Customer service has never been the strong point of Cyprus businesses. In good times, most companies have survived despite poor to non-existent customer service. Now that times are tough Cyprus businesses are closing down one after another.
A few companies have always offered an okay customer service, tracking it with customer satisfaction surveys. However, even this level of customer service is not good enough at any time. In bad times it is suicidal.
Satisfied customers do business with a company occasionally or temporarily because it happens to be convenient for now, or they did not know any better. They will know better next time. You don’t want simply satisfied customers who are ready to jump ship at the first opportunity someone offers them a better price; you want thrilled and loyal customers who will stick with you, seek your brand and promote it to their friends.
In good times, a merely satisfied customer is a missed opportunity. In bad times, such as now, with tight money and oversupplied customers, a satisfied customer is risky and even dangerous, because you count on him when you shouldn’t.
If we simply satisfy the customer we miss a great business opportunity before our eyes: to create a relationship that will bring us repeat business, referrals and enthusiastic word of mouth. Even a customer complaint can be turned into a positive customer experience and a long-term business relationship, if we don’t confine our response to only solving the specific problem of the specific customer. We can even go further and use the customer complaint as a source of competitive intelligence and an opportunity to improve the experience of all customers.
What is customer experience? It has been defined as the holistic sum of all activities that the customer encounters in his journey of searching, identifying, buying, using or consuming, and interacting with your product or service and your company. What matters is total customer experience not any particular element of the experience or milestone along the journey. The usual maths doesn’t apply. Five positive experiences plus a negative one may not add up to four net positive experiences but to zero in terms of total customer experience. Nor is caring about the customer enough to deliver a great customer experience.
As Harley Manning and his colleagues at Forrester Research put it, poor customer experience is consistent with the company caring about the customer and everyone in the company doing their jobs. “Caring is not enough because customer experience is the result of an ecosystem of people, departments, and relationships that deliver elements of the experience,” says a recent study of theirs.
But does exceptional customer experience pay? According to Watermark Consulting, over the past five years, a period when the Standard &Poor 500 declined by 1.3 per cent, the portfolio of publicly traded companies that are leaders in customer experience produced a cumulative total return of over 22 per cent compared to a negative return of -46 per cent by the portfolio of laggards in customer experience.
Customer experience management has countless advantages over other competitive differentiators and boosters of business performance. First, it is a soft innovation that establishes new standards of quality, experience, and sales; as such it is low cost, in contrast to costly hard innovation (R&D). Second, it is easily understood requiring little marketing effort. Third, while “the idea may be revolutionary, the steps to get there are evolutionary”, and hence not outside the realm of day-to-day business. Fourth, it leads to repeat business, referrals and positive word of mouth that save on marketing costs while boosting market share. Fifth, it raises the value-for-money and pries open the wallet of reluctant customers in tough times. Sixth, it justifies the payment of a price premium and gets the business outside the arena of cut-throat price competition, especially in tough times. Seventh, it both enhances current income and profits and boosts the prospects for future growth.
Why then are companies so slow in getting on the customer experience bandwagon? Customer experience is a journey not a destination. Fixing one bit at a time doesn’t work; it needs fixing end-to-end.
Customer experience is personal and hence customer service must be customised, or, even better, personalised. The one-size fits all or the standardised cookie-cutter approach does not create exceptional customer experience and loyalty; the best it can achieve is a mildly satisfied customer. Experts agree. Exceptional end-to-end customer experience is the ultimate source of competitive advantage, and one that is sustainable.
But how do you create it? In a recent book titled Outside In: The Power of Putting Customers at the Center of Your Business, Harley Manning, Kerry Bodine, and Josh Bernoff provide the answer.
The first and most fundamental step is to “know thy customer”. If you don’t truly understand your customers, their needs and expectations, even your best-intentioned efforts to serve them may annoy and frustrate them. The classic example is the hotel front-desk officer who insists on telling the business traveller, rushing to a business meeting, about all the facilities and activities of the hotel.
Understanding the customer requires research that goes beyond the usual customer satisfaction surveys: who are your customers, what are their needs and expectations, and how do they perceive their interactions with you. Replace your best guesses about the customers with real information about what they are experiencing and feeling. Only then will you be able to improve their experience.
Once you understand your customers, design and implement customer interactions that meet their (individual) needs and exceed their expectations. Focus on changes that really matter to the customers. To do this you draw on the ideas of customers, frontline employees and partners to arrive at imaginative total solutions not piecemeal patchwork. Engage a sample of customers in the design of customer experience and test it with a different set of customers. The new design must encompass people, products, services, location, communications, websites, social media etc. Get your best customers to co-create the experience, so that they feel they have a stake in your success, and let this small group of highly vested customers add value to the majority of mostly passive customers.
This is only part of the game. The other half is going the extra mile to exceed expectations and to surprise the customers with low-cost but memorable experiences.
Finally, and perhaps most importantly you need to create a customer-centric culture in the organisation that imbeds customer experience excellence into the DNA and the value system of everyone in the organisation. A customer-centric culture is a system of shared values, attitudes and behaviours that focus on delivering an outstanding service and experience to the customer. For this of course you need to have hired the right people, provide them with continuous training and maintain the right attitudes.
Were Cyprus businesses to implement Customer Experience Management (CEM) along these lines they would not only survive through these tough times but they would also succeed in turning the crisis into opportunity, since few businesses globally and even fewer in Cyprus practise it systematically and comprehensively.
According to the Forrester 2012 Customer Experience Index only three per cent of companies “can legitimately claim that they have excellent experience which differentiates offerings, drives loyalty, inspires word of mouth, and fuels growth. Most brands score OK or poor.”
Some may object that even with exceptional service there would be no increase in sales and profits since customers’ budgets are tight. This is a very static and narrow view of the world. Reluctant customers can be induced to spend more and buy mo
re; non-customers can be turned into customers and customers can be attracted from competitors who provide poor customer experience. People who now prefer to shop overseas or online can be induced to shop locally.
Moreover, the 2.5 million tourists and half a million expatriates and foreigners visiting Cyprus on business are potential customers, many of whom are now discouraged by poor customer service. Most importantly, Cyprus businesses must open more to the rest of the world and sell to growing markets such as the emerging economies, where exceptional customer experience can win them customers for many years to come. Where there is a will there is a way. But, do we have the will? This is the million euro question!
Dr Theodore Panayotou, director of the Cyprus International Institute of Management (CIIM), was an economics professor at Harvard University and consultant to the UN and to the US, Chinese, Russian, Brazilian, Mexican and Cyprus governments. He was recognised for his contribution to the Intergovernmental Committee on Climate Change which won the 2007 Nobel Peace Prize
