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A dynamic Customer Experience strategy drives customer lifetime value.
Customer Experience as a sustainable competitive advantage
At Siili, we believe that companies can build sustainable competitive advantage by focusing and investing in customer experience (CX). Research results have shown time and time again, how investments in design and customer experience pay off. In this article, we aim to provide point of views on how to craft competitive customer experience strategies, and how to successfully realize them.
A dynamic Customer Experience strategy
We believe a CX strategy needs to support the goal of maximizing value for both the customer and the company itself (over the whole customer relationship lifetime). Just like the customer lifetime value needs to be considered as something dynamic, the CX strategy needs to be living and dynamic.
A strategy (with or without the CX-prefix) is a term some people favour, while others consider it too stiff and slow. And yes, if treated as something static, for a predetermined set of time, strategies can be stiff. Currently, consumer expectations and behaviour change fast, and often in a non-linear manner. Hence, a static approach might be too slow for modern, digitally infused business environments.
When treated as continuous and dynamic operations, CX strategies are powerful tools for creating exceptional experiences. We believe, that by moving from static CX strategy plans to continuous CX operations, companies build agility and resilience into their product and service development and finally, into the experiences that they deliver.
What is a Customer Experience strategy?
When looking at the CX industry, a CX strategy seems to typically consist of an experience vision, holistic set of customer insight, decisions on customer and market selection, a realisation plan for the CX vision, and KPIs to measure how it all worked out. All these are important ingredients. In addition to these, we emphasize the role of data in modern CX. We suggest coupling and integrating CX strategy with a data strategy - how to use, treat, and collect data and why. Combining the data and experience aspects is a winning combination.
From static to agile and resilient Customer Experience strategy
As mentioned, we think that CX strategies should be developed and operated in a continuous and dynamic manner, as it creates agility and resilience for the company’s product development. This also supports delivery of exceptional customer experiences. As the current times have shown, the aforementioned are key capabilities, when facing changes in the operating environment. Even without the extreme crisis we are experiencing right now, agility and resilience are capabilities that companies should be looking for, in order to respond and even anticipate to changing customer behaviour.
Takeouts from our experiences
To sum up our experiences, we have listed five takeaways below. We have found these useful, when crafting and delivering Customer Experience strategies, and hopefully so do you!
1) Understand the customer and the context – thoroughly
Diving into the customer journeys, context, behaviour, needs, aspirations and how they all manifest in real life is the key and starting point. Figure out what role your product or service has in the everyday life, and in what moments these roles manifest in concrete manners. Remember to tackle the whole journey – as the customer experience and perception is as good as the last encounter with your brand. Also, explore and define who the real customers are, and who you decide to serve. Identify which customer profiles make sense business-wise.
2) Match offering and experience with customer insight
Figure out your gain creators and stay out of the way for the rest of the time. Engagement and loyalty come from timely and meaningful interactions, not of the time spent using your services.
3) Prioritize CX opportunities with your company’s unique situation
There’s no one-size-fits-all solutions to develop CX. Figure out your company’s unique situation, current capabilities (such as competencies, resources, architecture, etc.) and aspirations. Match these with your CX vision and strategy. Aim high in the long-term, but make sure to root the next steps to what is possible.
4) Build relevant KPIs and data-capabilities to match the CX strategy
Focus on measuring impact and real behaviour. Define your KPIs accordingly, and follow them continuously, in a rigorous manner. Aim to build prediction models on customer behaviour and needs. In every customer life cycle phase, journey, and touchpoint, consider relevant data to collect, how to collect it and for what purpose. Use data to both optimize current CX, and as fuel for building new offering. Combine qualitative and quantitative data as you go, to paint a holistic picture of the situation.
5) Apply a continuous model to evaluate, develop and realize the CX strategy
Keeping the CX model running and living tends to be the hardest part of the CX strategy. In order to stay on the pulse of customer’s behaviour, we have experienced that a model of three intertwined tracks delivers some good results. The tracks run simultaneously and collaboratively – the first track focuses on tracking and evaluating customer behaviour and evaluates opportunities raising from the insight. The second track focuses on experimenting the opportunities on a quest to find a fit between the opportunity and a solution. The third track focuses on delivering the current offering and experiences. These solutions might be products, services, or marketing experiences. On a mindset level, the work should be considered as a process rather than as a set of projects.
To conclude, the continuous process of evaluating, developing, and delivering customer experiences should be an integral part of a company’s CX strategy. As with the customer experiences, keep your mind and eye open for improvement, also within your own strategy process. Hole-in-ones are quite rare in this game!
Juha-Matti Kosonen, Head of Service Design
Jussi Ahola, Director - Data & AI Services
Charlotta Välimäki, Key Account Manager
Read parts 1, 3 and 4 of this blog series:
Maximize customer lifetime value with data, analytics and machine learning