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The Commoditization of Customer Experience: How CX Became a Top Business Priority Marketing

By Kristian Bannister on May 18th 2017

We all know what bad customer experience feels like. Bad experiences stick with us. They frustrate us and leave a lasting negative impression of the brand involved. They build up over time and cause us to switch to competitors.

Organizations have long invested money and resource into improving touchpoints that customers interact with, but it’s no longer enough to tackle these touchpoints in a piecemeal approach.

Research by Gartner showed that “measuring satisfaction on customer journeys is 30 percent more predictive of overall customer satisfaction than measuring happiness for each individual interaction”.

Customer experience has fast become one of the top priorities for organizations today. While user experience tends to be owned and driven by designers, researchers and product managers, customer experience is far reaching across the business. It defines every interaction a customer could have with an organization–From the look and feel of your mobile app, to the responsiveness of each customer service channel, to the tone and voice of your marketing. It covers online and offline, pre-purchase and post-purchase, digital experiences and in-store experiences,

By 2017, 89% of marketers expect customer experience to be their primary differentiator

Gartner

Improving customer experience is not just a priority, it’s a necessity. With each passing year, the stakes are being raised and organizations who aren’t already investing in customer experience programs are at risk.

While it’s easy to identify a bad customer experience, describing a great customer experience is trickier. For the most part, it’s personalized and subjective to the individual. As consumers, we’re aware when customer experience is working in our favor. We don’t just appreciate great customer experience, we demand it.

Customer experience is the main battleground that many markets will complete over the next few years. In fact, we’re already seeing that battle play out in highly commoditized markets, such as utilities and banking, where brand loyalty is fast eroding.

But how exactly did we get to this point where business leaders are scrambling to prioritize customer experience by pouring attention, headcount and budget into initiatives that aim to improve it?

We believe there are three main factors that are turning customer experience into a commodity.

1. A faster path to markets

The entry point to markets is lower than ever. In most cases, it’s easier for a startup to design customer experience from the ground up than it is for an enterprise to transform their existing operations towards improving customer experience.

Take for example, Uber. A classic tale of disruption. There’s no doubting that a large part of their success was down to customer experience.

When compared to the vastly dispersed and unstructured taxi industry, which had no formal way of organizing around customer experience, the odds were definitely stacked in the favour of Uber.

On demand. Convenient. Cheaper.

Uber had an experience that the taxi industry would never have been able to replicate. It was technology that enabled Uber to conquer markets at an unprecedented pace. All the consumer needed was a smartphone.

Since launching in San Francisco 31 May 2010, Uber has gone on to deploy in 681 cities around the globe, which means they have entered a new market every three days and 18 hours.

When customer experience can afford you a differentiator that allows you to expand at this kind of rate, there’s no surprise that enterprises want a piece of the action, and perhaps more eminently, want to protect themselves from their own version of Uber.

2. The shift of power from brands to consumers

The rise of social media has seen with it a rise in the ‘empowered consumer’.

This new consumer has high expectations and won’t hesitate to take to social media to complain about a bad customer experience. With a single public post, the disgruntled consumer can influence family, friends, coworkers and friends-of-friends anywhere in the world.

The shift of power from organizations to consumers has played a key role in driving the need for improved customer experience. Consumers know they hold immense power and will routinely use it to demand more from brands.

It’s not just about mitigating risk, the empowered consumer can be the best marketer a brand can have. Delivering consistently great customers experience gives brands the opportunity to turn customers into advocates who will stick around for longer and share their positive experiences with the world.

Investments into customer experience will ultimately pay for themselves. According to McKinsey, “word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions.”

Customer experience is the new marketing.

Steve Cannon, President & CEO of Mercedes-Benz USA

3. Innovation is creating new benchmarks

It’s no longer the case that customers will be comparing your customer experience to those of your competitors, they’ll be judging you based on the best customer experience they receive anywhere.

Innovation in customer experience has a ripple effect that impacts all industries and raises the stakes for all organizations. We’ve seen this happen with the rise of on-demand services. The fact that we can book a taxi on-demand with the touch of a smartphone changes creates a new benchmark other consumer services.

Organizations should no longer be benchmarking themselves against direct competitors, they need to be striving for their own innovation in customer experience.

A copy and paste approach to customer experience will only take organizations so far. They need to start tackling the real issues that are relevant and pertinent to their own customers.

We’ve written a guide detailing how CMOs can drive customer experience transformation. Learn how to overcome the internal challenges faced when trying to embed customer experience across your organization. Read the guide.


Championing the Customer Experience

Learn how to lead your own customer experience transformation.

Get the guide

Kristian Bannister

Kristian is a Digital Strategist at Brandwatch. He helps our marketing team find the best opportunities for growth. He writes about using social data to support marketing, market research, content strategy and SEO.