B2B Customer Experience (CX): What is and Why it is Needed?
Life in the business world is continually hit with new problems and challenges. The main task for management teams is to keep thinking of how to reach the set targets, how to keep and improve profitability and to devise strategies when taking these new problems and challenges into account. Marketing managers think of how to attract more customers of a designated “group”. Product designers find new ways of keeping the customers captivated with the products (and making them better). Companies design innovative strategies to be “different” from competitors.
All of this revolves around one thing: the customers.
Customers are the ones who bring revenue, regardless of the strategies that are taken. Having a significant customer base is important, but nowadays, more so because of the fierce competition and our more-than-ever interconnected world, customer loyalty is the crucial leading factor in profitability growth. L. Myler in the interview for Forbes said that nowadays it is even cheaper to support a loyal relationship with current customers rather than acquire new ones. He also stated that having steady and loyal customers, it is possible to grow on profitable revenue, but most importantly, this “platform” is predictable. Profitability and Predictability are both two terms that business people seek to reach.
Getting new customers is a relatively easy task; making a high percentage of them become loyal customers is a different story. Most of the companies are sure that the crucial factor in success is the product they offer. Apparently, it is not enough. There are many things that make a customer want to keep doing business with a company but there is one global concept that encompasses all of these, and that is “Customer Experience (CX)”.
In recent years, CX has become a very used and widely known term and is often linked to growth and innovation but, indeed, no standard definition exists. Itself, CX is a very subjective topic, as every customer is different since every person is different. CX is the unique internal phenomenon when customers have direct or indirect interaction with a company.
Regardless of all the similar and distinct definitions, companies all around the world are continually turning themselves into the world of CX; and those who were already familiar to the concept, design and test new models while seeking to achieve their CX goals. In contrast to customer relations management, these companies are seeing huge differences by implementing customer experience management. The perfect CX path is very obscure for the most, but it is time to start to think of how to achieve, not only good customer experiences but great customer experience.
What Customer Experience Is
Customer experience is the internal and subjective response customers have to any direct or indirect contact with a company. Direct contact generally occurs in the course of purchase, use, and service and is usually initiated by the customer. Indirect contact most often involves unplanned encounters with representations of a company’s products, services, or brands and takes the form of word-of-mouth recommendations or criticisms, advertising, news reports, reviews, and so forth. Such an encounter could occur when Google’s whimsical holiday logos pop up on the site’s home page at the inception of a search, or it could be the distinctive “potato, potato” sound of a Harley-Davidson motorcycle’s exhaust system. It might just be an e-mail from one customer to another.
The secret to a good experience isn’t the multiplicity of features on offer. Microsoft Windows, which is rich in features, may provide what a corporate IT director considers a positive experience, but many home users prefer Apple’s Macintosh operating system, which offers fewer features and configuration options. A customer’s experience with an Apple device begins well before the purchaser turns it on—in the case of the iPod, perhaps with the dancing silhouettes in the TV advertisements. The origami-like (and recyclable) packaging enfolds the iPod as though it were a Fabergé egg made for a czar. A small sticker, “Designed in California, Made in China,” communicates the message that Apple is firmly in charge but also interested in keeping costs down. Even Windows users appreciate the device’s intuitive, Mac-like feel and find that downloading tracks from iTunes is easier than buying a CD on Amazon. Every Apple product is designed with the overarching purpose of making the time one spends with Apple an enjoyable experience.
A successful brand shapes customers’ experiences by embedding the fundamental value proposition in offerings’ every feature. For BMW, “the Ultimate Driving Machine” is much more than a slogan; it informs the company’s manufacturing and design choices. In 2000, Mercedes-Benz introduced a system that automatically controls the distance between a Mercedes and the car in front. BMW would not consider developing such a feature unless it amplified rather than diminished the driving experience.
Service quality and scope matter, too, but mostly when the core offering is itself a service. For example, the tracking and shipping support FedEx provides on the Internet and by phone is as important to customers as its fundamental value proposition—on-time delivery.
In their concern with logistics—how something is provided, not just what is provided—business-to-business companies take after consumer-service companies. For both, the goal is to provide a positive experience to the end user. The business partner or supplier of a B2B company helps the latter do that first by understanding where in its direct customers’ value chain the B2B can make a meaningful contribution, and then when and how. Those are different undertakings from capturing and parsing a given human being’s internal, ineffable experience. A business’s “experience,” one might say, is its manner of functioning, and a B2B company helps its business customers serve their customers by solving their business problems, just as an effective business-to-consumer company fulfills the personal needs of its customers. In a B2B context, a good experience is not a thrilling one but one that is trouble-free and hence reassuring to those in charge.
