I have noticed that the development of the customer experience has progressed by industry. In practice, this means that one of the companies in the industry has found an opportunity to stand out by investing in the customer experience. And soon all other companies in the industry will follow! Unfortunately, too often companies end up following each other in their customer experience strategy.
So what would be the right strategic approach to the customer experience for your business? Should we invest in ease or should we offer our customers unforgettable experiences? Have you remembered asking customers about this? And can they even say what they want in the end?
The Harvard Business Review reported on a study that interviewed 4,500 consumers in the U.S. and their opinions on 134 brands from five different industries. First, the results revealed that frictionless and memorable experiences were positively correlated with consumer perceptions and, most importantly, purchasing behavior. Second, these dependencies varied by industry. The article highlighted a third observation: the same company usually achieves only limited benefits by investing in both an effortless and unforgettable customer experience. So in order to grow, a company needs to choose one of two customer experience strategies – they need to invest in either ease or an unforgettable experience.
When this information was compared to the market position of the brand involved, it was found that companies with a larger market share have invested in ease. And in turn, companies with smaller market shares have invested in unforgettable experiences. HBR summed up the idea of the study in the image below.
The original article, on the other hand, does not mention price as part of the brand, nor as an element of a customer experience strategy. Brands aimed at the mass market are most often price-driven, and then ease and hassle are the logical priorities of the customer experience due to the need to streamline operations. And new challenger brands strive to build unforgettable customer experiences.
Of interest, however, there are brands that have managed to break this equation and rise to “Gravity brand” status. Ikea, for example, is the price and market leader, but nevertheless its customer experience is unique. Every customer experience developer knows that hod dog and soft ice do not happen to be at the end of the customer’s path by accident. In the US, a company selling bulk products (toilets, kitchen towels, diapers) has already added millions of handwritten messages to its customers for e-commerce orders. It is a key means of differentiation and has brought growth in fierce competition against e.g. Amazon.
It is important that companies identify the ways in which they can build a distinctive brand and, on the other hand, seek change in their position in the market. In brand and business development, companies are striving to find their own competitive advantage and this same thinking should now be extended to the development of the customer experience as well. Following competitors or the largest in your industry does not build a world of unique customer experience but vice versa.