Don’t delight, don’t innovate, and don’t correlate data – those customer experience strategies have very limited returns, according to Ed Thompson, Gartner VP and distinguished analyst.
And he revealed that the gap between customer experience leaders and runners-up is growing substantially, with those on top being “disproportionately rewarded”.
Speaking at the Gartner Customer Experience and Technologies Summit in Sydney, Thompson busted three customer experience myths and argued industry leaders are successfully ignoring some of the strategies that have become synonymous with customer experience.
“What you’ll probably hear most of the time is you want to delight the customer, innovate like heck and then use loads of data, correlate it and then draw conclusions and improve the customer experience using data and analytical [tools],” Thompson told delegates.
“I’m saying don’t. It’s a waste of time, all three. The best companies don’t do it, you don’t want to do it.”
1. Don’t delight the customer
Effective customer experience is about creating “effortless” experiences, rather than significantly exceeding expectations, Thompson said, noting the perception of financial returns continuing to grow in line with customer expectations being met was incorrect.
“If you move from below expectations to meeting them you get a massive improvement. The ROI pays off tremendously. And as you keep spending money it doesn’t really pay off.”
Thompson argues that while organisations should strive to meet customer expectations, it is prohibitively difficult to exceed them as they naturally grow with, and above, what an organisation actually delivers. Ultimately continuous investment to exceed customer expectations “doesn’t pay off”.
The alternative to delisting customers presented by Thompson is to create effortless experiences. For example, retailers should make it easy for customers to locate the store, banks can make service request easy to lodge, and utility companies allowing usage checks.
2. Don’t Innovate
According to the Gartner analyst, ideas and business processes are there for the taking and innovation from within is too resource intensive. Instead, companies should imitate successful organisations.
Often companies are lauded for their innovation when really they have just “repackaged” the ideas of original innovators, pointing out the success of companies applying the airbnb principle to other industries.
“Basically, steal the Airbnb idea, do it in your own industry and voilà you’re a prize winner,” Thompson said.
Not all ideas are viable nor is IP theft to be encouraged, Thompson says, but there are “loads of ideas to ‘steal’, you don’t need to come up with everything yourself”.
3. Don’t correlate data
Thompson pointed to Harvard Business Review research that found a lot of customer data was essentially useless in isolation and must be supplemented by “real” qualitative data to uncover the cause of customer actions. Essentially, organisations are better served by understanding what customers are trying to achieve rather than monitoring demographic or psychographic information.
Looking at such causation data uncovers the customer’s “jobs to be done” rather than what their behaviour correlates with.
Jobs to be done
One of the examples Thompson gave was an American housing company offering downsized properties to empty nester retirees. Despite extensive customer analysis on product preferences the company had little success in improving sales.
The research, and Thompson, suggests the motivation for not downsizing was not the houses on offer but a reluctance to immediately discard possessions and their associated family memories. Once the company discovered this through customer interviews, they began offering free storage to customers, immediately improving results.
“Sales went up 40 per cent, [they] became the most popular company in America for downsizing,” according to Thompson.
The job to be done, it turns out, was to “get rid of half my stuff”.
“It was not buying a house and it was not all the data they gathered. So the point is: not correlation, it’s causality.”