Trends in customer experience

Customer experience has long since ceased to be a buzzword within customer management. It has become indispensable for organizations that want to stay relevant and make a difference. More and more companies are therefore investing in an excellent customer experience. A lot has changed since we first surveyed the customer friendliness of Dutch companies in 2007. Three important trends have emerged from the past 15 years of electing the most customer-friendly company in the Netherlands.

Trend 1: The difference between good and bad is getting smaller

In the early years, the differences between the best companies and “the rest” were clearly visible. Whereas in 2010 and 2011 the difference between the winner and the number fifty was over 1.5 points, in recent years this has averaged only 0.6 points. Lower scoring companies are making faster progress than the top, which is understandable: raising a score from a 6 to a 7 is easier than from an 8 to a 9. So the difference between the top group and the middle group is rapidly shrinking, and with it, the distinctiveness! This trend is easy to explain: more and more organizations are investing in customer experience – they have to. Excellent service is the way to still distinguish yourself. This is for the following reasons:

Products are less and less distinctive

Delivering a distinctive product is becoming increasingly difficult. Competitive advantage disappears in no time, partly due to technological developments and partly because boundaries are blurred by online providers. Think of the Amazons and Alibabas of this world.

A distinctive brand no longer makes a difference

In the past, distinctive brands – think Philips, Nike and KLM – could still differentiate themselves with their unique branding. Nowadays, even these brands have to look for new ways to make a difference. They must rely on complementary (service) services in addition to the main proposition. ‘Branded utilities’ are therefore on the rise, with important focus on ease of use, perception and experience. Think of the Philips Avent app and Nike+. But Amazon’s Alexa or Apple’s Siri are also examples of complementary service services.

Customers drop out due to disappointing customer experience

A disappointing customer experience is increasingly the reason why customers leave. At the same time, there is growing awareness that (potential) customers are willing to pay for good service. Consumers see personalized contact as an important experience pillar. This is where you can make the difference. By the way, personalized contact does not necessarily mean personal contact. Good (digital) self-service facilities can also enhance the customer experience. However, it is important that approachable personal contact is possible if the situation demands it.
Those who finish in the top 10 of the most customer-friendly company in the Netherlands one year and sit back satisfied, may not even make the top 20 the next year. The lesson of trend 1 may be clear: daily hard work on your customer experience is not a bonus, it is necessary to remain relevant.

Trend 2: Functional service is no longer distinctive

Every organization is improving the customer experience, so if you want to remain distinctive – and thus relevant – you have to keep innovating and improving. Ten years ago, far from every organization had the basics, the functional needs, in place. Five golden rules emerged from the research of the first years of the most customer-friendly company in the Netherlands. These rules were clearly focused on the customer’s functional needs:

• Be available when the customer needs you
• Admit mistakes and fix them
• Keep your promises, including those you make in commercials
• Don’t bother with formalities
• Don’t bother the customer unnecessarily

Back then, you were already doing very well if you had this fully in order. Nowadays you often don’t make a difference. The rules still apply, but they have become hygiene factors, the rational basis that is now in order in almost every organization.

Extreme convenience

Anyone looking at this trend would think that there is little to gain in terms of functional elements. Yet there are still gains to be made, by focusing on extreme convenience. Calling instead of calling, not plastic but an app that allows you to activate vouchers on the spot. These are just a few examples of extreme convenience.
The good thing is that continuous technological developments ensure that extreme convenience can be surpassed again and again. The flip side is that expectations are getting higher and higher. As long as you start with your customer’s needs, you can keep up with those expectations. Preferably, you develop with the customer.

Emotional needs

Emotion was virtually absent from what was understood by customer friendliness 15 years ago. This shift to emotional needs began about eight or nine years ago. Open answers show that customers are mainly looking for genuine commitment to them as customers. That’s what makes the difference. Fortunately, organizations increasingly understand that customers are real people, driven primarily by intuition and emotions.
An “emotional golden rule” such as sincere engagement with your customer is difficult to capture in a process. It is not a question of either operational excellence, or product leadership, or customer intimacy, but all together. A good product is obviously the basis, then you keep costs under control with operational excellence and with customer intimacy you ensure a perfect customer experience.

Canoe model

This second trend is well captured by the Kano model. The first five golden rules are becoming the basic expectations. The customer doesn’t ask for it, but if you don’t have it in order, it leads to great dissatisfaction. The added value of the sixth golden rule, genuine commitment, varies by industry and sits between satisfier – the customer asks for it and satisfaction increases as quality increases – and delighter – the customer doesn’t expect it, but it creates a wow effect.

Holistic approach

When it comes to emotional elements, the key to success often lies with your employees. That goes beyond hiring the right people. Your employees only really come into their own in the right culture, where all the prerequisites are in place. No separate channels or silos, but a holistic approach. After all, the customer also sees you as a whole and not as “team social” or “the administration.

Trend 3: Increasing importance of people and society

Emotion also plays into trend 3: the importance of people and society. In 2017, now almost 5 years ago, a seventh golden rule was added to customer-friendly company in the Netherlands: ‘have an eye for people and society’. People expect you to do something good for the world. Whether you call it CSR or doing good, it turns out it makes customers more satisfied and loyal. And again, staying behind is not an option.
CSR is an important societal trend and has now spread to customer satisfaction. Customers are asking themselves: what do you, as a company, contribute to society? This is not yet equally important in all industries, but the importance is growing everywhere and is playing an increasing role in the assessment of organizations. Because of this development, the focus on maximizing profits is really off the table for many organizations. Consumers no longer accept that. Even for this third trend, you have to be in the movement.

Unbelievable

Zara already went wrong in this area once, after Turkish garment makers sewed cries of distress into the labels. Zara subsequently could not be reached for comment. And Primark did not fare well either when it was revealed that they monitor employees with cameras. If you treat your people this way, how sincere is your service, customers wonder. You can be so customer-oriented, but you become a lot more unbelievable if, on the other hand, you exploit your employees or suppliers.

CSR makes customers more loyal

The University of Groningen (RUG) and MIcompany also showed back in November 2017 that, in the battle for customers, organizations no longer distinguish themselves only through good service (trend 1) and providing exceptional customer experiences (trend 2). The responsibility companies take for the well-being of society is also a determining factor for differentiation. Corporate social responsibility therefore leads to more loyal customers. Customer loyalty – measured by the percentage who are still customers after two years – is seven percent higher among organizations that make a greater social contribution in the eyes of their customers. For all companies surveyed, investments in CSR have an indirect positive effect on customer loyalty. Noble convictions to be socially responsible can thus go hand in hand with financial motives, according to the RUG.

Three fronts

The three trends in 15 years of election of the most customer-friendly company in the Netherlands make it clear that you cannot stand still. Keep improving continuously based on the customer journey. If you want to belong to the top, you will have to make those improvements on all three fronts: functional, emotional and social.