In this post, we examine the relationship between customer experience and brand. Which is better at driving customer engagement and where might the Chief Customer Officer fit in to all this?
In a recent article in The Drum, Joe Heapy, a co-founder of Service Design Consultancy Engine, argued that customer experience is now starting to lead brand when it comes to communicating your business.
I think he may have a point.
In the article, Joe argued that brands like Uber and Amazon have grown big with little to no brand marketing effort. They have built their businesses almost entirely on the quality of their service proposition. The customer experience they provide builds loyal and in some cases almost fanatical customers. So much so, that when Uber was threatened with closure in London, almost 850,000 people signed a petition supporting them. This, even though Uber is just about as toxic as a brand can get.
But is this shift towards customer experience something that is only relevant to tech start-ups, or is something bigger going on here?
Let’s take a look.
From brands to experiences:
For decades, businesses have relied on brand advertising to create emotional short cuts to purchase in the minds of target customers. Tried and tested over many years, it has been by far the most effective way to build businesses. In fact, some might say too effective, leading to brands often making promises that don’t quite stand up to scrutiny. This was most recently seen with the Fearless Girl campaign in the US. Here, a Wall Street firm created a campaign celebrating women, while at the same time failing to offer pay equality to their own female employees. A spectacular own goal.
And while brand advertising can of course still be highly effective, thanks to digital there is a new game in town.
It is of course, customer experience.
It’s all about me, myself and my iPhone:
In a 2015 study about mobile behaviour, Google found that people are more loyal to their needs in the moment than to any particular brand. As a case in point, they noted that 65% of smartphone users agree that when conducting a search, they look for the most relevant information regardless of the company providing that information.
Clearly consumers are starting to value immediacy and utility over brand. And as we stand on the cusp of mass adoption of voice search, this is only set to accelerate.
Already we are starting to see technology such as Amazon’s Alexa threaten to supplant brands with automated purchase decisions in which tech companies, not retailers, own the customer relationship. This behaviour bypasses the need for any emotional connection between brand and consumer at all.
But voice search is just a niche activity, right?
According to Comscore, up to 50% of searches are set to be made by voice by 2020, so clearly there is not going to go away.
So, if brand advertising is diminishing in effectiveness, how will businesses differentiate themselves? The answer as shown by the likes of Amazon and Uber is customer experience. And increasingly this is starting to apply for all types of businesses, not just tech start-ups.
Customer experience is all about utility. It is about what a brand does, not what it says. People tend to search for what they need, not what they feel – at least when they want to buy something. So those businesses who can ensure that they are able to meet their customers’ needs in the here and now and with an exceptional customer experience will win. And how do they do that?
Well this is where digital transformation comes in.
Digital transformation to what exactly?
Much noise has been generated in the consulting industry about digital transformation, but there is often a deafening silence when it comes to defining what it actually is.
Increasingly through, digital transformation is about moving the entire organization from being brand centric to customer centric. And it is not all about bits and bytes – it is as much about establishing a customer first culture and mind-set as it is about integrating the latest AI.
In order to be successful in the digital world, businesses must start with a clear articulation as to what type of customer experience they want to have and then put all of their efforts into delivering that.
For example, take the airline industry. If you are British Airways the experience provided has always been about service – “To Fly, To Serve” as they say. However, under pressure from low cost carriers they are now diluting that service proposition in order to compete on price.
This creates two major problems.
Firstly, by reducing the quality of their service they are creating a disconnect between what they say about themselves and what they actually do. This leaves customers feeling anything from confusion to outright betrayal. Secondly, by attempting to mimic the low-cost carrier model, they are diluting their own unique customer experience and with that, their entire market differentiation.
What BA should in fact be doing is making a clear decision about what their customer experience will be and then pulling out all the stops to building a culture and transformation programme needed to deliver that. Crucially, this must be delivered constantly, it is not a one-off project. So, who should guide this? Enter, the Chief Customer Officer.
The role of the Chief Customer Officer.
The Chief Customer Officer should define and be the guardian of the customer experience across the entire organisation. This is not a marketing function or an operations function, it drives everything.
The CCO needs to ensure buy in from the board and ensure it is central to the culture of every aspect of the business. Both in terms of what it says and what it does.
Closing the gap between the “as is” and “to be” customer experience becomes the focus of the digital transformation programme, which sets up the internal capabilities needed to deliver ongoing improvement towards that common goal.
So, in the case of BA their innovation should not be led by mimicking their low-cost rivals. Replacing in-flight meals with M&S sandwiches diminishes rather than raises the customer experience.
Instead their focus must be on constantly driving towards becoming the ultimate provider of customer service in the sky. Their culture must live and breathe it and their entire innovation efforts must be focused on delivering it, while also pushing down prices.
Overseeing this must be a Chief Customer Officer. Because as brand advertising was the past, the customer experience function is now the key to success in an increasingly customer-led world.
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