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1. Customer experience is the new competitive battleground

Customer experience is how your customers perceive their interactions with your company.

Experience matters more than ever. In today's hyper-competitive market, product features and pricing are easily replicated. What sets companies apart is the experience they provide to customers across all touchpoints. A superior customer experience leads to increased loyalty, positive word-of-mouth, and ultimately, better financial performance.

The stakes are high. Companies that excel at customer experience outperform their competitors in stock returns and revenue growth. For example, customer experience leaders saw a 22.5% cumulative total return over five years, compared to -46.3% for laggards. Poor experiences drive customers away - 20% of U.S. consumers are willing to switch providers due to bad experiences.

Every interaction counts. Customer experience encompasses all interactions a customer has with a company, from marketing and sales to product use and customer support. It's not just about a single touchpoint, but the entire journey and relationship. Companies must take a holistic view and design intentional experiences across all channels.

2. Understand your customers' needs, wants, and emotions

You need your customers more than they need you.

Deep customer understanding is crucial. To deliver great experiences, companies must develop genuine empathy and insight into their customers. This goes beyond basic demographic data to understanding customers' goals, pain points, behaviors, and emotions throughout their journey.

Use multiple research methods. Effective customer understanding requires a mix of:

• Quantitative data (surveys, analytics)
• Qualitative insights (interviews, observations)
• Unsolicited feedback (social media, reviews)
• Employee input (frontline staff perspectives)

Create actionable customer profiles. Tools like personas and journey maps help synthesize research into an actionable format. These artifacts make customer needs tangible and guide decision-making across the organization. For example, Discover Financial created six detailed personas to represent key customer segments and inform product development.

3. Design intentional, cohesive customer journeys

Great customer experiences don't happen by accident.

Take a holistic approach. Instead of focusing on individual touchpoints, companies must design end-to-end customer journeys. This means considering how different interactions connect and influence each other over time. For example, FedEx mapped out 48 key touchpoints across the entire shipping experience to identify improvement opportunities.

Use human-centered design methods. Effective experience design follows a structured process:

1. Research to understand customer needs
2. Ideation to generate potential solutions
3. Prototyping to quickly test ideas
4. Iteration based on feedback

Co-create with customers and employees. Involving customers and frontline staff in the design process leads to more innovative and practical solutions. For instance, Fidelity Investments holds workshops where customers and employees collaborate on new service concepts.

4. Measure and improve customer experience continuously

If you want to succeed, today and in the immediate future, you have to decide—right here, right now—to roll up your sleeves and do the work of building competence in these six disciplines.

Establish a robust measurement framework. Companies need a systematic way to assess customer experience quality and its impact on business outcomes. This typically includes:

• Perception metrics (e.g., satisfaction, effort)
• Descriptive metrics (e.g., wait times, error rates)
• Outcome metrics (e.g., retention, revenue)

Connect experience to financial results. Quantify the business impact of customer experience improvements to gain organizational support. For example, JetBlue found that customers who had a positive experience spent 4.5 times more than those who didn't.

Drive continuous improvement. Use measurement insights to:

• Identify and prioritize improvement opportunities
• Track progress over time
• Hold teams accountable for experience quality
• Inform strategic decisions and resource allocation

5. Build a customer-centric culture across your organization

Culture is one of those squishy topics that people have a hard time getting their heads around in a business context.

Culture is the foundation. A truly customer-centric organization requires more than just processes and metrics. It demands a shared set of values and behaviors focused on delivering great experiences. This cultural shift must be driven from the top and reinforced at all levels.

Key elements of a customer-centric culture:

• Clear customer experience vision and strategy
• Leadership commitment and role modeling
• Employee empowerment and accountability
• Recognition and rewards tied to customer outcomes
• Ongoing communication and storytelling

Rituals reinforce values. Simple practices can help embed customer-centricity into daily work. For example, Ritz-Carlton holds daily 15-minute meetings where employees share stories of exceptional customer service. USAA requires all new hires to go through empathy training simulating the challenges military members face.

6. Empower employees to deliver exceptional experiences

Nothing is better than a convert. I had managed product support for a year and hated it. But then I flipped and became maniacal about the customers. This job is about taking my new passion and instilling it throughout the organization.

Frontline staff are crucial. Employees who interact directly with customers have the biggest impact on experience quality. Organizations must equip them with the skills, knowledge, and authority to deliver great experiences.

Key strategies for employee empowerment:

• Hire for customer-centric attitudes and aptitudes
• Provide comprehensive training on products, processes, and soft skills
• Give staff the autonomy to resolve issues on the spot
• Share customer feedback and insights broadly
• Recognize and reward customer-focused behaviors

Leadership sets the tone. Executives must model customer-centricity and remove barriers that prevent employees from delivering great experiences. For instance, at Zappos, CEO Tony Hsieh occasionally works in the call center to stay connected to customers and frontline realities.

7. Adapt to the age of the customer or risk obsolescence

We have entered the age of the customer.

A fundamental shift is underway. Empowered by technology and information, customers now have unprecedented control over their relationships with companies. This requires a new approach to business strategy and operations.

Key characteristics of the age of the customer:

• Easy access to product/service information and reviews
• Low switching costs between providers
• Rising expectations for personalized experiences
• Demand for seamless omnichannel interactions

Adapt or fall behind. Companies that fail to embrace customer-centricity risk losing market share to more agile, experience-focused competitors. For example, traditional banks are losing customers to fintech startups and credit unions that offer superior digital experiences and customer service.

Appoint a chief customer officer. Many organizations are creating C-level roles dedicated to customer experience to drive enterprise-wide transformation. This signals the strategic importance of customer experience and provides focused leadership for improvement initiatives.

Last updated: September 25, 2024