that you’ve set yourself. Experiential value is about the pleasant interactions or sensations that you have.
“Symbolic value is focused on the meaning that you create in relation to yourself, or to others. Economic value is about saving or gaining or making money.”
She noted as people interact with companies, they’re actually making trade-offs. For example, a company like Aldi where economics may trump experience.
“Somebody who shops at Aldi might do that because they’re getting big economic value from it, prices are low, they’re getting high functional value products but they’re trading in some experiential value. At the cashier, they’re being herded, and asked ‘can you pack faster?’ because the cashiers are so fast at Aldi that they sometimes look at you meanly making sure that you’re taking the products off into your cart as quickly as they’re ringing it up.”
Lastly, brands cannot deliver value to customers, customers are creating the values as they interact with brands. Schmidt-Subramanian said this is probably the most critical misconception that we need to try to eradicate.
“The customer is really the nucleus of that value creation. We need to think about value is something that happens as the customer and company get together, and the creation happens at that point. An organisation can really only help customers create value,” she explained.
To start renovating brands must do three things, define, pivot and measure.
Schmidt-Subramanian said, “Define what value your customers want and figure out what that you actually delivered. The second is that you pivot the organisation around value for customers to make sure that you do deliver it. And the third is that you track on an ongoing basis, whether you deliver value for customers.”