Thus, a supplier satisfies the purchasing department of its business customer by providing a balance of costs and benefits; it satisfies operations by offering products or services that are easy to use; and it satisfies a customer’s executives by expanding capacity at the same rate as the customer and in general evolving alongside it. Accordingly, sales and marketing do not necessarily monopolize points of contact with customers: Operations people at the first company deal directly with their counterparts at the second, and so forth. The functional nature of the relationship—indeed, the fact that it is a true relationship—creates a pervasive awareness of experience issues and priorities.
Whether it is a business or a consumer being studied, data about its experiences are collected at “touch points”: instances of direct contact either with the product or service itself or with representations of it by the company or some third party. We use the term “customer corridor” to portray the series of touch points that a customer experiences. What constitutes a meaningful touch point changes over the course of a customer’s life. For a young family with limited time and resources, a brief encounter with an insurance broker or financial planner may be adequate. The same sort of experience wouldn’t satisfy a senior with lots of time and a substantial asset base.
Not all touch points are of equivalent value. Service interactions matter more when the core offering is a service. Touch points that advance the customer to a subsequent and more valuable interaction, such as Amazon’s straightforward 1-Click ordering, matter even more. Companies need to map the corridor of touch points and watch for snarls. At each touch point, the gap between customer expectations and experience spells the difference between customer delight and something less.
People’s expectations are set in part by their previous experiences with a company’s offerings. Customers instinctively compare each new experience, positive or otherwise, with their previous ones and judge it accordingly. Expectations can also be shaped by market conditions, the competition, and the customer’s personal situation. Even when it is the company’s own brand that establishes expectations, the customer can be set up for disappointment. For example, Dell transformed buying computers over the Internet from a risky to a reliable experience. When it extended that set of procedures to the selection and purchase of expensive plasma HDTV sets, however, it disappointed. Dell did an effective job of creating positive customer expectations, but they turned out to be better fulfilled by the in-person sales force at Best Buy.
Ideally, good design makes both the most routine and the weightiest customer experiences—checking a price, getting a question answered, or placing a multimillion-dollar order—pleasant and efficient. However, even when dissatisfaction or wariness arises, artful control of consumer experience can overcome it.
Customer Experience encompasses every interaction the customer has with your organization throughout the customer lifecycle, whether they are in-person, over the phone, or online. At the center of good Customer Experience is a clear and compelling value proposition that is, a product or service that satisfies a customer's need or want, usually associated with a short or long-term goal; for example, a loan to buy a house. Delivering a positive customer experience generally requires coordination across different functions within an organization such as marketing, product development, customer care, operations, or retail branches.
Stages of Customer Experience (CX)
Explaining the physical side of the customer experience, it is essential to mention the five stages of CX elaborated by C. Shaw & J. Ivens. The timeframe of the cycle depends on the type of product (complexity, size, price, investments, design, purpose). However, the stages remain the same independently on those features. The figure below demonstrates the infinity of the process (FIGURE 1). It highlights the fact of how crucial is the continuous development of any business.
FIGURE 1. Stages of Customer Experience
Expectation Setting.
Another determination of the CX is that interaction with clients must deal with clients’ expectations and even go beyond these expectations. It is this aspect, which most companies usually miss in customer experience. Therefore, it is essential to set and meet customers’ expectations. Where are these expectations coming from? Most of the customers obtain these expectations based on the previous interaction with competitors, for instance. A company willing to achieve great customer experience should even go beyond these expectations set by competitors.
Pre-purchase Interactions.
This stage is about data collection. For any interaction with a client, a company should be prepared all the time. In this case, a company should know its customers: what do they want (their goals), how and when they want it, how much they are ready to pay, where do they want to get it. When collecting this information, a company can see the partial profile of a client willing to cooperate.
Purchase Interactions.
The actual moment of interaction, with a clear decision between two parties (to buy/to sell). As Shaw and Ivens stated, it is the heart of CX. This phase is extremely more essential for B2B companies, where the purchasing process can last for months. For example, implementation of the computer network might last up to six months. During this period, sustaining good relationships with clients is vital.
Product or Service Consumption.
Most companies aim is to continue to contact the clients, especially by using additional services or helpline, for instance. Therefore, customer experience also covers the consumption period, increasing customers’ loyalty with smooth problem solving or efficient assistance. Again, the type of industry plays an essential role here. Products with long consumption period (electronics, cars, furniture, etc.) oblige customers to continue the interaction.
Post-experience Review.
