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The Truth About Customer Experience

 Enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction

by Alex Rawson, Ewan Duncan, and Conor Jones

Companies have long emphasized touchpoints—the many critical moments when customers interact with the organization and its offerings on their way to purchase and after. But the narrow focus on maximizing satisfaction at those moments can create a distorted picture, suggesting that customers are happier with the company than they actually are. It also diverts attention from the bigger—and more important—picture: the customer’s end-to-end journey.

Think about a routine service event—say, a product query—from the point of view of both the company and the customer. The company may receive millions of phone calls about the product and must handle each one well. But if asked about the experience months after the fact, a customer would never describe such a call as simply a “product question.” Understanding the context of a call is key. A customer might have been trying to ensure uninterrupted service after moving, make sense of the renewal options at the end of a contract, or fix a nagging technical problem. A company that manages complete journeys would not only do its best with the individual transaction but also seek to understand the broader reasons for the call, address the root causes, and create feedback loops to continuously improve interactions upstream and downstream from the call.

In our research and consulting on customer journeys, we’ve found that organizations able to skillfully manage the entire experience reap enormous rewards: enhanced customer satisfaction, reduced churn, increased revenue, and greater employee satisfaction. They also discover more-effective ways to collaborate across functions and levels, a process that delivers gains throughout the company.

Consider a leading pay TV provider we worked with. Although it was among the best in the industry at managing churn, it faced a maturing market, heightened competition, and escalating costs to keep its best customers. Churn was a familiar problem, of course, and the typical reasons for it were well understood: Pricing spurred some customers to leave, while competitors’ technology or product bundles lured others away. The common ways to keep customers were also well known, but they were expensive, including such things as upgrade offers, discounted rate plans, and “save desks” to intercept defectors. So the executives looked to another lever—customer experience—to see if improvements there could reduce churn and build competitive advantage.

As they dug in, they discovered that the firm’s emphasis on perfecting touchpoints wasn’t enough. The company had long been disciplined about measuring customers’ satisfaction with each transaction involving the call centers, field services, and the website, and scores were consistently high. But focus groups revealed that many customers were unhappy with their overall interaction. Looking solely at individual transactions made it hard for the firm to identify where to direct improvement efforts, and the high levels of satisfaction on specific metrics made it hard to motivate employees to change.

As company leaders dug further, they uncovered the root of the problem. Most customers weren’t fed up with any one phone call, field visit, or other interaction—in fact, they didn’t much care about those singular touchpoints. What reduced satisfaction was something few companies manage—cumulative experiences across multiple touchpoints and in multiple channels over time.

Take new-customer onboarding, a journey that typically spans about three months and involves six or so phone calls, a home visit from a technician, and numerous web and mail exchanges. Each interaction with this provider had a high likelihood of going well. But in key customer segments, average satisfaction fell almost 40% over the course of the journey. It wasn’t the touchpoints that needed to be improved—it was the onboarding process as a whole. Most service encounters were positive in a narrow sense—employees resolved the issues at hand—but the underlying problems were avoidable, the fundamental causes went unaddressed, and the cumulative effect on the customer was decidedly negative.

Remedying matters would add significant value, but it wouldn’t be easy: The company needed a whole new way of managing its service operations in order to reinvent the customer journeys that mattered most.

Read the full article here http://hbr.org/2013/09/the-truth-about-customer-experience/ar/1