Are customers at the heart of your business?
No business leader in their right mind would answer, āNo,ā but the sad truth is that many of us in the corporate world have been paying lip service to customer needs, ideas, and feedback without deeply understanding and taking action on them.
This inertia is, in part, created by the speed of innovation. As the digital world has emerged and evolved, it's enabled businesses to reach size and scale faster than ever before, and to do so with smaller initial investments and fewer people.
Instead of sinking tens of thousands of dollars into a neighborhood gym full of costly equipment and overhead, we can spend a couple hundred bucks on designing a fitness app that helps people slim down and build muscle mass.
Instead of attempting to build an entirely new academic institution, we can compile expertise and information into an online learning platform.
Instead of spending two years scouting locations, finding suppliers, and negotiating contracts to launch a brickāandāmortar retail business, we can spend two days tweaking our ecommerce infrastructure and supply chain.
The acceleration rate is dizzying. You know this already.
You also know that the ability to go from zero to profit in record time has triggered a tsunami of businesses, many of which offer nearly identical products. In this teeming marketplace, the key differentiator and driver of loyalty has become the customer experience.
Does the customer feel understood and valued? Can they set up a new account without any friction? Is the initial experience using the app easy and enjoyable? Are the new offers that appear in their inboxes anticipating their needs and helping them feel connected to the company?
Today's customers expect great experiences with the products, services, and brands that they support. Many of the businesses that have achieved phenomenal success in this market are the ones that know this and prioritize the creation of aboveāandābeyond customer experiences.
Take Spotify: Personalization has always been central to the music streaming service's brand and market presence, and in the summer of 2021, Spotify kicked it up a notch by launching its āOnly Youā campaign. This dedicated ināapp experience leverages user listening data to highlight the artists, songs, genres, and listening patterns that are unique and important to each listener.
Like the service's popular and personalized yearāend summary, Spotify Wrapped, Only You content is easily shareable across social media. The Only You content joins Discover Weekly, Release Radar, and Daily Mixes in the app's Made for You hub, the title of which underlines Spotify's dedication to making each user's experience feel personal, bespoke, and special.1
Spotify has become one of the most successful onādemand music platforms globally, with more than 320 million active daily users and more than 144 million paying monthly subscribers as of 2021,2 while competitor Pandora has shrunk to 55.9 million active monthly users and 6.4 million subscribers.3 This focus on the almighty listener has clearly contributed to its success, and more and more people prefer and expect to receive personalization at this level.
And their expectations continue to rise as they compare experiences, not just within the same category, but across all of the products, services, and brands that they consume and support.
For example, when consumers purchase clothing online, they may compare their ordering and store pickāup experience with the experience they have booking a restaurant reservation via a smartphone app. The intuitive and fast reservation experience doesn't resemble the retail transaction, but the consumer doesn't care. They've come to expect the same level of ease and integration from both.
Nailing this mix of canny design and wellātimed emotional ephemera can set a company apart from its competitors. Far apart. Think trillions of miles.
It's all borne out in the stats. Research shows that customers consistently convert for companies who offer them delightful experiences, and that they remain loyal to those companies once a connection is made. Even if another company offers similar products or services at lower cost or delivers them faster, people prefer the company that delivers the best experience and makes an authentic connection.
Take air travel as an example: Overall, airlines consistently rank as one of the top five most hated industries in the United States,4 so the bar is set pretty low. The advent of fees for things like checked bags and more legroom has continued to sour public opinion, in part because when customers have to pay for something that used to be free, they interpret this as a personal loss.5
And yet the U.S. Travel Association found that 60 percent of travelers would welcome additional fees dedicated to improving efficiency and choice.6 During the COVIDā19 outbreak, surveyed travelers said they would pay up to 17 percent more to fly on airlines that blocked the middle seat,7 and when Delta continued the blockedāseat policy after other airlines rescinded it, Delta āārose to number one in the American Customer Satisfaction Index.8
This is a single example, but it isn't unique. Brands with superior customer experience rake in 5.7 times more revenue than competitors who lag behind,9 and 73 percent of customers say that good experiences influence their brand loyalties.10 And since every MBA knows it's far more costly to acquire new customers than it is to keep loyal ones happy, this is news worth noting.
Yet far too many business leaders note it and are paralyzed by the prospect of trying to please these hordes of techāsavvy, highly discerning consumers. Either that, or they pour company money into analytics, surveys, and customer databases and assume an influx of data will help them rise as a market leader.
It won't. Not by a long shot.
Many companies spend billions of dollars collecting, sorting, and interpreting customer data, but still don't ...
