80% of CEOs surveyed recently claimed that their organizations delivered an exceptional customer experience . 8% of customers of the said organizations agreed . This chasm between what service providers think and what their customers think has a new name – the experience gap . Mature customer experience programs have five principal objectives: 1. Improve customer retention and loyalty. 2. Increase customer share of wallet and lifetime value. 3. Optimize customer acquisition. 4. Reduce cost to serve. 5. Improve brand awareness and equity. (Source: QUALTRICS ) IMPROVE CUSTOMER RETENTION AND LOYALTY Why do customers desert and defect? How many organizations can you think of that have high retention rates rooted in great customer experiences? The fact remains that no matter what, some customers will defect. Any organization that claims to have zero or near-zero defections is living in a delusionary world
Showing posts from April, 2017
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For five decades, marketing has focused on the principles of segmentation, marketing, and positioning ( STP ). Segmentation of consumer products is generally along demographic , psychographic , and behavioral dimensions. B2B segmentation includes firmographics . Of the more than 20,000 new products evaluated in Nielsen’s 2012 – 2016 Breakthrough Innovation Report , only 92 (0.46%) had sales of more than $50 million in year one and sustained sales in year two ( Source: HBR ). What is wrong with STP as we know it? Practically all the data (including big data) on customers focus on correlations such as 70% of customers prefer product A to product B. Correlations do not necessarily show causality . Managers find it comfortable to use correlations because it is very difficult to understand causal mechanisms. Understanding causal mechanisms (what causes us to do something?) is possible if we use Professor Clayton Christensen’s “ Jobs to be done ” construct.
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As a graduate student, I worked as an intern at a large corporation. Into my second week, I had collected data on a project and wanted to place the papers in groups based on processes. When I requested my mentor for a few paper clips, I had my first experience with complexity. While handing over the paper clips, my mentor told me that to get a box of paper clips, the organization required 17 signatures!. Ever since I have been intrigued and baffled at the complexity that is an integral part of modern organizations . On the one hand, the advent of new technologies at a pace that could not have been imagined even at the turn of the century, new entrants more than willing to disrupt traditional frameworks and mindsets, and the changes in customer expectations , have combined to produce an unstoppable force . One would expect organizations to seize the opportunities and move forward. The twin factors that can provide a competitive advantage in today’s busine