Humanity is always learning by its mistakes. The same occurs in business. After the CX, a company should overview the whole process, especially the expectations a company met during the interaction with a client, assessing what went well, or whether something went wrong. According to the gathered results, the strategy of CX should be changed or used again.
Consequently, the post-experience review comes back to setting expectations. The researches, who determined the stages, are sure that it is important to consider these stages when building great customer experience1. When implementing a CX strategy, a company should align its operation to these stages and determine the actions required for each phase. The main mistake of most companies is that they forget about a customer after a purchase.
Great customer experience
In general, great customer experience is the same interaction with clients, yet a successful one. It brings only positive reactions from both parties great customer experience is about customers’ emotions. The researches specify, that, indeed, physical aspects contribute a lot to great customer experience, but that is far from being a complete statement. Nowadays the business industry is tending to avoid emotions. However, the business is run by people for people specifically. Since we are all human beings, emotions are the irreplaceable aspect of our life. Therefore, the complete statement about great customer experience can be expressed as a fruitful interaction between a company and its clients affecting physical (e.g. quality and price of an offered product) and emotional aspects
10 Principles of Great Customer Experience
Great customer experience is governed by ten main principles defined by Watkinson. The key idea of these principles is to create an accessible and understandable approach towards problem identification and its improvement. Great customer experience can be achieved through aligning with these principles. One can complement its customer experience management strategy aligning with the following principles:
Great customer experiences strongly reflect the customer’s identity.
All people are different: an individual has his own beliefs and values. Considering the fact of uniqueness of each client and respecting these beliefs and values, a company can obtain the loyalty of its customers. Therefore, great customer experiences are directly referred to the customers' loyalty. In other words, already at the brand level, a company’s values should align with the values of the customers.
Great Customer Experiences Satisfy our Higher Objectives.
Every customer has a goal he wants to accomplish. Any product or service is aimed to help a customer with his goal. However, here it is essential for a company to develop an approach to what else can be done to accomplish the goal, that people do not want to buy a product itself, they want their problem to get solved.
Great Customer Experiences Leave Nothing to Chance.
They say many things in business related to luck and chance. However, Watkinson is sure that to create smooth customer journeys everything must be organized. Basically, there should be no opportunity for accidents. Therefore, every small detail should be planned and designed. Every CX matters. Moreover, customers do not appreciate the uncertainty and unpreparedness of a company they are dealing with. Subsequently, great customer experience comes with the deeply detailed operation of a company.
Great Customer Experiences Set and Then Meet Expectations.
Before an actual interaction, customers have some expectations regarding a company, mainly formed by previous experiences and associations. In this case, great customer experience requires a high awareness level from a company to meet these expectations. Going even beyond these expectations creates a strong engagement with customers. Happiness equals reality minus expectations.
Great Customer Experiences are Effortless.
According to the researcher, customers avoid interactions obliging a lot of responsibilities from their part. Instead, they are seeking a replacement among competitors, demanding fewer efforts and energy. Customers want to gain something (mentally or physically) after the interaction, they do not want to lose anything. Therefore, great customer experience should not be demanding for customers.
Great Customer Experiences are Stress-Free.
Basically, this principle is related to the principles of effortlessness and preparedness. The life of the human-beings is already full of stressful situations. With the goal of diminishing the stress during the interaction, a company stands on the path towards great customer experience. That can be achieved with the elimination of uncertain situations and anxiety.
Great Customer Experiences Indulge the Senses.
As stated above, there is a huge relation between great customer experience and customers’ perception. The examples of this perception can be a piece of nice music played, sophisticated design of an office, even the quality of food served. In other words, anything that will cause positive feelings and associations for customers. Then, they will want to repeat this experience.
Great Customer Experiences are Socially Engaging.
Here, again, we can see how it is essential to affect customers’ emotion. In this case, customers are seeking “warm” relationships, yet formal and those not crossing the borders of their personal space. Watkinson highlights that it is easier to establish professional relationships with a friend, rather than with a too formal and “cold” representative of a company. These kinds of relationships are highly valued during the interaction with clients.
Great Customer Experiences Put the Customers in Control.
Referring to the principle No.3, we can see that great customer experience is expected to be well-organized since the control is an irreplaceable aspect during the interaction. However, the control should be held by the clients: they want flexibility and availability of the interaction on demand. For that reason, the third principle should be complemented: to achieve great customer experience a company, with well planned and smooth operation, must ensure its clients that the company is ready to do anything possible in order to fulfill the goal of its customers with maximum efficiency.
Great Customer Experiences Consider Emotions.
