While most industries were characterized by steady growth at the beginning of the last decade, many companies now face a new situation for years involving stagnation of growth, declining margins and increased customer requirements and expectations.
In addition, there is now additional competitive pressure through the digitization of business models and market processing. It is therefore no longer sufficient for most companies to simply produce a good product at a fair price and to offer a first-class service in order to be successful in the market. Today, customers are much more sophisticated than they were a few years ago. They expect not only a good product and corresponding services, but a unique and consistent "experience", both via traditional and new digital channels!
Customer Experience involves all the interactions of a company with its customers. It is a mixture of the company's physical performance and the feelings and emotions that it arouses in the customer. Feelings linked to a brand are created by a customer’s own expectations from the company. But the question here is are they fulfilled or not? If the perceived performance is in the tolerance zone, the customer feels indifference or a low degree of satisfaction. Only if the expectation level is exceeded that a high level of customer satisfaction and enthusiasm is witnessed. If, however, the level of performance is below expectations, dissatisfaction and anger result on the customer’s part, which, in the worst case scenario, can put the business relationship itself in danger.
Customer Experience Management: Active design of customer experience in order to meet customer needs optimally
From the company's point of view, therefore, the goal should be to ensure an optimal customer experience along all the interaction points. This requires the active involvement of both the customer and the company within this interaction.
A comprehensive approach to customer management is customer experience management, which enables companies to assess and actively shape the needs and expectations of their customers. The aim is to surpass customer expectations with sensible measures in order to strengthen customer loyalty in the long term. That is because loyal, satisfied customers become much more enthusiastic ambassadors of the brands and products that they use. And Customer Experience Management not only focuses on direct impacts such as readiness for purchase, turnover or the use intensity, but also on indirect effects such as oral propaganda and recommendations on, for example, the social media.
Why is Customer Experience Management so important?
With the help of professional customer experience management, companies have the opportunity to get a better understanding of their customers and, in turn, differentiate themselves from the competition. All this in order to build an emotional relationship and bond with the customer, to satisfy even the most demanding of customers, to increase the "Share of Wallet" and to secure itself for an economic downturn. Let us look at some of the main points of Customer Experience Management in more detail:
Better customer understanding
Through active customer experience management and customer analysis, companies have the opportunity to learn more about their customers and their needs and behavior. This information is extremely valuable and forms the basis for segmenting customers better, structuring tailor-made products and service offerings as well as effective marketing campaigns.
Differentiation from the competition
Almost all of today's markets are buyers' markets: consumers have all sorts of information at hand. Through the Internet it has become very simple to compare product specifications, quality and prices. The high market transparency and the wide selection of providers with extensive product and service portfolios make it difficult for companies to work out the right distinctive and unique features. Therefore, more and more companies are trying to differentiate themselves from the competition through a unique customer experience.
Building an emotional bond between the customer and the company
Despite all the available information on a product or service, studies show that people are often buying on the basis of emotions. For example, the purchase of an expensive sports car can be officially explained to the circle of friends and family as a great bargain - while the real reason might as well be that the buyer's heart had developed an emotional bond with that brand. This in turn is the result of a successful customer experience management.
Satisfying the more demanding of customers
Our highly developed product and service landscape with sophisticated technology and sophisticated processes has made the consumers much more demanding. Not so long ago, people were not used to spending their money freely at certain times because they had a limited supply of banknotes. While now, they are already impatient when an ATM machine needs more than 15 seconds to eject the cash and that too with a "round-the-clock" availability. Furthermore, debit and credit cards have further disrupted this landscape as people look to get better deals on their cards and quick resolution of issues.
Securing against the economic downturn
One thing is for certain that after an economic upswing, the downturn is inevitable. As new customers are very difficult to win in an economic downturn, companies must rely on the loyalty of their most valued customers. However, this is not an easy task, as companies focus solely on cost control in such a time. Without adequate consideration of customer experience management, companies risk falling behind competitors and are thus completely exposed to the negative effects of an economic crisis.
Increase the "Share of Wallet"
Loyal customers are active advocates for a company (Apple Inc. is a great example of this). They are regular buyers and have a higher customer value over the entire life cycle of the company compared to casual buyers. Therefore, they spend a considerable share of their income on the products and services from that particular company.