Why is customer experience so important? And, why is it important now?
Understanding this will help you be better at participating in the experience economy because it’s not just about product. It’s also about business model.
Anyone who uses technology knows that technology has become more human. It seems like that’s just been the trajectory. In fact, it hasn’t been. Or rather, it seems that the focus on making technology more human is accelerating. Computers were always hard to use. Just ask anyone working at a big company doing expense reports, or booking travel.
Interfaces were designed for professionals (accountants or travel agents) but then were expected to be used by regulars (self-service FTW).Why has customer experience become so important? Why now? What should you do about it? 3 tips: Click To Tweet
All of a sudden it seems that everyone is talking about user experience and customer experience. Why now? Why wasn’t it always obvious that software should be easy to use or technology easy to integrate into our lives.
Ben Thompson is developing Aggregation Theory as a way to explain the large technology “aggregators”. I won’t bore you with the details, but in his email today (you should subscribe, seriously) he wrote the following that got me wondering, why now? (emphasis mine)
That last sentence is the key: the critical takeaway from Aggregation Theory is that in the Internet era you dominate your industry by offering the superior user experience, as opposed to the old world strategy of controlling distribution. If you have the users you have the power, even when it comes to the most differentiated content in the world.
It’s easy to be lazy and think a better experience is better than a worse experience, and move on. But why now? What has shifted to give power to consumers? What has changed that owning distribution is no longer enough? I don’t know if the fact that barriers to distribution are no longer the barriers they once were, and so therefore a new vector for competition has emerged to fill the void (of defensibility / competitiveness).
Why does the consumer have so much power now?
As I was riffing on this in my mind, I came up with three things to consider if you want to understand how you can use this shift to experience:
- Transparency. Did anyone ever wonder about phone service when you could get phone service from anyone as long as it was AT&T? Probably not many people. Then, once there was a little competition it became of interest to compare offerings… but all consumers could do is compare based on what the vendors told us. Not only was it hard to get information, there wasn’t much accountability. We believed what the carriers told us because that’s what we did. Now it’s much easier to have transparency into offerings that are beyond the control of the vendor. This creates a more educated consumer.
- Discovery. Once a consumer is educated, technology has enabled greater discovery. I remember once calling ADT (my home alarm company, that I didn’t like) and asking them who they competed with. Other than looking through the yellow pages (which I didn’t trust) I couldn’t figure out how to find other companies that serviced my neighborhood. Needless to say, I was stuck with ADT. Now, competitive offerings are never more than a search away.
- Reduced friction. It’s easier to find out how things work, and to discover alternatives. It’s also become much easier to switch. I know retail banking business is built, in part, on making it hard to switch banks. Or, said differently, the banks aren’t really incentivized to make switching easy. Same with cable companies. The truth is that it’s even easier than ever to switch providers, and getting easier. With respect to banking, the European Union has taken a posture that financial data belongs to the customer and that banks have to make it portable. Other regions will follow, and many already have.
What should you do?
I think that if you want to build trust with customers and shift towards this new customer-first world, leaning into these three items will help.
- Be authentic. If everyone is going to find out that your an asshole, there’s really only one solution. Don’t be an asshole. (This by the way, is the hardest thing about parenting… I can be a great guy 99% of the time and my kids will copy my behavior from the other 1%. It’s always a struggle to be my best self.)
- Be visible. Put that authenticity on display. In blogging’s early days, that was one of the things about corporate blogging that was a concern. Companies thought that if the gave their employees a stage, they’d leave (or get poached). Well, those employees were poached anyway and these companies missed out on the social relevance that comes from participating.
- Make it easy. And, yes, that includes making it easy to leave. The best bosses publicly thank good employees that leave, regardless of past differences. Why? Because every employee that stays then knows that the company is sorry when a good person leaves. Just as they’re sorry to lose a customer. Each one matters, and the ones that stay know they’re valuable when we celebrate each other.
On ‘making it easy’, think about retail credit cards for a second. Credit cards have a ton of benefits. Did you know that banks sell their cards based on the benefits, then hope customers don’t use them (because it costs money to deliver them)? Have you ever tried to use a price matching service from a credit card? Or use miles/points for something really valuable (like travel on a holiday weekend)? Yeah, hard to do. Why offer a benefit, then make it hard to access? You’re definitely not thinking of the user when you do. Everything has to be easier.
Unfortunately, it’s not as easy as it sounds. How many of us are introspective enough to truly be as authentic as we’d like? It’s even harder for a company. For a company to be authentic, perhaps realizing that their product isn’t the best, but still does some really good things… that’s a hard thing to admit.Competing in an experience economy requires authenticity, visibility, and simplicity. Here’s why: Click To Tweet
It’s scary to put employees out there so that your best ones can be poached. It means you have to work hard and create an environment where people don’t want to leave, rather than hoping that the friction of leaving is greater than the pain of staying.
Hard stuff. But really rewarding.
Postscript: This advice isn’t just for companies, it applies at an individual level too.