It would be fair to say that the last principle is uniting the nine previous ones, since all the principles, to some extent, are related to the emotional background of customers. Indeed, emotions take an important place in the life of an individual. Sometimes, emotions can too overwhelm a person. For instance, it is scientifically proved that before making a rational decision, a person is ruled by his emotions firstly. However, most of the companies are ignoring that fact, considering that their clients are highly rationale, meanwhile customers are willing to be understood without any explanations. Therefore, in order to avoid potential failures and problems, a company must concentrate on the idea of emotions importance
Great Customer Experience = High Competitiveness
Basing on these main definitions, it is essential to mention that successful interactions with customers lead to the profitability of a company, indeed, profitability is strongly referring to high competitiveness. Therefore, the equation shows that if great CX equals profitability, and profitability equals high competitiveness, then it would be fair to claim that great customer experience equals competitiveness. This final equation basically can supplement the statements listed at the beginning of the section. Moreover, I believe this addition is an irreplaceable aspect, which should be included inside the common definitions. We are going to justify this statement below.
The 2011 Customer Experience Impact (CEI) Report shows that nearly 90 % of customers choose the companies basing on the availability of high-level customer service. Furthermore, approximately 70% of customers might change their mind from the current company to its competitors because of the poor customer relationships, and even though customer service is just a part of CX, it does contribute a lot to the overall experience. Continuing with data, it is essential to point out that according to the CEI Report, 86 % of U.S. citizens are ready to pay more for great customer experience. Moreover, almost 55 % of the respondents of the survey specified that, for increasing customer loyalty, companies should improve their overall customer experience. Complementing the key data, We found interesting the following outcomes from the CEI report:
Only a quarter of U.S. respondents share their feedback after negative CX online.
Around 80 % of this quarter have never received a reply on this negative feedback.
However, most respondents would experience positive emotions after receiving a reply from a company (approximately 60 %).
To sum up, the situations nowadays can be described the following way: companies are more concentrated on the quality of products; the customers do not get enough decent attention; those companies which do care about CX are so-called “high-league players”. Nevertheless, how could this tendency towards great CX be explained?
It goes without saying that we live in the epoch of hyper-competition. In a single industry, there can be several companies promoting the same product (in terms of quality and operational functions). The market is full of these “alike products”. Companies cannot compete selling absolutely the same goods or services. Therefore, customers need something else rather than the quality or quantity of the provided products. The data from different surveys, mentioned above, demonstrates that customers seeking, indeed, for great CX. Companies might have an amazing and unique product, but if clients hate calling their customer services it is a failure.
In other words, for now, the main possible differentiation between companies is the level of customer experience. Nowadays competitiveness is about overcoming the expectations of a customer; while competing with a company, one should take in mind the expectations and feelings a customer gets during CX. Additionally, great customer experience creates long-lasting loyal relationships with clients, which is extremely essential against tough competition in the market.
Examples of Great Customer Experience
Unfortunately, Great Customer Experience is a feature widely achieved only among big and well-known companies. It seems that small and medium businesses tend to ignore or even avoid achieving excellent CX. While the researches around the world are just trying to influence minor businesses, big players have been already applying CX in their strategies for some time. Bellow, one can find the main examples of great customer experience in the case of well-known companies.
Ikea is the brightest example of excellent CX. It is noticeable throughout the store decoration (different sections, right consequence), additional services (i.e. restaurants, delivery, customer service, grocery stores), prices and assortment. Moreover, Ikea knows everything about its customers: who they are, how much do they earn, what do they do, even what do they like. It can be explained exactly with its range of different prices, design, and quality. Ikea knows that its customers are students/youngsters, renting their first flat, or a young couple decorating their new house. Additionally, the concept of the store makes it impossible to leave the store with empty hands: one buys at least a pair of slippers there. Finally, Ikea leaves positive emotions not only because of its multiple touchpoints with customers but with the expectations it sets before. One can just look at our pop culture: there are a lot of movies illustrating Ikea stores as an amusement or a place for having fun (e.g. “500 Days of Summer”, “What happens in Vegas”, “How Do You Know”, etc.).
Another important example is The Coca-Cola company. Technically, it is challenging for companies like Coca-Cola to sustain good customer relationships due to its size. However, it has recently eliminated the label from the “Coca-Cola” products. Instead, the company is emphasizing the importance of time spent with its products rather than that of the products themselves. It is done with the tags printed on the bottles (cans) saying “Share it with…”. Thus, people are engaged in a certain “game” with the company, reminding “Simon says”. Moreover, the #ShareACoke campaign is not only about playing but corresponding the products with people’s precious time.
