Disrupt Yourself

IT Modernization

Differentiation Through Customer Experience

The trend

Customer experience is the next competitive battleground for differentiation. Need proof? Uber is worth $52 billion. Airbnb has had a 90% growth rate to its valuation and now is worth more that Marriott or Starwood. Facebook is valued higher than GE and Walmart. Each of these businesses has disrupted its respective industry by being customer obsessed and finding new ways to create customer value.

While startups have the advantage of orienting themselves around the customer from the beginning, many enterprise-level businesses have entrenched structures and processes that make it difficult for them to truly put the customer first. They need to disrupt themselves to focus on the customer experience and transform their businesses.

In this point-of-view piece, Razorfish looks at:

  • Redefining customer experience
  • Opportunities for customer experience disruption
  • Recommendations for disruptors

 

Redefining Customer Experience

In the face of disruption, more brands are realizing there is real business value associated with aligning around their customers, regardless of the brands’ internal structures or industry nuances. This is redefining customer experience from a single touchpoint like a call center experience to the entirety of every touchpoint. In today’s “new” definition of customer experience:

Experience is fundamental business differentiator

In Forrester Research’s “The Revenue Impact of Customer Experience” report, data shows that each brand in nearly every industry (from wireless providers to retail banks) stands to gain tens of millions of dollars a year in upside revenue from the retention, enrichment and advocacy loyalty associated with great customer experiences. These figures are causing the C-suite to launch large-scale efforts to rethink the experience as a business differentiator.

Single experiences are measured in the context of a broader outcome

Customer experience used to be focused on simply CSAT or Net Promoter Score, but today it is defined as the sum of all the interactions with the customer and how that affects the overall business.

Marketing and customer experience leaders have more influence across the entire customer journey

We are seeing a consolidation of ownership of all or most of the customer journey under one leadership role (typically in marketing). This marks a shift from siloed organizations owning different elements of a customer experience based on stages of the customer life cycle or marketing channels.

 

iPad User.

Ongoing discovery of unmet needs is driving continual innovation

Customer experience innovation is not a static thing that can be achieved at one given point in time. Continually delivering and measuring improved experiences helps brands understand where they are not meeting needs. These moments become the innovations that drive future differentiation.

Data is enhancing the art of great experiences

With the increasing expectation that experiences be personalized, and with more channels to consider designing for, data is critical to connect our business goals to the behavior of our customers. Many brands are developing their own strategies to make sense of data across the entire customer journey to enable greater decision making.

Technology is playing a front-and-center role

Technology plays a critical role in helping bring together disparate experiences and in delivering more contextually relevant content. We are increasingly seeing corporate marketing and IT working closely together to connect technologies to allow measurement of data across different channels. Finding the right mix of enterprise platforms and custom feeds is critical to deliver desirable experiences.

Coworkers Reviewing Image.

Opportunities for Customer Experience Innovation

1. Reorganizing around customer behaviors

 

Reorganizing around customer behavior requires knowing what those behaviors are...

Internal barriers (like disconnects between teams or an overly product-centric culture) can get in the way of an optimal customer experience. The first steps a brand should take to break down these barriers and better align around customer behaviors are:
 

  1. Map the experience​
    Many brands use customer journey maps, but they are often illustrative or based on intuition. We are advocates of understanding and mapping the journey, but doing so through a combination of data about current customer friction points and live observations of unmet needs.
  2. Strategy and experience prioritization
    Develop a shared vision that prioritizes customer experience opportunities based on their business value and complexity. The business value of an experience improvement can be determined through testing, surveying a consumer panel on an ongoing basis about brand interactions and conducting post-experience surveys. The goal should be to understand the net value of an experience change. Will it influence a larger sale? Will it make a customer come back? How do those things affect our business metrics?
     
  3. Visualization of the new journey
    After mapping the journey and prioritizing new opportunities, articulate the intended future vision for the experience to stakeholders in a visual way using storyboards, wireframes, full creative mock-ups or video. Define the overall ROI improved by each individual experience based on the anticipated behavioral change.
     
  4. Roadmap development
    Once stakeholders are aligned on the new journey vision, create a phased action plan to guide implementation. This needs to incorporate details about the planned functionality, the internal teams that need to come together, the technology, the data, and the anticipated timeline for creation.

Projects within the roadmap will fall into two categories:

  1. Reinvention—solving an unmet expectation, like giving a customer an easier shopping experience online
  2. Pioneering—meeting an unmet need, like being the first in an industry to create a mobile booking tool for an airline

We use this matrix to map initiatives and identify whether they represent an opportunity for reinvention or pioneering an entirely new experience.

