This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

January 4, 2017

The Customer Experience Revisited

As we have talked about on numerous occasions, positive Experiences are the key to organizational success. Now, from McKinsey & Co. comes a CEO Guide to help executives know how they may gain their competitive advantages by creating exceptional customer experiences. The smartest companies already know and act on the fact that they are in the customer experience business. Equipped with advanced analytics, business leaders now have the insights they need to build loyalty, "make employees happier, achieve revenue gains of 5 to 10 percent, and reduce costs by 15 to 25 percent within two or three years". To that end, the agency has revealed a few factors that contribute to the success of a customer experience initiative. This Herman Trend Alert is an overview of that extensive report.

Understand the interaction through your customer's eyes
Technology has given customers new power in dictating the rules for purchasing goods and services. Three-quarters of customers expect "instant" service---within five minutes or less of making contact online. Customers today know more now than they used to, have evolved, and have higher expectations. We can thank companies like Google and Amazon for that.

Identify the customer's entire journey (process)
McKinsey says we must pay attention to the "complete, end-to-end customer experience" from the customers' perspective. Too many companies focus on individual interactions, including billing, onboarding, service calls, and similar points in the customer lifecycle. By contrast, a customer journey spans the entire progression of touchpoints.

The advantage of focusing on the journey
Concentrating on the overall experience is much more effective than focusing on individual touchpoint interactions. For example, guests of hotels that focus on the journey seem to be 61 percent more willing to recommend those properties than customers of hotels that merely focus on touchpoints.

What really matters to customers colors everything
In one airport security case study, the determining factor in customer satisfaction was the behavior of security personnel, not the time spent in line. When you take the time to find out what's really important to customers and invest in giving it to them, you will be rewarded by bottom-line profitability.

The most progressive brands apply behavioral psychology to interactions
Understanding the role that customer perceptions play is vital to generating significant additional value. Using behavioral psychology can be a tremendous advantage to drive customer perceptions and satisfaction levels. Using behavioral psychology professionals can "merge different stages of interactions to diminish [customers'] perceived duration and engender a feeling of progress". These simple manipulations can be used to give customers a feeling of control and choice.

Expect better designed customer experiences
As we are beginning to see now, large established brands will use this information to tweak and refine their customer experiences to make a huge difference for consumers and for their bottom lines. What's coming is organizations' understanding of the value of focusing on the experiences of all of the stakeholders, not just external customers.

Find the entire CEO Guide from McKinsey at

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