What 'customer experience' really means: Prophet's Harry West

‘Customer experience’ has only become a buzzword relatively recently. Why the sudden increased interest?

The short answer is social media. It’s outshouting paid media, and what people talk about is their experience. If you’re trying to build a brand you have to [increasingly] focus on building a great experience as that what people are going to share. So what we’re seeing is dollars moving from communication design to experience design.

The reason it’s a buzzword is that people are starting to grapple with that and are rethinking the skillsets needed in that space. If we think about it from a global point of view, it is largely down to the rise of democracy. We’ve moved from a world that was business-centric to one that is customer-centric, and I think the rise of customer experience is an inevitable consequence of that change.

Shouldn’t this always have been the crux of marketing?

Customer experience is a very broad term, and companies that succeed in it do a number of things. One is that they are truly customer-centric, which is very difficult to do because the voice of colleagues and the bottom line is usually louder than the voice of the customer. Also in one way or another they listen very well to what customers are looking for.

When you think about the way the term is being used now, it’s unfortunately been watered down to become a brand standard—a new term is just being applied to an older deliverable. To win in this space you have to be completely holistic. Companies that have been successful have made bold moves and dramatic changes in the experience they offer. The bolder the move, the greater the [chances of] success.

Why do so many brands still deliver such a poor experience?

It’s very difficult to deliver a good experience, and most companies are just trying to fix problems right now. It’s incredibly expensive to change everything, so you don’t; you oil the squeaky wheel, fix the problem and try to make the change pay its way. Most companies are in that stage. It’s an exception of companies that have made the bold move.

One we helped [in the US] is [mobile carrier] T-Mobile. Telecoms providers were making incremental changes, and we recognised an opportunity to do something quite different. The convention in the [telecoms] industry is all about coverage, price, and some elements of service. We did some research with consumers and what we heard was that they hate you [telco brands]. It wasn’t immediately taken seriously—more as a cost of doing business—but T-Mobile asked us to delve further and we realised that people hated their service providers because they felt trapped. So we went back and said, 'How about we unleash their consumers—take their handcuffs off?' It was an incredibly bold and scary move. Once you free your customers [from contracts] they can leave. But with its ‘Uncarrier’ strategy, T-Mobile saw more net adds than all its competitors combined, and its stock price doubled. We looked at everything the industry was doing to piss of the customer and took it away, and it worked. But that sort of thing is difficult to do because there will always be people who say it’s too big a change.

Do you see any universal rules to good customer experience?

At a high level you think of segmentation of customers. You want to figure out who you are going to go after, then think of the right value proposition to offer that target market. The tough thing to do is to figure out the priority of investments. If you’re creative, you can always think of better ways to serve the customer—but the question is how to do it cost effectively.

Generally, if you can figure out a digital solution to preempt human intervention, that’s a really effective solution. We’ve done a lot of work in the financial space and I would say these companies are aware of the challenge and are working very hard to try to improve customer experience. Some issues are a disconnect between the dominant way customers interact and how banks make money. As a consumer, most of my experience is doing day-to-day transactions, but that’s not how a bank makes money. There’s a bit of tension there. The bank is thinking about profitability that comes from more intermittent connections. Secondly, they have legacy systems. In many banks, even if they want to have a more holistic view, the systems are more organised around products than the customer. The third challenge is that you have such a range of customers—banks are trying to serve customers who want to do everything from their phone, but they also have to serve customers who developed habits prior to the smartphone. It’s difficult to manage all modes of interaction well at the same time.

Which sectors are really getting it right?

The areas where we’re seeing the most activity now are those you might think of as the most challenged: finance, healthcare and believe it or not, B2B industries. It’s partly because these are large industries—they have a big share of wallet, and for legacy reasons the inefficiency of their experience is most obvious so they’re working very hard to improve it.

In B2B, the mindset is [typically] that the customer experience doesn’t matter. But that is changing with the realisation that there’s always a customer at the end of the line. But if we look for a canonical example of success, it’s often in more overtly experiential industries such as hotels and entertainment, where the customer experience is more obvious. The trick is to be able to see why something worked and not be deluded but apply the principles in general to your industry. Some principles from Disney, for example, are fantastic. Most other industries can’t apply them literally, but at the high level they do apply: understanding the customer, figuring out the touchpoints, setting up measures to track the impact of change and then fine-tune, putting in place a high-level governance system that makes sure something is a successful ongoing endeavour. You can apply those principles to most industries.