Editor’s note: This is the first in an ongoing series of posts about how executives should think about and execute improved customer service. Angelo Lombardi, a former COO of La Quinta Inns & Suites who worked for 25+ years in the hospitality industry, is passionate about helping companies improve the experiences of their customers. He currently collaborates with Medallia, the leader in customer-experience software and solutions.
Here’s a startling statistic: According to the 2015 Forrester Research index of customer experience, “Improving the customer experience is a strategic priority for 73% of businesses, yet only 1 percent of companies deliver an excellent customer experience.”
How can such a gap exist? 73% of companies claim a strategic priority that they aren’t achieving in the eyes of their customers. I believe that what’s missing for the majority of these businesses is sufficient understanding of the level of commitment and knowledge that it takes to turn the relationship with the customer into a competitive advantage.
Good service isn’t enough. Even great service will fall short if you haven’t taken the time to understand what the customer wants. You need to understand each customer so thoroughly — and at every touchpoint — that you can move from merely reacting to his or her wants and needs, to actually anticipating them. Because even if we assume that 73% of companies are doing a good job of customer service, you need to do a *great* job in order to stand out.
I learned this lesson the hard way a few years ago. In my role as chief operating officer at La Quinta, we had a company-wide initiative to improve the customer experience for our guests. It had strong executive support and the resources to make it happen.
Building upon what I thought the customer wanted, I tried to create training and processes around a standardized set of experiences that could be refined and reproduced across the company to provide the best possible experience for our guests.
Fortunately, we were working with some talented experts who took the time to gather deep customer insights and show me what our customers really wanted. They wanted personalization. They wanted “their experience,” not a canned, standardized one. Each guest was different; each interaction was unique.
I learned that no central organization, or codified set of processes, could deliver the “right” customer experience. Only employees who were best positioned to understand the context of an individual customer’s needs could. In that moment, we realized that before we could focus on our guests, we had to focus on our employees. Show our employees how to recognize our customers’ needs and create individual customer experiences tailored to those needs.
Through a journey of learning, understanding and constant evolution, we changed from a customer-sympathetic company to a customer-centric one.
A sympathetic company knows its customers and understands what they want and will often consider the benefits to their customers when they are making meaningful decisions. Customer satisfaction scores are important to them and they value customer insights.
In a customer-centric organization, the customers are at the heart of most, if not all, of the key decisions. The impact of any decision is considered through the lens of the customer. The entire customer experience is considered and every touchpoint is scrutinized. In order to do this, customer-centric companies have deep insights into their customers’ needs and wants and keep them up to date, to reflect a constantly changing business environment.
Not only does a customer-centric organization collect customer satisfaction scores and data, it understands the relationship between the various aspects of the customer experience and loyalty. A customer-centric company uses this information to constantly adjust its business practices to ensure the customer is getting the right experience to drive loyalty and create an army of brand promoters.
A customer-sympathetic company will tell you how much it values their customers, while the customers of a customer-centric one will do it for them. Do you want happy customers or loyal ones? Do you want customer-friendly policies or a culture that puts the customer first?
If you’re a customer-sympathetic it’s time to take the next step and evolve to a customer-centric culture. There are many reasons to do it, including increasing revenue. In a Harvard Business Review article, “The Value of Customer Experience, Quantified,” Peter Kriss shows the annual revenue increase per customer based on his or her customer-experience score.
The difference between a 1 and a 7 is 50% more revenue. If you take the customer experience to a 10, she’ll spend 140% more in annual revenue.
If you want to join the elite ranks of the 1% that are rated by their customers as delivering an excellent customer experience, you need to turn it up to a 10. Your customers, and your shareholders, will thank you.