Customer Experience Is The New Marketing

This post in Danish for Mandag Morgen
Interaction Design with Google Classroom and 53 - Delighting Customer on Tech and The City

For the first time technology is sold to everyone, it is not just organizations that buy servers and workstations, nor only the middle class that buys home computers. Today mobile pocket sized super computers are sold throughout the world, to all levels in society. In Sub-Saharan Africa, there are more people who have access to mobile coverage than to clean water and more people has a mobile phone than electricity. The democratization of technology has led to constant changes in markets and consumer behavior. Just two decades ago, the customer journey was far more linear, today between 55-75% of B2B purchase processes has been finalized before a customer contacts a supplier. Consumers are increasingly using their smartphone to compare prices online, at home as well as in the store. Many consumers will go to the store to see the product before they complete the online purchase. This has created an increased need to meet consumers across their digital devices and media, offline as online - also called omnichannel.

A secondary effect of this differentiated purchase behavior, is that consumers are much less brand loyal today, they are instead loyal to the experience. Customer Experience (CX) is a buzzword that is called the new marketing and is changing how technology is used to create business. 89% of companies today expect to compete customer experience, a number that has gone up from 36% in 2011. 10 years ago Airbnb would probably have sold their software to the Hilton, but today they are the world's largest provider of accommodation, without owning any properties. Facebook, the world's biggest and most popular media platform does not create content, and Alibaba, the world's most valuable retailer, has no inventory. These businesses are not technology companies, all though they are built on technology. Their business is build on a reinvented interface and their customer experience.

This development is increasing the pressure on traditional organizations more than ever before, because it is not only the technological development that needs to be deployed, but rather the constant change in ones market, driven by new players. Competitors can no longer be spotted in the windshield, they lie in the blind angle, waiting for the chance to overtake established brands through innovation. In order to compete on these new market conditions, organizations need to update their structure, skills and management, transforming all C-level functions. If organizations want to move with the same speed as their market, it requires a constant focus on customers, their needs, wants and future demands. This increases the need for interdisciplinary collaboration within the organization, because if you have to stay ahead of your customers, the business needs to be aligned in all the links of the value chain, that makes the customer journey. It's a break with silo thinking, requiring new KPIs and staff development. It also places new demands on analytic tools, data criteria, and the connection between the data that is collected across the business and how it benefits the customer experience. Today it is not enough to know what your customers are doing on your website, you have to know where they came from and where they want to go.

There are companies that creates technology like Samsung and Microsoft. Then there are companies like Uber, Airbnb and Facebook that ensures they are the users preferred interface build on technology. Finally, there are companies like Apple and Tesla, that own the entire value chain from development, production to sales.
Tesla was founded in 2010 in California and produces luxury electric cars. According to car-reviewers, they outshine other car brands on all areas. Tesla is a leading example of how a new company has surpassed their competitors through technology and customer experience. Many of Tesla’s competitor has been on the market for more than a century. They use technology to update errors and add new features, in the same way as we update our smartphones. The technology replaces the need to convene thousands of cars to garages, when errors need to be corrected. This development also allows existing car owners access to the latest functionalities. Tesla has implemented an innovative system that allows customers to submit requests for functionality. Tesla selects the ideas that have value across their business, based on this feedback. One example was their "crawl" function, which is a very slow cruise control, that was requested by a client who wanted to minimize stop-start driving during heavy traffic. Tesla chose to roll out this function via a software update for all their vehicles, new as old.

If technology plays a fundamental part of your business, whether you produce it, provide the user interface or own the value chain it requires a constant update of skills and knowledge at all levels of the organization. This insight should ensure that the organization won’t be lulled to sleep by their own narrative of success, build on outdated business models. We all know how it went Kodak, Nokia and we are currently witnessing how Microsoft is trying to recover from their slumber. 10 years ago the biggest tech companies were Microsoft, Intel, HP and Dell - until they overlooked wireless. In the nineties the automotive industry could have taken ownership of mobile technologies, that was born in their cars. It is a symptom of how daily operations overshadows the visionary work that allows the management to discover the opportunities created in the wake of change. Organizations have always had to deal with change, but the speed of change has never been so rapid, which is rarely compatible with the traditional organizational structure. Most companies know that a transformation is inevitable, but few know what to do. The problem is based on skills, KPI’s, tools, and strategic leadership. One of the main responsibilities of the board, is to outline the overall strategic management of the company, including defining the vision ensuring the company's future survival. But when boards are too homogeneous, they risk a lack of the right skills, to discover the opportunities that arise on their market and in the technological landscape. The challenge is not only to bring more women into the boards, but in general to ensure qualified diversity, so icebergs and new territories are not overlooked.

If brands are to survive in a world where companies like Uber is the world's largest transport company, without owning any vehicles, and where Amazon invests heavily in becoming the equivalent of cable TV for physical goods, it requires a new vision for technology and especially customer experience. You must be a tyrant on behalf of your customers, as Steve Jobs was known for. Customers must be incorporated in all parts of the customer journey, supported by data that can provide a constant overview of customer-related KPIs. There has been a big improvement of analytics tools, algorithms and Big Data which means we can scrap the traditional customer satisfaction surveys and instead monitor real-time customer behavior and feedback. With the proper understanding of data and behavior, it is not only products, services and ultimately the customer experience that can be enhanced but also the bottom line. Ramboll has performed a study together with Copenhagen Business School, documenting that an improvement of +10% in Customer Experience efforts strengthens the company's ability to differentiate themselves with +9%, and increase the financial performance by +5%. The improved insights therefore leads to increased customer loyalty, market share and economic performance.

One of the more surprising words that is mentioned together with Customer Experience, is the word Delight. It is no longer enough to make your customers happy, your customers should be surprised and delighted. According to a study by Gartner, 86% of consumers will pay more for a good customer experience, but there is only 1% that experience that suppliers consistently meet their expectations. The same study concluded that 68% of consumers have changed suppliers because of poor customer service. In comparison the average US consumer is exposed to over 5000 ads a day, so it is about time to differentiate on more signal versus noise. Marketing is much more complex than ever before, building on long-term relationships, cross-media and insights into the customers world. Management, marketing and technology investments are no longer linear, but feeds back to the value chain that represents the entire customer journey and experience with your brand and business.