 

Value Expectations Graph.

2. Reinvention of the underperformers

When a project has high customer value and is not meeting customer expectations, that experience should undergo a reinvention. Examples of reinvention include:

  • A full experience redesign to streamline common tasks
  • A mobile or social application enhancement enabling new functionality
  • Conversion and funnel optimization that decreases friction across digital channels

When looking at the moments that need to be improved, the solutions still need to be channel agnostic. For example, if a loyalty program is not performing well signing up new customers, there could be an unmet expectation that is reducing performance. Solving that experience is going to require an analysis into the varying expectations a customer might have as he or she interacts (from the first download, through ongoing experiences) to find that the problem is in the description of the app on the app store, or the requirements needed on the registration screen.

There can also be tremendous opportunities to improve business outcomes by reinventing just a portion of an experience. For example, Delta asked Razorfish to reinvent its online booking process and flight management experience. After revamping these to be more memorable and simple, Delta experienced an increase in its J.D. Power scores and hundreds of millions of dollars of incremental digital sales revenue.

 

My Delta Digital Experience.

 

3. Pioneering new experiences

Projects with high customer value that address an unmet need involve pioneering entirely new experiences, products or services. Drivers of new services include:

  • The opening of new channels or business models that change traditional ways of interacting with a customer
    Example: Roadster in California allows customers to find a new car and negotiate the deal online, then have the car delivered to their door, avoiding the dealership entirely.
     
  • New technologies that enable new types of interactions that did not previously exist
    Example: Magic Leap layers augmented reality naturally into a user’s environment.
     
  • Changes in customer behavior
    Example: After discovering that younger urban customers were less likely to need a test-drive before buying a vehicle, Razorfish partnered with Audi to create Audi City, a digital showroom experience.
     
  • The intersection of digital and physical experiences, which creates new opportunities to connect previously disconnected brand touchpoints
    Example: Razorfish launched a new retail store for GrandVision in Shanghai that allows visitors to come into the store and interact with digital tools to get fitted for their next glasses.

Unmet needs can be identified during the journey mapping and visualization process explained earlier. Developing the actual ideas will require a strong knowledge of consumer, industry and technology trends. Once ideas for new product or service experiences are identified, we recommend asking:

  1. Does this new service or product reflect the brand’s culture?
  2. Does it build the brand?
  3. Is it technically feasible?
  4. Will people love it?
  5. Will it be profitable?

If it meets these criteria, it is worth further exploring as part of the larger roadmap. To limit risk, try variations of the Opportunities for Customer Experience innovation experience in test markets. 

Recommendations for Disruptors

To successfully create experience-based disruption, we recommend that you:

Create an experience management office (XMO)

Traditionally, the customer is segmented into interactions that are important for a channel or business unit. Then, initiatives are delivered to solve those independent opportunities. This creates inconsistency for the customer, which is difficult for the business to track or fix. It also silos customer data within organizations, making cross-organizational insights difficult to find and overall business value hard to quantify.

To address this issue, we are helping some leading clients to build a customer experience management office that focuses across the business to deliver customer and business value.

This approach:

  1. Leads to a more strategic partnership to support growing responsibility of client CX groups
  2. Creates an opportunity to quantify CX innovation based on value across the customer journey
  3. Adds an ongoing correlation layer connecting business goals to customer behavior
  4. Holds project teams responsible for delivering business value through CX KPIs, not just budget and time

Make customer journeys objective by using data to identify specific KPIs

Reorganizing around customer behavior requires knowing what those behaviors are, which can come from a mix of behavioral data and qualitative inputs. Identifying the opportunities to pioneer your business and industry through innovative experiences is more heavily dependent on observation of customers.

Iterate solutions until they work, not until they are done

Disruption is not a switch you can flip when you launch a new site design orexperience. To get results, start with a hypothesis and keep iterating with the experience until it generates the desired outcomes (like user adoption, satisfaction, loyalty). Do this by building quickly and testing often.

Know the difference between an unmet need and an unmet expectation

Reinventing or simplifying a current experience is likely going to be a quicker fix than concepting and launching an entirely new product or service experience. Before you think about pioneering something, make sure that you can’t solve the customer problem by first improving the channel interactions you already have with customers. When it is clear that you need to either reinvent or pioneer, build your solution teams differently to address each type. For each type of team, success will require evolving around the customer and managing each solution as part of a holistic customer experience program.

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